re: The Time Table for the Dollar

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but even bitcoin is governed by a set of rules

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Right, but as you admitted in your previous post, the rules are unchangeable, at least by a central authority. Which, IMO, is a great thing.

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Are you for a single global currency?

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If it was something like Bitcoin, then yes. But I don't necessarily think it should be the only currency. I like the idea of currency competition. If Bitcoin is preferable to government backed currencies, then people will naturally move to it, otherwise they will avoid it. The question then becomes one of whether or not the central bankers and governments will allow for that kind of currency competition because...

...if Bitcoin is truly a preferable currency, then it would jeopardize the central banking system.

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It's the impossible trinity. The problem that all countries have with banking. You Chose what the US has, which is the most logical, IMO.

Here's a 80 second explanation

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I watched the video, and it makes total sense to me, but I was left with only one thought:

It's still an artificially created problem due to the existence of nation states. So calling it "impossible" is a bit misleading, IMO. "Impossible in the current worldwide political paradigm trinity" is more accurate, but not as catchy.

Well like I said, I am in the process of understanding economics and business. What I have read may be all lunatic literature but most of it made sense. However I don't necessarily agree with a gold standard based off its use throughout time. I also don't agree with the complete absence of government in the market. But printing money or moving assets to save dying companies makes no sense to me. It delays or spreads the tragedy to other competitors. It's those moves that make me question the role of the government/federal reserve in the economy.

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WikiTiger

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You make a series of great points, but I think that even you would admit that some of them are Utopian. In reality, there are real dangers in a currency that doesn't have someone in control, as there is no one to be held accountable in the occurrence of their failure.

While your premise of competitive currency would allow people to choose which currency to hold and therefore allow people to eliminate that risk, you're completely and totally overrating the intelligence of the human race. Most Wal Mart cashiers have a really hard time making change. They can't do basic arithmetic and it's a part of their daily duties. Do you think they would be able to effectively monitor the risks associated with multiple currencies? I'm going with no.

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I watched the video, and it makes total sense to me, but I was left with only one thought:

It's still an artificially created problem due to the existence of nation states. So calling it "impossible" is a bit misleading, IMO. "Impossible in the current worldwide political paradigm trinity" is more accurate, but not as catchy.

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You win.



I don't think I've ever said that on this site before.

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I sense sarcasm.

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Not really. You make some good points. You are describing a system which I did not consider an option. I think it has some inherent flaws which make it unsustainable, but in all fairness to you, you have similar legitimate concerns about the current system.

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To clarify, I was thinking in terms of a global currency like bitcoin, which if it gained traction on a global scale would be immune to the impossibly trinity, don't you agree?

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A global currency would inherently give up the sovereign monetary policy, unless there is a one world government. Agreed?

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Why do you think bitcoin, or any single global currency, would work?

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Bitcoin will work for multiple reasons:

1) free of government control and manipulation
2) inflation protection
3) inability of governments to freeze 'accounts' or seize assets
4) it's not just a currency but also a transaction system
5) it's not limited by political borders

etc...

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The notion that a single currency benefiting the majority of sovereigns that use it is a very, very misconceived notion.

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Sovereigns won't use it. They will hate it. It's the people that will use it. Sovereigns will attempt to stifle it.

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The only way a single monetary union works is with a single fiscal union.

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I disagree.

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but I'm really curious what you believe the benefits are to it.

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It's a currency and transaction system that offers anonymity, low or no cost transactions, and security.

I've been posting a lot about it lately, mostly on the Poli Board. I'm very fascinated with it, but I also acknowledge it's in its infancy and will likely take 10 years to even get close to critical mass.

The problem is that the exchange rate for bitcoin is still based off of another currency, the dollar in this case. If you allow bitcoin to be a global currency then it won't have a base for the exchange rate and trade equilibrium will be broken as we know it. Trade will be based simply on who can provide an item for the lowest price, which will absolutely ravage developed economies' labor markets. Current standards of living will fall beyond dramatically.

I have some issues with the reasons you pointed out.

1) free of government control and manipulation
- There is no such thing and there will never be such a thing. Power and money will have influence, that is one of the closest things to a certainty I've found in this world.
2) inflation protection
- While there is still a base currency, yes. But as a global currency you become the base and if there are no other currencies not only does inflation/deflation not exist as we know it, trade equilibrium as we know it ceases as well(see above).
3) inability of governments to freeze 'accounts' or seize assets
- I think you seriously underestimate human nature's thirst for power.
4) it's not just a currency but also a transaction system
- How is it any different from book order entry trading systems?
5) it's not limited by political borders
- The euro isn't either, which brings me to the point...

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I disagree.

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The euro is the perfect example of needing fiscal authorities in cooperation with monetary authorities. The basic concept is two completely different things should be valued differently. Entities that take two completely different paths in terms of competitiveness and fiscal responsibility should not be valued the same way. The euro is on its way to a fiscal union within the next decade, but that won't solve the underlying issues of competitiveness for the continent. However, that is a completely separate discussion. My main point is that humans (and in turn sovereigns) will do what they can get away with, and having the same monetary umbrella without fiscal checks and balances puts too much faith in humans doing the right thing. Humans at their core will do what benefits them, and the static economic nature of using bitcoin, or any global currency, would not breed prosperity in the US.

I think the whole basis for being "anti-fed" is the thought that a smooth, increase in wealth is a less admirable goal than a less "manipulated" free market where there are consequences for the players that aren't "smoothed." This is because the goal is purely freedom, not material prosperity and therefore everyone's actions shouldn't be smoothed economically.Also,as others have noted, the authority to control results leads to influence being steered by special interest, which the anti-fed sees as not worth the benefit of stability.

For example, government intervention by the fed and the government through easing and bailouts kept the entire banking industry from collapsing but the debt is racking up. I get what Ron Paul says when he says that our wealth is purely artificial because it is built on debt and monetary policy rather than on pure prosperity. I think if we had the swings in standard deviations cause by a lack of monetary control, it would definitely limit our expansion of standard of living. It would cause uncertainty and instability in employment, etc but on the bright side it would prevent the government from digging us in a hole that we may never be able to get out of. We may not be as rich as we are but government wouldn't have the tools to dig the long-term grave we are digging, IMHO. Definitely a great discussion. I understand both sides' points.

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I think the whole basis for being "anti-fed" is the thought that a smooth, increase in wealth is a less admirable goal than a less "manipulated" free market where there are consequences for the players that aren't "smoothed." This is because the goal is purely freedom, not material prosperity and therefore everyone's actions shouldn't be smoothed economically.Also,as others have noted, the authority to control results leads to influence being steered by special interest, which the anti-fed sees as not worth the benefit of stability.

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This is true. The core of Libertarianism strives for "freedom" over "prosperity" when the two are inconsistent with each other. Libertarian philosophy will allway choose the option that grants more freedom over an option that grants more prosperity but also requires more government control. I beleive that in 99% of cases, however, liberty and prosperity go hand and hand with one another. Currency may be one of those cases where the two are at odds with each other.

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slutiger5

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Every time I see your screen name, I think the same two things.

1) Was the double entendre intentional?
2) Are you a female?