111–120 of 191 posts
Money do expire! There is inflation... I would like similar system for land ownership and buildings. Property taxes at level of 5%. In China land can not be owned, but only leased for 70 years.
Earlier quoted context omitted.
The idea that people need to be encouraged to consume (consumption being the opposite of saving) I don't think is supported by economic theory.
> consumption being the opposite of saving No. The opposite of saving is spending . You can spend on capital as well as consumption. Inflation only devalues cash , i.e. money you keep in your mattress. You can avoid inflation by either consuming or investing, both of which help keep the economy humming along.
Earlier quoted context omitted.
That's a very good way of explaining this. Here in Brazil the previous generations have a golden rule that you must store value in land, not in money. And Brazil has had tons of inflation and weak currencies in the last decades (with all the poverty and stagnation that it brings).
Land can expire. IIRC back in the late 60s and 70s Singapore had, and may still have, a law requiring purchased land to be developed within 7 years else the government would auction it off. The same effect is why many economists believe that a bit of inflation is important (this argument is different from the widely held central bank theory that an inflation target of ~2% is better than 0)
Mainstream economist think inflation is good and recommend 1-3% for a healty economy. And inflation is more practical to implement than putting date stamps on the back of bills like the original idea in the article.
Earlier quoted context omitted.
> consumption being the opposite of saving No. The opposite of saving is spending . You can spend on capital as well as consumption. Inflation only devalues cash , i.e. money you keep in your mattress. You can avoid inflation by either consuming or investing, both of which help keep the economy humming along.
Maybe 'spending' is a better word, yes. However, 'consumption' isn't entirely inaccurate. Investment is the production of capital goods, and the production of capital goods involves consumption.
The point is:
> The idea that people need to be encouraged to consume (consumption being the opposite of saving) I don't think is supported by economic theory.
People absolutely need to be encouraged to be productive. That's the whole point of an economy, to encourage people to produce things that others want in exchange for other people producing things that they want.
Honestly, how could anyone possibly not understand that?
Earlier quoted context omitted.
There is a difference between inflation, which affects the entire monetary system, and money expiration which affects individual units of currency. In the first case, there is no incentive to use the money any faster, and as long as inflation isn't too high, there could be incentives to hoard/save it. In the second case, each unit has an expiration, and like the game of hot potato, you want it out of your hands quick…
> there could be incentives to hoard/save it Yes -- for a while. Not forever. This is a feature, not a bug. Hoarding/saving for short periods of time (relative to human life spans) is a good thing. It helps damp out transients. Hoarding/saving for long periods of time is bad because it discourages people from taking risks by putting resources to productive use.
I think that named a problem.
Think about something like "Measurement Importance" in terms of the "level of competence in the handling of the vehicle", so to speak ?
So how is your MI as high roller ? Think some people have not only accounts for that, but alghorithms, nor ? ^^
Money do expire! There is inflation... I would like similar system for land ownership and buildings. Property taxes at level of 5%. In China land can not be owned, but only leased for 70 years.
I carry around a piece of hard currency (1901 Silver Dollar) to remind me of what real money is like... it's always been worth about 4 retail gallons of gasoline. I expect that trend to continue for at least another decade. Soft money, tends towards zero, as you said.
Money do expire! There is inflation... I would like similar system for land ownership and buildings. Property taxes at level of 5%. In China land can not be owned, but only leased for 70 years.
If land is not owned by anyone the risk is that it's treated poorly since there is no incentive to treat it well. Take the profits that are available during your 70 years lease and run, it's not your problem afterwards.
Infrastructure ages and needs to be refreshed. Look at NYC, how old "land improvements" get stuck.
The whole point of money was to last longer than the expiring and perishable things it was used to pay for. The purchasing power of a dollar in the last century is about 1/500th of what it was when it was paid for the value someone created back then. If money expires/inflates, people use it to buy something to hedge it, which creates a bubble in that asset. The real estate bubble created by low interest rates is exac…
I agree that store of value is an important property of money. Although, I think money wasn't explicitly designed as you suggest. Modern money is a complex cultural phenomenon that evolved over several stages. I think there's so much confusion about money because people refer to different stages. If we wanted to have really stable money, we could fix prices of goods. But I guess this doesn't make much sense in a dynamic economy (how do we compare a basket of goods from 1920 with one in 2020 which includes iPhones).
> The real estate bubble created by low interest rates is exactly what happens to everything else in an inflationary environment.
I wouldn't be so sure whether there's a real estate bubble. I think our current situation is different from the years before 2008 where people where actually buying houses in expectation to sell them at higher prices one year later. I would rather explain the real estate prices as adaptations of net present values to changes of the interest rate.
> Hedges include gold and metals, land, art and alternative assets, or like Wiemar [0], people just spend devalued money on gambling and prostitution.
I don't see how a reference to prostitution in Berlin in the 1920ies supports your economic argument. I guess the situation in the Weimar Republic is more complex than simply explaining inflation with printing of money. (As far as I know, monetarism was abandoned by major central banks long ago. The German Bundesbank tried it quite long though, not surprisingly.)
Germany lost WWI and had to pay for reparations. So it had to produce goods for which they didn't get foreign currency. Before the inflation really kicked in, the Reichsmark devalued already. Basically, the central bank didn't have any currency reserves to counter this. So everything imported became much more expensive. It probably also didn't help that Germany had to take care of wounded soldiers that weren't fully part of the workforce. In sum, the production capacity was hindered but there was excess demand.