You know it’s a classic example of inflation bringing an empire to its knees
I mean, its not, though its frequently cited as such by those obsessed with pure commodity money; at that level of reductionism it would be more accurate to say you are reversing cause and effect, as the Empire tried to cope with decline by debasing currency.
My point is that history is filled with stories of inflation and its disastrous consequences.
History is filled with stories of inflation with and without disasters, and full of disasters during which inflation was turned to as an (sometimes successful, sometimes not) route of escape. Reading it as full of stories of inflation’s “disastrous consequences” takes both reversing cause and effect and highly selective reading.
the Empire tried to cope with decline by debasing currency
That sounds like, "The spouse tried to cope with the failed marriage by cheating." Maybe, but maybe also it played a role in the marriage failing. Can you truly separate the two things?
Listen, you could be right. I would definitely say that I've never been one to be "obsessed with pure commodity money." But I've also steadily lowered my respect for the entire branch of Economics over time. What's that H.L. Mencken quote? "It is difficult to get a man to understand something when his income depends on his not understanding it." When you watch the film The Big Short, it seems to talk down to the audience but it's also talking down to the entire finance industry and population at large. It all seems so patently obvious in hindsight -- but it was obvious in foresight too, if anyone wanted to look. (Note: We're facing the same thing now, in greater degrees, but with different names (CDO's? Horrible! BTO's? Sure!) and we're about to be humiliated once again.)
I'll repeat what I said initially. I used to be Keynesian. I used to think that inflation allowed for growth. It encouraged investment. I saw the opposition as a fringe group: gold bugs and conspiracy theorists, frankly.
But what I came to realize is that, long-term, it can't work. It's not a Nash equilibrium (see: https://blankpoole.com). It doesn't encourage investment; it demands it. And that, to repeat myself, removes the coupling to value. Your local coffee shop is only worth so much, based on its revenues. Period. If you go above that, you're speculating -- fine; but you continue past that and you're in "growth investing" land, where you quite literally know that the coffee shop isn't worth that but you expect someone to be the greater fool.
People right now, unironically, say that the market always goes up. I'm not joking. You've probably heard it yourself. Economists could fight it but they enable it instead. "Just put your money in the market and wait. There is always a greater fool." Shame on them.
As that article I linked to points out, while the coffee shop shares can only be worth so much, any scare resource widely viewed as a currency, such as precious metals, have no such restriction. It's a Nash equilibrium. If field of Economics was minutely honest, if it had a mote of respectability, it would recognize that and stand firm despite what its income depends on.
Comments
I mean, its not, though its frequently cited as such by those obsessed with pure commodity money; at that level of reductionism it would be more accurate to say you are reversing cause and effect, as the Empire tried to cope with decline by debasing currency.
History is filled with stories of inflation with and without disasters, and full of disasters during which inflation was turned to as an (sometimes successful, sometimes not) route of escape. Reading it as full of stories of inflation’s “disastrous consequences” takes both reversing cause and effect and highly selective reading.
That sounds like, "The spouse tried to cope with the failed marriage by cheating." Maybe, but maybe also it played a role in the marriage failing. Can you truly separate the two things?
Listen, you could be right. I would definitely say that I've never been one to be "obsessed with pure commodity money." But I've also steadily lowered my respect for the entire branch of Economics over time. What's that H.L. Mencken quote? "It is difficult to get a man to understand something when his income depends on his not understanding it." When you watch the film The Big Short, it seems to talk down to the audience but it's also talking down to the entire finance industry and population at large. It all seems so patently obvious in hindsight -- but it was obvious in foresight too, if anyone wanted to look. (Note: We're facing the same thing now, in greater degrees, but with different names (CDO's? Horrible! BTO's? Sure!) and we're about to be humiliated once again.)
I'll repeat what I said initially. I used to be Keynesian. I used to think that inflation allowed for growth. It encouraged investment. I saw the opposition as a fringe group: gold bugs and conspiracy theorists, frankly.
But what I came to realize is that, long-term, it can't work. It's not a Nash equilibrium (see: https://blankpoole.com). It doesn't encourage investment; it demands it. And that, to repeat myself, removes the coupling to value. Your local coffee shop is only worth so much, based on its revenues. Period. If you go above that, you're speculating -- fine; but you continue past that and you're in "growth investing" land, where you quite literally know that the coffee shop isn't worth that but you expect someone to be the greater fool.
People right now, unironically, say that the market always goes up. I'm not joking. You've probably heard it yourself. Economists could fight it but they enable it instead. "Just put your money in the market and wait. There is always a greater fool." Shame on them.
As that article I linked to points out, while the coffee shop shares can only be worth so much, any scare resource widely viewed as a currency, such as precious metals, have no such restriction. It's a Nash equilibrium. If field of Economics was minutely honest, if it had a mote of respectability, it would recognize that and stand firm despite what its income depends on.