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Governments can't fund war without quantitative easing - I get that.

But someone help me out with the game theory here: if there exist adversaries that wish you harm and will debase their own currency to attack you, how do you defend yourself on a sound money standard long enough to wait out their currency collapse?

Shorter: your violent enemies can remain irrational longer than you can remain solvent.

Crusty 👨‍💻 6mo ago

I think from state/country standpoint, they need to debase to stay competitive. If other countries debase, you have to debase, otherwise you lose your export.

Storing your wealth in another something is a different thing.

It seems to me, that if anyone is debasing, they are making themselves cheaper to the world. And from cost efficiency point of view, companies will try to minimize their cost, so choose that.

And from gold/bitcoin standpoint. If countries start to adopt bitcoin, they will put their savings in it, and keep devaluing their currency. This way, they get best of both worlds. They keep their competitiveness, but does not lose their profits. Like China does it, so far with US assets, shifting towards something else.

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Discussion

Crusty 👨‍💻 6mo ago

Basically inflation is a voluntary tax at this point.

vinney...axkl 6mo ago

kind of agreed, but its only really voluntary if you fully grasp what's going on. and I think anyone in that position quickly stops volunteering.

Crusty 👨‍💻 6mo ago

Yes. I think so. Therefore you could name it with a less appealing name too.

vinney...axkl 6mo ago

"complicit" 😝

vinney...axkl 6mo ago

(I meant the rare case where someone is aware and still goes along)

Crusty 👨‍💻 6mo ago

But like the case of many people. Is it their fault not knowing it?

vinney...axkl 6mo ago

not their fault, no. our fault for not helping enough.

Crusty 👨‍💻 6mo ago

Actually it feels like it is due to the complexity of inflation.

I mean it is easy to see the downside of inflation.

But it is harder to see what solves it, and what causes it.

In money terms, you know fiat, and you keep your money in fiat. So anything else requires change. Making a money decision requires trust and understanding, so because of safety/security you rather do nothing.

So to opt out of inflation, you have to understand it. But the problem/cause of inflation is not easy to see. Requires quite a mental bandwidth. Therefore, you get many not understanding inflation.

Plus until a problem is not burning, you will ignore it.