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Satoshi got it right; "Chancellor on Brink of Second Bailout for Banks" — 10 years and running strong. Seems the Austrians are winning back a century of lost g

Satoshi got it right; "Chancellor on Brink of Second Bailout for Banks" — 10 years and running strong. Seems the Austrians are winning back a century of lost ground!

qubex 7y ago
Satoshi got it extremely wrong, to the point that if he had any economic background at all I’d suspect the first wave of crypto currencies to be a sick joke: artificial scarcity (and more generally, inflexible money supply) of the kind engendered by bitcoin and its ilk are the exact embodiment of what money must not be if one is to not artificially crimp the economy’s growth. There’s a very good reason why we came off the so-called Gold Standard (bimetallic standard, actually), and why coming off it heralded the greatest period of economic growth in Western history.
- koheripbal 7y ago
  Bingo. Money is only a useful medium of exchange if it is stable, and deflationary currencies are inherently volatile.
  - DanTheManPR 7y ago
    Double bingo. Money is only useful insofar as it has velocity. If speculators are just sitting on it, it's not facilitating economic activity.
    - qubex 7y ago
      I’d never thought of it that way but I wholeheartedly agree.
  - lawn 7y ago
    Don't delude yourself to thinking that the volatility of Bitcoin is due to it's constrained supply. It's because it's used for speculation almost exclusively, and not for it's intended purpose: buying stuff.
    - deleted 7y ago
      [deleted]
  - qubex 7y ago
    The volatility of bitcoin has nothing to do with its eventual theoretical maximum (and therefore extremely long-term contraction, as the theoretical maximum will be subject to corruption, loss, and so forth). The volatility of bitcoin and other cryptocurrencies (or more accurately, crypto-assets) is due to their extremely shallow markets and unpredictable volumes.
- drcode 7y ago
  Satoshi used his/her economic theories to create a 100 billion market cap asset from literally zero... what would they have to do to convince you folks that they were on to something with their ideas? Also cure cancer?
  - oblio 7y ago
    There's been fads bigger than Bitcoin that no one remembers anymore. The true test of Bitcoin is longevity.
    - drcode 7y ago
      No, there has never been a "fad" that had a 100 billion dollar market cap.
      - qubex 7y ago
        Yeah... but... nah... it being the biggest fad in history does not mean it’s not a fad. If even 5% of bitcoin held were placed on the market simultaneously the whole thing would implode like a coke can filled with a vacuum. It’s totally illiquid and any attempt to cash out by a significant proportion of holders would herald instant disaster. That’s why it’s so volatile. Research shows the 2017 peak and crash were due transactions by a single ‘whale’.
      - SketchySeaBeast 7y ago
        I wonder what the total worth of tulips during tulip mania were worth.
  - doublement 7y ago
    Bitcoin isn't used for anything except to transfer dollars from regular buyers to miners and/or large early adopters.
    - drcode 7y ago
      Nobody is forced to buy Bitcoin.
- larrysalibra 7y ago
  "we" came off of the gold standard because Nixon was having trouble paying for the Vietnam war. Printing money doesn't create wealth, it redistributes it to the printer: this is seigniorage and it is a tax https://en.wikipedia.org/wiki/Seigniorage https://en.wikipedia.org/wiki/Seigniorage
  - mc32 7y ago
    Whatever the case, it’s bit of odd bedfellows when extreme conservatives and some people on the left see the bi-metallic standard as something to go back to. What’s the case for it?
    - logicchains 7y ago
      It takes power away from the government. Printing money is a wealth transfer from currency holders to the printer (hence why counterfeiting is illegal), and the government has unlimited ability to do this, which in the case of a bad government can result in hyperinflation and mass impoverishment, like happened recently in Zimbabwe and Venezuela. It's harder for the government to do this with gold.
  - qubex 7y ago
    No, the Gold Standard effectively died when convertibility of paper currency into gold was suspended, starting with the Gold Reserve Act of 30 January 1934 and subsequently elsewhere. The post-WWII Bretton Woods regimen of “gold standard without domestic convertibility” definitely falls short of meeting the gold standard for gold standards: absent any audit of extant gold reserves, the price of gold (dictated by a purely hypothetical estimation of availability) served as a fixed exchange-rate (and thus implicitly fixed relative real rate of risk-free interest) and not as a true gold standard. To say that Nixon dictated the end of the Gold Standard is as myopic as to suggest that the surgeon who removes the organs from a brain-dead patient is guilty of murder.
- Mirioron 7y ago
  >There’s a very good reason why we came off the so-called Gold Standard (bimetallic standard, actually), and why coming off it heralded the greatest period of economic growth in Western history. How sure are we that this was a good idea in the long run? Politicians and their appointees aren't always the most responsible people. If it's possible for them to obfuscate some of their spending without upsetting people then we could end up with quite a surprise later. The US already has a big debt problem. I get where you're coming from, but I'm just not sure whether we know the long-term consequences of this.
  - qubex 7y ago
    > The US already has a big debt problem I’m going to stop you right there. You see a large public debt and you presume, because you view debt as all household agents do (i.e., as something that needs to be repaid and that limits future discretionary spending). It’s not necessarily that way for a nation-state that (as the article seems to recount) can literally print money to make good on the debts it is running up. The US has a big debt. A debt is, for households/firms/private individuals usually a “problem”, so a big debt would qualify as a big problem. But that doesn’t apply here. Who would be most alarmed by a true “debt problem”? The bond-holders, one presumes. And yet there’s apparently no limit to the willingness of market participants to lend money to the US and, judging by the yields on those bonds, no suspicion of default. There is no debt problem. There is just a big debt, because lots of money needs to be in circulation to support the massive amount of economic activity going on.
    - Mirioron 7y ago
      The percentage paid as interest of the budget seems to be increasing. Current forecasts put it at over 12% by 2023. That's double what it was in 2016. At that point it'll rival US military spending in size. When would you say it becomes a problem? Does it have to become the highest cost item on the budget? The government is borrowing money that future taxpayers have to bear the burden of. Does the return on that extra spending outpace the servicing cost? >Who would be most alarmed by a true “debt problem”? The bond-holders, one presumes. That's only the case if the problem was that the US wasn't going to pay back its debt. The problem is that future generations are responsible for paying back the debt, not the current generations. This means that the people potentially most affected by this aren't even born yet.
- logicchains 7y ago
  >Satoshi got it extremely wrong, to the point that if he had any economic background at all I’d suspect the first wave of crypto currencies to be a sick joke ... >coming off [the Gold Standard] heralded the greatest period of economic growth in Western history. You got this extremely wrong, to the point that if you had any economic background at all I'd suspect your comment to be a sick joke. The US saw average growth rates of over 4% in the 19th century as it industrialised. By the time the Gold Standard was abandoned, most of the west was already thoroughly "developed", and could not grow as fast as before due to there being fewer lower-hanging fruit. This is the same reason places like China and India see growth rates of 6-8% in recent years (compared to 2-3% in the west): there are many more low-hanging fruit in a developing economy (e.g. moving the 50%+ of the population engaged in subsistence farming into more productive factory or service work). As an aside, such language is unbecoming of anyone who wishes economics to be considered a real science. Even in physics, where it's possible to craft exact, repeatable experiments that can prove a statement true with 99.999% accuracy, practitioners still try to avoid bombast and smuggery because of how easy it is to make mistakes. Yet in economics, a field where it's difficult to even repeat the same experiment twice, and no model can predict the future anywhere near as accurately as a simple model such as Newton's laws can in physics, many practitioners seem quite comfortable making grandiose, bombastic and mocking statements with complete confidence in their own correctness. To me this smells like a consequence of economists never having been exposed to the humbling experience of having to validate their models' predictions against the real world, and not being held accountable for bad predictions.
  - qubex 7y ago
    As the youth of today are wont to remark: “whatevs”.

Satoshi got it right; "Chancellor on Brink of Second Bailout for Banks" — 10 years and running strong. Seems the Austrians are winning back a century of lost ground!

qubex 7y ago

Satoshi got it extremely wrong, to the point that if he had any economic background at all I’d suspect the first wave of crypto currencies to be a sick joke: artificial scarcity (and more generally, inflexible money supply) of the kind engendered by bitcoin and its ilk are the exact embodiment of what money must not be if one is to not artificially crimp the economy’s growth. There’s a very good reason why we came off the so-called Gold Standard (bimetallic standard, actually), and why coming off it heralded the greatest period of economic growth in Western history.

koheripbal 7y ago
Bingo. Money is only a useful medium of exchange if it is stable, and deflationary currencies are inherently volatile.
- DanTheManPR 7y ago
  Double bingo. Money is only useful insofar as it has velocity. If speculators are just sitting on it, it's not facilitating economic activity.
  - qubex 7y ago
    I’d never thought of it that way but I wholeheartedly agree.
- lawn 7y ago
  Don't delude yourself to thinking that the volatility of Bitcoin is due to it's constrained supply. It's because it's used for speculation almost exclusively, and not for it's intended purpose: buying stuff.
  - deleted 7y ago
    [deleted]
- qubex 7y ago
  The volatility of bitcoin has nothing to do with its eventual theoretical maximum (and therefore extremely long-term contraction, as the theoretical maximum will be subject to corruption, loss, and so forth). The volatility of bitcoin and other cryptocurrencies (or more accurately, crypto-assets) is due to their extremely shallow markets and unpredictable volumes.
drcode 7y ago
Satoshi used his/her economic theories to create a 100 billion market cap asset from literally zero... what would they have to do to convince you folks that they were on to something with their ideas? Also cure cancer?
- oblio 7y ago
  There's been fads bigger than Bitcoin that no one remembers anymore. The true test of Bitcoin is longevity.
  - drcode 7y ago
    No, there has never been a "fad" that had a 100 billion dollar market cap.
    - qubex 7y ago
      Yeah... but... nah... it being the biggest fad in history does not mean it’s not a fad. If even 5% of bitcoin held were placed on the market simultaneously the whole thing would implode like a coke can filled with a vacuum. It’s totally illiquid and any attempt to cash out by a significant proportion of holders would herald instant disaster. That’s why it’s so volatile. Research shows the 2017 peak and crash were due transactions by a single ‘whale’.
    - SketchySeaBeast 7y ago
      I wonder what the total worth of tulips during tulip mania were worth.
- doublement 7y ago
  Bitcoin isn't used for anything except to transfer dollars from regular buyers to miners and/or large early adopters.
  - drcode 7y ago
    Nobody is forced to buy Bitcoin.
larrysalibra 7y ago
"we" came off of the gold standard because Nixon was having trouble paying for the Vietnam war. Printing money doesn't create wealth, it redistributes it to the printer: this is seigniorage and it is a tax https://en.wikipedia.org/wiki/Seigniorage https://en.wikipedia.org/wiki/Seigniorage
- mc32 7y ago
  Whatever the case, it’s bit of odd bedfellows when extreme conservatives and some people on the left see the bi-metallic standard as something to go back to. What’s the case for it?
  - logicchains 7y ago
    It takes power away from the government. Printing money is a wealth transfer from currency holders to the printer (hence why counterfeiting is illegal), and the government has unlimited ability to do this, which in the case of a bad government can result in hyperinflation and mass impoverishment, like happened recently in Zimbabwe and Venezuela. It's harder for the government to do this with gold.
- qubex 7y ago
  No, the Gold Standard effectively died when convertibility of paper currency into gold was suspended, starting with the Gold Reserve Act of 30 January 1934 and subsequently elsewhere. The post-WWII Bretton Woods regimen of “gold standard without domestic convertibility” definitely falls short of meeting the gold standard for gold standards: absent any audit of extant gold reserves, the price of gold (dictated by a purely hypothetical estimation of availability) served as a fixed exchange-rate (and thus implicitly fixed relative real rate of risk-free interest) and not as a true gold standard. To say that Nixon dictated the end of the Gold Standard is as myopic as to suggest that the surgeon who removes the organs from a brain-dead patient is guilty of murder.
Mirioron 7y ago
>There’s a very good reason why we came off the so-called Gold Standard (bimetallic standard, actually), and why coming off it heralded the greatest period of economic growth in Western history. How sure are we that this was a good idea in the long run? Politicians and their appointees aren't always the most responsible people. If it's possible for them to obfuscate some of their spending without upsetting people then we could end up with quite a surprise later. The US already has a big debt problem. I get where you're coming from, but I'm just not sure whether we know the long-term consequences of this.
- qubex 7y ago
  > The US already has a big debt problem I’m going to stop you right there. You see a large public debt and you presume, because you view debt as all household agents do (i.e., as something that needs to be repaid and that limits future discretionary spending). It’s not necessarily that way for a nation-state that (as the article seems to recount) can literally print money to make good on the debts it is running up. The US has a big debt. A debt is, for households/firms/private individuals usually a “problem”, so a big debt would qualify as a big problem. But that doesn’t apply here. Who would be most alarmed by a true “debt problem”? The bond-holders, one presumes. And yet there’s apparently no limit to the willingness of market participants to lend money to the US and, judging by the yields on those bonds, no suspicion of default. There is no debt problem. There is just a big debt, because lots of money needs to be in circulation to support the massive amount of economic activity going on.
  - Mirioron 7y ago
    The percentage paid as interest of the budget seems to be increasing. Current forecasts put it at over 12% by 2023. That's double what it was in 2016. At that point it'll rival US military spending in size. When would you say it becomes a problem? Does it have to become the highest cost item on the budget? The government is borrowing money that future taxpayers have to bear the burden of. Does the return on that extra spending outpace the servicing cost? >Who would be most alarmed by a true “debt problem”? The bond-holders, one presumes. That's only the case if the problem was that the US wasn't going to pay back its debt. The problem is that future generations are responsible for paying back the debt, not the current generations. This means that the people potentially most affected by this aren't even born yet.
logicchains 7y ago
>Satoshi got it extremely wrong, to the point that if he had any economic background at all I’d suspect the first wave of crypto currencies to be a sick joke ... >coming off [the Gold Standard] heralded the greatest period of economic growth in Western history. You got this extremely wrong, to the point that if you had any economic background at all I'd suspect your comment to be a sick joke. The US saw average growth rates of over 4% in the 19th century as it industrialised. By the time the Gold Standard was abandoned, most of the west was already thoroughly "developed", and could not grow as fast as before due to there being fewer lower-hanging fruit. This is the same reason places like China and India see growth rates of 6-8% in recent years (compared to 2-3% in the west): there are many more low-hanging fruit in a developing economy (e.g. moving the 50%+ of the population engaged in subsistence farming into more productive factory or service work). As an aside, such language is unbecoming of anyone who wishes economics to be considered a real science. Even in physics, where it's possible to craft exact, repeatable experiments that can prove a statement true with 99.999% accuracy, practitioners still try to avoid bombast and smuggery because of how easy it is to make mistakes. Yet in economics, a field where it's difficult to even repeat the same experiment twice, and no model can predict the future anywhere near as accurately as a simple model such as Newton's laws can in physics, many practitioners seem quite comfortable making grandiose, bombastic and mocking statements with complete confidence in their own correctness. To me this smells like a consequence of economists never having been exposed to the humbling experience of having to validate their models' predictions against the real world, and not being held accountable for bad predictions.
- qubex 7y ago
  As the youth of today are wont to remark: “whatevs”.