pull down to refresh
0 sats \ 2 replies \ @21millioins 28 Feb \ parent \ on: Argentina Cut Spending and Posted a Budget Surplus. Why Can’t America? econ
I understand this is caused because banks are allowed to do fractional reserve, as Jesus Huerta de Soto explains and many other austrians ec.
But my point is if money is not entering the economy then it is like it doesn't exist. If banks has it but don't lend it, it does not count as "printing money"
If I got you right, is like if under gold standard I find a way to turn dirt into gold and do a x2 in the monetary base but just hodl it in my vault and never spend it, it is there but is like it isn't from the POV of the economy
https://m.stacker.news/17882
Man, what a crappy world we live in where academia and "common sense" call deflation as something adverse. We're so brainwashed by state education that is hard to believe.
But under most articles you would read about money printing, including most bitcoin articles, they would call it money printing and refer to the ever expanding balance sheet for FED and banks as a sign.
Deflation is a risk, because there’s two types of deflation. (Or even more) one caused by bad economy, thus low velocity of money. Another is deflation thanks to technology improving living standard everywhere, which is ideal.
I was lucky enough to be taught by an Austrian economist during my high school years, even he would put out deflation is a risk. Eg japan had an extremely low to negative GDP for decades. And UK is becoming similar, shrinking population, low GDP growth despite high liquidity.
Bank reserve in your example wouldn’t become gold. Money itself is an incredibly complex tool, and I would be confident enough to say no one knows what exactly is money.
That’s why we have m0, m1 etc etc to measure money supply. Gift card is not money money, but is a form of money as an example.
reply
The market and money in particular are complex systems, and as a general rule I would never try to mess, tweak such systems because there are way more changes that brake them than beneficial changes. So I can understand a general feeling against any weird ideas of messing with money or money supply and apply that to the general society. (John Gal make an excellent case for this line of thought in Systemantics)
As I understand it so far, money works both as an abstraction of the goods and services in the economy (decentralized mechanism to distribute right to consumtion of the stock of goods and services) and a communication layer for decentralized knowledge. Messing with it will mess both of that functions but the most stable "fideling" will be the one that hide better under the rug the casual relationship between cause and bad effects.
Is interesting the example of gift cards, is something you can "print" out of thin air but I believe it works as fractional reserve, the moment you have a sort of bunk run it will be obvious that you gave more gift cards than what you actually have available in goods and services. Isn't exactly that what the FED does with its balance sheet? and even worst, they fiddle with the interest rate which is the same as fixing a price and will cause underproduction or overproduction of the good, in this case society real savings
reply