Timeline for A world where some currency loses value when handled would have a deflationary economy. What would the consequences to society be?
Current License: CC BY-SA 4.0
10 events
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| May 9 at 5:59 | comment | added | Ton Day | @benrg This is a perfectly valid answer, to wit: Mu, the question cannot be answered because of invalid implicit assumptions. This answer elaborates on the definition of "worth", what does it mean to say "this is worth $X" -- then uses this to further explain why it doesn't matter that the government has attempted to declare by fiat the value of this particular coin changes - people won't go along, so their word means very little. The real world is replete with examples of "real economies" ignoring government price controls, which is effectively what this is (a price control on money). | |
| May 8 at 16:17 | comment | added | Pelinore | @justhalf Sure, just look at property values of leasehold compared to freehold, the value of a 100 year lease is practically the same as the freehold value for the same property, but every indication is that this is something that happens in under a year (or maybe two tops, but also maybe only months), and you don't have predictability of when it will happen (while leaseholds you do) so it's not really the same .. part of the problem is also there are other coins this doesn't happen to, so it will be measured against them. | |
| May 8 at 15:26 | comment | added | justhalf | @Pelinore does it depend on how long the process of devaluation takes place? 1 year? 10 years? 100 years? Does it make a difference? | |
| May 8 at 11:57 | comment | added | Pelinore | @benrg this coin is like a 3p scratch card that pays 3p or 2p, you lose or break even but never win, no one will play that game, they'll take it as 2p or they won't take it and ask for other coins instead (as there are other coins that don't have this risk), merchants aren't dumb (if they are they won't stay merchants long) if this coin is all you have and you insist on 'using it as 3p' they'll charge you their 'special rates' (charge you more than otherwise) or not sell to you and wait for the next person .. so (functionally) it will be worth 2p [shrugs]. | |
| May 8 at 5:33 | comment | added | benrg | This is no way answers the question. The premise of the question is that the coin is worth 3p when new and 2p when old. There are many ways that the government could ensure that: it could exchange the coin for three penny coins when new and for two penny coins when old, it could exchange it for 3p or 2p worth of gold, it could accept it in payment for 3p or 2p of taxes, it could make it legal tender for the repayment of 3p or 2p of debt, etc. If any system of that sort is in place, arbitrage ensures that the coin will have a similar valuation for all other purposes as well. | |
| S May 6 at 16:35 | history | mod moved comments to chat | |||
| S May 6 at 16:35 | comment | added | L.Dutch♦ | Comments have been moved to chat; please do not continue the discussion here. Before posting a comment below this one, please review the purposes of comments. Comments that do not request clarification or suggest improvements usually belong as an answer, on Worldbuilding Meta, or in Worldbuilding Chat. Comments continuing discussion may be removed. | |
| May 5 at 20:56 | history | edited | Pelinore | CC BY-SA 4.0 |
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| May 5 at 20:50 | history | edited | Pelinore | CC BY-SA 4.0 |
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| May 5 at 20:44 | history | answered | Pelinore | CC BY-SA 4.0 |