/biz/ - Business & Finance

I've been trying to understand this shit for 3 months, listening to hundreds of podcasts. Only takeaways: no one knows if inflation or deflation is coming, CPI is a meme, and tech is deflationary.

>>23897995
FUNDAMENTAL & NECESSARY

I have a bachelors in Econ from a state uni and I don’t really know, it makes money worth more but it’s bad cuz it lowers gdp I guess

if people believe prices will fall then nobody consumes anything (because it will be cheaper tomorrow) which leads to people losing their jobs no taxes getting payed etc.

Another problem is that if you DONT have inflation then your debt doesnt wither away with time. This is a problem because every country has unpayable debt.

>>23897995
DMM / DMG. 6% APR and DMG voting rights. Look into it.

deflation is a decrease in the money supply. by money supply, we mean the volume of money circulating for goods and services. this decrease in volume of the circulating currency makes the currency more scarce and therefore more valuable. this is not inherently bad. in fact in a normal world, it is good. it means your savings and income is worth more and you can get more for your money.

In the clown world we live in however, it is disastrous, for two major reasons. Debt and consumerism are the bedrock of our entire worldwide economy. deflation fucks our shit up because

1) it makes debt more expensive to pay(because there is now LESS money available)
this can lead to banks becoming insolvent and they can now no longer issue new debt. this means the debt-consume cycle stops.

2) it decreases consumerism because now that the supply of money is lower it is more valuable and must be spent more carefully. and because debt is harder to acquire people cant borrow money to buy shit they dont need.

so in a world of debt and consumerism, a deflationary spiral leads to mass unemployment, poverty and depression.

To combat this deflationary force, central banks print money and inject it straight into the economy, meaning people have more money to spend on goods and services. This increase in money supply is caused inflation and makes the currency LESS valuable. Over time, they print too much and lose control by hyperinflation and all fiat currencies return to their inherent real value - they become worthless.

>>23898158

People stop spending money because they know their money will be worth more in the future. This leads to a cycle of money becoming more scarce, leading to less spending, leading to a slowed down less productive economy.

>>23899162
cringe pop econ take
>>23898158
>it’s bad cuz it lowers gdp I guess
nominally....

>>23899162

there is absolutely no evidence QE leads to inflation, stop talking out of your ass.
look at Japan, their QE program is incredibly extensive, the central bank is even buying stocks, and they can't get inflation to save their lives.

>>23897995
buy Freedom Reserve

https://www.dextools.io/app/uniswap/pair-explorer/0x62008a04401662689467f5ee5d57c4863adabfc0

The idea is to have the monetary measurement stick be deflationary working with a correlated inflationary currency.
I.e. bitcoin standard > collateralized > fractionalised > hypothecated > inflationary currency

>>23899202
not an argument

>>23899213
increase of the money supply is inflation by definition.

>>23899920
>increase of the money supply is inflation by definition
brainlet

>>23897995
when capital pays you to hold it, you only allocate capital to worthy projects

the scrutiny on what to allocate capital towards would increase
the quality demanded from projects would increase

products and services everything would increase in quality, speed, effectiveness, etc

>>23899920

>increase of the money supply is inflation by definition.

this is incorrect. inflation means increase in consumer prices. you have a schizo-definition of inflation. that's all fine and dandy but don't call it inflation, call it smurf-flation or something.

QE might lead to smurf-flation but it doesn't lead to inflation.

>>23900434
Do you watch jeff and emil?

>>23899187
But wouldn't people be investing with that money if it's worth more? Even if they leave it in the bank, the bank will invest with that money. Isn't that good for developing capital goods?

>>23899953
>>23900434
Hes right. up until the 70's inflation was defined as an expansion of the supply of cash and credit.
The definition was changed in the 70's during a period of heavy stagflation, probably so the populace didnt start beheading bankers

>>23901317

It literally doesn't matter how it was defined 50 years ago.
riddle me this; what purpose those your idea of inflation serve? if money suppley is expanded by 30% but all prices stay the same then what difference does it make?
how is your measurement useful?

>>23897995
its what happen when efficiency increases: you can make and buy more with the same dollar. Govs and banks siphon this off and call it 'fiscal policy'. When lots of money is destroyed it is deflationary and if created inflationary.

>>23901401
>riddle me this; what purpose those your idea of inflation serve? if money suppley is expanded by 30% but all prices stay the same then what difference does it make?

In your example, this would still be a fine concept to apply in this manner - since there would be more supply. The supply would be inflated. The only difference between the Econ definition and this example, would be that this type of inflation would lead to a mean increase in purchasing power (since prices stay the same).

It’s useful to talk about inflation in such a way, with Hayek money, for example.

>>23897995
Coins that take your coins for every transaction is a scam

>>23901529

no there will be no increase in purchasing power in my example, that's what we're seeing.
massive QE does not lead to increase or decrease in purchasing power.
that's why your definition of inflation makes no sense, yes we have QE, no it doesn't affect prices, so your "inflation" tells me nothing.

>>23901401
It matters because consumer prices become more sensitive to the velocity of money when the supply is increased.
Consumer price inflation is never measured properly anyway

>>23901652
By literal definition, if prices stay the same - but supply increases, the holders of this supply sees an increase in purchasing power.

I don’t think you really read my reply. Look into Hayek money, or try to understand how something like Ampleforth works, to see how this version of inflation is valid.

>>23901697

there is no increase in purchasing power because the money ends up in the stock market, gold, real estate.
people who consume arent getting any richer and that's why money expands but prices and purchasing power stays the same.

>>23898022
>>23897995
Inflation = the same nominal value of dollars has less purchasing power
deflation = the same nominal value of dollars has more purchasing power
You're probably asking yourself why this is bad. Well, currency prices start to have impacts on things like our national debt, trade, and how fast money enters the economy (dollar velocity). A healthy level of inflation is basically like economical lubrication, without it everything kind of just grinds and comes to a stop. Hope this was helpful and accurate

>>23900434
>>23899953
you fucking RETARDS. you LITERALLY fell for jewish banking tricks. imagine not knowing austrian economics.

https://mises.org/library/inflation

this board really if full of fucking idiots. you will all die poor.

A reason Deflation is "bad" because the only economics anyone cares about is the S&P 500. If the dollar becomes more valuable, a stock that carries the same value will appear to drop in dollar price. Every politician does not want this because "the dow is at 30000" sounds better than "well the dw is at 20000 when it was 30000 but really it's worth more because (reasons 99% of americans do not and will never understand)
Thus government will always seek inflation over deflation no matter the costs.

>>23902055

ok let's say I accept your definition we have hyperinflation.
what difference does it make if all prices stay excactly the same?

>>23898022
>CPI is a meme, and tech is deflationary
why these 2 anon?

>>23899187
People will still buy food, clothes, shelter and other things they need. It just discourages mindless consoomerism.

>>23902160
>what difference does it make if all prices stay excactly the same?

you keep vaguely using the term 'prices' without referring to anything specific. if you refer to essential and luxury consumer goods, then the only reason we havent had substantial increase in prices is because the inflated currency has not made its way into these channels(yet). QE has led to excess money making its way into stocks and real estate. hence we say massively artificial highs in these asset classes.

aside from the corona stimulus package, newly created money has not yet made its hands directly to the consumer, available for spending. what do you think will happen when stimulus inevitably becomes consistent, and people have an abundance of newly acquired, freshly printed money at their disposal? are you naive enough to think prices of consumer goods will remain the same? rent will remain the same?

remember, prices of consumer goods can rise for two reasons
1) demand increases
2) the currency inflates, therefore, more units of currency are needed to purchase the same amount of goods

>>23902308

but Japan has been doing massive QE for literally ages and it doesn't affect consumer prices, it only affects asset prices like what we're seeing in the US.

There is absolutely no data that's suggesting QE is gonna cause massive inflation in consumer prices. It doesn't happen.

>>23898022
>tech is deflationary
this, it just means stuff becomes cheaper
>>23898158
big corps hold off from investments if they know that they can get more bang for their buck if they wait

>>23897995
Ends consumerism and saves the environment.

>>23901100 = >>23900163
Ye that's what I mean

>>23902160
Prices can never stay the same, after a purchase the supply and demand of any item has changed.

>>23899187
*a less pozzed economy

>>23897995
It took me a few weeks to get it so don't worry. But as the one anon here said once you get it you REALLY get it.

Essentially STA is inserted into a liquidity pool. The balancer keeps the liquidity pool in perfect balanced ratio. So if one of the tokens go up, it will sell that token to buy the others so that the growth is steady. So you believe in crypto to succeed then you believe in STA to grow. Also, everytime STA is involved in a transaction (sold/bought/ratio corrected by the balancer) it will burn 1% of that STA, creating deflation and more volume. Now if the demand remains the same or grows, price WILL increase due to deflation. Any of the balancing creates volume which creates more fees.

But what if STA dies and has no volume you say? It does not matter, because the Statera involved in the pool means that volume is also counted for everything else in the pool, so eth btc link snx. Do you really think these will have no volume?

As pool integrations grow, so do arbing opportunities creating more opportunities and more volume -> burn + fees. You could literally be the only one running the pool and get enormous returns. That's why many of the top wallets are buying more. Because if STA goes up in price, the APY from the pool will be absolutely insane. It's not a regular hold and sell.

Of course there is much more to this, but this is the basic idea.

>>23897995
I can tell you from experience how HYPERinflation works because I live in it
your best way is to never put all your eggs in one basket, get gold/silver, crypto or any stocks in FAANG
then again I lost everything in a banking ponzi scheme so my advice might not hold

>>23897995
thanks to these threads, i'm sometimes reminded that i exchange arguments mostly with underage tweaking retards.

>>23902973
kek'd

>>23897995
It's a good thing from the standpoint of average Joes, but kikes want you to think it's bad for the economy

>>23902556
>There is absolutely no data that's suggesting QE is gonna cause massive inflation in consumer prices. It doesn't happen.

your lack of reading comprehension is indeed regrettable.

I didnt suggest that it was. If you had actually read my post, you would have noted that i made deliberate point of explaining how QE does NOT lead to increase in prices of consumer goods because this money is not flowing into the hands of consumers instead it is flowing into bonds, which represses them and diverts money into equities and real estate.

QE is a mechanism that only exists to pump asset prices of the rich, and bail them out.

As to how and why consumer goods will increase, refer to >>23902308
as for 2), this inflation will be caused by STIMULUS and mechanisms that create new money and give it directly to citizens so that they can use it for consumption.

>>23897995
less supply over time, prices go down to zero. safex still bringing your shit to your house

We are now having deflation...

If you are looking for a car low ball the guy he will sell it to you for half the price.. Its because he wants to have fiat and not the car. Same with flight tickets.

When the economy will get back on steam we will get inflation. The car will be much expensive and with the ticket they will fuck you in the ass.

>>23897995
its basically a meme, everything is priced in

>>23902914
I too have a high iq :3

>>23903077

All I'm seeing here is that you have an idea of inflation but this inflation only pumps asset prices.

That's the exact same thing I've been saying all along. QE doesn't affect consumer prices.
I'm not even sure what we're arguing about.

>>23903435
>its basically a meme,
why is it a meme?

>>23899162
you a real one. larping crypto virgins won't know these economic feels

>>23903665
:3
gibs discord

>>23899187
You’re so fucking dumb. I bet you think MMT is legit. People buy shit all the time knowing it will be cheaper in six months. (Any consumer electronic)

>>23899213
Well they’re getting inflation, they just aren’t getting rising consumer prices, instead they have massive real estate and stock bubbles, same as the US. As well, the inflation is preventing prices from falling - which helps the average joe.

>>23899953
>spotted the government bureaucrat

>>23900434
Sure moshe, whatever you say.

>>23903040
most based response itt

>>23903783
I have the explained the classical definition of inflation(the real definition) and how QE is inflationary. but this inflationary mechanism carefully only pumps the prices of certain asset classes. You initially were adamant that QE is not inflationary.

It is essential that i dispel this misinformation. I think you believe that inflation literally means the prices of consumer increasing. It doesn't, and this definition has deliberately been promoted to create the type of confusion we are seeing in this thread.

>>23899162
Based and austrian pilled.

>>23899162
>1) it makes debt more expensive to pay(because there is now LESS money available) this can lead to banks becoming insolvent and they can now no longer issue new debt. this means the debt-consume cycle stops.
It also makes debt more profitable so the interest rates tend to go down, making it easier to take on debt. Banks don't become insolvent. Why just look at half of the equation?

>2) it decreases consumerism because now that the supply of money is lower it is more valuable and must be spent more carefully. and because debt is harder to acquire people cant borrow money to buy shit they dont need.
You don't stop consuming because things will be cheaper a year from now unless it is a big buy like a house. Construction doesn't stop because, as I said, debt is dirt cheap. Same applies to industry and capital.
If by any chance you see a decrease in consumption, that acts as a signal for certain industries to invest in productive capital, which increases the demand for certain things. These sectors will require more workers.

>>23904945
you know it
fuck keynesian jews

>>23899162
>>23904992
Sorry, I thought you were giving the classic anti deflation arguments. Yes, it would be good if we didn't have central banks. Central banks are the source of mindless consummerism

Inflation or deflation doesn't matter, only its effect on consumer prices. That said, we will experience hyperinflation soon. Buy silver and gold (physical).

>>23899162
>>23905008
absolutely and unapologetically based fellow austrian bro.

>>23905093
you know it brother
I'm the Leb-anon who posts here frequently
I have seen firsthand what they can do and how they fucked over an entire populace lol
stay based and HODL on

>>23905175
on another note, I have 200$ that I have as a rainy day fund
can we really expect a dip or should I just dca that amount?

>>23905175
holy fuck seriously? is sent you some btc recently. what did you spend it on lol?

>>23905766
food and medicine for my parents
subsidy on resources is stopping early December here so I can't take any chances because USD prices will skyrocket
I hid the rest at home for when we truly need it
it was much appreciated anon

>>23905766
I always lived frugally worry not, ain't no useless expenses in my book