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38 sats \ 1 reply \ @Scoresby OP 5h \ parent \ on: Dumping a fork coin doesn't crash its price bitcoin
I agree. If people don't know something exists it doesn't affect the market. If a bug exists in software, it isn't all that relevant until somebody finds it and exploits it or fixes it.
Another way to say "bid up prices" is to say people have less demand for the money.
I agree that the cantillonaires will get the newly printed monetary units first. However, in a world like most central banking systems we have today, the populace learns about monetary inflation (the creation of new monetary units) as it happens.
What role do you see a decreased desire to hold cash balances playing in price inflation?
Sorry for my delay in responding. Was offline for a few hours.
Another way to say "bid up prices" is to say people have less demand for the money.
Medium of exchange status makes this a lot harder to think about with money than it is with other goods.
However, the expanded money supply (which I realized from this conversation is a confusing term), immediately alters the holder-of-the-new-money's willingness to spend it. Essentially, it's just an expansion of their budget, since prices haven't responded yet.
Their increased willingness to part with the new money is likely accompanied by a reduced desire to acquire more, but strictly speaking these are separate things and don't have to go together. There would be nothing logically inconsistent about being more willing to spend money, while not changing what you'd do to acquire it.
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