If you do not spend your money and hold it, you are deferring your claim on resources and allowing those resources to grow the economy instead of being consumed by yourself.

You're drawing a distinction between "using resources" and "not using resources" and thinking it's a distinction between consumption and investment. That's not accurate.

You're using a definition that most of the rest of the field doesn't use. The fact that they use it that way on misses.org doesn't mean that's how the rest of the world operates. Insisting on your own boutique definition doesn't help anything.

Fractional reserves are not the boogie man.

I try to tell people this. Even without fractional reserve banking, there will always be entities that borrow short and lend long. When long term and short term expectations shift, some of those entities will go bust. You can't "fix" that problem by doing away with fractional reserve banking.

Inflation is the change in the aggregate demand of money verse the aggregate supply of money.

Exactly this. Bitcoin is a perfect example of what happens when the rate of change of the money supply is basically unrelated to the demand for money. Surely the massive Bitcoin price swings are not "telling" us anything about the Bitcoin economy's "need" for more or less investment. It just tells us that demand for Bitcon fluctuates and the supply of Bitcoin is pretty much on a smooth trajectory and will be until the final Bitcoin is mined. Again, I can't figure out why "possible" hyperinflation that comes from having a central bank is somehow worse than *actual* bouts of hyperinflation and hyperdeflation that we are observing *right now* with this nifty new currency.

Inflation means we need more capital investment to improve our ability to produce, while deflation means that we've invested enough and its time to consume.

I'm generally with you (modulo the fractional reserve thing) until here. It would be nice if this was true, but I don't think there's really a good reason (either theoretical or empirical) to believe that it is. On the theoretical side, inflation or deflation could simply be a temporary reflection of consumer sentiment and desire to hold cash--one that would return to normal if it weren't for the self-fulfilling nature of those types of actions. On the empirical side, I'd expect our needs for capital investment to be at least somewhat continuous over time and move at a relatively low frequency. We don't need "lots of 20 year investments" one day and then "a lot less 20 year investments" the following week. That doesn't appear to be the case with the demand for base money, so it seems difficult for instantaneous demand for base money to send useful signals about our long term capital structure.

Of course, if that function was heavily smoothed, it probably would be a very good long-run indicator, and you'd get the nice side effect of reducing the heartburn that comes from rapid changes in the price level. But that's roughly what a central bank does.

Then there's the other kind of rich people who take the money handed over to them by the government and lend it out to others, receiving interest on those loans for doing effectively *nothing*.

You mean banks, who lend out a mixture of money they borrow from the government and money they borrow from savers. They lend it out to borrowers and receive payments back, and those payments decline in value with inflation. If they hold on to those loans as assets, they're in the "hurt by inflation" set.

Those who put a little money in a savings account, CD or other instrument that makes sense for those who need liquidity are losing value daily.

Those people are also very likely to be net debtors. Inflation reduces the real burden of fixed nominal debt. The set of people for whom cash holdings and fixed return nominal debt are substantially larger than their debt and who don't reasonably have the option to use something other than savings accounts is pretty darned small. If you have enough fixed return assets to be concerned with inflation, you have enough assets that you have options other than savings accounts. "Waah, I have a $250K fixed rate mortgage but the $800 I have in cash savings lost $20 in value last year due to inflation!" is pretty weak tea.

Right, but the time of exchange isn't the only interesting time, especially when you're trying to decide if something is just a speculative bubble. In fact, I'd say that a good definition of a bubble is a case when most people are buying a financial asset because they belive something about the future price that is unlikely to be true. I think Bitcoin fits that description better than just about anything else these days.

And like Bitcoin, a lot of people get tattoed thinking that it will provide a certain level of utility for them and then come away realizing that they had miscalculated.

And inflation can't?

This is what I don't get about the hard money types. They talk as though consistent inflation is some sort of magical evil that businesses and consumers couldn't possibly hedge against or factor into contracted interest rates, but jarring bouts of deflation out of nowhere can easily be smoothly absorbed by the market. WTF?

Pretty sure George Soros wasn't saying that the ERM was all that great an idea either.

The silly thing is that while you've been rolling on the floor laughing at me, I've been rolling in cash.

That's not really how currencies are supposed to work, though.

And with that comes its inability for supply and demand to move together to smooth out the insane price fluctuations. Bitcoin holders who are worried about the theoretical possibility of hyperinflation in a well-managed fiat currency scheme seem to be ignoring the actual hyperinflation and hyperdeflation of their currency.

And if you had borrowed the $90 to finance your venture based on assumptions about the nominal return that later turn out not to be true, your investment goes bust.

I don't get why so many people who underestand the problems associated with inflation manage to think that deflation is a big win for everybody. I especially don't get why it's this bad on slashdot. You'd think that math and CS nerds would be able to see "negative inflation is a wealth transfer from borrowers to lenders" as an inescapable restatement of "positive inflation is a wealth transfer from lenders to borrowers" or any one of a dozen formulations that describe the effects of changes in the price level.

Recurring costs are everyhere in IT. Power, AC, floor space, people to guard your servers, replacing broken/obsolete hardware. This is nothing new. It's not like you just buy a big ass server and watch it run forever with no recurring support costs.

I think a lot of people here are massivly underestimating the total cost of a unit of computing resources when they run it in their own machine rooms. It's not like your machine room is any more efficient to operate than Amazon's. In fact, it's probably massively less efficient unless you're a pretty big operation. The only cost they have that you don't have is "profit for Amazon."

Your argument would be plausible if what one experiences after death were the -sole- line of evidence for theism.

My argument would be plausible? Dude, I'm saying that you can't use observation X as evidence to support your explanation of observation X. If I a scientist said, "The reagents react together to produce a jelly. I hypothesize that angels are creating the jelly. The jelly is produced, therefore the angels hypothesis is supported," We'd all say he was nuts. And I wasn't arguing that it was the *sole* argument for theism. I was addressing just that one because it's a particularly bad argument.

Fulfilled prophetic claims are another.

How does one keep score on fulfilled prophetic claims? Like, how does, say, the Bible stack up against Nostradamus or the Koran?

Willing martyrdom of contemporaries is another.

The fact that people believe in something hard enough to die for it also isn't really very strong evidence that it's true. Are we saying that Islam is getting more plausible by the day?

I will say this--if a religion says that you experience X when you die and X looks nothing like the near death experiences people report, that's good evidence that the religion in question is not true. But failing to reject a hypothesis when the hypothesis was written to explain the observation is not exactly a big win. As they say, you can kill sheep with witchcraft if you also feed them arsenic.

Seriously? Maybe I didn't make the analogy clear. The reasoning is circular. You're assuming that it went like this:

1) Prediction of what people will experience when they nearly die.
2) People nearly die and experience it. Prediction validated!

The problem is that people have been dying and nearly dying for, like, a really long time. That means that "what happens when you nearly die" is not so much a prediction of the future as an observation of the past and present. So it's more likely that it went like this:

1) Person nearly dies and experiences trippy things.
2) Person describes trippy things and creates mythology around them or incorporates them into popular mythology.
3) Later people nearly die and experience similar trippy things. Therefore, mythology in (2) is validated!

In that sense, it's no different from:

1) We observe that the sun crosses the sky daily.
2) We tell a story about Helios and his chariot crossing the sky daily.
3) Everybody observes the phenomenon of the sun crossing the sky daily. Everybody! All subjects in the study saw it! Prediction validated! Helios is real!

Not so much. I don't discount that people experience very similar things during near death experiences any more than I discount their observations of the sun crossing the sky. I just dispute the conclusions that can be drawn from it.