Andrey on Nostr: In an inflationary Keynesian economy, fiat currencies continuously lose value, ...
In an inflationary Keynesian economy, fiat currencies continuously lose value, leading to boom-bust cycles and rising prices. This isn't just due to high demand or low supply; it's largely because fiat money is devalued repeatedly.
Claiming that inflation is beneficial is equivalent to accepting that it's okay for the purchasing power of your savings to diminish over time. While those in advantageous positions may benefit from rising property values and find it easier to repay long-term debts due to devalued money, this promotes a debt-based economy.
In such an economy, people exhibit a high time preference, eager to spend their monthly earnings immediately on desires rather than necessities. This behavior fuels over-consumption, leading to increased production rates, lower quality goods, environmental pollution, and rapid depletion of resources.
Furthermore, inflationary policies often lead to geopolitical instability and war. Governments can finance military conflicts by printing more money, bypassing the need for direct taxation and masking the true cost of war. This creates a cycle of endless conflict, as the immediate financial burden is shifted to future generations through increased national debt and devalued currency.
Sound money, such as gold or Bitcoin, imposes fiscal discipline and limits the ability of governments to engage in reckless spending and perpetual warfare. With sound money, the true cost of war becomes apparent to the public, making it harder for governments to finance conflicts without broad support. This can lead to more peaceful and stable societies, as financial prudence and long-term thinking are encouraged.
Claiming that inflation is beneficial is equivalent to accepting that it's okay for the purchasing power of your savings to diminish over time. While those in advantageous positions may benefit from rising property values and find it easier to repay long-term debts due to devalued money, this promotes a debt-based economy.
In such an economy, people exhibit a high time preference, eager to spend their monthly earnings immediately on desires rather than necessities. This behavior fuels over-consumption, leading to increased production rates, lower quality goods, environmental pollution, and rapid depletion of resources.
Furthermore, inflationary policies often lead to geopolitical instability and war. Governments can finance military conflicts by printing more money, bypassing the need for direct taxation and masking the true cost of war. This creates a cycle of endless conflict, as the immediate financial burden is shifted to future generations through increased national debt and devalued currency.
Sound money, such as gold or Bitcoin, imposes fiscal discipline and limits the ability of governments to engage in reckless spending and perpetual warfare. With sound money, the true cost of war becomes apparent to the public, making it harder for governments to finance conflicts without broad support. This can lead to more peaceful and stable societies, as financial prudence and long-term thinking are encouraged.