The reason why we have inflation and debt is to keep the value of our currencies stable. IE, if people want to use dollars, the US government can print more dollars to satisfy the demand. (And thus keep the value stable.)
Cryptocurrency's volatile value is a result of its inability to "print money" when more people want to use it.
Remember: Currency is not an investment. A good currency has a stable value over time; otherwise it's very difficult to conduct commerce.
I'm not following. By definition, inflation is what happens when the price of a currency is not stable.
> Remember: Currency is not an investment. A good currency has a stable value over time; otherwise it's very difficult to conduct commerce
Agreed. But in countries with high inflation, such as mine, you will lose money if all your wealth is stored as fiat.
Even fairly high inflation levels of say 7% annually can still be quite stable on a daily or monthly basis which is all you really need. As most people spend most of their paycheck every month and savings aren’t limited to the currency in question.
By comparison crypto coins tend to have much higher daily and monthly variations which isn’t a big deal for savings, but in practice it discourages their use for day to day expenses.
Even without knowing what country you are from, I would bet that inflation is because imports and exports imbalances and nothing to do with "printing too much money".
And anyway, if the problem is storing value, why you don't buy gold or dollars, yens or something like that?
Those are the traditional means and are usually banned or strongly regulated, if the states money is at stake.
That kind of stability is more beneficial to the middle class than any negatives that may come with that level of inflation.
[0] https://www.nytimes.com/2020/09/02/business/australia-recess...
And if you're going to break the guidelines and comment on voting anyway, the very least that you could do is also add some value to the discussion, e.g. add some thoughts/elaboration/support for the points made.
Australia has gone 30 years without recession because we're supplying commodities like iron into the most miraculously productive miracle in all of recorded history, aka mainland China. And because we've got one of the highest rates of net migration in the developed world.
On a per capita basis Australia has had recessions, and it is a stretch to say that our inflation target did anything relative to all the other countries that have inflation targets.
However, bitcoin experiences 10-20% drops against the USD on a regular basis. It looks like this announcement has triggered another one. It's not stable, it's just (a) appreciated over time a lot and (b) is doing better against the USD than, say, the Argentine peso.
> By definition, inflation is what happens when the price of a currency is not stable
Inflation is what happens when the price of goods and services in a currency is not stable. It can be triggered without a change in the money supply by underlying shocks to the real economy (e.g. 70s oil shocks)
Bitcoin claims to guarantee money supply stability, but it cannot guarantee price stability.
That's also the case in countries with low inflation. That's why, in the US, wealthy people don't stuff cash in mattresses, or keep most of their wealth in general bank accounts. They buy stocks, bonds, real estate, ect. This is also why, in the US, investment vehicles like 401ks and IRAs are highly encouraged.
A stable currency would have an inflation rate of 0%. Inflation does not cause currency stability, it decreases the value of the currency.
By definition, its value is changing.
Sure, and if the government had centralized control of all prices, it could mandate that. Since it doesn't (even those that assert that power don't have it in practice), what it seeks to do, as far as stability, is try to acheive low short-term price volatility, and as it turns out, experience shows that low-to-moderate inflation helps with that.
The M1 isn't the measure that matters - but it is a fact that large amounts of money are appearing from somewhere and that is probably the most significant factor in the currency losing value. Price controls are an overreaction, there are easier ways to make the currency more stable.
[0] https://tradingeconomics.com/united-states/money-supply-m1
No it doesn't. M1 also includes demand deposit accounts (checking and savings accounts), among other things that aren't physical currency.
The USD is one of the most stable currencies in the world.
Perhaps that is why countries like Japan are changing the definition of crypto and calling it "virtual assets" instead of "virtual currency".
The CCP is a bunch of unambitious individuals. Everything that causes troubles to the CCP means troubles for Xi and the possibility that his "president for life" title might be revoked, creating room for somebody else to ascend.
From a game theory standpoint it is better to be at the helm of a slightly less relevant organization than being a subordinate of an organization plowing ahead at full steam unrivaled.
This is even more true in politics and NGOs where the monetary compensation is very limited and it's all about the status.
This thing also poses a real threat to SWIFT and anyone trying to put together a successor to SWIFT. The US has been weaponising international currency transfers for a while now, and China would be facing problems controlling capital flows if people could just send money internationally without much consequence. There are good, selfish, reasons for why governments would intervene.
Why would any sane person invest in real estate? You have maintenance costs, property taxes, it's not liquid and you can go years with little growth. Not to mention if your area see's hard economic times (i.e. Detroit), the chance of a rebound is slim.
You also ignore the premise being put forth, that Bitcoin as a currency still isn't ideal. You don't think "long term investment" with currency so much as short to medium term. Like, will bread and milk cost 10x as much next week?
"Stop thinking investment and start thinking survival" might be a good way to put it.
Nassim Taleb disagrees: https://youtu.be/dLOeBSaq-Ps
I bet the CoinGeek conference audience were stunned by his keynote talk because Taleb used to be a supporter.
At the same time, hedging against inflation is hard. The things you suggested come with their own risks.
I think a future in which crypto becomes stable due increased adoption is possible, and in that future it will be a good hedge.
Does that logic applies in China? Are real state or equities a protection from volatility on a self proclaimed communist country? What about South America, Lebanon or Turkey?
The incontestable precious and invaluable wisdom of the hacker news poster who potentially lives on US California or some rich western country on a comfortably fat salary.
Every. single. time.
Bailouts are another benefit. Governments can at will dull or even prevent financial contagion thus preventing another Great Depression.
All this has a cost in the form of inflation until the money is reabsorbed of course but it’s better than economic collapse.
The burden of the proof always lies with the person or the entity trying to sell something.
The government failed to sell QE and bailouts to the population, the government further failed to sell inflation target at 2% to the population.
Had government not failed in selling these concepts we'd not have bitcoin.
Government as always can't sell. Otherwise it won't be government.
I recall a recent vote where someone was elected president by a significant majority running on just this platform.
In any event even if this was true an ambitious organization such as the government can't be satisfied with 52% confidence in its financial planning
As a democracy, there's no alternative to the government working with whatever majority it gets.
The government managed to sell the need for the military industrial complex.
The military is the most popular branch of the Federal Governemnt whereas the Fed and Treasury linger at 50-60% depending on who is in the WH.
50-60% is very low, that's the reason why Bitcoin thrives. If that number was 92-95% then Bitcoin would not exist.
Is it possible to have that number at 92-95% ? Maybe, maybe not...in any event the answer is not attacking bitcoin because even if Bitcoin is destroyed that remaining 50% void will be filled pretty quickly by something else.
In fact the the US government actually made money from the bailout.
> In total, U.S. government economic bailouts related to the global financial crisis had federal outflows (expenditures, loans, and investments) of $633.6 billion and inflows (funds returned to the Treasury as interest, dividends, fees, or stock warrant repurchases) of $754.8 billion, for a net profit of $121 billion.
- https://en.wikipedia.org/wiki/Troubled_Asset_Relief_Program#...
If you are an organization with 6000 nukes, 22T GDP, largest navy and airforce you don't get to cry about "misinformation".
People don't like QE and bailouts. Period. The burden of the proof is always on the person/organization trying to sell something. Always. For sure the public didn't conceive QE or bailouts and didn't try to sell it to the government.
Bitcoin would not exist if QE and bailouts were marketed by master salesmen such as Steve Jobs, Dana White, Don King or David Geffen
We as investors should operate with what is perceived by the population, not textbooks.
Perceptions move the market, and in the case of Bitcoin perception created a market. From 0 to 2 trillions in 10 years.
It’s not like the banks didn’t suffer during 2008. That bailout money was mostly returned with interest. All the government did was extend a lifeline.