this post was submitted on 10 Jul 2023
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No, they shouldn't. The money supply is unaffected by discharges.
Discharge does introduce short-term shocks but it's not the doomsday scenario you're painting it to be. We did it in the 1800s and it was mostly fine compared to the regular bank panics before the greenback was adopted.
Ah, OK. Maybe "inflation" is the wrong word, but there's a response. Insurance becomes more expensive, loans become more expensive, basically everybody for whom such an event is a risk reacts to its probability growing.
Well, I'm not saying it's literally a doomsday scenario, just that it likely wouldn't benefit the person dreaming about it more than it would harm them.
Nono, inflation is the right word. Inflation isn't caused by the money supply, but by supply vs demand. If demand suddenly increases, there will be inflation. If a lot of money is printed and is thrown in a hole, money supply will increase, but there'll be no inflation.
Well, yes, I'm just always floating in economic terms, it really doesn't help that people around often have differing ideas on what these mean.
Only decreases (if we are speaking about demand for money, not demand for commodity bought with it), not increases, but I think it's an error, not a mistake. =\
Ah, I was talking about the demand for commodities/services.