Governments can keep overspending their budgets, and create more debt and inflation as long as there is economic growth exceeding the inflation rate. Which has been true since the industrial revolution. In this economic progression, the inflation acts like a tax on the drivers of growth.
With the advent of AI, growth is likely to increase from 3-7% yearly, to more than 7%. So we can expect that inflation will only rise, as more productivity is created thanks to this invention (economic growth driver), and therefore the capacity, and incentive, to tax.
But, it's possible technology driving growth will plateau, and at that point it will become unsustainable, and we will see a crash of the fiat currencies due to the increasing debt and printing.
So will this economic plateau occur, and if so, when?
Technological breakthroughs happen suddenly, and are hard to predict. Meanwhile the economy is a constant stream of value-creating exchanges (transactions), and ticking interest payments, that chug along every day. So a stagnation of the economy is a slow incremental process. A death of fiat currencies is likely to occur slowly, in the wake of this, with trust fading.
So it's not a "catastrophe" that will defeat fiat, but more so a lack of "miracles".
Thoughts?
With the advent of AI, growth is likely to increase from 3-7% yearly, to more than 7%. So we can expect that inflation will only rise, as more productivity is created thanks to this invention (economic growth driver), and therefore the capacity, and incentive, to tax.
But, it's possible technology driving growth will plateau, and at that point it will become unsustainable, and we will see a crash of the fiat currencies due to the increasing debt and printing.
So will this economic plateau occur, and if so, when?
Technological breakthroughs happen suddenly, and are hard to predict. Meanwhile the economy is a constant stream of value-creating exchanges (transactions), and ticking interest payments, that chug along every day. So a stagnation of the economy is a slow incremental process. A death of fiat currencies is likely to occur slowly, in the wake of this, with trust fading.
So it's not a "catastrophe" that will defeat fiat, but more so a lack of "miracles".
Thoughts?
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