of course there will be. Unlike the Federal Reserve and US government, I welcome currency competition. The cream will rise to the top. It may or may not be bitcoin. It won't be a fiat currency.
You can always very easily exchange currency (although I wouldn't recommend it from a financial perspective due to the bid/ask spread outside of the market).
This disappoints me, Benny, because I thought you were smarter than some of the others here. I really can't believe you are making this argument.
Come the frick on Wiki, I know you aren't versed in the applicational aspect of finance so I've held back from any sort of "name calling" as it doesn't enhance the conversation so don't infer my "ignorance" when you missed my point. My point is that it becomes no different than any other current forms of fiat currency compared to currencies base on a "real" asset, from an applicational standpoint. For example, say all currency goes to your idea of competiting crypto currencies. Bitcoin currently has a value of 1 compared to crypto currency B. Say crypto currency B appreciates to 2 bitcoins, or 0.50 bitcoins per crypto B, or bitcoin appreciates to 2 Cryto B, etc.. If a good or service is denominated in crypto B then you would just pay 2 or 0.5 bitcoins for it. That's the spot market which is pretty straightforward but not the crux of your arguement, however even though moving a decimal doesn't constitute additional supply it falls into the same structure we currently have in that there isn't a "base" or "floor" value that you have to always default to. So now to the futures market, where if crypto currencies became a worldwide institution companies would do most of the business in as they don't want to have currency volatility with transactions. Since the future "supply" of bitcoin, and possibly other future crypto currencies, is a somewhat known figure, futures contracts of bitcoin will bake this into futures prices much like expected interest rates and inflation are baked into the prices of current currency contracts. If there was an all encompassing crypto currency index that goods and services would be denominated in then you would base the price you pay off a bitcoin/crypto index (which is exactly what the dollar index is in my previous post that you ignored), and futures contracts would base expected demand/supply into these as well. My point is supply is essentially a moot point with currencies, which I will continue on here:
Yep. Isn't that beautiful?
Central bank easing monetary policy has no effect on the true applicational supply of fiat currency unless there is economic activity, hence me covering the book entry format in the previous post. The perception may change initially with currency traders shedding dollar long exposure or increasing shorts in the expectation of future weakening, but the end result is you won't actually get an increase in the "supply" of a currency until there is buying of foreign currency denominated goods or lending or credit which is dependent on a lot more factors than just easy monetary policy. Relative demand and relative fundamental economics will be the true drivers of currency valuation, which is why the dollar has appreciated against almost every currency this year.
This is what frustrates me so much when people say the "dollar is tanking", "we're printing the dollar to oblivion", or "we're going to lose our reserve currency status". Relative demand spawned through relative attractive economics drive currency value. Central bank "printing" will not affect whether or not we keep or lose the reserve currency status, that will only be affected by economic activity. China is the only real threat but people massively overestimate how quickly that will come. You not only need economic size and strength, but you also need transparancy, confidence in authority, social stability, etc. which China is severely lacking. They have even admitted as such in closed quarters.
As for most of the rest of your post, I'll just say it like this: We've had this discussion before. The literature you read differs from the literature I read. That's all it comes down to. We could sit here and argue back and forth about this crap until the cows come home but it doesn't look like either of us is going to change our mind any time soon.
Wiki, I've read a lot from the Austrian school, I read ZeroHedge daily, I've read and respect Ron Paul, hell I've wasted my times and even read Zeitgeist material. It has nothing to do with what literature we've both read, it comes down to appicational reality. A lot of those theories make perfect sense in theory but just don't work in reality. Using the best data available at a time is the only way to truly make judgements at a point in time, which is why I posted the dollar index information which I'm not sure why you ignored?
As for the "smoothing" argument, I'm sorry but I don't buy it and I don't know how anyone with a lick of intelligence buys it.
And I don't know how anyone with a "lick" of intelligence can't see the data. Currencies are much more stable than they were pre-central banking and economic growth is much more stable than it was pre-central banking. The "shorter and correct themselves naturally" portion in regards to recessions is just not true in regards to the "shorter" aspect. Even if you include the great depression the average length of recessions since 1913 has been 1 year and 1 month. If you want me to I can go do the math for pre-1913 duration of recessions, but I promise you it'll be longer. Just by spot checking my guess is it'll be around 1 year and 6 months, and I'm being conservative.
Your buddy Benny even admitted that the Federal Reserve caused the Great Depression. Oh, I know, I know, you argue that it's because they didn't do enough.
It's not an arguement. That's what he meant. I've spoken with and sat at several conferences and speaker series with Fed members, affiliates, and governors and everytime that is mentioned they delve into how the Fed didn't do enough. Most of this stuff is a debate/arguement. This isn't, that's what Ben meant. This is one of those we shouldn't waste time on argueing, that's exactly what he meant.
I will further argue that central banking caused the current mess that we're in as well. So much for smoothing.
What, low growth? That's just a natural convergence. High debt? That's a completely different, and much, much longer, conversation which I will half-way disagree with you. I will admit the Fed has given politicians a safety blanket feeling which isn't the Fed's fault, it's a lack of oversight on politicians. The Fed has tried to fight back against politicians several times (mainly Volcker).
Speaking of the natural divergence, if you really want to read something that I almost completely agree with, a masterpiece by Michael Spence is here.
Great piece of literature. Absolutely worth the read.
Why are we even having these debates on bitcoin? That is the core question here.
Because my entire point of arguement here are my two questions in the previous post.
1. How will this be any different than what we currently have?
2. How is it any better than what we currently have?
Why not allow people to use whatever they prefer as a means of exchange?
Why do governments fear that?
This is completely different conversation, because governments are people. As much as you want to think there are grand conspiracies, there really aren't that many. Your point on tyranny is confusing, do you honestly think there is a group of people just chilling and deciding what the fate of the world is on a daily basis?