• Cethin@lemmy.zip
    link
    fedilink
    English
    arrow-up
    29
    arrow-down
    3
    ·
    1 year ago

    A small amount is good. Deflation makes it so not spending money is more beneficial. The longer you wait to spend the more the money is worth. This causes fewer products and services to be purchased, which pays for wages. Inflation makes the opposite true. The longer you wait to spend your money the less it’s worth. It encourages spending, not saving. Inflation that outstrips increases to pay is obviously very bad though.

    • jj4211@lemmy.world
      link
      fedilink
      arrow-up
      13
      ·
      1 year ago

      Note that a critical part of that equation is that wages are included in the inflationary trend.

      But other than that explicit detail, that’s spot on. Ultimately money is a “trick” we use to influence our productive behavior. So a slightly creeping number works best to make the “money” move instead of sit still, and the whole point of the mathematical model is that the things need to move around.

    • Buddahriffic@lemmy.world
      link
      fedilink
      arrow-up
      7
      ·
      1 year ago

      With all of the credit balances being carried, I question the whole “people will just wait instead of spending because it will be more financially advantageous”. I’m also not so sure we really need an economic system that encourages and depends on increased consumption. It would be nice if we had a system that could handle inflation, stagnation, and deflation without imploding on itself.

      To me, the biggest factor is that it means debt burdens get lighter over time, assuming you are at least covering interest (if not then interest will outpace inflation, though even the growing debt will be cheaper over time vs what it would be without inflation). Oh, also assuming wages match inflation, which is the other big factor. Your employer can save money over time just by being stingy with raises.

    • Jake Farm
      link
      fedilink
      English
      arrow-up
      1
      ·
      1 year ago

      Does deflation decrease all spending or just luxury and investments?

      • nybble41@programming.dev
        link
        fedilink
        arrow-up
        10
        ·
        1 year ago

        Just luxury spending and underperforming investments. Essential spending can’t be deferred, and worthwhile investments will outpace any natural rate of deflation. Forced inflation drives conspicuous consumption and malinvestment, but in doing so it increases monetary velocity, which helps bankers and tax collectors extract higher rent from the economy.

      • Trainguyrom@reddthat.com
        link
        fedilink
        English
        arrow-up
        5
        ·
        1 year ago

        This is something you can think about from a micro economic level! think of your next big dollar purchase. Maybe its a car, or a TV or a computer or a kayak. Whatever it is, you probably have to save up to buy it, you probably spend a lot of time researching and thinking about which one to buy, and you wait for a good time to buy. If you know that simply waiting another few months means you can get it for cheaper, would you? If the answer is yes, then that’s how deflation would effect every luxury and other non-necessity purchase

    • nostradiel@lemmy.world
      link
      fedilink
      arrow-up
      5
      arrow-down
      11
      ·
      1 year ago

      Currency isn’t worth a shit cause it ain’t money. Money should be out of all stable saving of value. Gold is money, precious metals are money, diamonds are money. Currencies are worthless shit created to infinity by banks and hold together by enforcement of governments which are deep in debt to those bank so cannot do a fucking shit about that. All of our tax money goes straight to banks.

      • Ulv@feddit.nu
        link
        fedilink
        arrow-up
        9
        arrow-down
        1
        ·
        1 year ago

        You try too pay for potatoes and pork with a krugerrand and tell me how that works out

      • Trainguyrom@reddthat.com
        link
        fedilink
        English
        arrow-up
        5
        arrow-down
        1
        ·
        1 year ago

        Having worked at a bank for a year I can certainly say, banks need the federal government just as much as the federal government needs the banks. The federal government (as well as state governments) frequently use banks as a low cost, low risk way to increase access to capital for those that need it, as well as of course controlling interest rates to then control the speed that the economy grows or shrinks

        A well-regulated private banking industry allows the competing interests of a government and a private company to compliment eachother in ways that really only become apparent from directly working in the industry. The government provides grants and subsidies to allow small banks to provide access to capital that might not otherwise exist, competition with other banks forces banks to provide better services to customers and government regulations prevent banks from taking too much risk or doing too much harm, plus a strong government safetynet protecting bank customers from failure all come together to provide a surprisingly good system. I’m not saying private banks are perfect nor that its the best system one could dream up, but in a society that relies on capitalism as a method to limit access to resources, a well regulated private banking industry with strong competition (which we actually largely have!) is really good for consumers

        • Uriel238 [all pronouns]@lemmy.blahaj.zone
          link
          fedilink
          English
          arrow-up
          2
          ·
          1 year ago

          A well-regulated private banking industry

          Remember that shareholder primacy assures the banks will pressure the government to deregulate, eventually capturing regulatory departments, as has happened in the US (if not the whole developed world).

          Marx explains this in Das Kapital even when there was a notion of social responsibility. But after Dodge v. Ford Motor Company in 1919, it was established by judicial ruling that publicly owned companies have interests in direct opposition to the public, and should not be allowed to influence government, which is meant to serve the interests of the public (and only the public).

          Even in 1919, plutocrats had already been dismantling US democracy towards oligarchy. It had failed just as the Soviet Union was trying its hand at ur-communism (and being sabotaged by Wilson).

      • Cethin@lemmy.zip
        link
        fedilink
        English
        arrow-up
        5
        arrow-down
        1
        ·
        1 year ago

        Gold is not money. Gold is something that some people value but has no value in itself. It’s useful in small quantities for electronics, but other than that it just looks pretty. It has almost no utility. If an apocalypse happens and society fails, gold won’t be worth anything. If people need food, water, shelter to survive, they won’t accept your gold for payment. They can’t eat that. Booze may be a good item that will retain value well, but gold will not.

      • Ignisnex@lemmy.world
        link
        fedilink
        English
        arrow-up
        3
        arrow-down
        1
        ·
        1 year ago

        Currency is a very useful tool to gauge the worth of dissimilar items used for trading. It’s a trait known as fungibility. Without it, we’re in full barter mode. The barter system is… deeply flawed for one reason. If you don’t have anything the seller wants, you’re SOL. You wanna buy food, but don’t have gold, silver, or a skill that the food vendor needs? Well, you’re going to be hungry. Abstracting value to a useless piece of paper that denotes a value, and is enforced by the power of the land (a government) means that paper can buy food, shelter, comforts, whatever you need. It’s an objectively better system.

    • Deftdrummer@lemmy.world
      link
      fedilink
      arrow-up
      3
      arrow-down
      11
      ·
      1 year ago

      What’s the payoff in sending billions to the state known as Ukraine aka the former world’s largest illicit arms trafficker since the fall of the ussr?

      • Wiz@midwest.social
        link
        fedilink
        English
        arrow-up
        8
        arrow-down
        2
        ·
        1 year ago

        What’s the payoff of you inserting obvious Russian propaganda spam into a story about American labor?

        There is none. Go away.

        • Deftdrummer@lemmy.world
          link
          fedilink
          arrow-up
          1
          arrow-down
          3
          ·
          1 year ago

          Learn your history dumb fuck. You don’t have to believe me. You still haven’t answered what’s to gain by pissing tax payers money away to a failed eastern bloc state that formerly peddled weapons to our enemies.

      • SpaceCowboy@lemmy.ca
        link
        fedilink
        arrow-up
        1
        ·
        1 year ago

        The price of food is increasing at around double the rate that everything else is. This indicates food prices are the driver of inflation.

        What could be the cause of this? Is there any disruptions in the food supply somewhere in the world? Like for example a staple food like grain? What’s causing this disruption?

        • Deftdrummer@lemmy.world
          link
          fedilink
          arrow-up
          1
          arrow-down
          2
          ·
          1 year ago

          California is the breadbasket of the world and certainly the US and produces far more grain, nuts & corn. Learn your shit.