36 sats \ 3 replies \ @freetx 29 Feb \ on: Convince me I am wrong about these bitcoin themes meta
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Agree
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This is perhaps too big of a topic to cover as a comment, but a few notes
(a) For most of human history we had more or less deflationary currency (yes more gold was being found each year, but population growth was exceeding new gold discoveries)
(b) Yes, deflationary currency discourages spending, but it rewards savings. Society needs savings to actually function, this should be encouraged. (Otherwise we just become debt slaves)
(c) Deflationary currency promotes "own less things, but each thing should be better quality". So yes you won't buy a new car every 5 years, but your existing car will be expected to last 20-30 years. We currently live in a world packed with poorly made, disposable trash-products. As a simple example: Your grandmother owned 1 or 2 heavy cast iron pots / pans that lasted her whole life (and could be passed down). Now people buy cheap disposable pans that are worn out every 2 years. In a deflationary money system you will naturally gravitate to buy good products that last your whole life.
(d) Deflationary currency may promote new business models that dont exist today: Buy a new computer today and we will automatically upgrade you for free to latest model in 4 years time....
(e) Deflationary currencies dont force "investing", savings is usually enough. This ties in with self-custody as you really don't need 3rd parties involved in your financial life...just save currency and use later.
(f) Because of above, deflationary currencies removes "financial institutions" from the overwhelmingly important position they hold in political sphere. In effect their disappearance promotes better governance.
Argument against (c): Higher-quality goods cost more than lower quality goods. If you can buy a 20ksat pan now, rather than the 100ksat one, you can "save" the 80ksat difference and it will increase your purchasing power in the future, presumably by enough that you can buy another cheap pan.
(d) is VERY clever!!
(e) this also discourages investing in productive ventures. Similar to how higher bond returns discourage stock ownership.
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(c)
True.
Having said that, if you remember "lifetime warranties" used to be a thing and would probably make a return. My grandmother received a Le Creuset pot after the war in 1945, and by 1980 the enamel had worn off from daily use. She was able to send it to the factory and they re-enameled and sent it back for free. Doubt such a thing exist anymore....
(e)
I think it would encourage companies to return to dividend payments and the net effect would be to invest solely for cash-flow.
The idea of investing in a stock and earning 0% dividends is a very modern idea that leads to weird distortions.
One of the effects of this is zombie companies that hate their clientele yet still survive. If Disney was forced to attract investors based on dividends, they wouldn't be making "woke" kids cartoons that nobody wants to watch...