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> it depreciates because of the Fed The dollar depreciates / appreciates due to various economic factors, not just because of actions by the Federal Reserve.

• bhupy 6y ago
  I don't think anyone disagrees that there are multiple causes of depreciation. The key takeaway from your link is that USD value is a combination of (1) Fed policy as well as (2) economic growth and corporate profits (or lack thereof). The argument is that (2) is an inevitability of the market, whereas (1) is political. Crypto adherents aim to solve for (1) and accept the inevitability of (2). And deciding to use Coinbase to store (and exchange) your crypto is not at odds with that philosophy. To be clear, I live my entire life on fiat, and most of my savings are in traditional financial instruments. What I take issue with is the misrepresentation of the case for crypto; when it comes to assets like Bitcoin, Coinbase is not equivalent to a central bank nor will it ever be.
  • joubert 6y ago
    > (1) Fed policy as well as (2) economic growth and corporate profits (or lack thereof). The argument is that (2) is an inevitability of the market, whereas (1) is political. The market is influenced by politics more than you might expect, and, conversely, the Fed’s actions are less political that you think.
    • bhupy 6y ago
      Oh yeah, it's certainly a spectrum. That being said, political influence on markets (e.g. via fiscal policy) is indirect and can take years to manifest. https://fivethirtyeight.com/features/no-bill-clinton-does-not-know-how-to-fix-the-economy/ https://fivethirtyeight.com/features/no-bill-clinton-does-no... https://fivethirtyeight.com/features/dont-let-trump-or-any-president-take-credit-for-strong-jobs-numbers/ https://fivethirtyeight.com/features/dont-let-trump-or-any-p... https://www.theatlantic.com/business/archive/2014/07/why-the-economy-grows-faster-under-democrats-than-republicans/375180/ https://www.theatlantic.com/business/archive/2014/07/why-the... Monetary policy, on the other hand, is immediate. Interest rates and treasury yields cause immediate movement in the economy because capital can be made liquid. It also has the potential to get really bad really fast, as we've seen with hyperinflation in Venezuela and Zimbabwe. And specifically speaking to the merits of assets that are free from Fed/Treasury policy; if you had held a little bit of gold throughout the 2000s as a safety net, it'd have been much easier to weather the storm of the financial crisis than if you hadn't. People flock to safe haven assets to seek refuge from their country's policies when required: https://news.bitcoin.com/venezuela-bitcoin-use-hyperinflation-crypto-adoption/ https://news.bitcoin.com/venezuela-bitcoin-use-hyperinflatio... https://www.coindesk.com/nigeria-bitcoin-adoption https://www.coindesk.com/nigeria-bitcoin-adoption Gold (and other comparable deflationary assets) are considered a hedge against fiat. Whether Bitcoin can also be seen as a comparable asset is the central question, but looking at the last 12 years, the ship has mostly sailed there.