Who would want to be the person to hold this currency and lose massive value?
Holding cash woud indeed be a bad strategy… just like it is now. Your options would be to spend it for something you consume, spend it for something you keep for later, spend it for means of production, or lend it (if you can thus make more money than you lose by the currency decay). Just like it is now.
danger of hyperinflation
The value of the “alpha” parameter would determine whether the inflation is hyper or not.
Holding cash woud indeed be a bad strategy… just like it is now.
Today, whether I hold cash or have my money at the bank doesn’t make much difference.
The value of the “alpha” parameter would determine whether the inflation is hyper or not.
No, inflation is not controlled. You can get into a situation where nobody wants to hold cash and everybody prefers to change their cash into other things and then there’s in hyper inflation.
The danger for hyper inflation is why central banks generally want fight all inflation as it sets incentives for hyper inflation that is hard to control once it starts.
Holding cash woud indeed be a bad strategy… just like it is now. Your options would be to spend it for something you consume, spend it for something you keep for later, spend it for means of production, or lend it (if you can thus make more money than you lose by the currency decay). Just like it is now.
The value of the “alpha” parameter would determine whether the inflation is hyper or not.
Today, whether I hold cash or have my money at the bank doesn’t make much difference.
No, inflation is not controlled. You can get into a situation where nobody wants to hold cash and everybody prefers to change their cash into other things and then there’s in hyper inflation.
The danger for hyper inflation is why central banks generally want fight all inflation as it sets incentives for hyper inflation that is hard to control once it starts.