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Strategies & Market Trends : 2026 TeoTwawKi ... 2032 Darkest Interregnum -- Ignore unavailable to you. Want to Upgrade?

To: TobagoJack who wrote (170537)	4/15/2021 11:27:46 PM
From: sense	Read Replies (1) \| Respond to of 219570

Not much illumination in that article, anyway... It remains a frustration for sound money advocates... that the only truly sound money in the fiat world we have are physical gold and silver. Bitcoin still a useful experiment, even if failing by the numbers now in those elements that matter most in relation to actual utility and persistence in utility beyond fueling a giant Ponzi. What we see shows more innovation required... but also that no single innovation is likely to be ideal, rather less so in the limit that it is not both absolute and flexible enough to adapt to change... giving innovators hooks but not license. The pace of innovation... versus the pace in recidivism... a concern. But the article gets even that element wrong...in perceiving bitcoin as posing a threat... by creating a parallel currency that is inherently deflationary ? We've had gold as money forever... without gold's existence imposing a load of unstoppable deflation on us... even in spite of the best efforts of the printers contracted by the Treasury ? Gold WOULD be deflationary... if you fixed the value per unit currency AND limited the quantity of currencies allowed relative to a fixed amount of gold... which we have not done since Nixon. Similarly, bitcoin would be deflationary... if you allowed the existence of bitcoin to operate to impose limits in the amount of other currencies that can exist ? Otherwise... mining more bitcoin over time... is both directly inflationary... and a contributor (for now) to accelerated liquidity that is goosing the velocity of money... To understand that... get that NO item used as money is deflationary in its own right.... Gold becomes a problem in driving deflation... only when there isn't enough of it (available) to use to enable exchange in commerce, relative to the demand for the amount of money needed to facilitate that commerce that wants to occur ? When Spain ruled the America's and operated the new world gold and silver mines as fast as they could... the flood of new gold and silver made Spain the preeminent global economic power... for a bit over 300 years. But, it also made everyone else suffer the impacts of inflation... as the flood of new money benefited Spain... and just diluted the value of everyone else's money. Mine gold and silver as fast as you can... and the expansion in gold and silver will drive inflation just as much as the expansion in the number of paper slips will. Or, of course, change the value in relation to currencies with rolling devaluations... and the existence and utility of gold in NOT losing its value like fiat... doesn't limit fiats' ability to inflate ? Bitcoin would be deflationary... only if every transaction buying bitcoin... resulted in the fiat used to buy it being burned... Otherwise... bitcoin is inflationary... first as it is a direct substitute for other fiat... fungible... so just the simple fact of it being "more" money than would exist without it generates an inflationary impulse... and second as the escalating price is a direct inflation of "the balance sheet"... of the not well enough disintermediated "non-central" "non-bank" whose reserves it compromises... If I had bought a 1000 bitcoin back when they were $0.10 each... or $1.00 each... etc., odds are pretty good that having 1000 bitcoin worth $67 million today... would make me incrementally more willing to spend those dollars that I do have coming in... just a little bit more liberally than I would without a $67 million dollar "store of digital gold" in my personal "non-central" "non-bank"... ? What bit coin / crypto is doing... and it is obviously apparent in the market now... is PREVENTING the banks fake fiat "inflation" but really "lied to you about it" deflationary policies from shutting down innovation and competition for lack of capital... That's sort of the Reddit/Robinhood/Gamestop story in a nutshell... that not only is there a new ability in the use of social media making "the little guy" able to organize capital flows to compete directly with and counter the investment banks... and win their trades ? There's also a source of new capital backing them... that the investment banks aren't able to capture, control, redirect, and shut down... so the tech boom we're seeing... isn't driven by Wall Street... as much as AT Wall Street... ? Jamie Dimon wouldn't be worried about the competition... if "the usual suspects" were able to control it... as they have managed to for the last 25 years ? Bitcoin is a "win"... whatever other impacts it has... in the degree it succeeds in forcing a reintroduction of actual competition in the now essentially useless monopoly game that is legalized banking... The bigger problem for bitcoin... in isolation... is that when it does stop expanding... as it must and will... when the price finally stops going up... it probably will start coming down... when there is no longer any expectation that it should go up... And, when that happens... THAT will be deflationary... The issue for the economy, though, is that the proliferation of bitcoin mimics or knockoffs... means there is no natural end point to the number of new currencies that might be creatred... and thus no natural end point to the amount of new money that can be created out of thin air... based on some hand-waving explanation about how the quality of the thin air that our Zeeblefunchins are created from... makes it a vastly more appealing currency option than those other less well heeled pretenders. So, we will keep creating more... as long as the market feels a need for more... ? Perhaps that will result in an economy that is NOT continually throttled by liars lying about inflation risks... as they impose the opposite in policy outcomes as they claim to intend ? Privatizing issuance of money... isn't an overly radical step in terms of there already being a proliferation of currencies... given the already excessive numbers of currencies I can trade on line now ? Detaching currency issuance from and control of money by central state authorities... isn't exactly the outcome... as enabling competition in that work they do... isn't overly different than the Post Office having to come to grips with the fact that UPS does a better job... without a need for stamps. The only question that leaves... is whether or not free market pricing in the value of a currency choice... really makes any difference at all... in a world that already has a lot more choices available to it... ? If bitcoin were considered "a virtual new country" with its own currency... and a lot of virtual dual citizens found it useful to maintain duel residency ? When you transition from "we don't need you controlling our money"... to "we don't need you controlling" ? It is possible that the outlines of "what's coming"... haven't formed up well enough to be seen even in rough outline ? Success in a crypto-dystopia... could reduce the role of central banks to that of organized gangs mounting occasional currency hacking raids into competing gangs virtual territory... ? I don't trust that the only possible outcome of digital everything... is greater freedom... rather than the creation of a virtual reality fostering the illusion of choice... The world is not a simulation... but, your participation in the world as if it were... will have costs and consequences...