Topic: DEFLATION GETS A BAD NAME - page 2. (Read 3991 times)

Ftfy

I'm for as little financing a distance as possible. Money needs to be a tool. Your real savings should be your property and reputation in the community where people know they can depend on you when things break.

Look I'm for less employment and more person to person, community to community, trade and commerce. We have the means to set it up. Global economics is all bean counter fantasy. But the fact is, we're ALL paper pushers. Inflation and deflation benefit one side or the other, when that side is in the position to make itself more secure through that option. Pushing for deflation in the short term just makes the rentier class less able to pull themselves out. Pushing for inflation makes their costs go up. It's lose-lose unless the rentier class gets inflation in money in their pocket and deflation in cost. But this isn't happening.

Either way people get screwed. The they write manifestos based on the idea that they will always get screwed, which isn't an unreasonable premise.

Like I said before. The 1% owning shares doing fuck all for their capital gains potentially earning less income. I can live with that. The rentier class should be eliminated per original Keynesian economics.

The banking sector, shuffling paper to allocate resources. Them I can live without. Especially in a debt free world. We don't need debt funding and complex financing. It's all bullshit. Let's go with equity financing. Way more robust. No runs on debts. Elimination of debt crisis. End of story.

With real skin in the game, even dumbasses on Wall Street will make rational choices.

You are a really smart dude. Thank you. Thank you. Thank you.

Amen brother! Finally, some really excellent perspectives.

+999999999999999999999999999

Why do you pro-inflation/pro-deflation advocates ALWAYS leave time-to-effect out of the analysis? You have no credibility if you base all your analysis on 10-year scales where time-to-effect becomes negligible. The average person deals with week to week, month to month, maximum two year time scales.

So far I see how neither side has a clue.

Deflation is good for those who have fiat stashed and owe nothing on property.
Inflation is good for those who have nothing stashed and owe on property.

As for saying that people who have no savings spend too much. They spend nothing. They earn nothing. They simply move money for the rest of the economy and essentially work for free.

In order to spend, you need disposable income. They have none.

If any analysis is done without taking into account deliberate and easily demonstrated bankster warfare against municipal funds and communities (yes I can), then it is bullshit.

C'mon gentlemen, let's be reasonable and use that common sense. Deflation is not a problem, and not the cause of any drama in any society. If we do our maths correctly then we'll realize that in a deflationary situation all prices shall go down. So economic growth can still be achieved even when the current GDP is less than the GDP in the previous year. Imagine this year's GDP is 10 million BTC and last year's was 10.1 million BTC. On first glance one would think growth is (10 - 10.1) X 100 / 10.1 = - 0.99 %. But, let's say the inflation rate (lost coins) is 2%, which changes the calculation into (10 - (10.1 X0.98)) X 100 /(10.1X0.98) = 1.03%.

See how that works?

I love how you're dodging the math with rhetorical declarations. So right, I could just fire people. Still less income. See there's this thing called investors. Some of them are top tier and some other are second tier. Top tier investors expect the value of the company to rise. If I make less and pay the same, that goes down. Second tier investors expect the short term opportunity value to go up. So they expect me to cut wages but keep production capacity. Yeah income goes down.

So I've shown two cases where income must go down.

Oh and that other thing: if I fire people production capacity goes down. Oops. That ends up causing a dive for both tiers.

Your entire position rests on projections from theory unbounded by time or speed of change. This is disturbing. Employee purchasing power increase does not manifest instantaneously. It lags. Hell, IT RESISTS. The vendor can always last longer in this staring contest.

No it mustn't pay less, that doesn't make any sense, you're applying ultimatums to a situation that doesn't require it.

If my small business makes less, my small business must pay employees less.

What part of second degree function do people not understand?

Income does not go down if everything goes down, it means it's easier to earn money because you don't have to earn as much of the currency you're paying in, this is another bullshit statement perpetrated by pro-inflation economists that ignores basic mathematics which I am getting quite annoyed by nowadays.

Tell me, how exactly does it mean that people have to work more if things are cheaper? Are you actually going to use an example? Or are you just going to keep parroting that same bullshit again and again?

Let me give you an example:

If I wanted to get a Cintiq it would cost me:

$1000

In Bitcoin that's roughly 1.22 BTC - 1.22BTC is worth a tiny bit more than $1000 lol, I'd have to go into 8 decimals to calculate it properly but I'm not that good at maths

Now the problem here is you assume that deflation will carry on infinitely, that's just not the case because there is a hard limit of 21 million coins, so eventually if hyperinflation keeps going $1000 will be 0.00000012 BTC rather than 1.2 because of course a Bitcoin can be broken up into decimals. So in actual fact over time it will simply get cheaper and cheaper to buy a cintiq assuming you still want to value things in dollars but I suspect by the time 1 BTC reaches higher than $3000 people are going to think twice.

In inflationary money like the dollar it would be the opposite, because the federal reserve keeps printing so much you'd have $1000 at first but because they keep printing the money the overall money supply increases and the suppliers are FORCED to charge higher because everything else goes up to eventually you're going to end up with a Zimbabwe situation where you're going to have to pay $100,000,000 just to get something like a Cintiq. The thing you fail to realise is that in an inflationary economy everything goes up when you print money you can't just have it affecting 'the rich' or benefiting 'the poor' and that means that in order to get anything they need anyone would have to work longer hours for less pay because again suppliers and employers would be forced to put the prices up to cover their needs as well as the price for materials and tools etc. would have gone up along with anything else. These are just rough estimates I've done in my head but I think pretty realistic of the kind of problems we'll be facing in the next five or so years.

Yes, you can maybe remedy the situation by giving tax cuts and fixing prices like our leaders have been doing currently for their own ends now, but it's only a temporary fix and it doesn't get rid of the overall problem which is the fact that you're increasing the currency supply and forcing prices up thereby making it more difficult to get what they need never mind what they want.

If anybody still ignores this, you really are a moron.

Income goes down as well. Cheap is as unstable as expensive is. Cheap is only cheap for people who can save. And people get railroaded on four fronts:
Food (includes water)
Rent
Fuel (includes electric)
Vehicle

You have to have them to have a job. You have to spend all your money on them. The system essentially gets your labor for free. You're not earning anything.

And I can't understand why this is such a difficult concept! For the same reason that Bitcoin has any value at all, or why gold is worth more than just what can be made of it in electronics etc: Percieved value. Intrinsic value is actually nonexistent, because even it is based on our perception. It is meaningless without the human context. Gold connectors? That's not intrinsic. That's potential. And there is no potential without human perception. A cat certainly gives zero fucks about gold, or bitcoins.

Therefore people will buy a car today, despite it being assuredly less costly tomorrow, for the same reason. The percieved value of owning a car today is worth more than the value lost by buying it today.

Even in our economic system, where most things inflate, Moore's law provides a clear example of his occurring on a wide scale, regularly. Every 18 months, computing power has doubled while the price has halved. Not even the same for half: DOUBLE, for HALF. Why does anyone buy a computer, or a tablet, or an iPhone? Why don't you wait?

Current economic theory has become a religion and like arguing with anybody religious it's pointless, the only thing you can do is prove them wrong with undeniable evidence, think about it, how long did it take for people to prove the world was round and that evolution isn't a theory? Even with all the evidence presented to them there are still people who have been pretty much brainwashed into believing in this stuff so there's no point in giving them the attention and trying to come to a consensus with them.

Yes, I think we've been socially engineered to think that deflation is a bad thing but when you look at the numbers this belief system just doesn't add up, especially if you take into account how much is being borrowed to pay for this inflationary economy we're in, deflation doesn't just get a bad name, it gets blatantly attacked.

Stagflation is what happens when economic contraction and rebalancing would have occurred, but instead the Keynsians increased the money supply. So instead of everyone being hit by deflation, it is converted to stagflation which will save the rich and politicians, whilst making the poor and middle income groups suffer more.

Having a cap on the total number of currency has two aspects. One is that the price denominated by this currency will decrease as the economy grows. Another aspect is that people will have to use smaller and smaller units of the currency as prices decrease. The second aspect is really a pain in the ass with traditional fiat currency so central banks advocate the idea of printing more fiat as the economy grows and they have ever since been milking it. However, the second aspect isn't a problem with Bitcoin because Bitcoins are technically infinitely divisible.

It's easy to understand that people will buy stuff more based on real needs rather than take out speculative loans to buy inflating assets, which is not real GDP growth.

As Norwegian guy's wealth approaches $40 Million (or $10,000 per Bitcoin), I guarantee you he will be spending Bitcoins even though Bitcoins might keep rising in value.  

Look at China OTOH.  Millions of empty apartments whilst poor people live in cramped basements and ghettos.  What a sick debt driven economic system.  The inequity is just sickening.

Sure the Norwegian guy can be confident that Btcs will rise in price.  Afterall, he retained 80% of them.  It's simple: there is a limited supply of Btcs and as long as Btc users increase at the rate of 30% per month as it is currently doing, all will be well in Bitcoin land.

The only problem is when some Government tries to intervene and regulate Bitcoin to death.  

I'm sorry, but I don't understand. Why would anyone pay more for something today when they know it will be more affordable tomorrow? Why would you ever buy a car for $2000 when you could have it for half that price the next day? That makes zero sense.

Also regarding the guy who bought an apartment. That's all well and good, but that's pure speculation. That's not confidence buying, it's speculative investing. He can't be sure the price of btc will rise over time, he can't be sure if the price will fall, neither can the seller.  and joulesbeef is correct. Deflation you most certainly cannot live with if it is sustained over time. Same with hyper inflation. 

A slight bit of inflation might be good but share prices rising more than 20% in 2013 is not good. Property prices rising more than 10% is not good.  Yes, that is your purchasing power being devalued.

Deflation I can live with. I'd buy a car for 2000 even if I could have it for 1000 tomorrow. The Norwegian guy who bought an apartment by selling his btcs proves this point. He sold at around $886 per btc knowing full well that btcs could rise further. He retained 80% of his btcs and spent 20%.

I like Btc being deflationary. It will prove that deflationary systems can work.