Quote from: Wekkel on November 06, 2014, 07:30:07 AM

Quote from: marcus_of_augustus on November 06, 2014, 07:10:24 AM

Quote from: 79b79aa8d5047da6d3XX on November 06, 2014, 06:08:30 AM

Quote from: solex on November 06, 2014, 05:19:02 AM

Hoarding is simply the same as saving. Savings are what makes capitalism a viable economic model. Inflation is a stealth tax from those who have last use of new money (the poor, middle class) to the pockets of those who have first use of new money (the banks, wealthy, government).

It is not quite so simple. Standard economists worry that if inflation becomes too low (or if there is deflation), incentive to hoard increases and incentive to invest drops, which could lead to negative growth, the bête noire of capitalism.

The situation you refer to is only possible in a domain where there is an artificially enforced monopoly on the money supply, e.g. central bank, totalitarian capital controls, etc.

Free markets rapidly fill shortages of goods, monetary or otherwise, and correct mispricing.

Can't let that happen, can we?

In Estonia, which was totally fucked up for a decennium or so, got a new money system after the fall of the Soviet Union, they had no money to subsidize, so they started with essentially a free market. It took 3 weeks to eviscerate all goods shortages. Heard it on Tom Woods show, I am too lazy to give a more accurate reference.