Yes, bitcoin is predictably hard money.
You cannot simply extrapolate directly from that era to today in the way you are trying to. The situation is different.
Anyway, why do you want to defend dishonest money that funds generational theft and international unjust war? Like, the banking crises of the gold era are MUCH better than the massive evils perpetrated by the modern US federal government. Why are you defending that? What solution do you propose to ending US money hegemony over the world? Or do you support that? I mean, are you like, F those children in the middle east, let's send more of our boys to be cannon fodder, etc.? Do you LIKE letting the big banks steal the country's wealth?
Uh because it doesn't. That's tinfoil hat conspiracy talk.
> What solution do you propose if not hard money?
There really isn't anything wrong with fiat lol. You obtain it, you spend it on necessities, you invest the excess. Inflation is an incentive to productively allocate capital. The variable supply allows an expansion and contraction of the supply to retain stability.
It's backed fully by demand.
The system works just fine lol.
You totally ignored the essential point of my post which is that many things have changed since the gold money era and you can't extrapolate directly from that era to this. In particular, we have instant communication and much better ways to verify institutional financials.
(I'm leaving the conversation now. I know you'll do your best to make it look like I'm wrong, but I'm going to ignore it.)
(1) I don't support ending US hegemony because it's the least worst option.
(2) US hegemony doesn't depend on the dollar.
(3) All major historical wars were fought on hard money so there's no reason to think reverting to hard money would somehow end war. In fact we live in roughly speaking the most peaceful time in recorded history.
(4) Fiat works fine.
(5) Variable supply is ideal because it creates stability and separates long-term store of value (volatile) from short-term store of value and medium of exchange (predictable).
(6) Inflation is useful because it incentives productive allocation of capital.
(7) Banks aren't stealing huge quantities of money from Americans, they make a 1% annualized return on assets on deposit, which is returned to bank shareholders. Money circulates.
(8) Honestly its up to you to explain what changed and why you think there would be a different outcome. Quantifiably.
I don't, it's the least-worst option. The US hegemonic order is better than a Russian hegemonic order, which is in turn better than a PRC hegemonic order. But make no mistake, the currency alone isn't the reason for US hegemony.
> Or do you support that? I mean, are you like, F those children in the middle east, let's send more of our boys to be cannon fodder, etc.?
Hey remember that there World War? That was fought on hard money. Napoleonic Wars? Hard money. Boer War? Hard money. Basically any war in any history book covering pre-mid-century 1900s was fought on hard money. All of colonialism happened on hard money. There will always be sufficient lending resources available to fight a war. That's not a function of monetary policy that's a function of social policy - a matter for congress, not the Fed.
> Do you LIKE letting the big banks steal the country's wealth?
Surely you have some citation. Retail banks serve the Fed in that they expand and contract the money supply via lending. They make very little actual profit for their role. Return on assets on deposit for major US retail banks is roughly 1% annually. That's their fee for managing the money supply on behalf of the federal reserve, which exists at the whim of congress.
Wars like Vietnam, Iraq and Afghanistan could not be financed or prosecuted under a hard money regime.
The wars you name as examples were "real" wars, i.e. they required real sacrifices of the nations involved, political buy-in, and were financially limited in a way that modern US fakewars are not.
(Aside: Of course, our fakewars do require limited sacrifices---of our young "grunts" that are recruited from high schools and haven't received a good enough education to know that signing up for Iraq makes you a sacrificial victim, not a war hero; and that sacrificing yourself in the Middle East hurts our country and is anti-patriotic, rather than the reverse.)
> Surely you have some citation
The rich are getting richer by buying assets (like equities, US homes en masse turning us into a nation of renters, farmland, etc.) while borrowing for nearly nothing. The Fed is what allows the rich to borrow at near zero interest. It isn't literally the banks as corporate institutions that are getting rich; I was referring to "banking" in a more general sense.
If you're serious in asking for a citation, you'll know that in modern scientific and semi-scientific literature works in such a way that there are dozens of "citations" for any position anyone wants to take. "Citations" are not the way to go. Understanding fundamentals is what is needed. That's why we have these conversations. The answer does not lie "in the literature."
I'm leaving the conversation now.
And yet World War 1 could? C'mon now. There is no reason to think that lending would be impossible under hard money. That's how wars are financed now lol.
> The rich are getting richer by buying assets.
Yes, this is social policy not monetary policy and can be addressed easily with a wealth tax. It's a question of appetite not means.
> "Citations" are not the way to go.
Yeah, they are...
The benefit of hard money is citizens actually feel the pain of taxation. With forever wars financed by fiat money, we can funnel freshly printed cash into the meat grinder forever.
They were destroyed financially because they were destroyed physically. There are a lot of reasons the British empire fell apart, including losing Hong Kong to the Japanese showing the world they were no longer able to protect their territorial posessions. Pinning this on hard money is really difficult IMO but if it was actually hard money, that sounds like a great reason not to adopt it? Empire collapse sounds bad...
> Afghanistan lasted far longer and had no real sacrifice of current citizens, other than debt which will be paid by debasement.
What makes you think lending won't be possible in a hard money environment? Afghanistan was expensive but not that expensive. US GDP is 21T. Afganistan cost $100B/yr, or 0.47% of GDP. America can fight forever-wars because of its largesse, not its ability to create debt. That's just accounting.
You can't make a $21T GDP country feel $0.1T/yr. That's a rounding error in appropriations. The Defense budget alone is $700B/yr.
> With forever wars financed by fiat money, we can funnel freshly printed cash into the meat grinder forever.
This is social policy not monetary policy. Japan has a soft monetary system, struggles constantly with deflation and has no army.
Taxation is an explicit act that is visible on your paycheck; something you sign on at the end of the year. Debasement is more subtle and the common man who has little in his bank account may not even consider the effect, thus rationally would be more likely to go along with a war based on implicit debasement rather than explicit taxation.
>This is social policy not monetary policy. Japan has a soft monetary system, struggles constantly with deflation and has no army.
War is a social and monetary policy in a fiat currency nation; including a tacit approval for debasement to pay for that which cannot or will not be paid via other means.
In the past you have argued that illegal immigrants / criminals should not be aided with easier monetary tools for their trade. If that point follows, that could be extended to the criminals who authorized the latest Iraq War and last decade of the Afghanistan war as well. Fiat debasement is just one tool in the toolbox of the criminals in legislature and Federal Reserve. [*Note: personally I do not agree with your hypothesis that we should restrict the monetary tools of criminals. I think instead we should focus on the underlying crime itself.]
Of course, the rich already know all this, and seek to hold most of their wealth in assets and then hide any capital gains with any shell game they can.
You don't have to tax in a hard money environment, you can borrow. That's how wars have been funded in the past. You sell bonds. There's no reason to think a bond market would disappear under a hard money environment is there? You a can borrow against Bitcoin today lol. With 125X leverage!
> Note: personally I do not agree with your hypothesis that we should restrict the monetary tools of criminals. I think instead we should focus on the underlying crime itself
Por que no los dos?
Restricting guns leads to less gun crime. Restricting financial tools leads to less financial crime. Restricting access to bomb-making equipment makes it harder to create bombs. I'm fine with all that.
Whether that's a good thing or a bad thing depends on the character of the small number of people "hodling" the majority of the BTC. I expect it would be a catastrophe after a generation or two of inherited BTC wealth, with BTC "nobles" raising private armies attack each other and lord it over the population.
Yes I recall the great Swiss Civil War of the 1990s, when the holders of the gold backed Francs fought for spoils of each canton. Perhaps our Polish friend can chime in on the horrors of the refugees he saw.
>no lending or spending would be possible without their assent
Lending and spending shouldn't be possible without the assent from those which the money comes. Involuntarily spending someone else's money is also known as theft.
You are indicting the greater system you think Bitcoin represents (which resembles sort of monarchy or feudalism). You ignore that this system has been overcome even with those transacting in hard currencies. This reads of fear mongering or some desire to emulate Nostradamus.
I wouldn't expect those plutocrats to get along in perpetuity, and if there's no way to expropriate their inheritances, they'd form a permanent class of (potential) warlords.
Unless you have a problem with the Nuremburg trials and you think the holocaust was just a gentleman's disagreement between the Jews and German government, I think you understand the government is capable of crime.
> The state is the will of the people
There's certainly an argument to be made here currency debasement is not necessarily the will of the people, unless you truly think the people of Zimbabwe or Venezuela wanted to see their already inflating bills lose value even faster as the government printed more to fund the wages and ill-gotten gains of corrupt bureaucrats.
I really haven't done either of these things haha, I suspect you're not following.
> Unless you have a problem with the Nuremburg trials and you think the holocaust was just a gentleman's disagreement between the Jews and German government, I think you understand the government is capable of crime.
The question of whether a state can commit a crime is a difficult one because the state itself decides what is and is not a crime domestically. When you throw someone in a locked room, it's kidnapping, but when the state does it, it's an arrest. Abortion is legal in some states now, not in others. The same action committed in different places may or may not be a crime depending on which state you're physically located.
A crime in the legal sense is defined as "an action or omission that constitutes an offense that may be prosecuted by the state and is punishable by law."
With respect to the Holocaust some aspects were criminal and some were redefined not to be crimes in Germany by the Nazis. In a real way the fact a lot of it either wasn't a crime or wasn't prosecuted is the reason the war happened. To make it a crime, and to prosecute it.
When you go to that extreme, you usually land on "yeah, you and who's army?"
More on the notion of state crimes here. [1]
For a state to commit a crime, it's not as simple as you make it out to be, see Article 19 paragraph 2 of the ILC Draft Articles on State Responsibility. It has to be an internationally wrongful act, resulting from the breach of an International obligation which is essential for the protection of fundamental interests of the international community and also be recognized as a crime by that community as a whole.
Under that framework you can see why whether the Holocaust was a crime in Nazi Germany or not is more challenging to answer, whereas the international community decided that - under that framework - it was, and well, we had a war over it to make sure that international definition matched up with the domestic one.
So we circle back to...
> Does restriction of financial tools that are used to abet crime help reduce crime or not?
I think you'll find that overwhelmingly financial matters do not rise to the level of international crimes under the ILC Draft Articles on State Responsibility. This leaves it largely to the state to define.
Therefore, given that the state broadly decides in financial matters what is and is not criminal the state really isn't in a position to commit financial crimes at home - as they can simply change the law to define them as legal without running afoul of the aforementioned. Individuals can. And therefore, broadly speaking, no, the restriction of financial tools does not reduce the ability of a state to commit crimes. It does in fact prevent individuals from committing crimes as defined by said state.
You're asking for a simple answer to a very complex question.
> There's certainly an argument to be made here currency debasement is not necessarily the will of the people, unless you truly think the people of Zimbabwe or Venezuela wanted to see their already inflating bills lose value even faster as the government printed more to fund the wages and ill-gotten gains of corrupt bureaucrats.
Sure, and we call that a failed state. In a failed state, you have bigger problems than your currency (like violence, bloodshed and a devastated economy) - and once you resolve your governance issues, your currency will no longer be a problem.
So lets rephrase the question:
Does restriction of financial tools that are used to abet the harming of innocent victims (which virtually everyone else but you refers to as a crime) help reduce the harming of those victims or not?
No it does not, because the state can simply borrow from its people. The state will not be limited in its ability to carry out these actions.
Only individuals who try and commit financial crimes will be materially impacted.
Again the question you keep dodging is what makes you think the government won't be able to borrow to fund its wars in exactly the same way it does now, and exactly the same way it did for hundreds of years under sound money?
> Which virtually everyone else but you refers to as a crime.
Uh, if they did it would be a crime. But you're gonna need to cite some sources! More than likely the international community is onboard because the target state violated international norms and they see this as the lesser of two evils, and therefore not a crime.
Don't project your morality here :) we're talking about a very difficult concept. There's no right or wrong here, no absolutes. Just minimization of harm. Nobody's flying this ship!
Thank you. Now that we've established that restricting financial tools does not stop the harming of innocent victims, it follows that a state such as El Salvador adopting bitcoin (or for instance, an allegedly untraceable currency such as monero) as legal tender as part of its monetary policy does not lead to increased harming of innocents. Those with desire to harm others, including those in government, could simply borrow or trade fiat from the other ilk who like to harm others.
You now understanding why restricting crypto doesn't prevent the underlying crimes (now a criminal just has to steal your identity or use one of the other gazillion illegal and legal ways to move funds) to transfer his funds abroad instead of using coinbase and a cellphone. Killing the legality of crypto stops the law abiding unbanked from having a very low cost means of international transfer.
You understand now that restricting access to fertilizer to prevent bombs is stupid, because now the common man who grows food can no longer provide the grain stock for the nation. Or restricting guns from the peaceful is asinine because it disarms the innocent against the criminal who can buy a gun readily on the black market virtually anywhere in the world or failing that 3d print a very reliable one for only a few hundred dollars including ammunition out of unrestricted materials even in Europe.
> But you're gonna need to cite some sources!
You're the first person who's ever actually demanded from me I cite the fact that the US has harmed innocents in war, but here you go![1]. That's just one bombing, there's plenty more acts such as as the My Lai massacre but I don't enjoy seeing more pictures of dead 2 year olds which you say is the "will of the people" since it was done by the government. Or perhaps we are a "failed" state?
>Don't project your morality here :)
Is it even a contentious subject that the bombing of innocents is wrong? What about the killing of nuns in El Salvador by US backed regime? Why do you think discussion of morality is off limits? If there is to be a government, is it not just that it at least be used to deal with the most gravest of brutal acts such as the killing of innocents?
[1] https://www.cnn.com/2021/08/29/asia/afghanistan-kabul-evacua...
This is such a cheap thing for you to say. Of course I could find citations for my position, and you could find citations for yours. Grow up!
Mockery in a place where an intellectual response goes says a lot. Learn how to have an adult conversation.
Why are you even on this site?
P.S. I've taken econ classes. Can you think, or do you just accept whatever any particular book tells you as truth?
Stimulating a zombie economy will just keep it alive longer. Economy must be allowed to die and regenerate.
There's a 100% chance of some kind of crisis in our future.
The first crisis in a system with no monetary policy will knock everything down.
Hard monetary policy is like nailing a board between the dock and the boat - it's great for stability ... until the tide goes out, or, a big wave comes.
That's why we use ropes, not boards.
Currencies can only exist within an economic zone and they're a useful tool wit price stability etc.. BTC provides none of that so it's not very useful.
It's a neat idea.
Also, the US definitely does not have 'Monetary Hegemony' in the world. Just an outside influence, that's waning a bit.
The 'Big Banks' are not stealing your wealth because of monetary policy, for the most part. They will steal your wealth just as well with BTC.
https://wtfhappenedin1971.com/
This makes a compelling case that abandoning hard money is exactly where we went off the rails and the money started flowing straight to the top.
The top marginal tax rate in the US dropped from 90% in 1963 to 30% in 1983. The bottom tax rate was 0% in the 1970s and it's now 10%. A compression of 70%. [2] The estate tax went from 80% to 30% by 2010 [4], and is now roughly speaking eliminated (the exemption is now almost $12M) [3]. The minimum wage went from an inflation-adjusted $12 to today's $7.25 [5]. This all while the tools of social mobility (education, health care) were allowed to run way in excess of inflation in the US. Way in excess.
[edit] Union participation went from 25% in the 1970s to 10% today and the wage growth is almost perfectly inversely proportional to union participation. [6] Check out the wage distribution on page 12.
None of this is monetary policy, it's 100% social policy. That's why inequality started to really accelerate. If you decide that the rich should keep 7X more of their take home pay, yeah, they get richer. If you decide the rich should be able to pass on their estates to their kids tax-free, their kids get richer. If you make education harder to obtain, the already-rich have a leg up. If you make healthcare impossible to obtain, the already-rich don't die.
If you want to reduce inequality advocate for unions, advocate for inflation-adjusted minimum wage, pegged at a notional $15/hr and kill the tipped minimum wage of $2.13/hr. Advocate for socialized medicine. Advocate for free college. Advocate for all the shit that Europeans have. Advocate for more meaningful progressive taxation, increasing the top end and bringing the bottom end below zero. Bring back a 90% estate tax. Bring in mandatory sick leave and 6 months of paid mat/pat leave!
Check out the Europe vs. US graph on Page 6 [1]. Europe is also centrally banked, and also exited the gold standard by 1973.
Correlation != causation.
Your cause is noble but you're tilting at wrong windmills Quixote! :) None of this changes under hard money!
This is the outcome of 50 years of ultra-conservative social policies.
[1] https://ec.europa.eu/info/sites/default/files/economy-financ...
[2] https://commons.wikimedia.org/wiki/File:Historical_Marginal_...
[3] https://en.wikipedia.org/wiki/Estate_tax_in_the_United_State...
[4] https://en.wikipedia.org/wiki/Estate_tax_in_the_United_State...
[5] https://www.pewresearch.org/fact-tank/2017/01/04/5-facts-abo...
[6] https://www.hamiltonproject.org/papers/the_shift_in_private_...
Anyway, most bitcoins in existence today were produced on a laptop so I don't know about hard to produce.