|
|
| Re: LION : New (Fantasy) Government (1400232) | |||
 |
|||
| Home > SubChat | |||
|
[ Read Responses | Post a New Response | Return to the Index ] |
|
||
|
Re: LION : New (Fantasy) Government |
|
|
Posted by Steamdriven on Mon Jun 27 22:39:52 2016, in response to Re: LION : New (Fantasy) Government, posted by Spider-Pig on Mon Jun 27 11:27:38 2016. Because it ain't that simple. Am no ex-pert, but I can guess:i) When the size of the economy expands, more total money units are needed. ii) When the money of nation X becomes a desired means of exchange and value storage among other nations, more money is needed or it will be scarce. There's both a windfall and hazard for nation X, if they treat the demand for their money as if it is a real export product, they'll get accustomed to getting imported goods for basically nothing. iii) There may be an effect related to have fast money changes hands. In system where stuff circulates (say, trains going around a loop), the faster stuff moves, the less of it you need to keep a pipe filled. I dunno exactly how this works regarding money, but I suspect the systems have some common behaviours. iv) There is a powerful need to avoid deflation - each money unit becoming more valuable. It sounds great; every dollar you have is worth a little more tomorrow. But it quickly goes bad: You wouldn't want to borrow to buy a house, because the mortgage payment would effectively go up every year. But you wouldn't want to pay cash, because tomorrow the same house will cost fewer dollars. Deflation is actually a disaster, because it causes an economy to go into death spiral such as the Great Depression. --- The public constantly demands something for nothing. To supply this demand, politicians give them deficits, which require issuing more money to pay for the new debt interest. The economy may expand fast enough that the gimmick causes no harm, or it may not. |
|
(There are no responses to this message.)
|
|