Quote from: ErisDiscordia on March 24, 2014, 08:37:49 PM

Since the external factors affecting economic growth are constantly changing (as you say) I think it becomes a choice between:

dynamic growth vs. fixed money supply vs. dynamic prices

and

dynamic growth vs. dynamic money supply vs. fixed prices

Personally I would feel happier with the fixed money supply. It is much easier to fix, for starters. It doesn't even require a human central planner, which can be badly informed and/or corrupted. Also I view prices as signals about how much people value certain things and I like my signals as pure and without distortion as possible. When we are trying to fix prices by managing the money supply (by using unelected central planners!) we don't change the underlying reality the price signals are expressing. But we do distort these signals, which causes all sorts of havoc, colloquially known as "malinvestment".

It would certainly be easier to handle, if there is no handling and money could just run with a fixed rate. Corruption of the central planners is a serious issue, but that could be fixed if people would actually spend more then 5 minutes to do research on who will they elect for the public office. Corruption isn't caused by economic philosophy, but rather by intellectual development of the general society.

But still, it's more efficient to have a central planner, and to have a dynamic supply rate. If supply rate isn't regulated to cause price stability, then it would cause you a lot of problems if you are in finance or even if you're an entrepreneur. When doing prognosis, then you have to calculate in the possible inflation (or deflation for that matter). When the inflation rate is stable, then you can create more solid prognosis and predict the needed numbers. With fixed supply and unstable value of money, you can never be sure which way will it go next year, or even next month. Doing business will be more of an lottery, and that's not a good thing. It's not good when competition is decided by luck, not by competence.
To me, saying that the modern monetary system would do better without centralization, is like saying that an symphony orchestra would do better without a conductor, or an football team would do better without a captain. We don't have to change the system, we have to change the people who have control over the system. People will always be in charge, and it's a good thing. Machines automate our work, but the major choices still come from the people. We don't need an Terminator 2/I, Robot type of scenario where some A.I. takes over society. Leadership still needs heart and common sense that only humans can offer. Don't blame the system, but blame yourself for not caring enough for electing the right people to lead the system.

Quote from: johnyj on March 25, 2014, 01:15:08 AM

There is an illusion that goods price should not change over a certain period (price level stability)

This is wrong, because the productivity is increasing all the time and creating more supply and less demand, every goods' value should drop constantly over time. And if you compare many different type of goods, the speed of their depreciation are all different

A currency that is increasing in value over time will reflect that truth more precisely. In another word, there will never be a price level stability if the productivity is improving. So the best currency should be the one with fixed supply, not the one that can keep the price level stable, which is impossible to achieve for all the goods at the same time

Goods price drops in a normal matter if you are dealing with an technological product. Then the speed of technological development will cause intense competition, and products soon become obsolete. This is the price of technological development.
But there are also resources thats extraction rate and demand growth is quite stable and predictable. The important thing is to let money follow these resources, so they would give money the same stability. Gold was a good resource for that, but it became too unstable because of the strong speculative attraction and lack of regulations. Oil was good for some time, until the price started to depend too much on the outcomes of wars, that also caused a lot of speculation and instability. I think that the future is agricultural products because of their rising importance. The phrase "bitcorn" wasn't as much as funny to me, as it was farsighted.