The Federal Reserve wrote down a target for how fast your dollar should lose value. The date on the page is January 25, 2012.
Before that there was no number. The law told the Fed to pursue "stable prices" and for decades nobody wrote down what that meant. Then, on a Wednesday afternoon, a committee decided stable meant "inflation at the rate of 2 percent," published it, and promised to reaffirm it every January.
Two percent a year halves your money in about 35 years. That is the plan when everything goes right.
Since that page went up, the dollar has lost about a third of its purchasing power. The target was 2. The result has been closer to 3 than 2. The same committee meets again on Wednesday to set the rate for the year ahead, and nobody outside the room gets a vote.
A target for losing value is still a policy of losing value. It just has a number on it now.
Bitcoin's issuance schedule was also written down, in 2008. It has been hit every year since, and nobody has ever had to meet.
Before that there was no number. The law told the Fed to pursue "stable prices" and for decades nobody wrote down what that meant. Then, on a Wednesday afternoon, a committee decided stable meant "inflation at the rate of 2 percent," published it, and promised to reaffirm it every January.
Two percent a year halves your money in about 35 years. That is the plan when everything goes right.
Since that page went up, the dollar has lost about a third of its purchasing power. The target was 2. The result has been closer to 3 than 2. The same committee meets again on Wednesday to set the rate for the year ahead, and nobody outside the room gets a vote.
A target for losing value is still a policy of losing value. It just has a number on it now.
Bitcoin's issuance schedule was also written down, in 2008. It has been hit every year since, and nobody has ever had to meet.
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