> Why would my management ask me to work 10 extra hours a week? What does that have to do with deflation?
You're advocating a system which discourages saving. I'm pointing out a situation where lack of savings has a negative consequences for quality of life.
> Where is all the consumer inflation that they are allegedly creating?
The fundamental problem with inflationary policy is that it makes it so that dollars from the past purchase less food today than they would have previously, even though it is much easier to produce food today. You're calling it "consumer inflation" to avoid the glaring fact that every widget that has gotten easier to produce but yet remains the same price represents pure inflation. And as the rate of technological progress increases, this gap will grow ever larger.
> Yes they would, because we are entering a potential depression. Smoothing out means cutting when things are bad and increasing when things are good. You have to act at both ends to achieve stable prices.
But the fact they've hit zero shows that the average target has been chosen incorrectly over multiple cycles. Negative isn't just a curious property of a freely-tunable parameter - it's paying borrowers to take on debt with the hope that they'll spend it on something.. anything.. please?
Investors are understandably weary, and low rates can only mitigate this to an extent. Worthy investments would still be made with 1-2% rates, lower rates only perpetuate "no money down" and "users first profitability second" wishful thinking. The only thing that will fix general confidence is time.
> What evidence do you have that central banks have departed from their mandated inflation targeting regime?
I can't really claim that the central banks have deviated from their stated goal, when their stated goal is to devalue the currency as much as they can without pissing consumers off.
2002-2004. These were good times, yet the rate is solid at the lower end of the scale. A war should make creditors cautious, but rates were kept low to avoid any kind of economic slowdown that would make people realize an elective aggressive war has consequences.
The fact we're now talking about paying borrowers to take loans is precisely the consequence of failing to to keep the rates high enough.
> What do you mean when you say the economy is 'driven'?
Driven - Stimulated by an external source (rather than being left to steady-state)
> Sustainability is entirely orthogonal to monetary policy.
You haven't addressed my point. You can't claim it a virtue to lift masses out of poverty if they have the same proportion of wealth and the increased magnitude only comes from depleting natural resources as fast as possible. When the price of resource extraction goes up, the economy will slow back down, and they'll be left in deeper poverty.
> Why do you say they are the second?
The borrower pays the bank for the privilege of having access to the newly printed money. If the bank did not have first stab at the money, they wouldn't be able to attach their own conditions. Capiche?
> Your last part shows you don't understand the economic laws of nominal pricing
No, you're making an invalid assertion that the immediate consumer supply is fixed. By raising the prices of goods through monetary inflation, you short circuit the proper path which involves reduced demand for employment.
> Many people have created alternative currency systems
And they're allowed to exist as long as they stay local curiosities. When they grow and start attracting widespread attention, they are raided and neutered like Liberty Dollar and E-gold.
You're advocating a system which discourages saving. I'm pointing out a situation where lack of savings has a negative consequences for quality of life.
> Where is all the consumer inflation that they are allegedly creating?
The fundamental problem with inflationary policy is that it makes it so that dollars from the past purchase less food today than they would have previously, even though it is much easier to produce food today. You're calling it "consumer inflation" to avoid the glaring fact that every widget that has gotten easier to produce but yet remains the same price represents pure inflation. And as the rate of technological progress increases, this gap will grow ever larger.
> Yes they would, because we are entering a potential depression. Smoothing out means cutting when things are bad and increasing when things are good. You have to act at both ends to achieve stable prices.
But the fact they've hit zero shows that the average target has been chosen incorrectly over multiple cycles. Negative isn't just a curious property of a freely-tunable parameter - it's paying borrowers to take on debt with the hope that they'll spend it on something.. anything.. please?
Investors are understandably weary, and low rates can only mitigate this to an extent. Worthy investments would still be made with 1-2% rates, lower rates only perpetuate "no money down" and "users first profitability second" wishful thinking. The only thing that will fix general confidence is time.
> What evidence do you have that central banks have departed from their mandated inflation targeting regime?
I can't really claim that the central banks have deviated from their stated goal, when their stated goal is to devalue the currency as much as they can without pissing consumers off.
2002-2004. These were good times, yet the rate is solid at the lower end of the scale. A war should make creditors cautious, but rates were kept low to avoid any kind of economic slowdown that would make people realize an elective aggressive war has consequences.
The fact we're now talking about paying borrowers to take loans is precisely the consequence of failing to to keep the rates high enough.
> What do you mean when you say the economy is 'driven'?
Driven - Stimulated by an external source (rather than being left to steady-state)
> Sustainability is entirely orthogonal to monetary policy.
You haven't addressed my point. You can't claim it a virtue to lift masses out of poverty if they have the same proportion of wealth and the increased magnitude only comes from depleting natural resources as fast as possible. When the price of resource extraction goes up, the economy will slow back down, and they'll be left in deeper poverty.
> Why do you say they are the second?
The borrower pays the bank for the privilege of having access to the newly printed money. If the bank did not have first stab at the money, they wouldn't be able to attach their own conditions. Capiche?
> Your last part shows you don't understand the economic laws of nominal pricing
No, you're making an invalid assertion that the immediate consumer supply is fixed. By raising the prices of goods through monetary inflation, you short circuit the proper path which involves reduced demand for employment.
> Many people have created alternative currency systems
And they're allowed to exist as long as they stay local curiosities. When they grow and start attracting widespread attention, they are raided and neutered like Liberty Dollar and E-gold.