Money gets created in the USD economy all the time, whether by invented debt, cash printing, or the issuance of bonds. Does that money actually represent wealth? Does the USD economy actually contribute anything of value?
So let’s say you wanted to permanently remove value from the USD economy for some reason. What’s the most effective and impactful way to “burn money?” Not spend it. Not acquire it. Destroy it, with the goal of taking that value out of the economy.
Burning/ shredding physical cash seems really inefficient. Maybe the answer lies in devaluing real estate?
This is all hypothetical so assume whatever resources or labor you want.
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Inflation. Make the currency worthless.
Destroying money would make it more valuable.
Yeah this is kind of the opposite
That would be deflation - which is its own problem
Become President and do exactly what Trump is doing.
Give it to billionaires who will never need to spend it. I don’t know how efficient it is, but we already have a system set up for it.
Removing currency isn’t the same as removing value.
The quickest way to remove currency is raising the reverse ratio.
Money gets created in the USD economy all the time, whether by invented debt, cash printing, or the issuance of bonds.
The Federal Reserve targets about a 2% inflation rate:
https://www.federalreserve.gov/economy-at-a-glance-inflation-pce.htm
What is the Fed’s inflation target?
The Federal Reserve seeks to achieve inflation at the rate of 2 percent over the longer run as measured by the annual change in the price index for personal consumption expenditures (PCE).
…but that’s not something unique to the dollar. Other countries will have central banks that will do the same thing.
For the euro, this is the European Central Bank:
https://www.ecb.europa.eu/mopo/strategy/pricestab/html/index.en.html
The ECB’s Governing Council, after concluding its strategy review in July 2021, considers that price stability is best maintained by aiming for 2% inflation over the medium term.
For the British pound, the Bank of England:
https://www.bankofengland.co.uk/monetary-policy/inflation
We are responsible for keeping inflation (price rises) low and stable. The Government has set us a target of keeping inflation at 2%
Just part of keeping a functional economy.
So let’s say you wanted to permanently remove value from the USD economy for some reason.
I think what you’re wanting to do is to decrease the money supply, which you wouldn’t normally call “removing value from the economy”.
You don’t normally want to see deflation, as deflationary spirals create problems:
https://en.wikipedia.org/wiki/Deflation
A deflationary spiral is a situation where decreases in the price level lead to lower production, which in turn leads to lower wages and demand, which leads to further decreases in the price level.
But the Federal Reserve can and does create deflationary pressure, reduces the rate of inflation:
https://www.stlouisfed.org/in-plain-english/expansionary-and-contractionary-policy
How Contractionary Monetary Policy Works
Suppose that inflation has exceeded 2 percent for some time and the Fed recognizes that individuals are starting to expect high and rising inflation going forward. In this situation, the FOMC might decide to use contractionary monetary policy to bring actual and expected inflation back toward its target, to maintain price stability.
To do this, the FOMC could raise its target range for the federal funds rate (FFR) and increase the administered rates—interest on reserve balances (IORB) rate, overnight reverse repurchase agreement (ON RRP) offering rate, and discount rate—accordingly.
You are incorrect about the goal. I am talking about destroying value, not reducing money supply.
Some of the things that you have in your post don’t make much sense to me, then, since you’re talking about the money supply in at least part of it: “Money gets created in the USD economy all the time, whether by invented debt, cash printing, or the issuance of bonds.”
I’m not sure if it’s really coherent to aim to “destroy value” in the “USD economy”.
If you want to reduce the size of the US GDP — though that’d be linked to the US, rather than the US dollar — you could reduce that by reducing economic activity. Like, say everyone in the US works four days instead of five, and then there’d be less economic activity, and that would cause the GDP to decline.
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Create and then destroy some crypto currencies and their trading places.
Give it to the KLF.
Would the plot of Goldfinger help here? 🤔
What would happen if you nuked Fort Knox? Especially now that the dollar isn’t backed by gold?
‘Destroying’ money, either physically burning banknotes or just setting some numbers to a lower value in a digital ledger, does not remove value from the economy. When you create money, usually through debt, it takes its value from the currency that already exists. Money is also destroyed all the time through the payment of debt but not as fast as it’s created, that’s why its value mostly goes down (prices mostly go up): Money printer goes BRRRRRRRRR, money burner goes brrr.
What matters for an economy, and therefore the value of its currency, is the value they create–simply put, how much resources they exploit and how efficiently. The most important resource (in my opinion at least) is people.
So if you want to remove value from an economy you have to take those resources away, or make them hard or impossible to exploit efficiently by them, or make them obsolete…
What matters for an economy, and therefore the value of its currency, is the value they create–simply put, how much resources they exploit and how efficiently
Yeah, thats the way it ought to be, its actually slightly different, and is very important in the context of what a country does to undermine it’s own currency, or even a companies director does to the value of their company.
Value is a question of perception. How much are people/investors willing to tolerate and still perceive the value in a good or service or currency.
Its the reason the massive quantitative easing ended up spreading so widely as a tool in the last 15 years. In the beginning it was assumed that the massive ‘money printing’ would lead to massive devaluations, which didn’t really happen as expected. Thats because the reaction in value percieptions in those currencies ended being more flexible than central bankers and economists initially feared.
The perception of value played a role in how long it took for people in the US to recognise the real estate bubble exploding in 07-08. It plays a role in really any bubble, and is why prices drastically plummet instead of taper. The value perception changes en masse, and bang, everybody runs for the door.
One more interesting example is the value perception comparison of essential workers in the COVID19 Pandemic compared to normal times.
Create a new currency using USD as a base; stop printing USD, re-evaluate USD to be near worthless compared to new currency (1 USD : 100 N(ew)USD
Following this, implement either hyperinflation after USD is largely switched over, and it’ll destroy 99% of value, or you can stop printing right after, and NUSD will quickly devolve lower than it can even be represented, leading to inflating prices, and less use of NUSD in place of literally anything else, with no access of USD to even return to
emp bombs in the right places
EMP bombs are not realI was wrong, EMP bombs are real
idgaf you corrected yourself, the fact you so arrogantly insisted in your ignorance in the first place earned you a block
Also research HERF guns. I suggested them for IEDs but the researcher I talked to said the military was far beyond that idea.
1: Invest in crypto 2: Invest in AI 3: Buy high, sell low
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you’re not even correct, why would you take this risk
