Around 1/1000 worth of all printed currency in the world.
Ppl complain about bitcoin, but fiat is the same.
Ppl complain about bitcoin, but fiat is the same.
0.0000% of them transacted in Gold or Bitcoin
2) The fundamental property and requirement of currency is fast, seamless transactions. Don't confuse this with store of value. If you want store of value buy cash/dividend producing assets.
3) It's incredibly dumb and naive (all Bitcoin maximalists and Gold Bugs are) to ask currency to both act as transaction and store of value (those are opposite requirements).
4) Gold Peaked in 2011 with a price of 1900. It has lost 10% in 11 years. Forget about beating inflation, it actually has lost value over 11 years. Just a reminder is Boomer Gold == Gen X/Y Bitcoin. All it took was Gen X/Yers embracing Bitcoin over Gold to make Gold irrelevant All it will take would be Gen Zers embracing something over Bitcoin to make Bitcoin irrelevant
Cash/dividends denominated in falling currency is not a store of value. Ie. a profitable business that takes revenue in and pays out dividends in Turkish Lira or Venezuelan Bolivar. Not an issue for those in west, but not everyone has access to stable currency/markets.
> to ask currency to both act as transaction and store of value (those are opposite requirements).
They are actually complimentary, with one use-case following the other. For anything to be become tradable (used as currency) it must first be valuable. Over time, money that hold their value better become the "better money", as its ability to hold value becomes self-evident, and everyone becomes willing to accept it. This is how we got to a gold standard over some thousands of years. Lesser valuable monies trade hands more frequently, and have higher velocity, not because they are preferred to be held, but because people view them as inferior stores of value. Ie. you hoard the gold coins, and daily trade with the silver and copper ones. The proliferation of trade denominated in silver or copper makes it appear that a society prefers silver or copper as their money, but this is a deceptive metric.
Paper dollars initially represented a redeemable voucher for gold in a vault. Trading paper gold was more convenient than custodying actual gold. However you expected the paper to be redeemable for gold, which is why this paper bill had value in the first place.
A business bought in Turkey will pay the net-profit margin of the said business (in whatever currency you denominate it).
Both are inflation protected.
If you want economic risk protection because of inflation/hyper-inflation in your local currency, buy GOOG, AAPL or a broad basket of International Stock.
In a stable environment, using currency as store of value for anything more than 3 months is stupid
In an inflationary environment, using currency as store of value for anything more than a week is stupid.
Gold didn't act as store of value. Bitcoin didn't act as a store of value. Both are what it is --- speculative assets (not store of value).
If you really really really want a currency that acts as a store of value, of course there is the King Dollar, the greatest currency in the history of currencies.
Not sure about your logic here. The more exposure you have to an inflating/hyperfinflating currency, the more risk you carry. Your house holds value, but the rent in fiat you collect doesn't. Every month you collect X liras, but they become worth less and less. You're assuming you can reprice rent on demand, but contractually this is dependent on the locale.
> In a stable environment, using currency as store of value for anything more than 3 months is stupid
You only seem to be thinking in the single dimension of currency for the average person. You forget that all government treasury bonds (pretty big and important financial instrument in any economy) are denominated in some fiat currency. 10, 20, 30 year bonds. There are macro affects when people no longer expect or trust a currency to hold value. It is part of how debt crises occur.
> If you really really really want a currency that acts as a store of value, of course there is the King Dollar, the greatest currency in the history of currencies.
People think Bitcoin is a monetary experiment. But it really is the modern day fiat currencies that is the huge experiment.
We started with gift based economies where people keep track of favors in their head and after that ancient Egypt introduced a grain standard which did the exact opposite of holding value and it worked for thousands of years and encouraged long term investments like the pyramids as there is no point in making the rest of the economy wait eternally.
The Roman empire ran the first silver/gold growth pyramid scheme which forces it to conquer more and more territory to mine more silver and gold as they fail to circulate throughout the economy and lead to pointless economic stagnation. Egypt fell victim to this overexpansion and once the Romans ran out of easy territory to capture, they couldn't mine enough silver to pay their soldiers, forcing them to reduce the silver content of their coins. This is especially problematic if those soldiers are foreign mercenaries who are former refugees driven off their home by the Huns. Since there are plenty of privately wealthy people with gold and silver, they try their hand at playing Caesar and hire their own army, only to get killed by another self proclaimed Caesar or by their own men if they run out of money. Some Caesars tried to impose price controls by threatening capital punishment instead, with little success.
What we are looking at are two thousand failed years of permanent money. Madmen trying to do the same thing over and over again with the same expected outcome.
Honestly your whole argument has a pretty huge flaw and that one has nothing to do with store of value or medium of exchange but rather with a property that any successful medium of exchange must have. A medium of exchange doesn't need a high velocity or be a good store of value, those can be desirable in some contexts but they miss the essence of what it means to be money.
Money is an asset whose primary property is to be highly liquid. Liquidity is the ability to trade one asset for another. Money is effectively a joker. Money that is widely accepted is more liquid than money that isn't. Money that is difficult to handle and transport is less liquid than money that is compact and lightweight. Money that needs to be weighed and verified is less liquid than stamped coins or bank notes of fixed denominations.
Government approved money that can be used to pay taxes or loans is more liquid than privately issued money where people have to voluntarily agree to accept the currency.
If you build your money on a commodity, that commodity will need to be versatile and either be the foundation of your economy or have a wide variety of uses.
Not even money itself is perfectly liquid. A soda vending machine may not accept large bank notes or credit cards, meanwhile self checkout may only take credit cards and no cash.
These properties are independent of whether the currency retains its value or has a high velocity. Of course, extreme shocks in either of these properties may ruin liquidity but most currencies tend to limp along even with 20% inflation which according to you should be enough to ruin liquidity and make everyone and their dog switch to gold but again, dollars are more liquid than gold so people prefer those.
And what gives an asset ultimate liquidity? Liquidity is desire to be owned by someone else. Something needs to make it desirable, what could that be?
Otherwise we'd be using feathers as money.
Printed currency value is pure speculation.