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As part of a previous post I posited that deflation is an anti-capitalist measure. nomadpengu has a different opinion here:
gemini://nomadpengu.in/thoughts/deflation/
It is true that deflation rewards savers, and therefore concentrates wealth with those who have. Superficially it seems that it would help those who accumulate capital.
In reality, the opposite is true, for several reasons.
The idea of a rich guy sitting on a bag with a dollar sign is comical. Capitalists do not hoard capital, they borrow it and deploy it. They borrow every penny they can, then collateralize every asset that is untapped, then fake some more. They borrow as often and as deeply as possible. Most could not ever pay it back, and are just carrying debt by borrowing more. Permanent Ponzi. Our society rewards this behavior.
Technically, the lender suffers in an inflationary environment -- the debts are paid in cheap money that buys less, and today's fake interest rates hardly reflect the real inflation rates, not the hedonic ones instituted by the Clintons. But where does the money come from? The Fed just makes it out of thin air! When a bank makes a loan, an entry is made in some virtual ledger, and a transfer is made into the borrowers account. Magic.
The lender is not a part of the wide economy. The lender is the casino complex.
Mathematically, debt money cannot be stable. Money is borrowed into existance and must be paid back with interest. Where would the money to pay the interest come from? It must be borrowed, by definition. Start with 10 units borrowed, pay back 11. Now tell me how to get that one extra unit. It's a scam, clear and simple.
Somewhere on the web there is a parable set on Gilligan's island. A rich guy washes up on the island with a trunkful of gold, and starts a bank. Here, each of you borrow 10 coconuts from me as a substitute for gold bars - they are so heavy and unweildy. Pay me back 11 coconuts next full moon. No matter how everyone struggles, they can't come up with 11 coconuts each because - there aren't that many! One needs to go bankrupt. Don't worry, says the banker. I will loan you 10 more, just give me something of yours. They lose everything, needless to say. And it turns out that the banker has no gold - the trunk is full of sand.
The economy must therefore expand infinitely or it will implode. More loans must be originated. It does not matter what for. Housing, flipped back and forth. Infrastructure. Weapons. Internet companies with cat videos. Have a stupid idea and a track record of massive borrowing? Congratulations, here is another billion to put a car wreck into space and five more to go to Mars.
And the more money is slushing around the system, the cheaper it becomes.
People are so brainwashed they think deflation is bad. The pseudoscience of economics is busy with shills screaming "deflation is terrible; inflation is necessary". It is not true.
Where did this idea come from? Search the internet for FDR's "inflation plan". That's the man who confiscated all money in the US and replaced it with paper, btw. The beloved president, who made it obligatory for presidents to be accomplished liars. A very wealthy president, old money, mind you. It is interesting that he managed to make the rich much richer, robbed the masses, put citizens into concentration camps, and came out looking like some kind of a socialist man of the people.
The rich are scared shitless, because they are exposed bigtime with assets that will probably be worth less tomorrow. When your Hamptons villa loses 20,000,000 in value, you feel it. And all the debt is no longer a cash cow.
The average guy benefits. Food is cheap. Rent is affordable. Property is affordable. Debt is harder to come by, but you don't need it if you have work. And real work is valued high, while reposting cat videos will not get you far without cheap VC capital.
When the propaganda machine starts spinning, it is invariably turns everything upside-down. Anarchism is violent, they say - when it is governments that start wars causing untold violence, and kill and torture people on a daily basis. Drugs are bad, except those patented drugs that prop up Big Pharma. Inflation is necessary. Without a government, there would be no roads. Is anyone really that stupid?