CodePsychology on Nostr: Hmmm, I think you touched many interesting topics in your answer, and I don't think ...
Hmmm, I think you touched many interesting topics in your answer, and I don't think you have hard feelings for any of the sides.
Let me try address some topics.
First, I think, if we will have fixed money supply, what we really solve in my opinion, is inflation induced by money supply changes. Inflation can be still there, but most probably, it won't be such "sticky", as we have now. As you mentioned e.g.: for bread. If most of the bread makers stop working, it can have huge inflation. So fixing the money supply is not really interfering with the inflation of the economy, it will only let it run by natural forces of supply and demand. For the bread case, in such a time in history, where bread prices skyrocket, in my opinion, more people will be incentivized to make bread, because they can earn a hell lot of money, with which they could "retire". So I would assume if bread prices grow, more people will go to sell bread on the market which will stabilize bread markets.
Usually to do something you have some costs, and you can have some returns. If most of the bread makers stop working, the gain you can get to make bread will be unproportional to its cost, so it will really worth to make it. But as more people enter bread making, it will naturally balance itself, and this is when the price stabilizes. At this point, it won't give you unproportional benefits of starting it, so the incentive will drop. I think usually this is refered to as an arbitrage opportunity which comes from market inefficiency. What is your opinion about this?
Let me try address some topics.
First, I think, if we will have fixed money supply, what we really solve in my opinion, is inflation induced by money supply changes. Inflation can be still there, but most probably, it won't be such "sticky", as we have now. As you mentioned e.g.: for bread. If most of the bread makers stop working, it can have huge inflation. So fixing the money supply is not really interfering with the inflation of the economy, it will only let it run by natural forces of supply and demand. For the bread case, in such a time in history, where bread prices skyrocket, in my opinion, more people will be incentivized to make bread, because they can earn a hell lot of money, with which they could "retire". So I would assume if bread prices grow, more people will go to sell bread on the market which will stabilize bread markets.
Usually to do something you have some costs, and you can have some returns. If most of the bread makers stop working, the gain you can get to make bread will be unproportional to its cost, so it will really worth to make it. But as more people enter bread making, it will naturally balance itself, and this is when the price stabilizes. At this point, it won't give you unproportional benefits of starting it, so the incentive will drop. I think usually this is refered to as an arbitrage opportunity which comes from market inefficiency. What is your opinion about this?