seigniorage is uniquely bad because it fucks up prices by generating lots and lots of inflation this in turn fucks up everything else that people try to do
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I'll give some examples but a nice read for background on why fucking up prices willy nilly is bad is The Use of Knowledge in Society, by Hayek Dozen pages, plain English, great paper Anyway
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Anyway suppose you adopt seignorage and are generating inflation at say a nice 50% annual rate This means that the price of things will double in less than two years Are you signing a contract? Better figure out how to account for that Hope you can do that math in your head
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Your salary will need to be adjusted or you will find yourself very poor very quickly, good luck predicting Lending a buddy money? Suddenly repayment on time matters a lot more Run a restaurant? Youll be printing menus quite a lot
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All of this is difficult to deal with day to day but there's more Suddenly holding onto cash becomes costly You'll want to be shifting it into "real" denominated assets as much as possible--assets that are Things like houses or cars Better hope they don't depreciate
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All of this is a pain in the ass but possibly manageable if the government does a perfect job of keeping inflation at a stable rate Hahahahaha yeah I don't think it would either Anyway good luckpic.twitter.com/8IjgzFNh9Y
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Replying to @eigenrobot
The US Fed has more experience and more success and more determination to control inflation than any other monetary authority in the history of the universe. It's gonna be okay. Not great. Nothing will be great, not for a while. But okay.
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Replying to @random_eddie @eigenrobot
the original question was “why not use inflation instead of taxation”
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Replying to @raptros_ @eigenrobot
Using (monetary) inflation instead of taxation is exactly what we're doing (as I understand it), and it runs the risk of (price) inflation. Monetary inflation doesn't automatically lead to price inflation. It TENDS to, but it might not. The Fed will do its best to make it not.
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... but yeah, I see the original idiots were talking about no taxes for anything ever, whereas I'm addressing the Current Unusual Circumstances. Right. Yes. My apologies. Quite right, carry on.
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I'm not worried about FRBS in the current environment, in practice they're still just slowing deflation is my guess Also they're still buying auctioned bonds afaik not buying them direct from USG Latter might get spooky
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Replying to @eigenrobot @raptros_
We just added 10% to the current debt in like three days, and I strongly suspect we're just getting started spooky days are nigh
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