MMT (Monero Monetary Theory)

Hi everyone,

This medium article explains better than I ever could the problems which could be posed by a deflationary currency to the economy which runs on it. Reading the books Theory of Money and Credit by Ludwig von Mises and Dying of Money by Jens Parsson has made it clear to me that if the supply of money is constant and the supply of goods and services increase then the prices drop (the value of money relative to the goods and services increase). If the world's GDP could continue to increase the way it has been increasing in the last 3 hundred years the inflation rate of Monero might not be enough to equal the increase in the world's GDP. Coupled with coins being constantly lost this might disincentivise the use of Monero as a currency. I don't really fancy the idea of Monero going the Bitcoin route.

From this logic it goes that in the event that the world's supply of goods and services decrease (as it did in 2020) the amount of the currency should decrease as well or at least remain stable in order to prevent price inflation. In my opinion this is infinitely better than what central banks are doing (inflating currencies in times good and bad).

What are your thoughts on the subject?

Edit: Grammar.

submitted by /u/Onrome
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