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What if money expired?

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Re: What if money expired?

#121

Post by bombcar »

gumby wrote: post #84
haolez wrote: post #77

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)

A 1% land tax expires the land in 100 years.

Re: What if money expired?

#122

Post by seydor »

Inflation is a good implementation of this.

The period of high inflation circa '70s was also the most equal economy of the recent decades. It's all been downhill from there

Re: What if money expired?

#123

Post by tiredofleftist »

abe_m wrote: post #4
numtel wrote: post #3

Uh, our money does already expire. It's called inflation.

It is interesting how closely the proposals of Gesell are to current US Fed policy of 2% inflation. The main difference seems to be the current system runs on the Cantillion effect, where those in favoured positions (close to where the money is created) benefit from the inflation, while those farthest away bear the cost. In effect, it is the rich who are able to borrow direct from Central Banks and Government Treasur…

Quoting. "those in favoured positions, close to..."

Add: "Investment is the production of capital goods, and the production of capital goods involves consumption."

and: "Are those countries flourishing as a result of local inflation? It doesn't seem"...so

...Question I have: "This disinflation, i.e. near or almost deflation, been first contested - because some things actually became truly expensiver, but to determine inflation you did not need to calculate it as an average?", i want to ask.

Re: What if money expired?

#124

Post by [deleted] »

motohagiography wrote: post #50

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…

[deleted]

Re: What if money expired?

#126

Post by owlstuffing »

CivilWart wrote: post #110
owlstuffing wrote: post #88

Fiat money already DOES expire. It’s called INFLATION. If you put all your investments in a savings account in 2008, your “money” would smell like a compost pit.

Inflationary expiration is not guaranteed though. Deflation is always a possibility.

Historically, inflation dominates and ultimately collapses fiat currency.

Re: What if money expired?

#128

Post by LouisSayers »

Geee wrote: post #46

Insanely bad idea. People will always try to store their wealth in inperishable goods. People will get rid of their perishable money and buy property. Which is what happens now already, because of inflation. When property becomes a "money" in a store of value sense, it will become overvalued, and people can't afford houses for living anymore.

> People will get rid of their perishable money and buy property

Which has rates to pay - assuming the market stands still that property is actually a liability.

Storing money in gold is probably a better example, until we find a way to cheaply create it...

Re: What if money expired?

#129

Post by corethree »

motohagiography wrote: post #50

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…

Right but the problem is money isnt value itself. It only represents value. Thus it's not a realistic representation of value because real value degrades while money does not.

Imagine I sell a house for 2 million. Now that house burns down. Basically that money now represents value that doesn't exist anymore. If this was an island economy consisting of 1 burned down house and 2 million dollars the economy essentially now has 2 million dollars in paper bills representing nothing.

This is why money is inflated deliberately. To keep the representation from getting too unrealistic. It incentives you to move your value into more realistic representations of value.

In short money already does have an expiry date or something equivalent. It's inflation.

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