The two percent mantra

[Erdogan]

The central planners want a 2 % inflation, and use it like a mantra. We are below that, near zero, they say, with a prospect of going negative, in which case hell breaks loose.

The point of inflation is to covertly take value from the savers and put it into centrally planned investments. But your savings in the bank is safe! And to fool the actors in the economy who have contracted future payments, like wage earners.

Both are fallacies, the savers know they risk losing value, and the earners know that they have to up their wages every year.

But when all actors take the consequence of the expected inflation, it will not work anymore. If you know what inflation is going to be, it is easy to adjust the future contracts, and it is easy change your interest expectation to cover inflation.

Therefore, when all actors adapt, inflation will have to go higher. It is the start of a downhill course for the value of the money.

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[johnyj]

The majority of the actors are ignorant, a few wise mind who understand the truth won't change anything. Even everyone have internet access, most of them are still ignorant

But with bitcoin these a few pioneer can seek their paradise in another monetary system, and after they got very success, people will blindly follow as before

[yayayo]

The majority of the actors are ignorant, a few wise mind who understand the truth won't change anything. Even everyone have internet access, most of them are still ignorant

But with bitcoin these a few pioneer can seek their paradise in another monetary system, and after they got very success, people will blindly follow as before

Yeah, I also get the impression that a significant majority of people tries to avoid independent thoughts at all costs, especially when these thoughts might challenge the status quo. I know quite a few people that I would consider rather intelligent, yet when it comes to taking care of their own finances they behave like illiterates. Sometimes I can't believe why many people would become so ignorant.

In future, most people will not use Bitcoin, because they gained insight that it is a good system. They will simply use it, because so many other people use it and it has risen in value.

ya.ya.yo!

[botany]

2% inflation is a yardstick for the western world.
In developing countries, you can even have double digit inflation. Savers lose value in bank deposits and look elsewhere for higher returns.
You still have the same issues - salaried class expecting double digit income growth every year and negotiating for it.

[Erdogan]

2% inflation is a yardstick for the western world.
In developing countries, you can even have double digit inflation. Savers lose value in bank deposits and look elsewhere for higher returns.
You still have the same issues - salaried class expecting double digit income growth every year and negotiating for it.

My guess is that after trying to create 2 % inflation, and succed, we will quickly move to double digit inflation on consumer goods (except already inflated goods, like housing). A long period of stagflation. Well, that is the best case scenario in my view.

[HarHarHar9965]

I think a higher inflation rate would reduce the public's ability to make accurate longer-term economic and financial decisions. But also, on the other hand, a lower inflation rate would be linked to an elevated probability of falling into deflation, which means prices and wages, on average. If this happens, we all know how weak the economic conditions would be

[botany]

I think a higher inflation rate would reduce the public's ability to make accurate longer-term economic and financial decisions.

This probably depends on how well the central bank can stick to its targeted inflation rate. If inflation is more or less predictable, then people incorporate in their day to day life. Bitcoin's inflation (increase in money supply) is high but it is known in advance.

[Amph]

I think a higher inflation rate would reduce the public's ability to make accurate longer-term economic and financial decisions.

This probably depends on how well the central bank can stick to its targeted inflation rate. If inflation is more or less predictable, then people incorporate in their day to day life. Bitcoin's inflation (increase in money supply) is high but it is known in advance.

not only that but it is known that it will be cut in half every four years, we are near the point already were inflation will not be that big with bitcoin, i think the initial time where inflation is high and then diminish to make space for a bigger deflation is perfect to increase adoption and price