First, on the previous answer I started sarcastically. Sorry about that.
I can’t find/download this one.
The real point is not that if central banks should be “dependent” or “independent”, but it’s if they should “be” in the first place.
State+Central Bank (inhuman, violent) interventionism, that’s the current “economy”. Knowing the monetary inflation index beforehand (as you put it) won’t change the means which they use which cause people to end up using state/fiat currencies, which is force initiation (aggression).
“Future money value estimation” is a complicated construct. Money is used too coordinate savers, investors and consumers (present and future ones), so that everyone may be wealthier by specialized division of labor. For what I can see, that’s it.
In this framework, I can’t define “future money value estimation”. I think you mean interest rate, where people like to call it “how expansive it is to borrow money”. If we think money like water in the desert, it’s easy to see why shortage makes it expansive to borrow, since everyone wants it. But it’s not just because money inflation rate is predictable that you will be able to predict the interest rate (how easily/willingly people will be to lend money at the expense of “consuming” it in the present). This depends on each individual, their mindset, their plans… depends on what everyone is doing, every little choice they made at every instant. This has the “final word”, this is what dictates interest rates.
Sure, if money inflation is high, this will result in affecting people in the reality. It’s not like everyone is affected in the same way and at the same time (as if money were possibly “neutral”), but just some individuals will be affected, and in specific ways. Those individuals will change their decisions (they may consume what they could not (or would not), for example) and so forth (they will impact other individuals and so on). Waves of individuals get affected in ways we can’t really measure, and what the media usually does is to throw some “general prices inflation index”, a clumsy measure.
This hides what (monetary) inflation really is: wealth transfer. Those individuals (person A) who got the “newly created money” get richer (A’s consumption of apples increase by +X, let’s say), and other individuals (person B) will be poorer (B, who also wanted to consume apples won’t be able to buy it because there are no more apples left) - and let’s say that B apple pies business go broke. This is just an example, but it shows wealth transfer from B to A, where B got broke not because of a free market, but a state intervention. (Again, I am assuming state fiat money here).
This is an effect that could happen in a monetary inflation, and that’s what it is. There is nothing beyond that.
If general goods prices increases by some metrics, lot’s of people surely feel they got poorer (since goods got more expensive), but how the monetary inflation effects spread around individuals interactions is unback-tracktable (we can’t backtrack it).
Forced wealth transfer is a form of stealing (like robbery or theft), but people see those “inflation indexes” as something “normal” or “sane”, since unfortunately no one really knows what is going on.
So, getting back to the “predict the interest rate” thing, sure, if given more money, people tend to consume what they would otherwise not be able to consume. But their time-preference may be so low (such as germany consumers during the war), that monetary inflation doesn’t actually implies in increase in overall consumption (and therefore price increase). For some period, even with monetary inflation, people were so uncertain for their future (according to Mike Maloney) that they tried to save everything they could. After this uncertainty lowered, their time preference went up, and they started consuming, and price inflation appeared. The state went with more monetary inflation, and then price hyperinflation followed. You can see he reading that part here. It’s good even if he is not an austrian, as far as I know (he also uses “money velocity” variable in the full episode, like you).
To sum it up, state fiat monetary inflation is a form of stealing, and predictable monetary inflation does not implies interest rate predictability.
It’s is unfair for a state fiat, because it’s imposed for people to use such currency. Otherwise, its always fair.
On the other point, I don’t know what you mean by “non-unitary increases in the price level”.
If you mean something like “non-uniform increases in the price level”, then I agree, fiat monetary inflation is non-uniformly distributed to whoever got some of that money. This is why there is wealth transfer. Even austrians agree with that.
But I don’t. Cryptocurrencies actually can be uniformly distributed, and therefore have a true neutral monetary inflation. I’m not assuming some Deus Ex Machina (see Human Action by von Mises, p. 417 and p. 440), but pretty much any currency which has public amounts can do it (Bitcoin could, Grin couldn’t). A rule that states “after block A, inputs before A may output 2x as much in the outputs” doubles everyone’s currency amounts. We can pretty safely assumes that everyone knows of this rule (let’s say, this rule was clear from genesis), and that everyone will simply charge 2x as much for everything in such currency. It’s an inflation that obviously doesn’t change the time preference of anyone, and no one became richer nor poorer. No one will start spending more (sure, they will nominally), but it’s meaningless. “Money velocity” term users would probably say that the velocity increased, but this is useless information, because money, in the end, matters for coordination.
(What got actually affected are data size and calculation precision, which I’m just ignoring)
But this is still monetary inflation, so I thought this should be pointed out.
I don’t really agree with this distinction of “store of value” vs “high velocity” money. Even on Bitcoin itself, if you classify outputs by their “lifetimes” (how long until they are spent), I’m pretty sure (I heard about it, but I don’t hold the data and I won’t really look for it), there are clear distinctions of short-lived and long-lived. I heard that about 20% are short-lived (keep changing owners) and 80% sit still. So you could even classify it as 80% held as store of value, 20% as high velocity, and this within the same currency. But one random individual may use it 100% for store of value, or 100% for high velocity trade.
(but to be clear, I’m totally against the usage of “money velocity” term)
But as I said in the previous quote, people would likely to spend more in the present if they feel they will lose wealth if they don’t, but this excludes holders. Everyone needs to hold wealth for the future, even a lone man in a deserted island. A theoretical 100% high velocity money would exclude everyone who would actually need to hold wealth for even a day. To spend the money, you need money-buyers, and those would be scarce in such situation. Therefore, more time would need to be spent to find those buyers (who need to be immediate money-sellers, in a recursive requirement) and other good would be more appropriate for intermediary exchange. Thus, the currency would implode.
So on the contrary, money without “store of value” is impossible.
In Rome and stuff, sure copper could be more commonly used (and have the “high velocity” status). But this doesn’t mean it’s inflation were higher (percentage-wise), as you would likely like to imply (but I don’t actually know if it is, I’m just assuming). It’s simply a matter of individuals pursuing a better calculation precision on daily activities.