Smarty_Pants

Keynes vs. Von Mises

"Creating a finite, inflexible [value holding] currency is asinine." - ohsosry

Then what label should we apply to a currency that has lost 95% of it's purchasing power since it was created? Soon enough it will lose 95% of what little purchasing power it has left.

A 'flexible' currency is no more useful than a flexible yardstick.

If someone offered to sell you 100 feet of rope for $20 but you knew that the definition of a 'foot' was "flexible", would you take the offer?

How would you feel to discover that the rope was shorter than your arm and the person who sold it to you told you "It's OK. I'm using a flexible yardstick"?

The whole point of money is to provide a stable means of storing value so you can exchange it for other items. If the value of money is not fixed and in fact is continually reduced by people you won't ever meet, doesn't that greatly reduce its usefulness?

If not, then why was the hyperinflation in Weimar Germany a bad thing? The were just being incredibly 'flexible' with their money. Same goes for Zimbabwe today, a highly 'flexible' monetary system there. So flexible that nobody wants to hang on to money any longer than they have to for fear that it will literally be worthless tomorrow.

That seems like a great way to run a country. NOT.