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re: The Time Table for the Dollar
Posted on 12/4/12 at 9:10 am to BennyAndTheInkJets
Posted on 12/4/12 at 9:10 am to BennyAndTheInkJets
quote:
Why do you think bitcoin, or any single global currency, would work?
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...
quote:
The notion that a single currency benefiting the majority of sovereigns that use it is a very, very misconceived notion.
Sovereigns won't use it. They will hate it. It's the people that will use it. Sovereigns will attempt to stifle it.
quote:
The only way a single monetary union works is with a single fiscal union.
I disagree.
quote:
but I'm really curious what you believe the benefits are to it.
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.
2
Posted on 12/4/12 at 9:26 am to WikiTiger
The one problem with bitcoin (and every system like it) is if there is no governing authority, how do you stop/reverse fraud?
Posted on 12/4/12 at 10:37 am to WikiTiger
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...
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 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...
quote:
I disagree.
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.
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