Consumerism and Harmful Habits: An Argument Against Any Form of Monetary Inflation

Let's kick off this discussion. So, this thread is a joint effort between d5000 and me. It’s basically a spin-off from a previous chat we had. We’re combining what we know about this topic and sharing our different takes. The thread's split into a few parts, and while we both contributed, some sections might lean more towards one of us. If you want to give props to a specific user for their input, feel free to do that in any part of their posts here. We get that our arguments come from years of learning and thinking things through. If you’ve read a lot about this stuff, you might notice some of our ideas align with other authors, maybe even word for word sometimes, even if we can’t remember where we got it from. Just to be clear, we’re not trying to steal anyone’s ideas; we’re just sharing our thoughts based on what we’ve picked up from various works. And hey, if you read those books, don’t just toss away whole arguments because you think the author is biased or has some flaws. That’s not really fair or helpful. What really counts are the strength and clarity of the arguments themselves. Part 1. Why Is There Even Monetary Inflation? To kick things off, let’s take a look at the historical reasons behind inflation. A lot of folks don’t really get the real impact of printing money and inflation, and even fewer have a grasp on how we got to this point.

I'll add some thoughts about a deflationary economy and how some challenges could be addressed. 1. Raising capital in a deflationary or stable economy without money printing One thing that is often mentioned by the supporters of moderate inflation is that it could become harder for companies to raise money, because bank loans would be more scarce in an economy with tight monetary policy if fractional banking rules still determine the money banks can "print" for loans. Above all innovative companies like startups, which are "risky by design", could have a harder time. But cryptocurrencies actually provide the tools to improve such a situation. Innovative companies which are too small to start a traditional IPO can recur to the ICO mechanism to obtain financing: simply issuing a crypto-asset which is then used to raise money. While traditional ICOs have been often associated with scams, there are possible mechanisms to prevent fraudulent money raising schemes. There are already several companies and projects auditing or reviewing and comparing ICOs, like ICObench or also MixBytes, and this mechanisms can be developed further. The other idea is to crowd-finance the business selling utility tokens or smart property, meaning that people can buy goods and services directly in advance. Such tokens are less affected by bureaucratic regulations than traditional ICOs. Even without crypto technology, similar financing schemes like the participation certificates (Genussrechte) [1] popular in German-speaking countries can provide similar opportunities, as there is less bureaucracy involved than with a full IPO. And as it was already written in Section 5 of the OP, there could be more money available for investing because there is less "inflation-driven consumption" and people are more willing to save and invest. This would benefit these alternative financing schemes. But also bank loans would be less scarce as one could think at a first glance, at least if people still use banks to deposit their excess money. 2. Stimulating the economy in recessions Recessions are another topic where a deflationary economy could struggle. While due to the reasons mentioned in sections 5 and 6 of the OP, deep recessions with real wealth loss are probably less likely in a deflationary economy, they can still happen due to cyclic reasons or external effects. There was a precedent which can provide us hints for a solution. Argentina in 1999-2001 had a deep recession, one of the major reasons was the economic crisis in its most important trade partner, Brazil. This was just in a phase of tight monetary policy where (excessive) money printing was prohibited by law: the local currency was pegged to the US dollar, and the Central Bank could only print money if they increased their US dollar reserves. So there was no easy way to stimulate the economy with money printed out of thin air. And there was also slight deflation in that era, so it is quite comparable with a recession in a future deflationary scenario. But the effects of this crisis were less devastating than one could have thought, and there were no significant effects on infant mortality or life expectancy. One of the reasons was probably that people who had lost their jobs created a massive alternative economy: the Red Global de Trueque (RGT) with a barter currency called the Crédito.[2] Up to 10% of the population participated in the RGT economy, effectively cutting unemployment (which went up to 20%) in half. The Crédito lost importance after 2002 due to the recovery of the formal economy, but also due to some flaws in its conception. But it showed that alternative currencies can be efficient temporarily to increase liquidity and solve real-world problems, also on a large scale. In a deflationary economy this can be the model to follow if recession hits: people and companies can offer their goods and services without using the main currency. Instead of a buggy printed currency like the Argentine Crédito, in the "Bitcoin-informed" world we're living now in, cryptocurrencies and tokens can be used for this purpose. The utility token and smart property mechanisms mentioned in the previous paragraph can also help in such situations. Instead of raising money as capital, in times of recession and liquidity problems, companies can raise "smart property based tokens", based on goods, resources (e.g. real estate) and services other companies and people offer. Further Reading & Sources: [1] Participation certificates: https://en.wikipedia.org/wiki/Participation_certificate [2] A simple introduction to the Crédito and the RGT can be found in Wikipedia. A more detailed overview with the problems and challenges of the RGT can be seen in Rossmeissl, B.: El Trueque en Argentina – ¿Estrategia eficiente en tiempos de crisis? (Spanish).

Beautiful so far but just read over a few paragraphs since I'm already feeling sleepy. But will add little things first. Around 64 AD by Nero to be precise after the great fire of Rome Which added to their expenditure then not withholding his greed. War a great source of revenue was on pause then. I believe you might have added this because I haven't read that far. Output / growth helps in reducing the impact to some level in the economy. Economic growth and the government couldn't pay hence why the Gold standard was stopped Because they couldn't easily print.

The first major debasement was by Nero, I just checked. I was referring to subsequent debasements in the 2nd and 3rd century because the reasons for printing part originally had a different focus. The original focus was that the primary reason for money printing/debasement was to expand the capability for waging war by using the wealth of everyone in the country (historically this was more true in the past, so that part was changed and expanded). The debasement by Nero was more for rebuilding, and some other ones were more focused on military reasons. I will adjust this, thank you. This is my explanation of what money printing does to value, i.e., dilutes it. You are never going to find it described this way in mainstream economics, even if this is exactly how it works in a simplified way. The primary reason for that is because it would be a very frowned upon idea if it was described this way.  Imagine the government making this announcement a couple times per year: Today, we have printed some amount of money and have stolen from each person e.g. $5000 (in value). That would not end well, assuming that most people could even understand that statement. If someone wants to be particularly annoying or picky, they can dismiss this explanation but in essence this is how it works. We have become so programmed to think that money printing is necessary that it becomes hard to imagine scenarios in which it is not used at all -- that everything could work without any printing at all. You will see more of this being an issue when different aspects of how things would work in deflation are discussed here. Good thoughts, I will get back to this in the future.

Thank you for summarizing so much knowledge and information in one thread. Reading some of this thread, I realized that it's easier to find flaws than to appreciate someone's thoughts and efforts. I also answer with limited knowledge and the little new knowledge I've recently learned from the thoughts of my new economic minister. Historically, I agree with your points about: Roman debasement did occur and was often related to military financing and state deficits.Inflation is a decline in the purchasing power of money relative to goods and services.Modern money is fiat; its value is backed by trust and economic capacity, not precious metals.Inflation has a regressive distributional effect—it is more detrimental to low-income communities. Some points I think we need to discuss are: Inflation is a complex macro phenomenon, a combination of monetary, fiscal, production structure, and expectations. Money creation is not always automatic inflation. QE creates base money (M0), not the money circulating directly in society. Inflation occurs when money growth exceeds real output growth. Monetary expansion without high inflation can occur. Inflation is not always the result of a technical accident; it is often a political-economic tool. For example, moderate inflation serves as an implicit redistribution mechanism to reduce debt burdens, maintain financial system stability, and avoid political conflict from explicit taxes. For example, the Roman debasement was not about money but about maintaining a power structure when productive capacity stagnated.Inflation is not neutral but reinforces the concentration of wealth and power. Those who benefit are: Those who own real and financial assets (stocks, property, commodities) that increase in value during inflation.Those who have early access to liquidity, before prices rise.Those who own debt because it reduces the real value of debt.These beneficiaries create an asymmetrical architecture of power through: Bretton Woods created a system in which the US became the issuer of the global reserve currency.The Nixon Shock (1971) severed the gold standard, giving the global elite extraordinary monetary flexibility to export inflation to developing countries through the dollar, global interest rates, and capital flows.Developing countries endure inflation without control over global monetary policy, and their people suffer as wages lag behind prices, cash savings erode, and inequality increases.Inflation is asymmetric redistribution, not simple arithmetic theft, because not all money circulates equally, and its impact depends on who receives the money first, the structure of assets, and position in the credit system. I also agree that: The central bank is the primary source of base money (M0).Without reserves, modern banking credit simply cannot develop.Weak or government-controlled central banks (Argentina, Zimbabwe, Venezuela) lead to direct monetization of deficits and high inflation, even hyperinflation.Central bank balance sheet expansion increased drastically after the crises (2008 & 2020). I have different thoughts on several things: In fact, QE doesn't automatically flow into consumption; most of it is deposited in the bond market, stock market, property assets, and bank reserves. Therefore, what occurs is asset price inflation, not direct consumer inflation. Therefore, monetary expansion (balance sheet growth) does not always result in CPI inflation (money chasing consumer goods).The central bank's balance sheet is a crisis stabilization tool, not a direct indicator of consumerism because the graph doesn't show the velocity of money, or where money flows. It doesn't differentiate between asset price inflation, consumer price inflation, and deflation in specific real sectors.M0 and M2 are not semantics, considering that: M0: base money, passive, does not circulate to consumption without transmission. M2: the result of private sector credit decisions. Inflation arises from the interaction of the central bank, commercial banks, and households. The central bank does not decide who receives credit. Commercial banks distribute credit based on profit, risk, and regulations, while households choose between consumption and saving. Monetary inflation accelerated consumerism, but it was not the primary cause, considering that massive consumerism existed before QE, driven by advertising, status culture, consumer credit, social pressure, and the financialization of daily life.The M0/GDP ratio serves only as an alarm, not as direct causal evidence, given that GDP doesn't capture production quality, income distribution, financial asset growth, velocity, and supply-side constraints. Monetary inflation is a necessary but not sufficient condition for destructive consumerism. What truly makes inflation socially destructive is not its existence, but how newly created money is allocated toward speculation instead of productive capacity. I see inflation in 2021-2023 as not a purely monetary phenomenon. Some opinions in response to your explanation The correct term is that Moderate inflation prevents stagnation of economic coordination. You seem to be overlooking real economic issues like deflationary bias, liquidity traps, and debt-deflation spirals (Irving Fisher). History shows that if inflation is permanently zero or negative, people delay consumption, companies delay investment, and the debt burden increases in real terms, followed by rising unemployment, falling incomes, and then declining consumption. So, inflation does not create demand, but zero inflation does not guarantee healthy demand either. https://en.wikipedia.org/wiki/Debt_deflation In Argentina's case, high inflation was caused by a structural fiscal deficit and institutional collapse. Meanwhile, Japan's stagnation was not due to low inflation but due to demographic factors such as the large number of zombie firms and a balance sheet recession.I think, a system without inflation is far more brutal. All modern debt systems require real adjustment mechanisms through default options, extreme austerity, social unrest, and economic depression. My focus is on who bears the costs of economic adjustment? Without inflation, the burden of adjustment likely falls on layoffs, nominal wage cuts, and mass bankruptcies. Inflation could be said to spread losses, while deflation concentrates losses. So, inflation is a mechanism for distributing losses, not creating them. In my opinion, inflation doesn't steal wages. It merely highlights inequality, not creates it. If inflation were eliminated altogether, wages wouldn't automatically rise, the middle class wouldn't immediately expand, and the asset bubble wouldn't disappear. The problem is caused by the distribution of economic power (monopolies, cartels, weak labor bargaining power, pro-asset owner policies). If inflation were eliminated, consumerism would collapse i think it is wrong because consumerism is more of a socio-psychological phenomenon, not a monetary one.The correct language in a credit-based economy and nominal contracts is that moderate inflation is a system lubricant, not a growth engine. Your hyperinflation analogy seems inaccurate, as if you were saying that because overdoses are fatal, drugs should not be available (CMIIW). Excessive inflation is destructive, while moderate inflation allows for economic coordination.Historically, deflationary eras are often sustained, often associated with depression, unemployment, and debt crises. Even in eras of high productivity, price deflation often triggers investment delays. Price declines due to technology are not systemic deflation. Sectoral deflation is safe, while general deflation is dangerous.You say that deflation in a growing economy requires a mentality change. In other words, the current system is incompatible with deflation, meaning that eliminating inflation WITHOUT replacing the entire economic architecture is a high-risk social experiment.If you claim t

Inflation can be complex, and there are different kinds of inflation that it true. However, here we are focused on monetary inflation. How much printing is going to cause inflation depends on a variety of things, but it is always inflating that is not disputable. Why? Even if after printing you only have a small inflation rate of 0.1% that probably means that without printing you would have some deflation. So regardless of what the final number for inflation comes out as (small or high %), monetary printing is always inflationary. In other words, the top 5% but mostly the top 1% or 0.1% of people. Therefore, the case against monetary inflation could be made solely based off of this. On the last point I agree but it does not apply to people who don't have a variety of incomes and cashflows. If you don't, then the value reduction in the debt is offset by your increasing costs elsewhere. Unless you have very large debt as an individual, you are more likely going to be losing more value overall. There has not been a time in history where QE didn't cause inflation. Nevertheless, when I talk about consumption in the thread I am not talking about consumption as a result of QE but as a result of living in a inflationary environment -- where people are encouraged or basically brainwashed towards consumption. The situation can be really bad, it depends on how much examples of individuals you know and how much data you have on this. Then in this case you didn't understand the argument. This distinction, in my view, is that the blame can be shifted towards commercial banks when needed. However, since printing in M2 is not possible without M0 expansion and the rules for M2 are decided by the central bank -- then it all comes down to the central bank, they are fully responsible for all printing that occurs due to their setup. If central banks allowed private people to print $100k USD per year, who would be responsible for the resulting inflation that comes out of it? The humans that are printing or the central bank for creating this policy? Of course, the central bank! A lot of this thinking comes as a result of programming for consumption and inflation. You need to realize for yourself just how hard it is to think that things could be alright under those contexts, or even thriving. Otherwise why not make the case for the opposite extreme? If delaying consumption is bad, let's push policies that maximize consumption velocity. What could go wrong?   Clearly, there is a balance somewhere where the optimal behavior lies. Therefore to say in general that consumption or investment delay is negative is incorrect. Furthermore the example from Irving Fisher and the Great Depression is completely misconstrued in mainstream information. That historical episode does not create a case against deflation it does the opposite: Created a case against runaway deflation.Creates a case against consumerism, debt purchases and similar.You need to look into the years before the Great Depression, before the stock market collapsed and not after. There you will find the causes that triggered the stock market collapse, and the wider deflation. I leave this to d5000. If inflation distributes losses, it does so in a disproportionate way. This means that it hurts the average people much more than it does the rich or those that caused the situation to develop this way anyway. How is this a good thing, how could you argue for this? In a perfect system, those that are responsible for these things should take most of the loss and losses would be distributed in a proportional way. Anyway, if you are talking about adjustment as in switching from inflation to deflation -- I explain also later in this reply, we did not create a strategy for transitioning. That is something that could be considered, but the absence of such a strategy or its difficulty can not be used as an argument against deflation. Your opinion is wrong here, there is nothing to dispute -- i.e. no reason to provide an opinion when this is measured in a quantified way. The real value of wages has been stagnating or even down-trending in many places in the last decades. I do think it would go away, but obviously not over night. You need to keep in mind that besides money gaining value instead of losing it, there would be no marketing of any kind for "spend now, pay later" ideas. I expect marketing that is inverse of that, and with time the population would adjust towards healthy spending and consumption. Yes ironically, in most cases mainstream economics uses spiraling deflation as an argument against any deflation. Historically we know that hyperinflation happens relatively frequently, and it does through monetary inflation. The risk is real, even if many countries have not yet had episodes of this. You need to give time. It does not mean that there is a necessary causal relationship between printing and hyperinflation -- that is, that it must always happen under a specific time frame. Currencies historically always collapse for a variety of reasons, but one big reason is giving absolute printing power to someone. Those are uncontrolled deflation areas, where there was no policy about controlled deflation. Often they This is mainstream economics dogma, the kind of bullshit you are not allowed to write against in an University -- you know, the places where they claim to be looking for the "truth". There is no proof for this claim. I've written where the real danger lies later in the thread. It is not deflation, it is deflation in the messed up system of credit that they have created. This system does not allow for deflation, it is completely broken. We have made here a case against inflation/for deflation, we have not developed a comprehensive transition strategy -- that could be even more difficult, and it is probably better to be left to people who have experience in developing public policy. The value loss and the loss of the middle class in this period is extreme. While it did not spiral into hyperinflation, the negative effects are unquestionable. It is better anyway to split up the responses, it makes it easier to talk about this.   Good post, I will leave the meriting to the merit sources. I am sure d5000 will have plenty to say to these points. I am much more extreme when it comes to the topic of inflation. I have zero sympathy towards this slavery system.

Who's the biggest debtor in an economy? Yes the government and what would favour them? Yeah inflation. Wage may seem like it's rising but it always fall short to the rate of inflation Hence why despite our supposed growth surviving still seems harder. My country is plagued by inflation Prices of goods are up. Wages can't keep up. Salaries are increased But it seems things were better in the past that they are now. And why isn't anybody talking about Mild Deflation? Adding to it be a little more equity financed than debt. Money should be a store of value But inflation makes it look otherwise. Alright I think I have a feel of the thread. Deflation over mild Inflation. Let me come from the angle of Inflation. When I was younger I believed deflation felt like a plus to the subjects while inflation a plus to the government But life isn't all Black and White Using Keynes words, Inflation is unjust, deflation is inexpedient. Of the two deflations is worse. He considered both harmful and picked deflation as worse in my opinion because of Debt . In our society today, some level of inflation is necessary. We are used to controlling inflation than we have historically solved the issue of deflation Using Japan as an example it shows that you can't really stop deflation by pumping money to the economy (suffering for more than 30 years) Unlike inflation where reducing the interest rate and controlling the flow of money helps. There's always a cost. There would always be an alternative forgone. Like I said before, Debt place a key role here. The world is financed by debt and has pushed economic growth Deflation corrodes this advantage and makes creditors loss out While inflation encourages it. Deflationary spirals steals jobs through amplified debt. This widens the gap between the rich and the poor. Rich has more disposable income to save than the poor that may loss their job And have little since it would be necessary to cater for their needs. Yes inflation also leads to gaps between rich and poor but from another direction. And on War? That's a fiscal policy. Inflation is usually a side effect.

Wages have been stagnating for several decades, even in the best countries with the best currencies. That is the question. Many people do not understand that economics is not a real science. It is nothing like math or physics, therefore there is a lot of subjectivity involved. From what I can observe and read through the lines, contrarian voices are suppressed and dismissed. It starts with what students are taught in class, continues with how their assignments are graded and all through undergraduate, graduate work, PHDs and until some of them become professors the cycle repeats. If you write things that are contrary to the mainstream economics, which is nowadays more of a dogma than anything else, you will receive worse grades. Very few professors will allow you to take a topic that disproves inflation or puts deflation in a big way. If you are a professor and write such a paper, peers will harshly criticize it or journals will refuse to publish it. You may lose funding or get denied further funding. Why would someone destroy their academic career by going against the system that is so broken? They won't accomplish anything, so they might as well just go along with it. The fact is, inflation is a scam built upon a house of cards. Lie upon lie. Controlled mild deflation to be correct, over any kind of inflation. Keynes is Keynes, his words carry no authority here. His arguments were weak and unfounded. He was wrong on many things. Here are some: 1. He was wrong about inflation not mattering much, he completely underestimated the effect of long-term damage that comes from inflation. He was mostly focused on moderate short-term inflation and claimed that was better than unemployment. This may be true, but he made a big mistake. 2. He thought that surpluses during economic booms would be used to pay debt back, which is wrong. We basically have a temporary stimulus policy that turned permanent, it just has a short period where the stimulus is paused or low. 3. He never understood capital structure and never considered time. As we also demonstrate here, low interest rates and inflation leads to bad investments -- so booms are created through cheap money and this leads to busts later. This was actually one of the triggers for the great depression, but they won't tell you that. They will tell you, deflation bad look at the great depression!  4. Too many others to go on. No, it does not. You can't use potential job loss as an argument for gap widening because these job losses also occur in our current environment. Again you are mistakenly using a deflationary spiral to argue against something which is not proposed here. In what we are arguing for, there is not deflationary spiral. You didn't understand the argument then. We are looking at reasons for which the government wants to print money, it does not matter what policy field it is in. War is constrained by the capabilities of the budget. Printing money allows the government to bypass this and start draining the wealth of its population to fuel the war machine.

The crossed section is me speaking from the lense of what most Economist are spreading. From the first paragraph it can be seen I believe Job losses are not really influenced on whether the economy is experiencing inflation or deflation. Okay that checks out. And as can be seen with the German, hyper inflation. The world itself is heading in that direction albeit slowly if nothing is been done.  When they talk about deflation it's impact on debt is bought up. Debt is why it's considered dangerous. If I'm not mistaken the earliest bonds were issued to fund wars. Global debt is increasing and I believe it's unrealistic that it would ever be cleared. They plan on paying via output when they create money more than it's produced I liked Friedman view that deflation was a symptom of bad monetary policy not the root cause. It's funny how this works. You create output and I reward by creating an IOU that is based on your trust.

Oh then it is all good, it was a misunderstanding on my part. Your writing can be a bit confusing even if some details are very correct. Yes. Actually initially I wrote that this was the only reason for monetary printing, but d5000 pointed out that historically this is true but in recent times it is not. Therefore I added also some other reasons based on his suggestions. A great man once said (paraphrased by ChatGPT to conserve time): To give any individual, group, organization or institution this kind of power is absolutely crazy. It is always abused, there is no dispute. Most people just don't understand that abuse can take shape in countless ways, that does not mean that it has to lead to a hyperinflation-style catastrophe. That is, they believe if there is no hyperinflation chaos that the money printer is not being abused. Yes, if debt to GDP ratios were 10% or lower then switching to deflation would not be dangerous. Meanwhile they created a situation with this sick system where it is extremely dangerous for both individuals and the state. The average individual is full of debt. I think that we are heading into a major catastrophe or a reset of some kind. Neither of this will be pretty and average people are going to suffer the most. What they have been doing mostly is pushing the problem into the future. What is often not talked about is what is the way out of this? As I said Keynes was wrong on so many things, including this one. I have not checked the data but practically no country is having a surplus that they are using to pay back debt, that is to reduce it (servicing a debt is not the same as reducing it). It seems that the total debt continues to increase and so do interest payments. This is unsustainable though, eventually the toxicity within the system will be too much and the existing measures and protections will not be sufficient. I always ask, what then? What is the way out of the current system? 1. Hyperinflated printing to pay back all debt. Economy and currency destroyed, complete chaos. 2. Default on debt and legally remove its existence (yes, they can do this the same way that they can steal Russia's funds -- everything can be "legally" done if there is enough will). Economy and currency destroyed (?), global chaos. 3. Something else? I don't know, I'm interested in opinions on this. Yes, on that he was absolutely correct.

I agree until this part. Good post! This is of course related to the Cantillon effect, where certain services are benefitting more from a money supply expansion (government and banks, mainly). For me there's a catch with this. While I agree that the flow is not direct, indirect flows are quite easy to explain. For example, the relation between real estate and consumer goods prices: if real estate inflates too much, there will be an effect on the CPI as well, above all for economic sectors like gastronomy where rent impacts a lot into the overall costs. And rising stock prices can impact in inflation too: first in niches like the luxury good sector (big stock holders spending their profits) and then in the consumer good sector too if the stock price increase is broad (companies can rise salaries, salaries impact in prices). There may be conditions where there are obstacles to this indirect flow though. Of course it is a bit more complex. There are phases where an increment in M0/GDP can indeed be "eaten" again largely, like in 2023/24 in the Eurozone. But in general terms I think satofan44 is correct: if money supply grows faster than GDP, then after some time you will see an impact in prices. I think in this phase indeed external factors like energy prices were also a large factor, above all in Europe where the countries were most exposed to the effects of the Russian invasion to Ukraine. However, this is accumulative to the money expansion in the COVID era. This is where I think that history (of the formal economy at least) doesn't show us the complete picture. I have brought up the example of Argentina's 2001 crisis in my follow-up post, you may have still not read it. But if there are liquidity problems in a zero-inflation or deflationary economy, people can circunvent it by "bypassing" the local currency with barter-like mechanisms. This increases liquidity but without touching the anchor of the local currency to the "real economy" and their values. I think I agree here, but if demand can be risen in a zero inflation economy, that demand is healthier in my opinion. Argentina's big problem is indeed one that could be solved with several decades of zero or near-zero inflation. The main problem is the lack of trust in the local currency, be it called Austral or Peso. This means that economic growth will always result into a tendency for capital flight, adding pressure to the local currency, it always tends to devaluate, and the prophecy becomes self-fulfilling. Fiscal deficit is an important factor but only in some years. Actually the most recent "inflation wave" in Argentina started in 2006/07, which was a period of debt reduction due to the soybean boom of that era. Money printing resulted in a continuing high inflation once the economy cooled down again and deficit appeared again in the early 2010s. The most recent inflation spike in 2022-24 was mostly monetary due to COVID-related money printing, but strengthened by the effect I explained above: the rise of the Libertarians triggered fears of an even bigger devaluation that the one that happened at the end, and that resulted in the 200-300% almost-hyperinflation of 2023/24. The curious thing is that in 2023 before the government change in December the money supply didn't grow faster than in 2020-22, even a bit slower (see the Chg% value in this graph), which means that "structurally" the worst should have been already over but due to the continued distrust in the local currency and continuous devaluations the inflation accelerated even more. See above and my paragraph about Argentina's 2001 crisis. This may be a "non-standard" mechanism today, but it could become the "standard" way to deal with liquidity problems once deflationary economies become more popular (e.g. in a "Bitcoin Standard" society). I'd say it does not only "highlight", but increase inequalities. And wages are often only reached late by the money supply increases, so I see nothing wrong to call it "stealing from the wages". Other kinds of income like profit from stock price increases are not stolen but instead benefit from inflation. This is correct but it is a factor contributing to inequality. If we can deal with the negative effects of deflation on liquidity, then deflation would be beneficial to these indicators. I could again claim that the "experiment" was Argentina in 1999-2001, and we continue to see a low-inflation society in the case of Japan. This was actually one of the disagreements in my discussion with @satofan44. I believe inflation can be controlled, but it can also get out of control. Thus the OP says out-of-control development "often happens in practice".

Actually, it can be even direct. People tend overlook that many countries have property tax. Money printing causes property prices to go up, this causes property taxes to go up, which causes rent to go up, which causes consumer prices to go up. The flow is direct in this case, there are just many intermediary steps. Just because we don't have a direct step from money printing to prices to go up, that does not mean that the flow is not direct. I would consider the same flow to be more indirect in countries where there are no property taxes. The rents will go up as asset prices inflate anyway, but not directly due to the increase in the tax burden. Further, we have never had a deflationary scenario under the current conditions. Bitcoin and cryptocurrencies are now available too. People have many ways to escape and bypass the local currency, much more than they did ever before. It would be interesting if we could simulate this, but I don't think we have software that is capable to accurately simulate complex economies. Yes, it does not mean that out-of-control must necessarily follow. The idea is more that with inflation this risk is always present (and sometimes these things did happen), and without inflation it would not be possible. Similarly, a deflation-spiral risk only exists in a deflationary environment. No deflation, no risk of spiraling deflation.

In my opinion I believe this is a useful distinction analytically, but I’m less convinced it changes the lived reality. Whether we call it “theft” or asymmetric redistribution the outcome is the same for those who receive the money last especially wage earners and savers. The Cantillon effect explains how it happens, but it doesn’t neutralize the distributive consequences which in the end is profiting the government instead. I'll say it's true in the short run but I don’t think the separation between asset inflation and CPI holds over time. Real estate inflation feeds into rents and rents directly affect service prices. Equity inflation also leaks out via wealth effects higher costs and eventually wages. The transmission is slow and uneven but it’s actually kinda hard to argue it’s structurally blocked. I agree it’s not causal on its own but I’d still argue it’s more than just a warning light. When money supply grows faster than real output for long enough price effects usually appear unless something actively suppresses them (say tight credit, weak demand, or institutional frictions) regardless delay doesn’t mean irrelevance. Energy shocks and supply disruptions were clearly major drivers especially in a country like europe. But I think where I'll disagree slightly is that I saw the COVID era monetary expansion as an amplifier since without it inflation would likely still have happened like it always had but kinda with lower peaks and shorter duration. I think this conclusion relies too much on the formal economy. Based on some country's economy, when official money fails people don’t stop transacting instead they kinda reroute around the currency using trade by barter or foreign money and sometimes informal credit. These systems are inefficient and unstable but I believe they challenge the idea that deflation automatically causes economic paralysis. I think inflation can be managed but history also shows it can actually slip out of control when institutions weaken or trust erodes. Decades of stability don’t disprove the OP’s concern they just show that control is kinda conditional and not guaranteed. I'll say the financial system weren't as messy and eroded as the current system is hence the lesser pressure people experience based off inflation back then.

I often ask what my friends what they do with their “old” smartphones after they buy the latest version, their answer is always the same. They keep it in their drawer. Sadly, people here do not have a recycle culture. They don’t realize that the resources used in building the smartphones are finite. Children and women in DR Congo are being exploited in cobalt mines, not to mention the waste impact on the local environment but who cares as long I can get the latest iPhone. https://www.amnestyusa.org/reports/this-is-what-we-die-for-human-rights-abuses-in-the-democratic-republic-of-the-congo-power-the-global-trade-in-cobalt/ I agree. Inflation impacts UN SDGs more than we think. I could write a book on just the impact of inflation on SDGs. Like you pointed out, inflation increases poverty which affects SDG 1. Inflation also drives inequality and makes it more difficult for vulnerable communities to afford basic needs such as food and health services, which affects SDG 2 (Zero Hunger) and SDG 5 (Gender Equality). For Nigeria, inflation is not just an economic problem, it’s a gender issue. When a family is struggling to make ends meet, it is usually the girl child that has to give up on her education and support the family in trade. This problem pose the question what is the WEF doing? Are their Nexus programs even working in countries that need it most or the programs dead? https://www.mdpi.com/2071-1050/13/4/1919

In many countries property taxes are so low that they almost don't influence rent prices. Above if you take into account that many properties don't change hands for long periods, and often their "valuation" by the State (to determine property tax) does not reflect market price. I think there may be indeed such a direct flow in countries with high property taxes, but the most significant mechanism in the flow between real estate and inflation imo is indirect, and that's why we can have several years with low CPI but high property increases. Agree with your other statements in that post. I don't know where the disagreement is here, as I think I wrote something very similar (I also agree with your post up to this point, basically you confirmed most of my points.) I believe in the cryptocurrency-informed era we're living in, we can find mechanisms to fight these "inefficiencies" and "instabilities". For example, the Argentine Crédito system collapsed eventually because it could not handle the massive growth followed by a recovery of the formal economy which led to a decrease of activity in the barter markets as people recovered jobs and formal income. Stablecoins like Dai have proven that there are ways to manage growth without the value of the base currency having to be unstable, and similar systems could be imagined in a deflationary economy: for example, a Dai-like system bound to a resource based largely on human work, for example agricultural commodities.

It is relatively controllable because it was man made and is been compared to deflation which is losing already to debt. Control interest rate which is tied to the debt they created and effect start showing in inflation. Even the said control comes at a cost, recession as can be seen with Paul Volcher I just got the time to read your post and there are something's I would like to share. If I'm not mistaken you talking about equity financing which doesn't necessarily require cryptocurrency Most ICOs are still usually considered equity by SEC and It would be effective here With deflation creating capital the problem is psychological There are investments opportunity to buy future products but majority don't want to part with cash Either because the returns has to outweigh what they would get from holding Or that they would need cash to cater for needs. Imagine everyone holding their breaths and the solution is creating another air. But the problem is people are refusing to breathe. It's harder to control inflation that comes as a result of supply shock like in the case of the pandemic. They are usually about scarcity and you can't policy scarcity away in the short run with monetary policy.

This is why I wrote it can and didn't try to argue that this is the strongest effect, but merely explained how it happens. While it most cases the valuations will lag behind, it does not change that it has an impact and it will have an even bigger impact when these values are eventually updated. There are different models, some use old reference values, some use self declared values and others use the fair market value. Take a look at this, property taxes have a very wide range. Here are some sources: So how is the value determined in the highest listed state there, New Jersey which has a property tax-rate of 2.33% (according to the not so credibly looking website)? This means that the value to be paid should be close to the market value, but of course it is going to lag sometimes as they are not going to reassess each property each year.  According to one source, on average they come pretty close to the actual market value: Therefore just do the math on a home that is worth $500k. To calculate the yearly property tax, I used the equalization rate to discount the market value of the house by 17.1% to an expected assessed valuation to get an average price of $414.5k. The example is a bit simplified and how much tax will be collected depends on a lot of things, but they are not relevant to this topic or this sub discussion. As you can see, these things can and do have a significant direct impact on rents in some environments.

Your opinion makes sense, even though it negates the positive role of inflation. A more accurate description of inflation, in my opinion, is that printing money creates inflation if it pushes demand beyond production capacity. Otherwise, it's neutral and sometimes even necessary to mitigate economic contraction. Agree ... It's too scary and not on my agenda and financial plan to have debt on purpose, let alone have large debt for any reason. This is where our thinking differs. I actually see human greed as the cause of normalized inflation in this era. Overconsumption behavior is formed from advertising, credit and social pressure which I think is still often found in conditions of low inflation. I still see post 2008 QE in the US, Japan, and Europe as not resulting in commodity price inflation. I believe asset inflation and general inflation are different categories. If you view MO as an absolute requirement for inflation without including the gap for sufficient cause, I won't argue. Because often in decision-making, the analogy is that I avoid alleys that have holes even though I can avoid them because I consider the x factors that might arise during the journey. I agree that anything extreme is destructive, but the Great Depression is an example of the destruction of a credit system in a sharply deflationary environment. What burdens the middle and lower classes is the exploitation of low wages relative to productivity, the lack of a social safety net, and high consumer debt. Inflation remains the primary cause. In my opinion, in a situation of deflation, whether inflation or deflation, the lower-income groups are still the most affected. Yes, hyperinflation does occur frequently, and it doesn't occur in isolation. It's always accompanied by political conflict, fiscal crises, and falling production, not just money printing. I think your generalization is too extreme, assuming monetary expansion always ends in hyperinflation. When low inflation does not guarantee prosperity, in other words inflation is not the root of the problem, but rather the distribution and structure of the economy, not monetary policy.

In a perfect world inflation would be around 0.5 % a little surplus when more kids get born than people die. As all figures only get clear after the events, a little surplus is healthy. And we don't live in a perfect world,far from it. Not healthy is playing with inflation, deflation, recession and devaluations for means to become more competitive. All states do it, Inflation in the EU is much higher if you just count items of 1st necessity.

Sorry, I can't in good faith answer you any more. I am disappointed with your use with AI, I have said this to d5000 privately when it was discovered. I was not really expecting that, even if for most users it is obvious. Please reconsider your ways. I prefer broken, real English over polished AI and fake stuff (writing on a level that is not representative of your skills is dishonest to me). Do not reply to this here, I limited my response so that we don't go off-topic. You can reply where it was exposed or start your own reputation thread if you really want to, but there is no need unless someone gives you a tag. See, if we could keep inflation at 0.5% and do so consistently then I would not mind it compared to the current system of abusive manipulation that we have. Still, this does not explore the question whether that is needed at all. We are so programmed to believe that inflation must be the answer that we often fail to look at alternatives. The economies of the current world really need some outside of the box thinking, but unfortunately pretty much every major universities has become dogmatic. They are not interested in alternative ideas, especially if those ideas destroy the status quo. The question is should the central bank or anyone have power of the printer. As you can see with Bitcoin, it is best if it is preprogrammed and if nobody can alter it. Just imagine if this was not so and redo the Bitcoin history with this in mind. The supply would have been changed and manipulated many times for the gain of many different powers. Every abuser has their own messed up justification, but not a single abuser has a valid reason to change the money supply.