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Comment by gnopgnip | Hacker News Reader

Deflationary currency discourages spending, increases the value of debt, causes people to hoard cash, and potentially causes wage unemployment.

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What is the difference between "hoarding cash" and "saving" besides the fact that one sounds evil and the other virtuous?

(I don't intend that as a rhetorical question - I'm sincerely asking.)

Saving (as distinct from investment in productive things) is also bad for the economy. A small amount of buffer may smooth the working of the economy, but stored cash/assets are dead weight - it's better if people are spending immediately, keeping the cash circulating into productive things.

> but stored cash/assets are dead weight

Curious, are US treasuries or interest in a savings account considered "dead weight" in your definition?

Not completely dead but close to it. To the extent that they provide funding for government infrastructure, business loans and the like, they're productive. But AIUI that link is pretty thin these days.

If investing in Treasuries and Savings accounts are considered hoarding or "dead money" that's +/-$13T to $19T depending upon how you look at it for Treasuries [1] and $8.6T for savings [2].

[1] http://treasurydirect.gov/NP/debt/current [2] https://fred.stlouisfed.org/series/WSAVNS

"Saving" usually refers to investments which are then loaned out to increase the velocity of money while "hoarding" does not.

Inflationary currency encourages consumption (and environmental destruction), decreases the value of debt (and causes people to pursue unsustainable risk on leverage), and cheats low- and fixed- income wage earners out of the value of their earnings disproportionately compared to the wealthy, necessitating minimum wage increases, which creates sporadic wage unemployment, which is more disastrous than gradual wage unemployment.

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