The Perks of Working in the Black Magic Industry - Vol. 4 Ch. 22 - Senpai and Kouhai

[Anony6152]

@Onsokumaru No, that's just the cheating, easy way they can ensure that they "make" money. Otherwise, they'd have to actually give out loans based on how much productive wealth would be created from it, and be extremely conservative with who they give it to. This is also what interest rates are for. Inflation is stealing from the savings of those who choose to be financially prudent by reducing the value of their saved money. Those who choose to have a long time preference are at a huge disadvantage in an economy that constantly devalues what they save. The banks love inflation because they get the increase in money supply first so they're always ahead of the curve in inflation, while the rest of us suffer from it. This is what has caused the insanity of current economic conditions with most companies saddled with massive amounts of debt because if they don't spend quickly and expand as soon as they can, they're left behind by the rest of the market. So when downturns happen, they have no working capital to be able to survive and then promptly go out of business or get bailed out by the government who created these conditions.

 

[Onsokumaru]

@Anony6152 No, wrong.
"that they "make" money" - A controlled gentle inflation will not make anyone money. Who is "they"?
That's not what "financially prudent" means.
The goal is to prevent hoarders. We should "steal" from them, since they are evil and cause deflation.
If you have a "long time preference" just invest the money into something low risk or into a long term savings. No need to keep it in your pillow.
"Massive amounts of debt" are caused by something else. If you are not hoarding, you will never get "left behind" since the rate is so low.

What is the alternative anyway? A deflation that gets everyone to lose their jobs like in this manga?

 

[Anony6152]

The fact that I put "make" in quotation marks should tell you something first off.
Second, I told you that the banks are the first to spend or lend this increase in the money supply so they are essentially using the value of the money yesterday to lend or spend today the "free money" they just received, for the price level from yesterday.
Third, "hoarders" as you call them are not evil and stealing from them because they are putting their money into their "long term savings" is at the very least a reprehensible, immoral act. You should probably think twice before legitimately arguing that people should be forced to give the banks their savings so they can then lend it out while having no accountability for being able to cover their customer's deposits.
Fourth, you say massive amounts of debt is caused by something else and yet provide no argument for it. What else would be the cause of behavioral patterns like that? If you incentivize people to borrow money at such low-interest rates, people will take you up on that offer much more so than if the interest rates were high.
Fifth, deflation does not cause economic depressions and has only correlated to one such time period, namely 1929-1934 during the Great Depression. Allow me to quote a study done by several Federal Reserve economists.

the only episode in which we find evidence of a link between deflation and depression is the Great Depression (1929-34). We find virtually no evidence of such a link in any other period. ... What is striking is that nearly 90% of the episodes with deflation did not have depression. In a broad historical context, beyond the Great Depression, the notion that deflation and depression are linked virtually disappears.

They also specifically mentioned Japan during the 90s which is clearly the allegory that is being referred to.

We note here that since WWII, one country has come close to having both a depression and
a deflation: Japan in the late 1990s. Is Japan’s recent slowdown from a historically high average
growth primarily due to its very low inflation rates? We doubt it. Since 1960, Japan’s average
growth rates have basically fallen monotonically, and since 1970, its average inflation rates have
too. Attributing this 40-year slowdown to monetary forces is a stretch. More reasonable, we think,
is that much of the slowdown is the natural pattern for a country that was far behind the world
leaders and had begun to catch up.

https://www.minneapolisfed.org/research/sr/sr331.pdf

It's depressing enough how economically illiterate most people are, though the fact that you took this manga's attempt at teaching bad economics seriously is far more concerning. @Onsokumaru

 

[Wreavant]

Huh, I thought Seria was like 110% loyal, that was sorta weird. She’s a succubus sure, but it hasn’t really seemed very in-character. Even with the euphemism it still seems like a sorta weird joke, maybe it makes more sense in Japanese? Not that it matters all that much, despite the fluff there hasn’t really been romance exactly.

 

[Onsokumaru]

Anony6152
That's why I said it's not an actual making. I'm genuinely asking.
Okay, so?
They don't need to give it to the banks. That was just one of the options. They can start a business.
Capitalism is a form of evolution - survival of the fittest. It's supposed to be like a jungle, so that the competition brings out only the best.
If companies go out of business because "they're left behind by the rest of the market", then that's how it should be.
If borrowing money is cheap that will increase the number of people trying to start businesses (which is good) and they don't have to be rich in order to begin.
Oh, I actually don't agree with this manga that deflation causes these problems. I said that cause I thought you said you considered this manga true. Must have been someone else, since your nickname is very generic. Deflation was the best thing that happened to my country many years ago.
This has nothing to do with economic literacy since economy is not very understood as a science. No country would have economic problems if it was. It's just that you don't agree on some things with my economy professor. She would fail you immediately in an exam for some of the things you wrote here.

 

[Shikuro]

People here talking about stuff I barely care to read, I'm here pondering the turtle scene (͡ ͡° ͜ つ ͡͡°) I know she's a succubus and all but still she is a main heroine, you can't just drop that weird scene on my fragile heart. Now I feel all perplexed ಥ_ಥ

 

[starburst98]

@Shikuro
I think she just wanted to say "your head looks like a huge dick!", as a Male he understood what she wanted to say.

 

[SuperRobotSolo]

Oh no, cute doggo slut caught a cold.

 

[pakyu1199]

Printing more money wouldn't change the problem though. There's this country in Africa where there's a trillion cash(?) But could only buy a piece of bread

 

[Geohie]

@pakyu1199

Yes, printing money would cause a inflation.
But since this is a deflation, trying to combat it by inducing inflation might be okay?

I dunno I'm not a economist

 

[Yorple]

square-enix really has some shit politics lately... It's like they've been taken over by the american republican party...

 

[testeure]

Do they even use paper money to print more of it? This looks like a typical medieval fantasy, the currency should be gold, silver etc.

 

[The5thSeraph]

Cerulia wants to fuck the turtle after Franz has died of old age, right?

 

[TNT261]

I don’t see the point in introducing economics and politics if they’re ignore solve the problem on seconds (seriously an actual solution would have been to cut spending in other areas or privatize education with forced gov’t mandates or pass laws that increase stability (which helps economic activity) and put education on the backburner until the economy expands more and the nation grows more (if it isn’t currently feasible, it isn’t feasible. You can’t start on the second floor if you haven’t built a good foundation)). This is really just kicking the can down the road and hopping someone picks it up before it falls off a cliff.

Also “Just do in debt. We can get out of it easily.” - Not like there’s the danger of setting a precedent of engaging constant deficit spending to pay for social programs and reforms, and just never paying the national debt because who cares?
Cries *IN AMERICA*

@Geohie deflation generally takes care of itself. When prices lower consumers want to buy more, but producers want to make less (because it sells for less, so it makes no sense to pay the same amount of workers and materials for the products that are selling for less). So there’s a shortage of goods and an increase of people wanting to buy them. This makes demand go up and overtime, producers should be able to charge more until they reach a new equilibrium and the economy is operating at its full capacity again. (Take this with a grain of salt; that’s from 1 basic intro to macroeconomics class). None of which this manga really took into account. If prices fell by 90%, I SWEAR to you there would be no stock or inventory left (especially in the basic medieval fantasy setting where they don’t have the transportation, mass production, or global trade they should (because magic)) like by morning. Also there’s the fact that inflation and deflation affect ALL prices (given enough time). In this case if a year passed then people should have getting laid off (don’t need as many workers if you’re making less stock to sell and 0 profits) and earning less (which also would have decreased economic activity and made things worse).

That said, I know at least in the U.S. the Central Bank (fed reserve) prevents deflation entirely (apparently they view deflation as much more dangerous than inflation, which makes sense; deflation can be a lot harder to come back out of). I can’t say if it’s specifically them printing money (because they also control interest rates and how much money banks can loan out and other... stuff), but there is a little inflation every year (in the U.S.; I think it’s see as good or at least fine if it’s a small amount). Again take it with a grain of salt.