What if money expired?
noemamag.comThe whole point of money was to last longer than the expiring and perishable things it was used to pay for. The purchasing power of a dollar in the last century is about 1/500th of what it was when it was paid for the value someone created back then.
If money expires/inflates, people use it to buy something to hedge it, which creates a bubble in that asset. The real estate bubble created by low interest rates is exactly what happens to everything else in an inflationary environment. Hedges include gold and metals, land, art and alternative assets, or like Wiemar [0], people just spend devalued money on gambling and prostitution. If history is any indicator of what happens when you debase a currency, I'd say the best hedges are a second passport and ammo.
[0] https://en.wikipedia.org/wiki/Weimar_culture#Berlin's_reputa...
> The whole point of money was to last longer than the expiring and perishable things it was used to pay for. The purchasing power of a dollar in the last century is about 1/500th of what it was when it was paid for the value someone created back then.
I agree that store of value is an important property of money. Although, I think money wasn't explicitly designed as you suggest. Modern money is a complex cultural phenomenon that evolved over several stages. I think there's so much confusion about money because people refer to different stages. If we wanted to have really stable money, we could fix prices of goods. But I guess this doesn't make much sense in a dynamic economy (how do we compare a basket of goods from 1920 with one in 2020 which includes iPhones).
> The real estate bubble created by low interest rates is exactly what happens to everything else in an inflationary environment.
I wouldn't be so sure whether there's a real estate bubble. I think our current situation is different from the years before 2008 where people where actually buying houses in expectation to sell them at higher prices one year later. I would rather explain the real estate prices as adaptations of net present values to changes of the interest rate.
> Hedges include gold and metals, land, art and alternative assets, or like Wiemar [0], people just spend devalued money on gambling and prostitution.
I don't see how a reference to prostitution in Berlin in the 1920ies supports your economic argument. I guess the situation in the Weimar Republic is more complex than simply explaining inflation with printing of money. (As far as I know, monetarism was abandoned by major central banks long ago. The German Bundesbank tried it quite long though, not surprisingly.)
Germany lost WWI and had to pay for reparations. So it had to produce goods for which they didn't get foreign currency. Before the inflation really kicked in, the Reichsmark devalued already. Basically, the central bank didn't have any currency reserves to counter this. So everything imported became much more expensive. It probably also didn't help that Germany had to take care of wounded soldiers that weren't fully part of the workforce. In sum, the production capacity was hindered but there was excess demand.
The vice angle is that when inflation increases faster than wage work, people switch from a longer term wage, to selling what they can negotiate spot prices for to keep up with inflation - like the value of a bet in gambling, or client prices in prostitution. Wiemar was the complete destruction of a social fabric under reparations and inflation, and the vice businesses that sprung up as people switched from regular wages to survive caused the social reaction that produced the second world war. Unmitigated inflation reduces people to animals.
Inflation destroys stability in the labour market and incentivises piece work to stay afloat.
Fixing the price of goods does not create stable money, it just creates huge black markets in foreign and alternative currency. Ask Argentina, Cuba, and the former USSR.
If you are interested in the history of money and banking, I highly recommend the book The Ascent of Money by Niall Ferguson as a basis for what most interested people outside of finance understand about how money works.
> The vice angle is that when inflation increases faster than wage work, people switch from a longer term wage, to selling what they can negotiate spot prices for to keep up with inflation
This sounds a bit confusing. Does an increase of inflation mean the rate of price changes goes from 2% to 4% p.a. or is it an increase of prices? Then, what does it mean that inflation increases faster than wage work? I can only imagine that it means that prices increase faster than productivity. But even this doesn't necessarily imply inflation. For economists, inflation has a specific meaning that's slightly different than what people usually think (e.g. [0]).
> Wiemar was the complete destruction of a social fabric under reparations and inflation, and the vice businesses that sprung up as people switched from regular wages to survive caused the social reaction that produced the second world war.
Hyperinflation of the Weimar Repulic did not directly cause WWII. Hyperinflation was in the early 1920ies. The final rise of the NSDAP and the election of Hitler as chancellor is attributed more to the misery of the Great Depression beginning at the end of the end of the 1920ies. Although, one can also argue that the overall instability of the Weimar Republic helped this party in gaining votes.
[0] https://www.clevelandfed.org/publications/economic-commentar...
I suspect the confusion is indeed yours. From the fed link:
> Strictly speaking, inflation refers only to a drop in the purchasing power of money that results when a central bank creates more money than its public wants to hold. Inflation manifests itself as a rise in all prices and wages—not just some subset of prices.
When you debase the purchasing power of the currency, you get demand bubbles for goods as people get out of depleted/inflated cash. This causes the staple goods price increases that cause desperation. Fuel taxes to pay down the debt the state accrues also causes a similar desperation via price inflation today. What kind of chaff argument is trying to confuse the issue with the rate of change and the net change? If you want to lie to people and tell them that inflation and MMT will be good for them so they do nothing while their society is demolished, this makes sense, but otherwise, it's dishonest. The Wiemar era humiliated a generation of Germans who became cruel and gravitated to NSDAP (and its precursors) as the result. A decade is a short time in culture. People in 2023 remember 2013 very clearly, as those in 1933 did of 1923.
I've been reading up on MMT recently, and I haven't seen adherents (e.g. Mosler) claim that inflation is good. They do provide a heterodox account of how government spending leads to inflation, a sectoral one that focuses on demand from the public sector outbidding the private sector in areas were the economy is already at or near productive capacity. And they claim the traditional examples of hyperinflation e.g. Weimar are adequately explained by supply-side constraints. They also explain why austerity has been such an abject failure over the last 13 years in the UK.
MMT ia utter garbage. It's wishful thinking rationalized by people looking at the current debt burdens and saying, "If things haven't broken under the current stress, the bifurcation point must be higher, and maybe so high indeed as to not be applicable."
The US is in an extremely privileged position in that it is the world's reserve currency, so most of the ill effects from QE haven't spilled into everyday products. At least until recently.
Mostly it impacted speculative assets such as crypto, equities, and real estate. Now it's starting to hit other sectors, jumpstarted by the supply side constraints introduced in covid.
The US is able to print dollars and exchange them for real goods. No other country can do that. But once foreign countries stop buyung treasuries and start demanding goods for goods instead of devalued dollars for goods, thr US won't have any goods to trade, and the MMG hypothesis will die with instant hyperinflation drovenby extraordinary supply side shocks to the US economy.
Right but the problem is money isnt value itself. It only represents value. Thus it's not a realistic representation of value because real value degrades while money does not.
Imagine I sell a house for 2 million. Now that house burns down. Basically that money now represents value that doesn't exist anymore. If this was an island economy consisting of 1 burned down house and 2 million dollars the economy essentially now has 2 million dollars in paper bills representing nothing.
This is why money is inflated deliberately. To keep the representation from getting too unrealistic. It incentives you to move your value into more realistic representations of value.
In short money already does have an expiry date or something equivalent. It's inflation.
New value is being created all the time. The actual value is not the house; it is your desire to have that house, for which you are going to be ready to trade some money (either to buy or to rent).
The total value of a country usually grows with time.
Then print money at the rate at which new value is created. Which is also what occurs in a sense.
What isn't realistic is I save money and that money grows it's value with the economy while I sit on my ass, contributing nothing. A little inflation makes the situation more realistic.
That's a very good way of explaining this.
Here in Brazil the previous generations have a golden rule that you must store value in land, not in money. And Brazil has had tons of inflation and weak currencies in the last decades (with all the poverty and stagnation that it brings).
Land can expire. IIRC back in the late 60s and 70s Singapore had, and may still have, a law requiring purchased land to be developed within 7 years else the government would auction it off.
The same effect is why many economists believe that a bit of inflation is important (this argument is different from the widely held central bank theory that an inflation target of ~2% is better than 0)
They probably preach that because they never saw land expire in decades, but they've seen money expire a few times.
If you buy forest or agricultural land you are pretty safe. The worst thing that can happen in civilized places is that a big entity forcefully buys it away from you for "reasons" and you don't get as much profit as you would like, but nonetheless then you can just buy more land somewhere else. Owning developed land is just a liability in many places since you've got to pay taxes and all kind of annual fees. It's business at that point and not just owning land (your business instincts don't have to be nearly as good when dealing with forest and agricultural land).
A 1% land tax expires the land in 100 years.
Most of Singapore land is on a 99-year lease. There is some freehold and 999-year leases left over from the British, but no new land will be created with that type of ownership.
When you buy land with a 99-year lease in Singapore, it will be turned over to the government at the expiration of the term, with $0 in compensation. There have been a lucky few who get en bloc development where the land is sold before expiration and a new 99-year is provided - so current residents get bought out at values higher than otherwise.
A few 60 year leases expired recently. The government assisted in finding new homes, but it was pretty much "get your belonging and leave".
https://www.channelnewsasia.com/singapore/lorong-3-geylang-e...
Because of compound interest, the total tax will equal original land value in about 70 years, assuming simple interest. But the utility of land is worth far more than 1%.
What is the utility of a piece of a forest somewhere in Brazil? Assuming you do not deforest it.
You do not need to deforest a forest to harvest trees. Assuming an annual growth of X m³ha-¹ you'll be able to harvest X*area by taking only mature trees. If you start out from a clear cut or a forested area grown from a recent clear cut you'll need to stagger the first few harvests (which will produce less wood that projected) to create more diversified age strata but once you have this system going you'll be able to keep on harvesting without breaking the forest cover. The effect of such a management technique is not too different from the way trees naturally age and die, especially not when tree crowns and branches (which used to be of little to no commercial value although this has changed with the increased demand for biomass for heating purposes) are left in the forest to make sure the soil is not depleted.
Expire !? For example, let's think about a solid basic land reform, and every owner now has to pay 5% of the immobile-value on it, as an annually tax.
And after twenty years i don't have paid the debt for an apartment or house, two-times?
But, sure so americans try to sell us houses builded from; chipboard, insulating wool, plasterboard and roofing cardboard?
i am questioning this... in terms of: "money was to last longer than the expiring and perishable things" and "The real estate bubble created by low interest rates"
Cos for me it seem that it ignored grief and "people" for -to be objective something the OP named "interest", i won't sound offending but it seem to be a mistake (both..all three...)
regards...
edited: sry "alittlebut" i mistaken you for the op p-:
Money do expire! There is inflation...
I would like similar system for land ownership and buildings. Property taxes at level of 5%. In China land can not be owned, but only leased for 70 years.
I carry around a piece of hard currency (1901 Silver Dollar) to remind me of what real money is like... it's always been worth about 4 retail gallons of gasoline. I expect that trend to continue for at least another decade.
Soft money, tends towards zero, as you said.
According to the internet this coin is worth between $45 and $2150, depending on the condition, but its weight in silver is only worth $18.40 [1]
[1] https://www.ngccoin.com/coin-explorer/united-states/dollars/...
I don't mess with coin collecting, just the melt value.
How do you get a gas station attendant to give you $16 worth of gas on the spot for a $1 coin. No intermediaries.
I think the comment is about the equivalence, not about being ready to perform the real transaction.
I’ve actually been casually looking for a Carson City dollar to carry around, just as a keepsake. Trick is finding one in bad enough shape to lose much of its numismatic value (since my intent is to carry it in a pocket with keys and other horrors) but retain the fact that it is, indeed, a CC dollar.
If you’re only interested in the intrinsic value of the metal, why not melt some silver and make your own coin?
I keep 200 Swiss Francs in my drawer, because the last time inflation in that country went above 4% was in the 90s and the last time they had war on their soil was in 1847.
Over here this should afford you a month's worth of groceries for up to two people if you're careful with your spending.
... and what did that produce? The cuckoo clock
200 francs isn’t going to buy you shit in any type of inflationary crisis situation.
It will buy you nearly a ton of wheat.
If land is not owned by anyone the risk is that it's treated poorly since there is no incentive to treat it well. Take the profits that are available during your 70 years lease and run, it's not your problem afterwards.
I disagree, it's about the culture, the culture and education will dictate how well public property will be treated, just look at public toilets in Japan vs ones in the US, it's quite revealing
Money that expire will work well in the EU/Asia, probably not in the US, it's a way too self-centred and selfish country
And is that really a problem?
Infrastructure ages and needs to be refreshed. Look at NYC, how old "land improvements" get stuck.
It's remarkable how many problems seemingly come back to Land Value Taxation.
maybe the only real technical problem is "whose is that?"
If nobody is to he found to tax then you can just take the land. Super lax version of use it or loose it
Actually no. Expiration of money and inflation can exist simultaneously.
Expiration of money is an end of life cycle event of individual bills - it affects certain lump sum of money that will become void in corpore. The nominal value of the money will remain the same.
Inflation is continuous devaluation of nominal value of all the money regardless of individual bills.
If we discuss expiration of money then we should consider what constitutes as money creation - when will the countdown start.
Is the money created when it is issued by a (central) bank or is created when an exchange (for value) takes place?
With the first idea a single transaction can contain money with multiple expiration dates and as such the money with longer expiration date will immediately become more valuable and the nominal value of the money is not universal anymore.
The second approach avoids this problem - the nominal value of the transaction is always the same. This has an other interesting side effect as it would incentive to make transactions legal.
But what Gesell describes is mandatory deflation of value of money by insisting a tax on money - a monetary money holder tax, kind of. Whoever holds the money is obliged to pay the tax - if you put your money into bank then it would be the bank. So his idea is considerably different.
These seem easy to game, and would just generate a (pure dead-weight) industry of money persistence optimization. Alternatively, people would ditch their <expiring currency> and buy <some other country's more stable currency> instead.
The whole thing sounds incredibly dumb.
What fool is going to buy that expiring currency with a stable currency?
Inflation serves the purpose. But more directly we also have various fractional reserve systems of money creation through debt.
Bank creates credit (money), often with timed terms of repayment
As you repay, that credit is gradually removed from the financial network.
> Expiration of money and inflation can exist simultaneously.
yes, but we are also expected to pay: rent, taxes, and subscription (utility) services simultaneously
One of the points in the article is that inflation wouldn't be necessary. Is inflation a workaround for the same issue that this is trying to solve? I imagine a bizarro world where they use this system and call inflation nonsensical- we already have expiring money!
I'm not an economist but it's intriguing. Keynes at least thought it was interesting as well.
Yeah but inflation also affects rich people you see. With this we can have selective inflation but only for proles
Not really. Rich people don't sit on cash. They have their money either in safe staff that has real value so it isn't affected by inflation (like real estate or gold) or some gambles like stock or other stuff.
When rich people use cash it's usually borrowed as needed.
No, inflation (as the name suggests), inflates then money supply and as a result, each person's holdings reduce in value. Here the value gets transferred in small blocks through purchase of stamps.
> Money do expire! There is inflation...
If someone put 1 dollar on the bank in 1900, then what would it be worth now, considering both inflation and interest?
Well it'd still be worth "1 dollar". But that's the problem with talking about the value of a dollar - the typical unit of measurement is the dollar itself.
However, in 1900 you used to be able to buy 70 pounds of potatoes for $1. Now you can buy 1 potato.
So yeah I would say that's pretty expired.
https://historycollection.com/30-things-you-could-buy-for-1-...
So. that isn't "money", that's "debt"; and, in fact, the article covers this...
> Money could be deposited in a bank, whereby it would retain its value because the bank would be responsible for the stamps. To avoid paying for the stamps, the bank would be incentivized to loan the money, passing on the holding expense to others. In Gesell’s vision, banks would loan so freely that their interest rates would eventually fall to zero, and they would collect only a small risk premium and an administration fee.
This only goes back to 1913, but says $1 in 1913 is worth $30.65 today. That's pretty rough. https://www.minneapolisfed.org/about-us/monetary-policy/infl...
If it's sitting in the bank, it isn't subject to inflation, only interest. Depends on the interest rate. With 2% compounded annually, it would be around $11 today. With 5%, around $400.
If you open a bank account today and deposit $1, you'll be in the red next month due to maintenance fees.
Land cannot be owned! There is property tax.
Land can be owned but there are other obligations. The whole idea that you can buy the land is because of a government and law.
Insanely bad idea. People will always try to store their wealth in inperishable goods. People will get rid of their perishable money and buy property. Which is what happens now already, because of inflation. When property becomes a "money" in a store of value sense, it will become overvalued, and people can't afford houses for living anymore.
> People will always try to store their wealth in inperishable goods.
Exactly this. This is how money came to be, "organically", in the first place. Because of modern fiat currency people tend to think that money is some sort of invention, but it doesn't take much to realize that if you're a dairy farmer then barter is completely untenable. How do you save and store enough milk to buy a car, and who has a car for sale and wants to trade it for a ton of milk anyway?
Throughout history everything from salt to spices to metals has been used as currency. There are 5 properties that make for a good currency:
- Easily divisible
- Relatively light weight / easy to store
- Difficult to counterfeit / fake
- Other people are highly willing to trade for it (high market value)
- Durable / non-perishable
You need all of the above, which is why precious metals became so common.
If fiat currency "expired" then people would just replace it with something that satisfies durable / non-perishable.
> People will get rid of their perishable money and buy property
Which has rates to pay - assuming the market stands still that property is actually a liability.
Storing money in gold is probably a better example, until we find a way to cheaply create it...
I feel like homes should not be taxed, or at least the first $X dollars of your first home should not be.
This is the case in most places I know of, it's called a homestead exemption.
Uh, our money does already expire. It's called inflation.
There is a difference between inflation, which affects the entire monetary system, and money expiration which affects individual units of currency.
In the first case, there is no incentive to use the money any faster, and as long as inflation isn't too high, there could be incentives to hoard/save it.
In the second case, each unit has an expiration, and like the game of hot potato, you want it out of your hands quickly. This should heat up the economy overall, while inflation is seen as the result of an overheated system.
The trick, as noted, is who is poised to benefit? The "new" dollars would be worth more, so the people at the top of the flow would have more advantages than those at the bottom.
In order for something like this to work, it would also need to recognize the creation of value, and not just the creation of the currency. The person who turns a pile of wood into a chair is creating value, but they are usually not able to capture the true value of their time and skill.
Overall, this is an interesting idea especially in that it changes the way we think about money.
I’m not seeing the difference. If I have $1 that’s worth $1 today and $0 in one year, doesn’t it stand to reason that in 6 months I could exchange it for $0.50 with a one year expiration?
Taken further, every day I could exchange all of my wealth which now has 364 days left for slightly less wealth with 365 days left.
That sure sounds like inflation.
The important difference is the inflation rate could differ from its current value. Money 200 months left is unlikely to be worth exactly 10x as much as money with 20 months left. That difference may not be meaningful on its own but could have interesting knock on effects depending on how money enters the system.
That’s true, but how is it different from nonlinear rates of return on bonds of varying lengths?
Changing the way money enters the system is interesting for sure, but orthogonal to whether expiring money is just inflation by another name.
That truly sounds like a nightmare. Imagine going to buy a loaf of bread and being asked "what's your expiry", then being told "your money is no good here" because it only has a week left.
I tend to agree but one difference is that inflation isn’t directly imposed on all goods at the same time. Businesses need to decide to change the price. Currency with a devaluation mechanism makes everything “more expensive” at the same time. This means that while there is general upward pressure on all goods, not all things change price at the same time. I’m not sure which is better, but it’s a difference.
It won't change the way people think about money, but it will certainly change the way they think about your money. That is, they'll stop using it and start using someone else's money (bitcoin, Euros, whatever) that doesn't expire.
>The "new" dollars would be worth more, so the people at the top of the flow would have more advantages than those at the bottom.
That's happening even now with inflation, even if the mechanism is less obvious.
It's called the Cantillon Effect.
> there could be incentives to hoard/save it
Yes -- for a while. Not forever. This is a feature, not a bug. Hoarding/saving for short periods of time (relative to human life spans) is a good thing. It helps damp out transients. Hoarding/saving for long periods of time is bad because it discourages people from taking risks by putting resources to productive use.
Some leftists always saied that (i'm tired of): "Hoarding/saving for long periods of time is bad." and call themselves up, "because it discourages people from taking risks by putting resources to productive use."
I think that named a problem.
Think about something like "Measurement Importance" in terms of the "level of competence in the handling of the vehicle", so to speak ?
So how is your MI as high roller ? Think some people have not only accounts for that, but alghorithms, nor ? ^^
The idea that people need to be encouraged to consume (consumption being the opposite of saving) I don't think is supported by economic theory.
> consumption being the opposite of saving
No. The opposite of saving is spending. You can spend on capital as well as consumption. Inflation only devalues cash, i.e. money you keep in your mattress. You can avoid inflation by either consuming or investing, both of which help keep the economy humming along.
Maybe 'spending' is a better word, yes. However, 'consumption' isn't entirely inaccurate. Investment is the production of capital goods, and the production of capital goods involves consumption.
Well, yeah, you can't create something from nothing. But that's not exactly a deep insight. All economic activity involves consumption if you want to cast the net that broadly.
The point is:
> The idea that people need to be encouraged to consume (consumption being the opposite of saving) I don't think is supported by economic theory.
People absolutely need to be encouraged to be productive. That's the whole point of an economy, to encourage people to produce things that others want in exchange for other people producing things that they want.
Honestly, how could anyone possibly not understand that?
I understand it fine, I just don't agree with it.
The whole point of an economy is NOT to encourage people to produce things. The point of producing is to satisfy a demand for consumption, and individuals choose their level of consumption according to their preferences and budget constraints. They don't need to be encouraged to consume. That doesn't make any sense.
> The whole point of an economy is NOT to encourage people to produce things.
I guess we'll just have to agree to disagree about that. Maybe things are different where you are, but where I live most people expect to be compensated for their labor, and investors expect at least a shot at a positive ROI. But if you want to work for free, by no means allow me to discourage you.
> They don't need to be encouraged to consume. That doesn't make any sense.
You're right about that. But that was not what I said. I said that they needed to be encouraged to produce, not to consume.
> I understand it fine,
Manifestly not. You couldn't even write three sentences without losing the plot.
You said: "Hoarding/saving for long periods of time is bad because it discourages people from taking risks by putting resources to productive use"
And later you added that by "saving" you meant specifically "not spending".
Then "taking risks by putting resources to productive use" is just a fancy way of saying "producing"
So, you're saying that people not spending is bad because it discourages people from producing.
In a market economy, the optimal level of production is the level that satisfies the desired level of consumption. If people want to save more, and therefore consume less, and as a result we also produce less, that's not bad. That's how the economy is supposed to work.
> the optimal level of production is the level that satisfies the desired level of consumption
You're assuming that "the desired level of consumption" is a constant. It's not. It's a function that depends on circumstances. People discover new things, and some of those discoveries lead to desires that were previously unknown or even unimaginable. It would never even occur to our neolithic ancestors to want an iPhone or a Tesla. But some of our ancestors wanted to discover new things, and some of those discoveries naturally lead to discovering new things to want.
And that's not even mentioning the fact that one of the things that people naturally want is to have children, which leads to more people wanting things. So even if the things they want are the same old things, demand will naturally grow as the population increases.
They aren't saying demand is constant. They're saying that all peoole have different utility curves, and some people are at their most efficient point on the curve when they spend all their day ealkimg in nature, with their demand being periodic walking shoes and food.
Such a person may not need to produce because their savings exceeds their total expected lifetime demand. And even if they had 80% of their assets invested, thry still may want a 20% cash buffer in case their investments go belly-up. Most people call this an emergency fund.
The idea of expiring money is plain dumb. We don't need to artifically increase the velocity of money. We don't need to increase demand for assets because people have time-constrained purchase windows. All that would do is lead to a lot of poor decisions as people scramble to find the most efficient ways to convert the expiring money into convertable value stores. Of course this would just increase demand and make those value stores more expensive. Some will be able to arbitrage market inefficiencies. I bet a whole lot more would just lose.
How would you save up cash for a good investment opportunity if it just died? How would people save for house down payments or businesses? So dumb.
Before publishing thr above, I decided to try reading the article. This Gisell dude is an idiot. Here is an example, and where I stopped reading
> The faults of money go further, Gesell wrote. When small businesses take out loans from banks, they must pay the banks interest on those loans, which means they must raise prices or cut wages. Thus, interest is a private gain at a public cost.
There is no public cost! The private bank lent money to someone they expect to pay it back. They make money if they're paid back and lose money if they don't.
The business, which would not exist without the loan, opens and brings more supply to the market. Increasing supply lowers prices (public benefits). The business emoloyes people. Those people choose to be employed at a given rate, even if that rate is lower than it could be if the business, which would not exist without the loan, didn't have to pay interest on its loan. (job creation: public benefits). The alternative presented is raising costs of goods. Okay... Either they raise them too high and have no customers and then go out of business and all concerns are washed, or they have higher prices than otherwise. But otherwise means there's no business and nothing to buy anyway, so here again thr public clearly wins. The only maybe scenario for public loss is if thr bank makes a loan thay isn't repaid. But obviously this is expected to happen from time to time, so either the losses are absorbed by the other profitable loans or the bank eventually goes out of business. Big deal. That's part of choosing a bank for bank consumers.
> How would you save up cash for a good investment opportunity if it just died?
That depends on how fast it died. Too much inflation is clearly bad, but so is none at all. And deflation is really, really bad. The last time the world saw deflation was during the Great Depression of the 1930s.
Empirically, 2% seems to lead to pretty good outcomes by my personal quality metric. That's a halving of value every 30 years or so, which seems about right to me.
The question then becomes - when is the money created? Is it created when it is issued by a (central) bank or is created when an exchange (for value) takes place?
(the later has an interesting side effect as it would incentive to make transactions legal)
Sorry, non native english speaker so (in german)
"Ich möchte das nochmal klarstellen, ich redete (schon was her) nicht von 'Zinsfrei' in Umlauf gebrachten Geld, aber sehrwohl und im Interesse aller Beteiligten, von Schuldfrei (i think 'debt-free money' would be the word in english, and against debt driven creation of money) in Umlauf gebrachtem Geld."
And explicit nothing from the Muzzies "economical"-stuff!
"The money keeps moving, in a circle."
- Mac McDonald, It's Always Sunny in Philadelphia
It is interesting how closely the proposals of Gesell are to current US Fed policy of 2% inflation.
The main difference seems to be the current system runs on the Cantillion effect, where those in favoured positions (close to where the money is created) benefit from the inflation, while those farthest away bear the cost. In effect, it is the rich who are able to borrow direct from Central Banks and Government Treasuries get negative effective interest, and are able to parlay that into charging more interest to those farther down the chain, until you hit people paying 20+% on credit cards and payday loans.
But as far as the perishable money, there are currently places like Turkey and Argentina where inflation is far higher than Gesell's proposed 5% inflation. Are those countries flourishing as a result of local inflation? It doesn't seem that way.
2% is an entirely made up number though.
"The 2 percent target widely adopted by central banks today originated from New Zealand, and surprisingly it came not from any academic study, but rather from an offhand comment during a television interview."
https://www.cfr.org/blog/history-and-future-federal-reserves...
Quoting. "those in favoured positions, close to..."
Add: "Investment is the production of capital goods, and the production of capital goods involves consumption."
and: "Are those countries flourishing as a result of local inflation? It doesn't seem"...so
...Question I have: "This disinflation, i.e. near or almost deflation, been first contested - because some things actually became truly expensiver, but to determine inflation you did not need to calculate it as an average?", i want to ask.
Yes but they want more. Authorities can't print endlessly, inflation would get too bad and apart from the danger of economic collapse, ordinary people do notice when the purchasing power of their money rapidly depreciates, even when they don't fully understand why. In comes CBDC and the realistic ability to make this "free money" stamp idea a thing at scale. They could give the tokens an expiry date as well, Chinese authorities have proposed such a thing.* Or void certain ones while leaving others untouched. For example if you were to take part in an illegal trucker protest, poof go your savings.
*https://www.econ.iastate.edu/ask-an-economist/why-would-chin...
So much wrong in this article. First, barter does not outdate money, contrary to popular wisdom. Money is always the most difficult to produce or procure, most long lasting, widely saleable good. No matter what system you start with, it will evolve into these characteristics because that's what problem solving humans want because it benefits them.
Money is, among other things, a tool to transfer capital temporally. Saving it is tranfering capital you created today into the future. Borrowing it is transferring capital you will create in the future to today, at a cost that benefits a facilitator. Financially this is equivalent to shorting the present or shorting the future, or going long on the future with leverage, if you borrow for investment purposes.
Creating a type of money that can only do this in one direction, that is, borrowing, is creating a world where we can only take from our futures and not give to our future selves. How you can do that without making the future worse is beyond me, seems impossible to my simple mind.
We already have a softer version of this. Money doesn't expire, but it devalues, there's a cost to saving in money, that is higher in the present and near term than the cost to borrow it. So the game is such that the incentive is to borrow. And we see the effects of this, taking from our future, the future looks increasingly bleak because it is a certainty that, at some point in the future, this system will spiral out of control. We have sucked the value out of our future for frivolities today.
If you can look at the state of the world and see the impact that our current monetary system has had, and believe that money that expires will be a positive development, I'd love to hear your reasoning.
An interesting look at theories around "perishable" money.
A very interesting concept. Most resources in the world have a lifespan - even an iron bar will eventually rust. However, a dollar is as perpetual as the system itself.
On top of that, the entire economic system is designed to reward those who take more and give less - that is how you become rich, and being rich is the highest ideal.
However, if money had a lifespan... if it could "decay" just like the crops we grow, then things would change. If you try to sell a bushel of corn today, and there isn't much demand, you will need to lower the price to sell it. This is because it will go bad and then you will have nothing.
If you get paid a dollar today, and you know that dollar has a lifespan, then you are incentivized to spend it! If you have a million dollars that can expire, there isn't much use in holding or hoarding it... like the corn, it will go bad. So, you want to spend it - on things you need, or services, or by investing in equipment, training, research,etc. Heck - even just going on a trip or getting a nice meal is better than letting the money "rot" in a bank account.
I'm not so sure that something like this would work at scale. It seems to be more workable in smaller circles, like a LETS or local trade system. Still, the thought experiment is useful, and I thnk it helps to highlight how some of the problems we face are actually baked into the system.
From the article: 'Gesell believed that the most-rewarded impulse in our present economy is to give as little as possible and to receive as much as possible, in every transaction.
In doing so, he thought, we grow materially, morally and socially poorer. “The exploitation of our neighbor’s need, mutual plundering conducted with all the wiles of salesmanship, is the foundation of our economic life,” he lamented.'
Call me cynical but I have a strong feeling that the wealthy elite who are already paying an entire cottage industry's worth of six-figure or more finance professionals and lawyers to dodge taxes will find a way to make this work for them too, while it creates an even stronger barrier to entering the truly monied classes from whatever remains of the middle class.
If you want to get money moving in the economy again, we already know how to do that. Tax the shit out of the wealthy in such a way that they can't weasel out of it, and turn that money over to the people, be it through hiring them for public works projects, more and wider spread research grants, Universal Basic Income, or economic stimulus. We have tons of mechanisms to move money "down the hierarchy" as Dr. Peterson would say, but the problem is all of our politicians and media are owned by the very rich, and so taking money from the very rich is not on the table, which is how you do that. So we're left with this entire group of two professionals scratching their heads as to how we solve the problem of "the rich have too much money and the poor don't have enough" without having the rich give the poor money, which rather predictably lands at "we've tried nothing and we're all out of ideas."
I'm not even necessarily arguing pro or con here (though if you're curious, I'm extremely pro) I'm just saying that the rich accumulating too much is doing exactly what economists have always said it will do: it stalls the economy, and it will continue to do that. No amount of thumb on the scale by the rich will change this fundamental fact, and even some of them are saying this. If you totally strip mine the consumer base in the never ending pursuit of number-go-up, eventually you have no one left to sell your products to and then the entire game is over.
> If you want to get money moving in the economy again, we already know how to do that. Tax the shit out of the wealthy in such a way that they can't weasel out of it, and turn that money over to the people, be it through hiring them for public works projects, more and wider spread research grants, Universal Basic Income, or economic stimulus.
Yes, you will indeed increase the velocity of money if you steal it from people. But that is typically short lived and not sustained.
It tends to be better to allow those wealthy folks with capital to use it to create new businesses that then have the same effect, and the benefit is that this solution is pareto optimal since it's composed of voluntary transactions.
I cannot comprehend that there are people who still think trickle-down economics can work.
The vast majority of the history of the United States is a story of the rich being taxed extremely highly once they crossed a certain threshold of wealth, usually around 70%. Corporations too. We still had massive corporations, and we still had insanely rich people, so much so that the most famous anti-trust cases occurred during that time. And we also, in addition to that, built the highway system, built the Hoover dam, built three electrical grids, went to the moon, waged two police actions in southeast Asia (I didn't say it was all good) and created the fundamental technologies that gave us the Internet.
Conversely there is no evidence that the super-rich do anything with their money consistently besides hoard it.
> Conversely there is no evidence that the super-rich do anything with their money consistently besides hoard it.
Didn't Elon just use a bunch of money to buy Twitter? Didn't he also aink a bunch of personal money wagering on SpaceX?
I'd hardly say the wealthy don't use their money. Typically they invest it in new companies and businesses. They don't just let it sit there. And those investments create jobs and new services.
Conversely, despite all the cool things yhe federal government has done in the past, we see massivr amounts of bloat and inefficient resource allocations. I don't keep to keep any of my yearly salary until approximately Easter each year. And what am I getting for that? Maybe the FAA is about the best outcome.
Elon is known for this precisely because it's such an anomaly. And also, buying twitter doesn't stimulate the economy in the way economists will tell you is important because the vast, vast majority of that Twitter purchase was a) financed debt, not cash and b) will simply go to other capital holders, not the working class.
SpaceX is at least better for an example but it still isn't great as SpaceX itself is funded largely by the Government anyway, which Tesla is also a large beneficiary over. I'm not opposed to spending money on important new technology, unless there's an Elon Musk at the top getting rich off it. If we're already paying for Tesla and SpaceX to exist, who the fuck needs the Aparthied profiteer? He's shown himself so many times to be wildly incompetent and out of touch with all of the large businesses he's an investor in, not the least of which is the absolute clown show that Twitter's become, while he's set fire to 40 billion of it's 44 billion purchase price. And according to insiders, that seems to be because Twitter didn't have the chance to build the "Elon management team" that exists at all his other companies to prevent his boondoggling from causing more havoc than it has to.
I'm not even saying he's a bad guy (though he is) I'm saying we don't fucking need him, we need his money, which he only has because we've said he's allowed to keep it. So tax his ass and then he can go have a normal mid-life post-divorce crisis and like, buy a Ferrari and crash it into a tree or something instead of buying and sinking a social media site.
> Conversely, despite all the cool things yhe federal government has done in the past, we see massivr amounts of bloat and inefficient resource allocations.
You see the exact same thing in the private sector. This isn't a bug in Government, it's a bug in human organizations.
> You see the exact same thing in the private sector. This isn't a bug in Government, it's a bug in human organizations.
Sure, but when the private sector wastes it only does so at the expense of its customers, as the waste leads to higher prices. It opens the door for that company to be out-competed.
There is no such mechanism for the waste in gov. It has no competition, and therefore the bloat keeps growing. Voters are the only recourse. There is no natural dynamic to keep operations efficient.
> I'm not even saying he's a bad guy (though he is) I'm saying we don't fucking need him, we need his money, which he only has because we've said he's allowed to keep it. So tax his ass...
This is called theft. We have plenty of money for public goods, such as national defense. You want to steal this man's money; plain and simple.
> A very interesting concept. Most resources in the world have a lifespan - even an iron bar will eventually rust.
Gold doesn't though, we'd just end up back at hoarding / investing in gold
It’s just too impractical. As a business I won’t accept expiring money, unless when it’s paid to me it converts into real money. But if that’s the case then everyone will either have their own “business” or be friends with someone with one in order to convert it to real cash. People already easily avoid the restrictions on foodstamps / SNAP by purchasing and reselling for cash. An interesting idea but totally unworkable.
Grain is quite stable under the right conditions (dry, cool), which is one of the reasons there can be a futures market for it and sales can happen over the winter and even the spring following a harvest.
It wouldn’t surprise me if the origin of currency began with grain.
... and possibly with futures. A clay tablet promising delivery of grain.
Money is a contract with the state. It expires with the state.
Physical paper bills also do wear out. https://www.washingtonpost.com/business/interactive/2023/old...
Soft money is a contract with the state, hard money doesn't expire. A $1 silver dollar coin from 1901 is worth a heck of a lot more than a $1 bill from the same time.
The value of that $1 silver coin is either the market value of the silver, or the sentimental value to collectors. It not functionally money anymore.
The notion of "hard money" is a joke.
> The notion of "hard money" is a joke.
Why? I don't even think modern Keynesians would argue against commodities this confidently, maybe MMT's would?
I guess we should distinguish money from commodities, though? For money to mean something different to commodities, it must enjoy a privileged legal and social role, by virtue of its ability to satisfy tax obligations to the state and debt obligations to other private citizens. I guess the "joke" is that we used to think the value of money derived primarily from its commodity backing. Which was maybe true in some particular historical periods but not true whenever state power was durable, as it is today.
Hard money can expire, sort of.
Hard money is a contract with generalized civilization that only has value so long as civilization continues to organize and complexify our resources. A $1 silver dollar coin still has a lot of objective value because civilization still provides lots of good and useful stuff for us to consume.
If we get to the point where a silver dollar has no value, we're either in a Star Trek where you can make as many as you want, at no cost... or we're past Nate Hagen's "Great Simplification", and worse off than the dark ages... Younger Dryas catastrophe level stuff
Or a huge cache of cheaply minable silver is found, or some fancy technology to extremely cheaply extract silver from the tailings of another resource, or a government decides to dump silver reserves onto the market to destabilize some economy somewhere.
I fully agree that the value of silver is very unlikely to crater but it's not exactly Star Trek unlikely.
Complete insanity.
Don’t plan for the future. Don’t delay gratification. Never save up enough money that you’re allowed to have a taste of true freedom. Always be precarious, always be dependent on your boss for the next handout, lest your food and shelter be in jeopardy. Don’t step out of line, lest that handout be jeopardized.
Keep your hands off my bank account.
"Your" bank account? Only so long as you don't step out of line or say the wrong thing. Access to "your" money is a privilege granted by the state and large corporations you are awarded only so long as you are making money for they system. What you seem to be upset about is EXACTLY the system we have now.
Roughly, state backed currencies seem to inflate by about an order of magnitude each generation, a nickle 40 years ago will buy what $.50 buys today. When I was a kid, soda was $0.25, now $2.50 for a bottle of pop is not uncommon, state money does expire and whats in your bank account can be taken away anytime.
Thank god we've had a solution to this problem for over a decade now but it might take another decade still for normal average people to catch on, I'm still surprised the HN crowd is so far behind in this regard :(
"Another decade" may be optimistic. Money is so core to many people's identity and sense of purpose that they block themselves off from considering any change to the familiar status quo, even when they're able to recognize the problem that needs solved. This might be one of those times where the older generation needs to die off, and its ideology with it, before new ideas can begin to flourish.
Too late - these ideas have, in a backward sort of way, been implemented in the form of quantitative easing, aka inflating away your savings.
QE did not lead to historically high levels of inflation. Most of the money stayed in the financial sector, on banks balance sheets.
Collecting compounding interest on capital isn't planning for the future, it's robbing from the future, that was Gesell's point. Inherent to his notion of perishable money is that what improves the future is work, investment, economic activity, and exchange. Perishable money wouldn't make you more dependent on your boss or a lender but less, because people would be pretty eager to actually hand you money for your work or business idea, rather than accumulating it.
A tax on money costs the people who hold it, and benefits the people who primarily use it as a medium of exchange.
No actually, at least by the idea of Gesell.
His idea was to put a kind of tax on money and the responsible to pay this tax is on the holder of the money.
As such you could still put your money into a bank and free yourself of this responsibility and the bank on the other hand is highly motivated to loan the money out as fast as possible to relive itself from the responsibility.
>Keep your hands off my bank account.
Your bank account balance is of little importance with a fiat currency. Banks themselves are superfluous now that money does not have to be represented by cash and thus needs no vault.
Maybe you mean “Keep your hands off the purchasing power of the currency in my bank account”.
In some places in Europe, like Sweden, when new bills are released, and if you don't get your old exchanged they will soon enough become worthless. So don't stuff cash in your matress or you'll lose it eventually.
That's more a technicality of the carrier. There's nothing lost in the value, you just have to replace them with newer version. Any sane country would do this if old bills turn out to be easily forged.
Not that different in U.S. The older bills without modern anti-counterfeiting (colored threads, holograms, etc) already attract increased scrutiny (not exactly worthless, but heading in the same direction). I recently went to an In-N-Out with a $50 bill from around the turn of the century, and a manager had to be called over to inspect it.
That's very different, it was inspected but you could still use it...? It was not invalid.
That's why I wrote "not exactly worthless, but heading in the same direction".
the number if plays it takes to game this out is making my head creak. my paycheck expires in a week so i have to spend it immediately on food and utilities. i have no job security so i'm always terrified. but everyone has to spend their money asap so job security is increased. however there aren't enough people to service all of the needs because savings would have created a buffer if it existed, but now we have too much demand and way too little supply. so people start stealing and killing from each other and the whole world descends into chaos.
let me go prompt DeathByAi.gg with this scenario.
There’s 2 interesting implementations of money that do expire:
1. GNU Taler (going live next year I think?) has expiry attached to all signed tokens, to prevent the tokens (really EUR tokens signed by an issuing licensed entity, not blockchain/crypto bullshit) to promote it as a payment instrument instead of an investment.
2. CBDC does offer expiry as one axis. The Indian implementation, which is very early, has very little adoption is extended from e-RUPI which is a purpose delimited voucher-based money, primarily meant for social welfare schemes. I’m not 100% certain but this includes inbuilt expiry.
To be fair, we tried it when people had money on
insert any crypto exchange name
The results weren’t great.
This also reminded me of the “Aaand it’s gone” meme from South Park https://youtu.be/jEBnrzNuUSA
And with going off the gold standard, it came to pass. Right?
Even his percentage of cost to hoarding money is in the ballpark of current inflation.
This was written in a time before inflation, where hoarding cash was not stupid. Today it is. We don't need the incentive to increase the velocity of money.
Well, I say that, but too many people just have their savings in a cash account. Sometimes not even a saving account, but an account with no interest at all.
But then again that just means that the bank invests it in one way or another.
Short of physical cash, there's not really any way to keep money being "unused".
People would buy gold or other money
We don't want that
This is honestly the winning comment. Water flows through the path of least resistance.
Unless you go back to Bartering, Money can't expire, but currency can, such as when an Empire/Country/Political union collapses/arises, new currencies appear. A more recent case being the Euro currency - many EU countries dropped their currency, for Euro. In the process there were losses and gains, since there may not be cross-market consensus in value-conversion. For instance, Real Estate may suddenly be more expensive, likewise groceries, but salaries stay the same.
What you could do though (i'm not an economist) is to periodically introduce Monetary and Fiscal Policies that reset/adjust the economy (outside a government's influence e.g. Central Bank + Supreme Court).
There should be an expiration sort of penalty for every KYCed account larger than a 0.0000x% of GDP. Current, savings, brokerage, insurance or whatever.
Beyond a certain amount of wealth and cash in the bank people and institutions stop thinking in an entrepreneurial way and start thinking about the economy at large, or predicting the economy at large.
And GDP is very much like performance anxiety, when everybody is thinking about that, then it becomes very difficult to get it up. Or you do get it up but it's not nearly as rewarding because it becomes an artificially inflated number without any connection with actual welfare of the population and developement of a country.
The author finally gets on to their real motivation for writing the piece near the end, where they call for 100% inheritence tax and the abolition of familial solidarity. The expiring money idea, as pointed out by others, is silly and would lead to asset and loan hoarding. But that isn't the point, the author is promoting an ideology that wants to move personal loyalty from the family to the state.
I believe my similar idea to be more funny.
Government mints a currency that can be used to pay taxes (for example 2024)
It uses the currency to buy products and services from the private sector. It will have a flexible exchange rate.
You anticipate how much taxes you will have to pay and try to buy the currency cheaper than using the conventional coins.
A forex market will happen based on economic activity, how much collective tax there will have to be paid.
If there is a crisis there is likely to be more of the currency in circulation than the total sum of 2025 taxes.
After the final tax day the currency is worthless.
If money expired I would invest in freeze dried foods, fuel and land. What remains would be added as credit in utility services. Most businesses beyond that would never see a penny of my money.
A couple other recent blog posts on the topic:
https://blogs.worldbank.org/allaboutfinance/expiring-money-p...
https://blogs.worldbank.org/allaboutfinance/expiring-money-p...
That is the digital economy of the future. Tagged credits, some with expirations and other constraints (perhaps geospatial).
It's the only reasonable way to implement something like UBI: give everyone X "food credits" and Y "housing credits" each week. There would still be fraud and "credit laundering" to get around the expirations, but the overall waste would be tiny compared to the legacy finance system.
The problem isn't a lack of expiration, so much as it is relying on commercial middlemen.
Nationalize the real-estate and you create a monopsony for housing credits. Open up state-run distribution centres that accept the food vouchers, and only redeem them there.
The laundering/cashout concept relies on someone qualified to accept the credits and get real money back from the state. Stereotypically, this was a shady bodega or landlord who would fudge the books to claim they had enough sales to cover the vouchers they bought for 20% of face value. Going to direct fulfillment means they fall out of the loop: there's nobody[0] who can give you anything for the voucher except for a can of corn.
[0] Yes, someone might be willing to buy up vouchers if they wanted a LOT of cans of corn, but the logistics and difficulty of converting that to real cash means that it's not going to scale. It might surge during crisis events, where the cash price of a staple suddenly skyrocketed, but a voucher denominated in grams/litres/bushels held value.
Do you have a study showing EBT cards are more effective and reduce fraud compared to direct cash subsidies?
There's another commenter that pointed out the concept of 'demurrage', there's a film about it - see this post on "Shillings from Heaven / Wörgl's Miracle" by Will Ruddick of Grassroots Economics: https://grassrootseconomics.org/worgl
It feels like there's a "Congratulations, you just re-invented the inheritance tax!" joke in here.
But all snark aside, I think this is part in parcel with the general observation that money as a stored good has mostly negative impacts beyond some amount amount proportional to single digit multipliers of median annual income.
This is just taxes and inflation with different words. The reason the FED targets a certain amount of inflation is literally this. So people will spend their dang money and keep the economy rolling at whatever pace they deem healthy. Your money already expires.
Might be the wrong question. Humans expire. Inheritance taxes, and shorter copyright expiration would solve many of the same problems that expiring money claims to address. As many others have noted, inflation already is a strong disincentive for hoarding money.
But the money does expire, it is called inflation!
Mainstream economist think inflation is good and recommend 1-3% for a healty economy. And inflation is more practical to implement than putting date stamps on the back of bills like the original idea in the article.
We already have inflation, but if governments want this then it’s possible via CBDCs
In a way we kine of have it, it is oil or really energy. And inflation is a factor of energy supply.
But if money expired, I think people would go back to Gold and Silver as a base of wealth with "money" being worthless.
Even normal money expires via something other than inflation. I have a bunch of CHF that can only be exchanged at the Swiss national bank now. No idea if I’ll ever be able to do that.
This might not help you if you’re outside the country, but I believe the railway ticket office and the post office will also accept them.
An anecdote: few months ago, my partner actually exchanged a 100 CHF note in the big SNB building on Bürkliplatz, and it’s essentially a Jason Bourne scene (although that wasn’t really Zurich in the movie). You walk in, a guy speaking with a stereotypical Bünzli accent takes your name, then brings you individually into an office where you can hand your gross old bank note to a man wearing a suit. Next to arguing about chess in German over a beer on the train, this is the most Swiss experience available.
EDIT: Maybe more to the point, like everything else in Switzerland, apparently you can resolve this by sending a registered letter. In this case, if you mail them the banknotes at the Cashier’s office in Bern, along with your account information, they will wire you the money.
I’m not in Switzerland or even Europe, however. I just have some cash left over from when I closed an account in 2011, actually, it’s around 5K or so. When they retired the currency, they only now allow exchanges at the Swiss national bank. I didn’t hear that I could do it by mail, will check that out. Otherwise a family vacation to Bern might be nice.
Note that there's a phase even beyond that where the notes are completely unredeemable.
At a numismatics fair, I saw a 10 CHF note in a stack priced at 4 USD, and thought "Woo! Free money!"
However, it was a 5th series note, which were fully demonetized in 2000.
And how much of adult life is the derivative logic of expirations.
Inflation, negative interest rates and the impending introduction of CBDCs (which will bring along more purpose limited and expiring vouchers too) all cause or will cause money to expire. In other words, these are tools to prod people to spend now or invest somewhere now to keep the consumption economy going.
Depending on the country and other events, entire fiat currencies or specific denominations of fiat currencies can expire and become color paper worth almost nothing. We’ve seen this many times over the last several decades that fiat currency (not backed by gold or other physical asset) has existed.
It’s all about trust from every angle and every motive.
Inflation is a good implementation of this.
The period of high inflation circa '70s was also the most equal economy of the recent decades. It's all been downhill from there
Fiat money already DOES expire. It’s called INFLATION. If you put all your investments in a savings account in 2008, your “money” would smell like a compost pit.
Inflationary expiration is not guaranteed though. Deflation is always a possibility.
Yes it is. At least in the US. It's literally the feds directive to make sure inflation happens at a steady rate.
Historically, inflation dominates and ultimately collapses fiat currency.
Then the rich people would find a way so that their money doesn’t expire and the poor and middle class people’s money would expire.
i took 'paper' 20 quid note from i think 2015 to an exchange here in this asian country to turn it into $ and was told no 'sir' we dont take this note anymore, only 'plastic' 20 quid note. my 20 quid note was valueless right here. of course i suppose i could go back to london and exchange it for a plastic 20 quid note. just saying.
I already live in a world where money can expire in 60 to 120 days.
It's called a check, and hardly anybody accepts them anymore.
Then everyone would throw it out of the window rather then investing and saving. Is that what we want?
Who would this hurt, anyway?
Rich people keep their “money” in the form of socks, bonds and properties anyway.
I always think things like this are amusing:
Poor people “failing” the Marshmallow Test is taken as not having impulse control — but I’d argue studies fail to account for different life experience in people taking your “marshmallow” away, no matter what they promise.
This is stealing marshmallows on an industrial scale.
Absolutely spot on. When someone is used to an unsafe environment, eating the marshmallow immediately is a perfectly rational behavior.
Why do you want it to hurt someone?
The real question is, who would this help? It doesn't appear that it would help anyone, it would turn money into breadline vouchers and enable the powerful to enslave us all.
We can be sure when CBCDs come into existence they will feature demurrage of some form.
If I were looking for a way to put myself under the thumb of some authority, great.
A portion of it is effectively always expiring: it's called inflation.
If money expired ID be living lavishly instead of in an RV and hoarding cash
I see, crooks look for new venues to rob people of hard earned money?
Money does expire: it's called inflation
Options?
The article is just making stuff up here:
> Total U.S. bank deposits are around $17 trillion. Meanwhile, total wealth in this country, including nonmonetary assets, is around $149 trillion, more than 63 times the total available cash. The gaps between these numbers are like dark matter in the universe — we don’t have a way to empirically account for it, and yet without it our understanding of the universe, or the economy, would collapse.
There's no reason you would expect these numbers to be the same, and nothing relies on them being the same.
It does, it's called inflation.
So you came to this thread and saw this comment made 18 minutes before yours, with replies to that comment, and just reposted the same irrelevant, dismissive, low-effort comment? Did you think it needed to be said twice? https://news.ycombinator.com/item?id=38294857
On an unrelated note, HN rules forbid me from implying that a commenter has not read the article.
I originally opened the article and didn't and comment until later. Real time messages would solve that.
In America in 2023, everything is corruption.
First, the wealthy would agree to complicated contracts with each other so they trade back and forth to avoid ever letting their money expire.
Then my landlord would sneak into my home and swap my new money for her about-to-expire money.
Then my employer would pay me with about-to-expire money by lying and saying they paid me that money long ago, and offer to pay me in fresh money if I worked a lot more hours and accepted a lower wage.
I's still be where I am, unable to gather enough weapons grade material to get even with The System.