Deflationary money is a Good Thing

Deflationary money is a Good Thing

Original Postby ZmnSCPxj

Posted on: December 6, 2023 22:47 UTC

The concept of defining the United States Dollar (USD) in relation to a basket of real goods is presented as a more stable alternative to tying its value to the volatility of Bitcoin (BTC).

The proposed basket would consist of commodities commonly consumed by individuals, such as rice, noodles, pork, and chicken, which could vary according to cultural norms. This approach enables the relative value of the USD to remain consistent over longer periods, reducing the need for frequent adjustments.

The advantage of this method lies in its potential to minimize the frequency of redefining the USD's value, which could be limited to annual revisions. This contrasts with the high volatility observed in BTC, where a USD-BTC exchange rate might require updates on a daily or even hourly basis. The stability offered by a basket of goods allows for easier monitoring by the general populace, ensuring transparency and accountability in the governing authority's management of the currency.

Furthermore, the infrequent updates required under this system could empower direct democratic participation. Citizens would find it feasible to vote on changes to the exchange rate due to the manageable number of updates. This participatory mechanism enhances the democratic process by involving the population in critical economic decisions, thus fostering a sense of collective responsibility and oversight over the monetary authority's actions.