Topic: It doesn't increase purchasing power - page 2. (Read 787 times)

I think most of the monetary policies set in place as regards any individual getting loans without interest is restricted to some elite few that have become familiar with how money moves. The reality is that there isn't any money. An individual will have to find a way to make more money with money, that's one rule in this life that even the rich can't escape from. The interest these days have made loans to be paid quite difficult to pay back, but one thing I learnt from someone is to first payback the interest of any loan taken, before the main loan is to be settled in total.

All this are getting someone all worked out, but clearly we know that the government runs almost every aspect of the economy but their indulgence in  these doesn't stop the  development  of cryptocurrencies .
The more they raise down  the volume,the more higher the volume will become.

Let's look at the economy sector,its a large space for cultivating every demands but an individual should be conversant with all of that rather than being indempted to the governments.

The amount of tokens that these projects, especially meme coins, burn is insignificant to actually make a difference for the value of the token because they generally have extremely large supplies which makes it difficult for the creators to actually burn enough coins to reflect the effects on the price. So, investors of these projects shouldn't really have very high hopes if the creators say that they are going to burn tokens because those burns will not reduce a very large percentage of the total supply.

If we want to show an example of that, we can see LUNC (Luna Classic), the developers tried their best to burn as many coins as possible to revive the coin and make it gain at least some value back after the crash and everything, but look at the price, there is almost no change in the price after so many tokens being burned.

This is why they increased the interest rates as well, and they will lower it small by small in the future to release it more. They printed a lot, and that caused inflation, so by increasing the interest rate, that would mean more people would put their money in the banks instead of letting it be in the market, the more money in the banks would mean that there would be less money in the circulation, and that makes the inflation go down.

After all of that is done, they could lower the interest and make sure that it is slow enough to not cause inflation and should be fine. I know that this will take some time and they can't do it overnight, but that is the path they are going to take and will end up with something nice. I hope that we could see it reach back to what it was, not saying we need lower than 2% interest rate, that is just not possible, but something lower than what we have right now to make sure that people use loans to grow and make the economy better is very much needed right now.

Eventho I tend to agree that most governments lie in many things and all they do is enriching themselves. I wouldn't think that they are carelessly printing money that will devalue their own currency, their currency is one of the biggest bargaining power in the global politic, devaluing their own currency will not do any good for them.

No one knows for sure whether the money supply that has already been printed has any real collateral. Yes, the government will claim that everything is fine, but these are just statements. So maybe a lot of unsecured money has already been distributed, who knows?

What proof do you have about that, I understand that gold reserve is important to know how rich and influential a country is and fortified the economy is like US for example with the highest gold reserve in the world. But does that mean that any other country that has no gold reserve won't print there fiat like we know some countries don't and yet they print money and exist as a sovereign nation. So what is the proof of your idea.

When I learned about micro and macro economics at school and specifically about money and its circulation, of course the state must have gold reserves to guarantee fiat, when gold reserves are abundant then the state has the power to print more money so that it can make the people more prosperous.

All we need is economic stability. Or in other words, it is reasonable inflation control. I think that before the Covid-19 pandemic came, the global economy was actually about to move towards fairly good economic stability. But unfortunately the Pandemic came and destroyed the economic order that had been built. This makes all governments print more money to distribute to the public so that the economy continues to run as it should. But because people cannot freely carry out their activities, we see that there is an increase in the volume of online transactions and even high risk investment sectors such as crypto are also flooded with large inflows of money which makes the market excited. The gaming industry is also increasing rapidly. But after the pandemic was over, the real problem emerged, namely high inflation which hit almost all countries. Excess currency circulation really causes prices to spike. plus reduced production of goods needed due to many factories closing. And there has been an economic crisis for quite a long time now. to combat inflation and slowly withdraw excess currency in circulation is by increasing bank interest rates. yeah it worked. But the impact is a recession. That is, people's purchasing power is starting to decline. To be honest, I'm still confused about what solutions world governments can take to overcome the current global economic crisis. But I am sure that we are slowly moving towards a better economy.

if money has no value it is the same as having no money. the most important thing is to have money and have its value, that way you can live a prosperous life. the most difficult thing is maintaining the value of money where many factors influence it, not just printing more money, that is not a good solution for creating prosperity, even if you have a lot of money if it is not valuable, it will be the same

What do you mean by larger supply? Because of its enormous possible amount that can be in the market? That's definitely true but you need it to have value if you want it to be used. Imagine doing something that would make you lose more money, investing in such coins/memes unless you are willing to lose it.

Anyway, the bolded text that you have, labor wouldn't be that fast in replaced by AI. There are a lot of industries that would need manpower. For the part where you repay loans and interest, you still need to because someone borrowed it. It's pretty basic. Wasn't this taught when people were young?

thats true make everyone a millionaire then that million would have no value, its silly but many actually believe such thing could bring wealth towards them which isn't true at all.
giving out money never a solution, instead its a way of destroying your own economy if the money given was too much.
nobody would trust money that gets printed out of nowhere, because after all if the government keeps printing, why even bother owning the money, there's too much supply meaning that money have no value at all better keeping commodity since its truly what these money represented to be but if money keeps getting printed, it means it fails as a money that keep its value.

When I said an ideal and perfect situation, you should know that I was referring to economic on paper, that is what I was trying to describe to OP, the theory to understand. If you are in a science class and you want to understand the behavior of a Gas, it's best study in an ideal situation because that's the best form you can understand it like when they neglect some properties like pressure, temperature and others.

If at all the theoretical aspect of economy does work, I don't think we will ever be in this mess, everything is going to move like how it was been written but again, life is not a perfect system because we are human that are bound to error and mistakes, there are some conditions that are just beyond us that can't be control even if you yield the power to change everything in a day, it will never be perfect.

Another thing is inflation is here to stay, when you give a solution to anything, in the process you create a problem and one that economist create when they define money system is inflation. As long the central banks(FED) print money out of nothing, inflation will always be there.

I have heard this argument before from people that have no knowledge at all about the economy, they argue that if the government gave one million dollars to everyone then everyone will be a millionaire and live with opulence, they do not understand that currencies themselves do not generate value, they are just a representation of value, what matters are the goods that are produced and at what cost, and if everyone received a million dollars, that million dollars could probably not buy you a six pack of beer.

There are no such thing as perfect and ideal situation for any country's economy. Even if government managed to control all those internal factor on inflation, there is always some external factor to consider which could affect inflation. As a matter of fact, you can always consider inflation is some sort of government's tool to control the whole economic situation because they can always put more fiat into circulation then use up another tricks up their sleeve to reduce some of its circulation later on

Obviously this is going to tarnish their reputation on how they deal with inflation but considering how bad all these governments are, I dont think most of them are even worried with their reputation

Some of the things that many projects does it to burn there tokens to increase the purchasing power. If they don't burning the value of there token would not increase and that is why we keep seeing meme coins and other POS project burning there tokens to increase the purchasing power and it value. There are many ways to give value to a project which include marketing and having a strong community backing it with liquidity significantly. Project team are always looking for different ways to increase the purchasing power of there token to attract more customers.

Bro, fiat represents a country's economy, not a company.
Memecoins were created without any basis, and to increase their purchasing power they can do crazy things like burning half the supply. of course you know that.
Increasing supply or withdrawing fiat from circulation isn't just a matter of increasing purchasing power, it has gone through various complex evaluations and decisions.

Actually, that's wrong. When the Federal Reserve or another Central Banking entity removes money from circulation, prices of assets, goods and services go down, making the purchasing power of fiat per unit go up. Essentially if deflation is actually happening, the value of goods and services today will be worth less tomorrow, then therefore making you buy more for the same amount of that money today.

I think I get the point here and truly that is what will increase purchasing power and who does the purchasing? Is the people. So giving them access to unrepayable interest free credit will ensure businesses are built, SME growth, employment of labour etc and this will naturally reengineer the fabrics of the economy including increase in GDP and improved standard of living. I think government should therefore work out modalities to grant credit to masses though with ways to ensure such loans are returned after a long stipulated time and some other unrefundable financial assistance too.

Most of the case when someone is willing to give a loan without interest is they help their close relative which is related to social terms.

But in this thread we're talking about money terms, so I have to agree with you it's impossible a stranger e.g. centralized entity want to give a loan to other people when they can use that money for the other thing which give an opportunity to earn more money.