Topic: If you are being paid interest on your money, why would you spend it? - page 2. (Read 2065 times)

Money only has value when it is spent. It doesn't make sense to keep your money in the bank forever. If the money is never spent, it is effectively worthless.

Well due to effects of QE that is true but over any longer period of time interest yields tend to be higher than inflation.  The FED currently is trying to force people to spend by making it punitive to hang on to cash.

I seriously want to know where you guys are getting your information about Bitcoin from, do you actually have proof of this? Or are you just regurgitating what you've learnt in schools about economics? I'm getting tired of having to argue with people about this now.

Why do you believe that introducing artificial incentives (e.g., "penalizing money that has been sitting in the bank too long") is preferable to just letting fiat money becoming worthless (if that truly is the outcome due to a decline of spending)?   Better yet, who elected you (or anyone else) to decide for me what I should be doing with my money?

Keep yer grubby mitts off of other people's property.

High interest rate are typically a way for the central bank to slow down production/consumption and fight inflation.

Uh, do you remember the circumstances under which that happened? Word-wide economic recession, IIRC.

If I had a safe, longterm interest-bearing investment (perhaps a government bond that was earning 10% right now, that was purchased when that was the going rate), I certainly would not want to cash in the bond, I'd use other money and maximize the appreciating investment. And yes, interest rate vs. inflation rate (as well as what other investment options there are) are pretty huge parts of the equation to consider.

In the world of Bitcoin, I don't own much, and I surely don't want my net BTC to go down much, because I do have hopes it will be worth much more in the future. I want to keep what I think will appreciate (BTC), and spend what I don't think will appreciate (USD). If you can poke any holes in that logic, I'm all ears. Maybe if I owned hundreds or thousands of BTC, or if I had more value in BTC than in USD, I might feel different about my net BTC going down.

I'm trying to use/spend Bitcoin a bit, to understand BTC commerce better, one of many ways I'm attempting to immerse myself in Bitcoin. But overall, at least in the near term, I want my net BTC to go up, and I'm okay if that's at the expense of my net USD going down.

I don't think this means Bitcoin will fail, as some argue. I think it means it will appreciate longterm while simultaneously being used as the backbone to many amazing things we have yet to see or dream of...

As stated above, inflation is more than the interest.

Even if it weren't, people will still spend money because ultimately it costs money to live.

BTW interest rates were up to 15 or 18% 30 years ago, and fiat didn't fail then. Interest rates are 1-4% these days.

Penalizing idle fiat would not solve anything and cause a shift to gold, property & other hard assets. It might even cause a failure of fiat, and drive society towards a search for new ways to store wealth, perhaps in some form of stateless digital currency.

Make inflation higher than interest rate.

Cute, but interest (if you even have that anymore) is much less than inflation.

If your current money is in a bank gaining interest, why would you ever spend your money? Is this a flaw in fiat? Everyone is hoarding their money to get interest on their money so nobody is spending their money. Should we penalize money that has been sitting in the bank too long?

If nobody spends their money fiat will become useless. What are some ways we can get people to spend fiat instead of hoarding it for the interest?