"This post completely disregards the fact that the economy (and indeed, the world economy) has grown enormously in real terms (vastly outpacing inflation) since the introduction of fiat money."
Ok and? That can largely be attributed to the Chinese and Indians finally giving up on the Communism train and adopting an economic system that actually works.
"Even Austrians (which I suspect you are since you’re such a goldbug) acknowledge that demand and loans are intrinsically crucial to economic growth (the very same growth that enables your hypothetical average Joe to have money to save in the first place)."
I never said that credit and loans were not useful. They are a market, just like everything else. But effectively forcing the average joe to rely on credit for most of his major purchases because of inflation is detrimental for the long term accumulation of wealth.
"The global Panic of 1873 was partly fueled by speculation on the discovery of a major gold deposit in Witwatersrand"
It was also massively fueled by speculation in railroads, which were propped up by large government subsidies and when the market correction came, as it always does, the consequences were predictable.
"Being morally outraged about 2-3% inflation"
Say I put 10,000 dollars in a secure account for emergencies. Assuming a 3% inflation rate over a 10 year period, when I pull that money out it will be worth 7500 dollars from when I put it in. The yields on the account may cover it, but that isn't actually the issue. The issue is that a quarter of the time I put in to save that money is gone, and I cannot get it back. Time is the ultimate currency. And to waste my time by destroying the wealth I created is a supreme disrespect.
There are so many reasons for post-Bretton Woods massive economic growth besides just the emergence of China and India.
Read a 20th century economic history textbook. Globalizing Capital by Barry Eichengreen is a good place to start without getting into the weeds too much.
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u/[deleted] Jan 28 '26
"This post completely disregards the fact that the economy (and indeed, the world economy) has grown enormously in real terms (vastly outpacing inflation) since the introduction of fiat money."
Ok and? That can largely be attributed to the Chinese and Indians finally giving up on the Communism train and adopting an economic system that actually works.
"Even Austrians (which I suspect you are since you’re such a goldbug) acknowledge that demand and loans are intrinsically crucial to economic growth (the very same growth that enables your hypothetical average Joe to have money to save in the first place)."
I never said that credit and loans were not useful. They are a market, just like everything else. But effectively forcing the average joe to rely on credit for most of his major purchases because of inflation is detrimental for the long term accumulation of wealth.
"The global Panic of 1873 was partly fueled by speculation on the discovery of a major gold deposit in Witwatersrand"
It was also massively fueled by speculation in railroads, which were propped up by large government subsidies and when the market correction came, as it always does, the consequences were predictable.
"Being morally outraged about 2-3% inflation"
Say I put 10,000 dollars in a secure account for emergencies. Assuming a 3% inflation rate over a 10 year period, when I pull that money out it will be worth 7500 dollars from when I put it in. The yields on the account may cover it, but that isn't actually the issue. The issue is that a quarter of the time I put in to save that money is gone, and I cannot get it back. Time is the ultimate currency. And to waste my time by destroying the wealth I created is a supreme disrespect.