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> Once upon a time the world used money whose value the oligarchs and governments couldn't easily manipulate: gold (and gold certificates). Why do you think go

> Once upon a time the world used money whose value the oligarchs and governments couldn't easily manipulate: gold (and gold certificates). Why do you think gold certificates can’t be manipulated? > The outcome? Widespread poverty, depressions, wars, etc. You’re missing the part where you substantiate your opinion that “poverty, depressions, wars, etc.” are the result of a stable currency. > What makes you think that wouldn't happen again with Bitcoin? I’m not sure “again” is warranted given that the invention of government fiat has done nothing to mitigate “poverty, depressions, wars, etc.” Also I’m not claiming that bitcoin will end war for all time. Just that governments/banks can’t currently print more than 24 million or so.

leereeves 6y ago
> You’re missing the part where you substantiate your opinion that “poverty, depressions, wars, etc.” are the result of a stable currency. It's not a fringe view: Economists, such as Barry Eichengreen, Peter Temin and Ben Bernanke, blame the gold standard of the 1920s for prolonging the economic depression which started in 1929 and lasted for about a decade.[35][36][37][38][39] It has been described as the consensus view among economists.[40][41] In the United States, adherence to the gold standard prevented the Federal Reserve from expanding the money supply to stimulate the economy, fund insolvent banks and fund government deficits that could "prime the pump" for an expansion. Once off the gold standard, it became free to engage in such money creation. The gold standard limited the flexibility of the central banks' monetary policy by limiting their ability to expand the money supply. In the US, the central bank was required by the Federal Reserve Act (1913) to have gold backing 40% of its demand notes.[42] https://en.wikipedia.org/wiki/Gold_standard#Depression_and_World_War_II https://en.wikipedia.org/wiki/Gold_standard#Depression_and_W... > I’m not sure “again” is warranted given that the invention of government fiat has done nothing to mitigate “poverty, depressions, wars, etc.” I don't agree, from a US perspective, based on comparing the depressions, poverty, and wars we had before and after the end of the gold standard in 1971 (say, in the 50 years before and after).
- chordalkeyboard 6y ago
  > It's not a fringe view: It still needs to be substantiated. > In the United States, adherence to the gold standard prevented the Federal Reserve from expanding the money supply to stimulate the economy, fund insolvent banks and fund government deficits that could "prime the pump" for an expansion. Argument by authority combined with argument by assertion. why do you think that devaluing people’s money and inflating the price of assets that the wealthy already own is going to help poor people feed themselves? Per Krugman, the point of quantitative easement is to decrease wages in real terms while keeping the same nominal price.
  - leereeves 6y ago
    Anything more than citations would be too much for a HN comment. There's more depth in the citations for the excerpt I linked. To oversimplify: Bitcoin has a limited supply, the majority of which is already held in too few hands, many of whom have a HODL attitude that prevents circulation. It also has transaction fees and technical obstacles that prevent circulation. How can Bitcoin ever be widely adopted as money without strangling the real economy? Fiat isn't perfect, but at least it allows concentration of wealth to be countered by issuing more fiat money, even if too much of that goes to the rich. And if Bitcoin won't be widely adopted as money, how is it going to be anything more than an speculative asset traded from one hand to another, with any profits extracted from a new speculator (sometimes called a pyramid scheme)?
    - chordalkeyboard 6y ago
      > Fiat isn't perfect, but at least it allows concentration of wealth to be countered by issuing more fiat money, even if too much of that goes to the rich. This leads to greater concentration of wealth. Since people don’t seem to understand that, we have this feedback cycle where policy leads to concetration of wealth, which cause people to advocate policies that lead to further concentration of wealth, over and over again. People need to break the cycke by realizing that printing money causes assets (held by the rich) to appreciate, and wages (earned by everyone else) to decrease in real terms.

leereeves 6y ago

> You’re missing the part where you substantiate your opinion that “poverty, depressions, wars, etc.” are the result of a stable currency. It's not a fringe view: Economists, such as Barry Eichengreen, Peter Temin and Ben Bernanke, blame the gold standard of the 1920s for prolonging the economic depression which started in 1929 and lasted for about a decade.[35][36][37][38][39] It has been described as the consensus view among economists.[40][41] In the United States, adherence to the gold standard prevented the Federal Reserve from expanding the money supply to stimulate the economy, fund insolvent banks and fund government deficits that could "prime the pump" for an expansion. Once off the gold standard, it became free to engage in such money creation. The gold standard limited the flexibility of the central banks' monetary policy by limiting their ability to expand the money supply. In the US, the central bank was required by the Federal Reserve Act (1913) to have gold backing 40% of its demand notes.[42] https://en.wikipedia.org/wiki/Gold_standard#Depression_and_World_War_II https://en.wikipedia.org/wiki/Gold_standard#Depression_and_W... > I’m not sure “again” is warranted given that the invention of government fiat has done nothing to mitigate “poverty, depressions, wars, etc.” I don't agree, from a US perspective, based on comparing the depressions, poverty, and wars we had before and after the end of the gold standard in 1971 (say, in the 50 years before and after).

chordalkeyboard 6y ago
> It's not a fringe view: It still needs to be substantiated. > In the United States, adherence to the gold standard prevented the Federal Reserve from expanding the money supply to stimulate the economy, fund insolvent banks and fund government deficits that could "prime the pump" for an expansion. Argument by authority combined with argument by assertion. why do you think that devaluing people’s money and inflating the price of assets that the wealthy already own is going to help poor people feed themselves? Per Krugman, the point of quantitative easement is to decrease wages in real terms while keeping the same nominal price.
- leereeves 6y ago
  Anything more than citations would be too much for a HN comment. There's more depth in the citations for the excerpt I linked. To oversimplify: Bitcoin has a limited supply, the majority of which is already held in too few hands, many of whom have a HODL attitude that prevents circulation. It also has transaction fees and technical obstacles that prevent circulation. How can Bitcoin ever be widely adopted as money without strangling the real economy? Fiat isn't perfect, but at least it allows concentration of wealth to be countered by issuing more fiat money, even if too much of that goes to the rich. And if Bitcoin won't be widely adopted as money, how is it going to be anything more than an speculative asset traded from one hand to another, with any profits extracted from a new speculator (sometimes called a pyramid scheme)?
  - chordalkeyboard 6y ago
    > Fiat isn't perfect, but at least it allows concentration of wealth to be countered by issuing more fiat money, even if too much of that goes to the rich. This leads to greater concentration of wealth. Since people don’t seem to understand that, we have this feedback cycle where policy leads to concetration of wealth, which cause people to advocate policies that lead to further concentration of wealth, over and over again. People need to break the cycke by realizing that printing money causes assets (held by the rich) to appreciate, and wages (earned by everyone else) to decrease in real terms.