14/ I addressed maturity transformation earlier when I said that we trade apples for oranges all the time, at ratios that are not 1:1 ... and "dollars today" vs "dollars in 1 year" are like apples and oranges. https://twitter.com/sconzey/status/1188964682691940353 …
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15/ Now, your SPECIFIC example is a bit of a cheat because you're not announcing the maturity transformation until after the IOU has been accepted. In reality when I buy a debt note (a bond that pays principle in 20 years) I know the transformation when I buy it.
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16/ Trade is good. Trade creates value. Farmer A has more apples than he wants. Farmer B has more oranges than he wants. Letting them trade creates utility for both of them. Same with "money now" vs "money later". >>>
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17/ When I was 25 I wanted to buy a house, but had no money. I wanted a loan. Now that I'm 48 I have a fully paid off house and have surplus cash that is doing me no good. I want to make loans. This is maturity transformation. This is trading apples for oranges THIS IS GOOD
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18/ I've already asked in this thread and gotten no answer: what percent of your net worth do you store in cash? I ask this every time, and no one EVER answers. Odd. https://twitter.com/SoSayethBob/status/1188960072409341952 …
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Replying to @MorlockP
Right now, about 1%. It fluctuates between .5 and 1% typically.
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Replying to @Advanced_COBOL
so if your net worth is, averaged over your lifetime, $1 M and on average 0.5% is in cash / dollars in an account and that loses 2% per year bc of inflation you lose $100/yr or $4k over your adult life pretty trivial compared to income taxes, sales taxes, real estate taxes.
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same and so my argument is "normal middle class people lose basically $0 to the level of inflation we have in the US...and therefore inflation should not be a topic they care much about"
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Replying to @Advanced_COBOL @MorlockP
This goes back to whining about fiat currency?
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End of conversation
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