Bitcoin has all of the problems listed in the article and is, arguably, not yet providing the social value that blockchain could.
Not sure how a high market cap is a counter argument to that.
Not sure how a high market cap is a counter argument to that.
Here is a good introductory article about the topic:
https://slatestarcodex.com/2019/02/25/wage-stagnation-much-m...
TL;DR: Inflation plays at most a secondary role, the majority of the effect is a result of stagnant real wages, i.e. the capital owners kept a larger share of the productivity gains.
Does the article conclude that the correlation with the US going off the gold standard, and consequent change in monetary policy, is completely spurious?
It seems to me that like most macroeconomics issues, it's a multivariate phenomenon, so correlational studies can only get you so far.
Do you have books you would recommend on the subject?
Sadly I can't seem to find the article anymore, but there was a publication by Robert Brenner that showed that the fundamental changes of the early 70s also affected Soviet Russia in quite similar ways.
Edit, sorry, forgot your literature question. I think the two important keywords are Fordism and Post-Fordism, as economic literature usually seems to use these terms to describe what changed before and after the early 70s. The Wikipedia article on Post-Fordism lists a few theory lines and their authors: https://en.wikipedia.org/wiki/Post-Fordism
See also Enron, WorldCom, Nortel, Bre-X (for the Canadians out there).
> […] and lately corporations put into Bitcoin as a store of wealth and a hedge against inflation.
Given its volatility, I'm not sure how useful it is as a store of wealth. Less than a year ago it lost half its value in two days (before the recent run-up):
* https://www.cnbc.com/2020/03/13/bitcoin-loses-half-of-its-va...
If you think inflation is coming, then you need to stop working in economics and/or finance, as you're burning up returns hedging against it, at least in the US/industrialized world. The last time it was a problem was >40 years ago (mostly due to OPEC):
* https://fred.stlouisfed.org/series/FPCPITOTLZGUSA
Outside of specific circumstance, deflation is the predominant force:
> But Inflation is not inevitable. There are numerous countervailing forces that have been at work for much of the past 50 years. The three big Deflation drivers: 1) Technology, which creates massive economies of scale, especially in digital products (e.g., Software); 2) Robotics/Automation, which efficiently create more physical goods at lower prices; and 3) Globalization and Labor Arbitrage, which sends work to lower cost regions, making goods and services less expensive.
> Put into this context, Inflation is periodic, driven by specific events; Deflation is consistent, the background state of the modern economy. To fully understand this requires grasping how scarcity and abundance act as the drivers of the price of labor and goods. My suspicion is many economists who came of age during earlier eras of inflation fail to discern how the world has changed since.
* https://ritholtz.com/2021/02/stop-stressing-about-inflation/
As for inflation, I’m guessing the exact opposite argument to yours was being made in the 80s.
By definition, inflation is what happens when demand exceeds supply. If the fed keeps flooding the market with cheap credit the expectation is that the money is invested into more production, either by machines or by foreign labor (i.e. in China). Prices stop growing because supply outstrips demand. That's why the fed is failing to create sufficient inflation. Supply side stimulus is causing the opposite effect and at the same time it is leading to an asset bubble.
Even if 1 client per year buy it (let's say my token purpose is to give to access to private content on my website), then my marketcap is still 10^32 $, because marketcap is just the number of supply x the last traded price of my coin.
And yes, we both agree, marketcap has 0 value. It was just to make a point that using the marketcap as argument makes no sense.
What about the people who try to sell it after buying it? If they have to sell it for 10^-32 $ before someone buys it then that immediately drops your market cap to just about nothing.
> And yes, we both agree, marketcap has 0 value
No, I just explained why marketcap correctly values your coin as absolutely worthless.
(1) not to mention the fact that as soon as there is volatility exchange sites go down, even the bigger ones.
Not sure what your point here is - as if panic and runs on the banks were somehow magically prevented by crypto.