An IMHO excellent piece on bitcoin

Do you know why there is no way to short bitcoin? Because it's a sure thing to go down and nobody wants to be on the losing end.

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By Felix Salmon

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Good article, very fair, very rational for the most part, but he goes off the deep end when it comes to deflation. Of course, I understand that there are many differing opinions in the economics community when it comes to deflation, but the Austrian school typically welcomes it. Deflation, IMO, is a good thing. It leads to more liberty.

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Deflation, IMO, is a good thing. It leads to more liberty.

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Know how I know you're an idiot?

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LINK?

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He posted the link in his OP. Click on it.

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It highlights the main point I have tried to make, namely that bitcoin's value is mostly either as a store of value for people in countries with bad financial systems

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I've made this point in other threads here if that's what you're asking. The classic definition of money is that it serves as a store of value or as a medium of exchange. Dollars are useful as the latter (which is why we don't need to worry about even halfway predictable levels of inflation). Bitcoins try to fulfill both functions, or so the article argues.

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Deflation, IMO, is a good thing. It leads to more liberty.

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As the article points out, this is only good if you happen to hoard your currency. It is very bad otherwise.

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As the article points out, this is only good if you happen to hoard your currency. It is very bad otherwise.

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Correct. Because if everyone, or even if a significant percentage of the population hoards their currency, commerce screeches to a halt and we go into a prolonged economic depression.

That is exactly what happened in the Great Recession of 2008 through mid-2009. People stopped spending and started saving their money at historically high rates in the U.S. We actually had several quarters of deflation in the U.S. as a result.

And I sure don't recall people celebrating how much more liberty they had when it happened...

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Their standard of living is lower now than it was in 1990.

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So is ours, with inflation.

Damned if you do and damned if you don't I suppose.

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I'm looking for a link to a foshizzle post where he argues that Bitcoin is a good store of value for countries with bad financial systems.

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Ah, sorry. I did misunderstand what you were asking.

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Their standard of living is lower now than it was in 1990.



So is ours, with inflation.

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Since 1990?

You're gonna have to give me some supporting link to that. The '90's in the U.S. was a booming economy which continued up to the dot com bust right after Y2K. And then 9/11 happened which created a short and shallow recession due to people's fears. But the U.S. economy recovered from that up until the 2008 Great Recession.

I sure don't have the perception that the standard of living in the U.S. is lower now than it was in 1990. It might be lower now than it was in 2007, but 1990?? I don't think so.