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jollybean | 3 years ago
As an economy expands, it needs more currency to facilitate growth.
A 'very hard currency' would strangle an economy with ugly deflationary issues.
Moreover - with a 'hard currency' the system will fail and collapse when it faces an existential shock such as an internal failure (bank collapse), war, pandemic.
The objective is to provide 'the right' amount of liquidity for the economy as needed, and, during times of crisis to be able to release enough liquidity to see the economy through the crisis.
Yes, the 'price will be paid' in later years for excess liquidity in terms of higher prices, but that's not necessary a bad thing, it's just accounting. It depends on the distortions. If the community accepts that 'yes, resources needed to be diverted to pay for xyz' then that's 'the cost' and it's going to be borne out in higher prices.
And yes, if Central Banks print wily nilly and provide too much supply this will result in hyper inflation.
But fundamentally, this idea that fiat = untenable is completely false.
WalterBright|3 years ago
https://news.ycombinator.com/item?id=33087419