One good reason for aiming for 2% is if the Fed aimed for zero percent there is a danger we would end up with negative inflation (deflation) and that is a very bad place for an economy to be
Deflation feeds on itself leading to a deflationary spiral, like in the Great depression or Japan's "lost decade"
So 2% seems like a reasonable buffer against the risk of deflation
nostr:npub1aaq8nmdelgfrcemz9zhakejl38hsgwd2ced60hajkvftxru3jmls0aykwv appreciate you asking tough questions of how pre-nostr EU edicts might affect nostr EU folk.
Now let me push back on your worldview.
“2% inflation is a reasonable buffer”; “risk of deflation” is the standard keynisian dogma taught in fiat schools.
Is it really bad if technology gets cheaper year over year, and the consumer receives more for less?
nostr:npub1aaq8nmdelgfrcemz9zhakejl38hsgwd2ced60hajkvftxru3jmls0aykwv I encourage you to check out nostr:npub1s05p3ha7en49dv8429tkk07nnfa9pcwczkf5x5qrdraqshxdje9sq6eyhe ‘s 📕 The Price of Tomorrow. The fundamental clash is fiat inflationary theft of people’s savings (and therefore time) vs. the benefit of entrepreneurship and tech in providing deflationary goods, services.
Here is Jeff laying out the thesis, and discussing implications. He is a tech veteran, so you should hopefully enjoy:
Thanks for sharing that video. I was going to watch but then realized it was an hour and a half long, which is more time than I care to spend
But I found this book description which I assume summarizes his views
I don't see anything here that supports the conclusion that deflation is desirable
It's true there are shifts in the relative balance between capital and labor, but that has been happening for about 250 years, since the industrial revolution, and so is not qualitatively new
A much more persuasive analysis of the consequences of the shifts of balance between capital and labor is Piketty's Capital in the Twenty-First Century
Here’s a podcast about half the length of that video. It’s available on different platforms as well if you don’t have Spotify. It’s hard to grasp the entire argument/hypothesis just from that book description. I still don’t know how to put it into my own words in a way that’s easy to understand. If you ever have the time, I recommend reading the book. Even if you disagree with it, it’s a good thought experiment to put yourself through.
Thanks for sharing nostr:npub1zmsrvhdse0fhdnzqt44gt0vxpft654e0p9tuas0644229rjjz4esumasvy 🙏
nostr:npub1aaq8nmdelgfrcemz9zhakejl38hsgwd2ced60hajkvftxru3jmls0aykwv it probably took me years first to be aware of the deflation vs monetary theft battle taking place under our noses. It also took humility to recognize what I did not know.
Everyone had their own journey, and I hope you too will find that folks in this community can be very generous with their time in engaging in good faith discussion with folks on their discovery journey.
P.s. I sent a one hour video condensing decades of thought to get you started, and you reverted with a 500 page treatise 😂
