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You’re making 2 big assumptions here:

1. That price inflation is caused only by an increase in the money supply vs. supply-demand imbalances

2. That there’s no benefit to you and me from government spending

Even if we were on a #Bitcoin standard, what would stop the egg producer from charging you 250 sats for a carton of eggs to 500 sats? Would the egg producer be “stealing” from you too?

Keystroke 2y ago

The first assumption is not necessary.

Money printing always dilutes the value of the money that is already in existence. It does not matter what the CPI says. Even if CPI is negative and we experience an overall price decrease, printing money is still diluting the value of the existing money. Preventing an even more pronounced price decrease.

#[5] does not make the second assumption at all. He's just saying that money printing is stealing. Arguing "but what if I sometimes benefit from being stolen from" is not arguing against that fact that you are being stolen from. It just says you like to be stolen from by the government, because you think they make better use of your money than you can yourself. That's a personal choice. And btw. inflation comes on top of the already existing taxes.

Your comparison with the egg producer is nonsensical. Luckily it highlights the importance of bitcoin though.

The egg producer can charge whatever he wants. If he charges more than his competition, I'll buy at the competition and he'll change his mind or goes broke.

There is no competition in FIAT Money though. The government forces you to use their currency. If you don't, you go to jail. That is why bitcoin is important as competition to keep them honest.

Should they, like the egg producer ramp up the money supply by 50%, I have the option to use the competing currency called bitcoin instead of being fucked over by their decision.

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Discussion

Squirrel Master 🐿️ 🇮🇱 🇵🇸 2y ago

My second point is in fact very sensical. Many Bitcoiners claim that with a Bitcoin standard there won’t be inflation. That is the non-sensical claim. Prices can still go up on a Bitcoin standard because of supply-demand imbalances. Look at what the avian flu outbreak is doing to the price of eggs now. That’s not a result of one egg producer being greedy. It’s the result of not enough eggs for all the people who want eggs at any given moment.

Keystroke 2y ago

Of course price increases and decreases can happen due to events like these. Bitcoiners have a problem with money printing. Not with temporary supply-demand imbalances.

BitBurn 2y ago

Not my convo but there are several types of inflation. Your egg example is price inflation which has nothing to do with monetary inflation, ie. money printing.

Squirrel Master 🐿️ 🇮🇱 🇵🇸 2y ago

Yes, exactly. Many Bitcoiners erroneously blame price inflation on an increase in the money supply.

BitBurn 2y ago

An increase in the money supply can cause price inflation, however your example was the price of eggs do to supply disruption which is different.

The more money printed, the more it will cost generally for everything and the harder you will have to work to get products.

The difference between endless fiat money printing and the bitcoin standard is the fixed supply. The price of eggs can go up or down based on their supply but not up or down based on bitcoins supply which is fixed.

I don't know your level of understanding so I explained it like I would to a 5th grader. No offense.

Squirrel Master 🐿️ 🇮🇱 🇵🇸 2y ago

I run a full node and majored in Econ. But thanks anyway. My point is many Bitcoiners erroneously think price increases won’t happen on a Bitcoin standard precisely because they think that an increase in the money supply causes all price increases. That’s what I was originally objecting to in the initial post as the first flawed assumption

𝖋𝖎𝖆𝖙𝖉𝖊𝖓𝖎𝖊𝖗 (¯`◕‿◕´¯) 2y ago

Increasing Money supply is the reason why everything gets expensive over time.