20 sats \ 2 replies \ @fiatbad 29 Feb freebie \ on: Convince me I am wrong about these bitcoin themes meta
Bitcoin's long-term inflation rate is asymptomatically 0%. The Federal Reserve's long term inflation rate target is 2%.
There isn't a whole lot of difference between 0% and 2%. Bitcoin is NOT deflationary. It's inflation rate is simply zero. Your house isn't going to depreciate rapidly. It also won't "rise" as quickly as it does under a fiat standard. Housing will simply be stable, and fair.
Zero percent is the perfect place to be to keep prices stable over time. This makes it more fair for the average citizen to "save up" for large items (like we used to do in olden days). Bitcoin prevents nation-states from purposely creating temporary inflation spikes in order to pay off old debt more cheaply or fund major wars without the public's consent. The pros of a decentralized zero percent inflation money far outweigh the cons... unless you happen to be part of the Cantillionaire class.
I have always understood inflation to be a function of price levels, not the supply of money.
The Fed's target is not to increase the monetary supply by 2% each year, it is to have prices increase by 2% each year. During a recession or just a general slow down and the velocity of money decreases, they increase the supply of money to offset.
reply
Yea, inflation can be caused by supply/demand dynamics OR by a growth in monetary units in the system.
I think it would benefit society if we would use different terminology for these two things.
Do you find it unethical that a small group of people control the monetary supply?
After reading "The Creature from Jekyll Island", "Broken Money", and other related books, I'm convinced that humans having control over monetary policy will inevitably lead to morale hazard and be detrimental to society. Around 1913, this system was set up by the same Cantillionaire families whos entire incomes today is derived from inflating the monetary supply. (they were laying the groundwork for decades before 1913).
The 2% inflation is arbitrary, unethical, based on no data, and asymmetrically benefits the people who have the power to set that target.
reply