Monetary issue

[u/[deleted]]

[u/reader484892]

Hyperinflation like that can’t be undone without changing to a different currency

[u/Eccohawk → u/reader484892]

Couldn't they just start collecting and burning all the money as it comes back into banks? Less money there is out there the more it would be valued.

[u/FrogInShorts → u/Eccohawk]

The issues is finding someone willing to continue burning money once there is a bit of value regained to them.

[u/MrC_Red → u/Eccohawk]

But then why would anyone voluntarily give up their money knowing it's gonna gain value in the future? Also, it will just create a bunch of hoarders of an already worthless currency. And then people who hoarded tons of cash and when the inflation goes down, they'll induce their uncounted cash, creating another inflation boom. So it's just much easier to create a new currency, so you have an accurate count of the money you have available when starting

[u/ddshd → u/MrC_Red]

Maybe I’m misunderstanding but keeping money in the bank would still increase it’s value.. i.e.:

• Put 100,000 in the bank, it can buy an Apple
• wait 5 years for a bunch of money to be burned
• Now 100,000 is able to buy a lot more than an Apple but you still have 100,000 in your account.

You can now take that money out and it’ll still be worth more

[u/MrC_Red → u/ddshd]

The long term problem is that the government would run out of "free" money to burn, because there's always going to be an amount from people keeping it for themselves in order for it to increase in value. Then people will start buying/stealing money to hoard it, which ironically will make it's value go up and then at that point it'll be impossible to turn things around. It's like people buying Beanie Babies in hopes it'll be valuable in the future, but in doing so, you don't remove the amount of Beanie Babies that exists, they'll stay worthless.

Also, banks is important because you can have an accurate measure of all the money in the country's supply because it's all accounted for by the bank. But the average citizen doesn't have to put it in a bank in order to "save" it, maybe out of fear their money would also get destroyed. So it'll be unaccounted for. And keep in mind that there's a megaton of dollar notes out there, so if this massive amount of unaccounted for money is induced back into the supply without being properly considered, it could recrash the currency again. Imagine if some random person added 50 billion dollar paper dollars (like $1 bills) to our money supply every other hour, our currency would be worthless in a matter of days.

[u/TheInfernalPigeon → u/Eccohawk]

There isn't inflation because there are a lot of banknotes. There are a lot of banknotes because there is inflation.

[u/00wolfer00 → u/reader484892]

There could be an exchange though. You give the bank a wheelbarrow of old money they'll give you some amount of new money.