"neutral" is a big word though, just because, actual value is subjective.

Inflation is based on circulation right?

rather currency in circulation

@Blackhawk342 most are agreed now inflation is caused by excess money supply.

So yeah, too much in circulation basically.

Money only has value if it is used. A 4tillion yen note is useless to me down the village shop. Just as useless as a billion ponds sitting in the bank I'm not going to spend.

The value of an item is based on what people will pay for it

Money is in no way neutral, nor is it representative proportionally to the goods and labour of a nation. You'd be right ages ago, but now the government controls the rate of value increase artificially

Modern cash is fiat based, not output based

And yes, the value of an item is exactly what people will pay for it, no more and no less

hoarding your labor, which is the closest you get to any actual value, is harmful to yourself and those around you as you are not effective at acquiring everything needed to live, and neither are those around you. Those effective at something will produce more results than those around you doing the same task for the same period of time. By shifting focus from being a jack of all trades to a master, more can be produced overall in the same amount of time, allowing buffers to be built up to prep for future problems

Or rate of value decrease rather

Money is "neutral" because everyone will accept it, but its value is pretty much subjective, which is why market prices fluctuate--what people will pay varies.

Rye, if hording money is not a bad thing and everyone does it the money supply dries up and no one can use it so they would start to use something else and your horded money loses value until it it worth nothing.

That's contextually based. I don't accept my wages in Yen, for instance

@Poppy Rider money is nothing, value is what is important.

I know

which is why i asked, hoarding value, or hoarding money.

It is the trust we put into it that gives it value.

unless you are low on cloths, hoarding money doesn't hurt.

He said money

^^

money is cloth like paper

doubt hording bolívar fuerte in Venezuela is hurting anything

I did say money

Paper money has more value than clothe simply coz it's easier to carry and not everyone needs cloths.

fite me

yeah, but its not as durable as cloth

Common currency exists because barter depends on the needs of the person you're trading with

but if you are hoarding value, it means you are taking from others without giving back, which is a drain on the system

currency bypasses that requirement

IF I horde all the money is can the supplier has to make more so there is enough to sever the community. That causes inflation making your cash worth less. If you are just sitting on it, that is.

Why does he have to make more? No exchange has been made that requires that money, no?

If there isn't enough currency is circulation to serve the needs of the community the community will start to use something else untill they stop using the original altogether.

If everyone stopped spending nobody would be buying food

Okay let's break this down though

do i need to pay with money?

There's 1000 dollars in the economy. I hoard 100 dollars of it. Only 900 dollars can be traded

why can't i do something for someone in exchange for food?

^^

Why is the economy going to fail now?

You could, grenade

You can't charge more than someone is willing to pay

Or rather more than anyone is willing

But what reason do you have to do something for someone who has nothing you want?

Or you won't trade

That's the role money fills. It's essentially a shape-shifting good.

Currency would have to scale to what the economy allows

how does one hoard money?

that would imply doing things for people, but people giving you stuff for free

No

How does one hoard rocks?

you get paid for your labor, but you don't pay people for their labor

I sell a product for 10 dollars, I spend 1 dollar on food I spend 2 dollars on services. I keep the rest

I'm now not putting 7 dollars back in

so you produce more than you consume

Yes, and then you store it

and this is harmful....

Or "hoard"

I would say no

Yes it is harmful coz no monetary exists in a vacume. More money will be printed to inlfate your saving aways or people will start trading in things they can get their on.

why?

So poppy

go on

The harm would arguably be in printing more money

Not in Hoarding it

Sorry BTW for dropping such a heavy topic and responding in blurbs. I got called for a delivery...

Unless you make a currency that can be infinitely devisable then yes. The population is going to grow so either the supply needs to grow or the value needs to grow.

If you hoard it, then value of each dollar goes up. At some point, in order to keep hoarding it, i'd need to produce everything i need myself, because otherwise i will need to pay out more than i get in because of the value increase of each piece of money

You did make an argument that lead to inflation, but I think the dispute is in causation

each piece of money i hoard, increases the value of traded money.

Grenades picking up what I'm laying down.

and i can only hoard money if i produce more than I consume, value wise, or i don't consume.

which means i need to produce more for each piece of money i hoard

Bingo

or, i need to stop consuming

You are talking about deflation.

basically

Can someone tell me whats wrong with deflation?

Depends on your goals

the only problem becomes how small you can divide your currency

but this is the problem of currency, its imaginary placeholder for the real value of stuff

If you want to spur growth it's bad, but I'm not convinced artificial growth is good

Yes, you need an infinitely devisable currency.

And?

It's called trade. After a year of deflation you will quickly find out you can't afford anything from the people over the river.

Why?

hang on. I know this one.

>stores will sell products nobody is buying

I don't understand

you can go down to there being only 1 dollar in the system, people will just rip the dollar in 2, now you have 2 half dollars

or someone will start using something else as a new currency, or just trade directly tit for tat

Sorry I've that wrong up there.

the worst that can happen is everyone is just focused on providing for themselves and no-one else.

I used to know all this stuff.

So does anyone fully disagree or did I make my case? (I didn't go into specifics even, yet)

I'm not convinced. You are just going to lower the money supply. Why would I spend today when it's going to be worth more tomorrow? I just makes the problem worse. Unless you print money to fill gap. Where that gap be caused by hording or population growth.

do you have enough to afford not spending today?

and will it be worth more tomorrow? everything will be more expensive tomorrow too

maybe it will be worth more tomorrow, but you will get less in return

what you currently own will be worth more, but your income will be less because each dollar will be worth more

Grenade making my arguments for me.

its just logic

money doesn't have value, it is a place holder for value

change the place holder doesn't change the value

Basically that

bread takes x human work to make. therefore it is worth x human work.

And what do you do if you're in debt. The money you borrowed yesterday becomes impossible to pay.

I mean, living within your means is the best option...

why would debt not get negative interest?

because each dollar you pay to them is now worth more than before

Getting a mortage that I can pay is living in my means, it also gives me somewhere to live.

so they don't need to recover your full debt to still make money

Ideally that would be the case

Part of the problem is that we look at the benjamins wrong

And look at work wrong.

Cultural problems

so they don't need to recover your full debt to still make money
thats not how this works.

yes it is

i give you money, you pay me back plus extra

It actually is. You're still thinking of money as a score and not as goods.

Granted EVERYTHING gets messy when you start taking loans.

they may still try and collect on that debt, but then again, you could probably take them to court

we have never really had deflation, that doesn't mean people can;t be reasonable

Real deflation hasn't been tried.

I think it has. It's called a 'hair cut' the Greeks used to it.

okay, not in modern times

They understood the problem with fiat currency

deflation isn't really a problem, nor really inflation. its the rate of change that causes problems really

So Rye if your system doesn't take into account debt then I surmise there is no intrest on savings?

its not the fall that kills you, its the sudden stop.

Not true

If you fall from high enough you will have a heart attack 😉

well then its not hte fall that killed you still lol

So, if you bought gasoline at 2.60 a gallon, and filled a 20 gallon tank. Next day, gas is worth 2.20 a gallon...

The gas in that tank is worth the same as what you'd buy at the pump

I guess that works against my point in a sense

As far as a loan goes anyway

But ideally, if you're taking a loan, you're taking that loan for something that will add value

the problem with debt is that the debt needs to be adjusted for the rate of deflation, otherwise they are asking for more money that technically are owed

Such as property.

just like debt is adjusted over time for inflation

So it's preicated on only buying things that are neccesities. not fun alowwed

what would probably happen in deflation would be the ability to get a lower interest rate

The weird thing is a negative interest rate would be extremely gameable...

depends on how rapid things deflate

its more likely that you would see very low interest rates

because how quickly would you need to be deflating to get a negative interest rate

It'd likely be fair to waive interest.

thats more likely what would happen

with perhaps the option to get the last bit waived at the end

because it would need to devalue so fast that the amount you borrow ends up deflating so rapidly that it will cover the operating and profit margins over the course of the loan to get an interest rate of 0.

or a negative one

That seems like economy crash levels of change.

Rye here trying to push shria law over here. Fuck off undercove sand nigger

... Crap. I've been found out.

I would disagree. In my country the national bank runs negative interest rate on the accounts of the commercial banks. And the government issue bonds with a negative rate too, to discourage foreign investment in them

Where you form? Is that to discourage companies from hording money?

Denmark. Ever since the 70s the national currency has been pegged to the D-mark and later the euro

In order to keep the exchange rate constant the national bank must conduct a constrictive monetary policy

It is primarily to discourage other central banks and pension funds to not buy danish treasury bills.

The side effect is the global capital markets are funding the welfare state here.

In the late 70s early 80s the economy was in shit so the interest rate was 22% in order to keep on par with west germany.

If it's not the banks buy the bonds, who are they selling them to.

The usual suspect that buy bonds, other central banks, pension, funds sovereign wealth fund other uber rich, that have large quantities of cash they need to store inflation safely and don’t want to buy risky bonds like Greece or Italy, and must be tied to the euro

Now that I'm at a computer, and off work now...

To get to the point: In general I'd say that fears and concerns about 'hoarding money' generally stem from a concern for the haves and have nots.

Most people who raise it as a concern are trying to advocate for some means of separating a person from their property.

I'm not one of those 'Taxation is Theft' types

but... it kind of is, in a way.

Imagine if money were substituted for any other goods that can be bought *with* money.

Let's say you farm rice.

You handle your fields entirely on your own. You've purchased grain silos, etc. you've got the means to store as much rice as you like.

Would you argue that, at a certain point, this person's excess rice from farming should be taken from them, based on the fact that they have it and aren't doing anything with it?

Would you argue that they're only entitled to the amount of rice that they need to sustain themselves?

With some here and there for trade?

You can't compere a field of rice that you farm on your own to money. You are not providing a service to aquire that 'wealth' so you aren't taking from the system.

If there is only a certian amount of land to grow the communities wealth then it's a different story.

Ah, so if they own more land than they need

then they might have to give up some of that land.

If this is the case then yes he should only be entitled to his share.

But what if he paid for that land that he grows the rice on?

Then everyoone else was stupid and he is going to pay the price in form a pitch fork up his arse.

Are you justifying that, though?

no.

Currency is a commodity like anything else.

It is either that. He gives it away or takes everyone as a slave.

The only difference is that it's only use is barter for other commodities.

Sometimes the commodity you buy with currency is shares in a company, which in itself is another currency representing a portion of said company's assets and profit.

You can buy other currencies with your own currency.

And the values of those commodities you're exchanging is generally analyzed and agreed upon.

Crypto is largely the same way.

Supply and Demand dictate economics.

Not anything else. not government, even.

Although government has the strings it can pull to manipulate it

If some nation-ending apocalyptic event were to occur tomorrow, like Hillary replacing Trump or something...

There would still be people who would accept USD. It would still have a certain value.

Almost inexplicably

But the core reason is, common currency is a proxy for goods in barter.

I work some on-demand jobs.

If I get a drive for a 30 dollar fare

load it on to my card, and buy 20 dollars of gas with it

Thinking of it as spending money is a basic way of looking at it.

I'm actually spending some fraction of a function of my car's fuel used for the fare, the wear and tear on the car, with the additional factor of my time to refuel that car.

And that is what I'm trading to that gas station for fuel.

Money's just the proxy for that.

When you're taxed, the IRS is taking a percentage of time from you, not money.

I had a really well paid job once and we would work sundays for the tax man. Why sundays? Coz my time was worth more. Your system seems predicated on an isolated system, were one days work is equal to anothers. That is not the case.

In my on-demand job

One fare might be worth more or less than another

If you're working on a Sunday where someone else might not, that is a supply/demand difference.

Frankly, either your work on Sunday was valued more due to a decreased supply or increased demand

Or your boss wasn't really thinking things through and just arbitrarily valued Sundays differently, which is perfectly acceptable within that model.

The key factor is that you agreed at any given point that your time and labor were worth that amount at that time.

hang on I think I've got you

When people start to horde their money the supply of money goes down. the value of the remaining money goes up.

people start to notice this and start to horde money knowing that tomorrow their money will be worth more.

Right, that's how the argument generally goes...

It was said earlier that that would just increase the price of goods coz labour would cost more.

I suppose I can see *sort of* a point on the other side of things now

In that having a currency with an unstable value makes things kind of wonky.

What if you are in the business of baking bread? You pay the boy to help[ you bake X loafs of bread but no one wants to by them coz they can buy two for the same money tomorrow.

You have already put in the investment.#

But your bread is organic and goes down in value as it ages

it doesn't keep.

We're talking about needs, here.

To make money your business is predicated on quick turn over

And if you had a currency that fluctuated THAT wildly, you've done something wrong. 😛

The time scale doesn't matter.

it's the pricaple of things losing value over time.

imagin your in the business of selling wives

whoa now.

Getting a little close to home there...

You have girls and it's a big investment but they need to be sold at the right time.

```Poppy RiderToday at 4:11 PM
Rye here trying to push shria law over here. Fuck off undercove sand n*****
```

(how do you do that ^^)

```

The best point I think I can concede is that instable currency can be a problem.

yes. a paper based system has to increase it's money supply as the population grows

The whole idea of trading my ladour for pay is to make a profit on it

There's also this assumption that rich people have scrooge mcduck baths in their basements...

Most people with money actually put that money to work to make more money.

Not everyone can make a profit on thier labour if the money supply is get smaller coz people are hording

sure they can.

In fact, they already are in that scenario.

Not if produck can lose value

produck?

producks. You know those ones that are paid to quack

We'll call this one sean.

He'll be pro duck sean.