CodingInLondon on Nostr: “If a saver had any hope of keeping up with inflation, it became necessary to ...

“If a saver had any hope of keeping up with inflation, it became necessary to deposit money in banks and collect interest. Bank deposits underperformed inflation from 1913 to the present, but at least underperformed less than holding physical banknotes that paid no interest. Therefore, this structurally inflationary system enhanced the power of banks by making them more necessary for everyone to deposit the bulk of their savings with. It also increased the power of the government to surveil account balances and transactions, collect taxes, and freeze funds on demand, since most of the money was in the banks rather than in the form of physical and private bearer assets. Put simply, an inflationary money necessitates the use of counterparties and leverage to try to keep up with inflation by earning interest, which is not the case with a hard money.”

Lyn Alden, Broken Money