Quote from: Roger_Murdock on November 17, 2012, 06:09:50 PM

Quote from: cunicula on November 17, 2012, 05:39:38 PM

Quote from: DublinBrian on November 17, 2012, 05:26:13 PM

Quote from: cunicula on November 17, 2012, 03:33:07 PM

When the central bank wants to encourage spending, they print money leading to inflation. Inflation encourages people to turn cash into goods and physical assets. This increases spending in the short-run and stimulates the economy.

There is no need for any entity to intervene in the economy. If people want to spend, they will spend. If they want to save then they will save.

Your "central bank" has no right to even exist. Its just a gang who think they can order people around and control them like livestock.

If a gang like that ever gains the power to do what you are suggesting, then users will abandon the currency and set up another one that isnt controlled by a gang of authoritarians.

And the authoritarians will control that currency as well. And the peons will know that. So they will rationally accept control.

That would be like paying a huge premium to acquire a controlling share of a company and then deliberately rendering that company worthless through mismanagement. And then repeating that process. That doesn't sound like a great business model.

I see. So if I understand the argument correctly:

1) If the central bank inflates the currency, then people will not use it.
2) If the people do not use the central bank's currency, then the central bank cannot affect people's behavior.

Is that right? So let's apply that to USD or Euros. Do you still continue to use USD/Euros/other national currencies for over 90% of your purchases in value terms? If yes, then I guess the central bank is not inflating the currency (otherwise premise 1 is wrong). I'd be interested to hear you confirm that. If no, then please tell me what you do. I'd be even more interested to hear about that.

If this reasoning applies to you, why wouldn't it apply to others in a similar predicament?
If no, then what do you use?