there's spending for necessities and theres investment in new and daring projects.
yes people will always seek to buy what they absolutely need.
they greater the deflation, the more people restroct purchases to what is absolutely necessary.
Discussion
There’s a tipping point tho. When it becomes “affordable” remember all the early bitcoiners buying homes and lambos? Those are not necessities.
the thesis is that on a hard money standard, monetary deflation will disincentivize innovation and economic growth
not that shitcoiners wont buy trivial stuff when they get lucky
Not to mention leading to a recession.
It’s not a new theory it’s the Keynesian economics viewpoint that Kanzan is taking where most bitcoiners view it from Austrian economic viewpoint.
no
thats just Bitcoiners armchair economic misunderstanding
John Keynes was highly critical of constant monetary expansion.
what he was an advocate for is *top down control of the economy*
which is why he was an idiot.
NOT because he was a proponent of monetary inflation
but its fashionable to screech "youre a Keynesian" so I expect it.
hell Mises and Rothbard talked about state economic intervention to avoid the deflationary problems I'm talking about
Deflation can be bad but I fundamentally disagree that all any amount of deflation is always bad. It depends on degree and cause. If your thesis is that hard money disincentives investment and economic activity I disagree does it mean utopia no or that recession isn’t possible no, but if you have more capital from saving eventually there is a point where it is advantageous to invest or spend. Saving then investing vs borrowing to invest.
If there was truly enough capital for investing and spending then deflation would never be a concern to begin with.
nobody suggested than any amount of deflation is always bad
I'm suggesting that structuring the market so that its *always* deflationary is bad.
I think you need to write a full paper on your thesis id read it
lol
thanks for the encouragement.
its just that maxis are erring on the other side of the inflation/deflation spectrum than MMT guys
but writing a paper would help me get my thoughts in order, which is usually most of the reason people write them... 🤔
I think we likely agree on many things but without a full picture of your theory it’s hard to say where exactly we agree of disagree since there are a lot of assumptions
Horseshit.
No, Ludwig von Mises never advocated for government intervention to fight deflation. In fact, he strongly opposed such measures.
Mises viewed deflation, particularly in the context of a sound monetary system, as a natural and healthy market process. He argued that attempts by governments or central banks to counter deflation through inflationary policies or intervention distort market signals, lead to malinvestment, and prolong economic adjustment.
ok
just Rothbard then 👍
but neither did Mises ever suggest that a permanent deflationary condition is an ideal.
which is the Bitcoin maxi position.
we're in agreement that deflation is a natural market correction phenomenon.
im just saying orienting the macro environment so that its ALWAYS deflationary is a bad idea.
I'm wrong here about "state" part.
Neither of those guys advocated for state intervention
although Rothbard had some writings about structuring markets to avoid extremely deflationary conditions
Please forgive me if I sound economically illiterate, but isn't Keynesian economics about government intervention in the economy? So far I haven't seen Kenzan call for state intervention so people saying he is a Keynesian makes no sense.
The idea that all deflation is always bad and always leads to recession or depression
What I'm getting is that deflation leads to less spending, which can be a risk factor or recession/depression. However, I think there are way more factors that can lead to either scenario besides deflated currency.
I think I would better understand your position if you identified a type of person today that is allocating large amounts of capital today, that would be disincentivized to do so in the future. Is it the top 10%-20% that you're worried won't want to lose their place and will ride the coattails of the top 10% and the working class?
Mister monster put it eloquently in this post.