incentive to make any investment at all is drastically reduced
because prices fall when you are just sitting on your money
I'm not saying there's ZERO economic activity.
obviously there will tx for essentials.
but theres a spectrum
and erring completely on the other end of that spectrum is equally stupid.
ideally
the number of monetary units would generally track with economic growth and there would be stable prices.
The incentive is to make investment in things you know will outperform the deflationary effects of technology. Something that is true today.
under *highly inflationary conditions
investment becomes gambling.
there is a spectrum.
its easy to make a good case for monetary inflation that follows economic growth.
that would be the safest and likely the most prosperous condition. its just impossible to achieve algorithmically.
but any sane and known monetary policy would solve most of these problems.
unfortunately a hard cap on the number of monetary units is a knee jerk reaction to inflationary insanity.
it is NOT sane monetary policy.
"2%" is what has caused the gambling... You are the one being ignorant.
its not 2%, and nobody believes it is or has been
.
so no. it isn't 2% inflation that has caused the degenerative environment.
In other words it's reduced to the appropriate level with proper incentives that actually match the real world. Any more investment than that will only serve to create more malinvestments.
no.
a purely disinflationary environment doesn't create some magic level of "appropriate investment"
it incentivizes not investing at all.
unless you can be *sure the investment will beat the appreciation the money would have anyway.
Which creates the environment for appropriately investing... You should not be investing in something that you don't know will provide you a return on investment... That's the whole point.
whatever dude.
at this point you're just wilfully ignoring what I'm saying.
good luck with your binary thinking.
