derBitcoinier on Nostr: I have often heard that the perfect money would be one where you can ...
I have often heard that the perfect money would be one where you can increase/decrease the amount at exactly the right time in order to have price stability.
But I wonder, why do we want stable prices at all?
Prices are a result of supply and demand, and if the demand remains the same, the supply decreases or the demand increases with the same supply, then the prices also increase.
This motivates producers to produce more of the good, as higher profits can be achieved.
This results in larger quantities are produced until the relationship between supply and demand has stabilized.
So why manipulate prices and send wrong signals to the market ?
But I wonder, why do we want stable prices at all?
Prices are a result of supply and demand, and if the demand remains the same, the supply decreases or the demand increases with the same supply, then the prices also increase.
This motivates producers to produce more of the good, as higher profits can be achieved.
This results in larger quantities are produced until the relationship between supply and demand has stabilized.
So why manipulate prices and send wrong signals to the market ?