it helps if you de-abstract money back to what it really is: food.bartering is commerce.
currency is a merchant abstraction of bartering.
people won't do work if it doesn't feed them enough to live (and indeed, when the food cost for an average person is over half their work day the country autodestructs.)
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Exactly, when you say "de-abstract money back to what it really is: food" you are really just saying "wealth"... so yes, when you stop viewing the number of dollars you are having as meaningful and instead look at how much **wealth** you have then slow healthy inflation is good
inflation reduces the amount of food i can get from the same amount of abstractions.
No it doesnt.. your employer pays you the same wealth as inflation happens... Thus the amount of food people can buy as inflation happens remains stable (assuming there are no other effects at play).
Price of food goes up but as I showed the average hourly wage of the population also goes up by an equal amount. So you can buy the same amount of food post-inflation.
you added more postulates.if i put 100$ in a crate and come back in 2 years, i get less apples than in the timeline i didn't wait two years.
this means my standing wealth (what money is supposed to store) decreases over time.
the market ultimately raises all of the rates to counteract the state diluting the currency. so your minimum wage goes up, but the effective apples-per-hour does not go up, but your stored previously-earned-apples goes down.
@melovida @clacke
> if i put 100$ in a crate and come back in 2 years, i get less apples than in the timeline i didn't wait two years.
1) No responsible person puts a large amount of wealth in a crate for 2 years, first thing anyone who learns money management learns is you do not keep any more than a small emergency fund as cash, the rest should be in investments, at a minimum a mutual fund.
2) We dont **want** people keeping money in crates for long periods of time. That is devastating to the economy as it causes economies to go stagnant as no one is using money to advance knowledge or build newer, better, and cheaper things.
3) Money is **not** and never was intended to be a long-term store of wealth, it is intended to be a short-term store of wealth.
Therefore inflation is good on the above counts, it discourages people hoarding large piles of cash, ensuring a healthy economy, and ensuring everyone benefits from the growing economy.
@freemo @clacke @melovida
Meanwhile people with reserves are deterred from hoarding cash and motivated to use it to build companies by investment.
This pressure gets stronger the lower the interest rates (they're low) and higher the inflation are (it's high).
That (along with "wait the world isn't actually completely ending" relief) is the reason the stock market surged after the lockdowns.
