Thread - Nostr Hypermedia

Money owned, if it's absolutely never spent, doesn't matter. If it really just sits in a safe somewhere it's as if it doesn't exist in the first place. The amount of money in circulation matters. However with someone owning a lot there is a risk of them suddenly putting it in circulation and thus suddenly changing the amount of money in circulation. This will cause prices to fluctuate causing price instability. Up or down doesn't matter. This isn't an abstract problem btw. Fiat currently has problems that are similar. https://www.investors.com/etfs-and-funds/sectors/sp500-companies-stockpile-1-trillion-cash-investors-want-it/ This goes both ways btw, someone being owed a lot of money ("owning" a large negative sum) can suddenly demand loans to be paid back and thus suddenly withdraw a lot of money from circulation with prices again fluctuating. I believe the financial crisis in the USA in the 30's was caused that way. This is why you need demurrage on money, according to Silvio Gesell's writings. It discourages stockpiling. You'll have to abandon dreams of generational wealth and other outgrowths of capitalism but it'll keep you from starving because of a financial crisis.

↑ Parent

Replies (3)

⛩oizen moizen@moizen.xyz 1 year ago

Can't zap your note (not activated on your profile settings) so had to say it with words: impeccable answer

Josua Schmid 1 year ago

This is very nicely put! My thought were about holding vs circulating as well. The historic example I thought about was Mansa Musa of the Mali empire who caused gold inflation in Egypt on his hajj. It‘s just that a some point holding or spending doesn‘t make a difference anymore. If there is a king (and only one) and he has all the gold, he cannot use it with his people.

frphank 1 year ago

Correct about the king holding 100% but don't worry about it because things will go South long before that. The difference between the king holding 50% and holding 95% doesn't matter, 10 times the amount of an abstract unit is still an abstract unit. It's like feet vs. meters. The change in the unit matters though. With the king accumulating gold, or Saylor accumulating Bitcoin or tech companies accumulating dollars, money is withdrawn from circulation and everyone has to recalibrate their yard stick a.k.a. prices. This causes confusion in the system and interrupts the flow of goods and services. You can literally starve with all the grain in the fields. Just ask dimwits like @semisol or @jb55 who are losing customers because of a recent recalibration of the ratio of money supply to services offered. They could have asked those questions beforehand but hey despair can be overwhelming and impact your reasoning.