Every time the money supply increases it actually devalues the time and resources a person has spent/ gathered over the years, and gives it to someone who didn’t work for it. Does it still sound smart?
it all depends on what the influx of new money is suppose to accomplish
take the quantitive easing.
you have to remember. fiat is not intellectual property of a citizen nor the citizens patent or invention. its government property. so they are the true owner and they are the party that decide how they should gain from it.. citizens use of it is the after thought to just service their "customers" (imagine government as a business and citizens mearly customers")
airmiles are not made to give customers value for flying. its to make airline companies more profit customers just get to use airmiles for staying loyal to the company and keep customers wanting to use the company..
what you find is at the micro level of the economics of different countries. china is actually above america already.. but when looking at the macro levels (the world bank stats) they are showing that america is only just ahead and thus america is deemed the top country in the world.
when certain things happened, america was threatened with losing its top position. it got into debt and had liabilities and china were buying that debt and treating those as chinese assets. pushing china nearly to be the worlds super power. so QE had to be done to push money into american GDP to make "america great again".
again due to the covid thing. china prospered and america declined. so more QE.
and soon it will need to be a regular occurrence.
the 2008 and the 2020 events were funds pushed to the high up elite back end systems of hidden money. which appear on the GDP but never enter the normal citizen circulation. thus it didnt cause an inflation at the citizen level of wages/goods value. but helped keep america in the top super power position
however the upcoming one will caus inflation at citizen level. and the next QE will not be to the elite hidden back end of bankers.. but instead throwing money at citizens. either as tax credits/rebates/grants. or as 'universal basic income'
(US seen the trial of this with their covid income cheques)
(UK too with its covid payments and this year is seeing this with their 'household energy grants')
all of this is to push GDP up to remain in top superpower position on world banks stats reports
it also helps keep the USD-Yuan exchange rate pegged at a healthy level to show that USD is more valuable then yuan
..
QE is like creating a new altcoin of 1 trillion coins and setting the price a $1 each to instantly have a market cap of $1trillion to beat bitcoins stat of market cap to make the altcoin appear as being the top crypto coin. even if the coin is useless of utility.
if only government stooped trying to fake GDP to use such fake stats to pretend to be top super powers. and instead used money/value to help actually build a better country. then that QE funds might be worth something at all levels.
fiat is backed by laws of taxes and minimum wage. where people labour has to by law be measured in fiat and taxes paid in fiat measured in that measure. which helps keep that fiat in circulation for its citizens which reinforces its circulation..
problem is. humans can play around with those 'backed' numbers. by changing and updating min wage and tax % at a whim.. thus its rule backed but not value backed. as the value has become meaningless in fiat.
And to the point by what Bitcoin is backed by, we can also ask what Gold is backed by? The laws of the universe give gold it’s properties. And the same way Bitcoin has certain properties that are valuable, are ensured by the network.
bitcoin is backed by the rules that enforce it AND its utility AND its function of circulation AND ontop of that its underlying cost of its creation.. after all a bank note or a bank account balance of $10 does not actually cost $10 to create the unit of measure. thus the unit of fiat currency is not in its cost of the unit creation. but only in the atleast minimum labour cost of someones work to obtain the cheap paper bank note or bank balance.
Also when we’re creating money we’re essentially trying to solve a human problem. Taking something from nature(like gold) and trying to make it work for us, can be inefficient. That’s why gold failed. Then came Fiat which is entirely a human construct(had some advantages), but failed too. And now we came up with a better solution that is Bitcoin. Just because something is architected to fit our needs, doesn’t mean it’s bad just because it’s not used for other things.
gold did not fail fiat.. fiat failed gold. there was too much fiat promising an allotment of gold. but the fiat creators couldnt honour every promise(to much fractional reserve). the fiat banks just didnt have enough gold in reserves to honour their promises. fiat failed the gold standard.. gold did not fail the fiat standard
gold has value without human laws. it has an underlying real cost to acquire it with no human laws to fake in new value every time they want to tweak a number.
bitcoin has real value in its cost to acquire new coin. the laws are fixed. consensus makes it unbreakable to ensure that no human can change the law and fake the numbers.
