8 ms·

> Has 1 USD ever not been worth exactly 1 USD Not really. If you own 1 fiat dollar today and I double the money supply tomorrow, I have just halved the value o

by noch 6y ago

> Has 1 USD ever not been worth exactly 1 USD Not really. If you own 1 fiat dollar today and I double the money supply tomorrow, I have just halved the value of your fiat dollar over time. Your share of the money supply has been diluted[1]. 1 nominal FD tomorrow is worth 0.5FD in real terms all else held constant. Of course this thought experiment is trivial and oversimplified because the real question is about purchasing power. But consider that majority of USD in existence were "printed"[2] last year. Consider that the global fiat monetary base expanded by ~50% last year. "Since 1933, the U.S. dollar has lost 92 percent of its domestic purchasing power. Even at its “moderate” 1994 inflation rate of 2.7 percent, the dollar will lose another half of its purchasing power by 2022." https://www.google.com/amp/s/fee.org/articles/central-banks-gold-and-the-decline-of-the-dollar/amp https://www.google.com/amp/s/fee.org/articles/central-banks-... [1]: https://cryptovoices.com/basemoney https://cryptovoices.com/basemoney [2]: https://www.lynalden.com/money-printing/ https://www.lynalden.com/money-printing/

SketchySeaBeast 6y ago
But that's not what the statement was - that it's always 1 to 1, which it always is. If you have a $1 bill from 1973 it still can be exchange for a 2021 $1 bill. If you look at today and tomorrow, sure, the value will change, but bitcoin has also gained and (occasionally lost) buying power. The statement is doubly useless as you could also say that "1 oz of Gold has always been worth 1 oz of gold." so it's not just currencies, it's also commodities that this rule is going to apply to.
- noch 6y ago
  > If you have a $1 bill from 1973 it still can be exchange for a 2021 $1 bill. Nominally. How do you grok the practice of coin-clipping? You hand in one gold coin which is then clipped and you are given a coin with a smaller percentage of gold in it. 1 solidus is still nominally worth 1 solidus. But it's really worth 0.x a solidus. Does this debasement matter? The coin has the same name but it's not the same coin. > bitcoin has also gained and (occasionally lost) buying power. Over the long term, Bitcoin can only gain and has only gained purchasing power, algorithmically. Unlike with fiat, your proportional share, based on your stack of coins, of the total value in the economy has not changed. This assumes a Bitcoin Standard where bitcoin is the world currency. (Some of us already live on a Bitcoin Standard preemptively.) With fiat, your share has been debased. 1 usd is not equal to 1 usd over time. With Bitcoin, your ruler is always accurate. 1 satoshi = 1 satoshi over time unto eternity. Fiat cannot make that claim. That's what we mean when we say 1 btc = 1 btc. > "1 oz of Gold has always been worth 1 oz of gold." Now you see why gold was the world's hardest money. It's chemical stability guaranteed this statement. Hardly any other commodities behave this way. Unless you have examples?
  - SketchySeaBeast 6y ago
    > How do you grok the practice of coin-clipping? You hand in one gold coin which is then clipped and you are given a coin with a smaller percentage of gold in it. 1 solidus is still nominally worth 1 solidus. But it's really worth 0.x a solidus. Does this debasement matter? The coin has the same name but it's not the same coin. That's not how modern money is reckoned. It's a neat aside, but it has nothing to do with a modern currency. > Over the long term, Bitcoin can only gain and has only gained purchasing power, algorithmically. True. As of this moment it's gained before. Day to day it's an entirely different matter. > Unlike with fiat, your proportional share, based on your stack of coins, of the total value in the economy has not changed. This assumes a Bitcoin Standard where bitcoin is the world currency. (Some of us already live on a Bitcoin Standard preemptively.) Bitcoins are being generated. It's a planned inflation - how do you reckon that with the share not changing? You have less porportions of the total Bitcoin supply. Unless wealth is created from nothing with every bitcoin generated you've lost a proportion of the wealth. It only works right now because it's being measured against things, if it ever became the determining standard, you'd be experiencing inflation with it. > With fiat, your share has been debased. 1 usd is not equal to 1 usd over time. With Bitcoin, your ruler is always accurate. 1 satoshi = 1 satoshi over time unto eternity. Fiat cannot make that claim. Again, this is a nonsense argument. You either have to accept that the 1973 $1 bill is still worth a dollar (relative to the dollar) or you have to admit that a 2010 Bitcoin is not worth the same as a 2021 bitcoin. > Now you see why gold was the world's hardest money. It's chemical stability guaranteed this statement. Hardly any other commodities behave this way. Unless you have examples? Silver. Sheep, salt. 1 measure of any commodity has always equaled itself. Bitcoin is just a commodity right now. That's it. If it becomes the standard currency it'll experience deflation as the supply grows just like any other currency.
    - noch 6y ago
      Lol. Okay. You win. You are right about everything. Thanks for your time.
iso1631 6y ago
M3 money supply in 2004 was 6.41T M3 money supply in 2009 was 8.48T M3 money supply in 2014 was 11.67T M3 money supply in 2019 was 15.32T So 60% of money in existence in 2019 was created in the previous 15 years Are you imply that means that the purchasing power of the dollar has dropped 70% then, and a dohicky that cost $1 in 2004 would cost $2.40 in 2019 in line with M3 increase? The cost of bread in 2004 was 97c, and was $1.36 in 2019 - increasing at 2.3% per year. [0] A pound of chicken went from $1.03 to $1.45 - 2.3% per year [2] A gallon of milk dropped from $3.23 to $3.19 in that time period [1] Official inflation figures for 2004-2019 are $1.35, about 2% per year, and that includes the time period of the 2008 crash. Rental price for an acre of cropland across the US in 2004 was $76.5, in 2019 it was $140, increase of 4.1% per year [4] Rental price for a primary residence has increased 3.05% per year [5] In that time GDP has increased by about 3.8% per year [3] Median wages have increased by about 2.6% per year [6] That period included the massive money printing of 2008 crash, none of it says hyperinflation, despite the federal reserve "printing" $3.9T between 2009 and 2014. [0] https://www.statista.com/statistics/236635/retail-price-of-white-pan-bread-in-the-united-states/ https://www.statista.com/statistics/236635/retail-price-of-w... [1] https://www.statista.com/statistics/236854/retail-price-of-milk-in-the-united-states/ https://www.statista.com/statistics/236854/retail-price-of-m... [2] https://www.statista.com/statistics/236834/retail-price-of-fresh-chicken-in-the-united-states/ https://www.statista.com/statistics/236834/retail-price-of-f... [3] https://countryeconomy.com/gdp/usa?year=2019 https://countryeconomy.com/gdp/usa?year=2019 [4] https://quickstats.nass.usda.gov/results/58B27A06-F574-315B-A854-9BF568F17652#7878272B-A9F3-3BC2-960D-5F03B7DF4826 https://quickstats.nass.usda.gov/results/58B27A06-F574-315B-... [5] https://www.in2013dollars.com/Rent-of-primary-residence/price-inflation/2004-to-2019?amount=1000 https://www.in2013dollars.com/Rent-of-primary-residence/pric... [6] https://www.ssa.gov/OACT/COLA/central.html https://www.ssa.gov/OACT/COLA/central.html
- noch 6y ago
  > That period included the massive money printing of 2008 crash, none of it says hyperinflation, despite the federal reserve "printing" $3.9T between 2009 and 2014. [chuckle] Now do assets as well. Do healthcare and school fees and energy for good measure. > […] dohicky […] Also see Jeff Booth's "The Price of Tomorrow" for a discussion on the deflationary effects of technology. Also consider velocity of money and if it slows as governments and commercial banks print. Also, M3 contains illiquid assets. Perhaps, better to think in terms of base money? https://cryptovoices.com/basemoney https://cryptovoices.com/basemoney For fun, the history of McDonald's menu prices. > Official inflation figures for 2004-2019 are $1.35, about 2% per year, and that includes the time period of the 2008 crash Inflation is perhaps a vector.[0] > Median wages have increased by about 2.6% per year US centric but consider also https://wtfhappenedin1971.com/ https://wtfhappenedin1971.com/ [0]: https://www.lynalden.com/fiscal-and-monetary-policy/ https://www.lynalden.com/fiscal-and-monetary-policy/

by noch 6y ago

SketchySeaBeast 6y ago

But that's not what the statement was - that it's always 1 to 1, which it always is. If you have a $1 bill from 1973 it still can be exchange for a 2021 $1 bill. If you look at today and tomorrow, sure, the value will change, but bitcoin has also gained and (occasionally lost) buying power. The statement is doubly useless as you could also say that "1 oz of Gold has always been worth 1 oz of gold." so it's not just currencies, it's also commodities that this rule is going to apply to.

noch 6y ago
> If you have a $1 bill from 1973 it still can be exchange for a 2021 $1 bill. Nominally. How do you grok the practice of coin-clipping? You hand in one gold coin which is then clipped and you are given a coin with a smaller percentage of gold in it. 1 solidus is still nominally worth 1 solidus. But it's really worth 0.x a solidus. Does this debasement matter? The coin has the same name but it's not the same coin. > bitcoin has also gained and (occasionally lost) buying power. Over the long term, Bitcoin can only gain and has only gained purchasing power, algorithmically. Unlike with fiat, your proportional share, based on your stack of coins, of the total value in the economy has not changed. This assumes a Bitcoin Standard where bitcoin is the world currency. (Some of us already live on a Bitcoin Standard preemptively.) With fiat, your share has been debased. 1 usd is not equal to 1 usd over time. With Bitcoin, your ruler is always accurate. 1 satoshi = 1 satoshi over time unto eternity. Fiat cannot make that claim. That's what we mean when we say 1 btc = 1 btc. > "1 oz of Gold has always been worth 1 oz of gold." Now you see why gold was the world's hardest money. It's chemical stability guaranteed this statement. Hardly any other commodities behave this way. Unless you have examples?
- SketchySeaBeast 6y ago
  > How do you grok the practice of coin-clipping? You hand in one gold coin which is then clipped and you are given a coin with a smaller percentage of gold in it. 1 solidus is still nominally worth 1 solidus. But it's really worth 0.x a solidus. Does this debasement matter? The coin has the same name but it's not the same coin. That's not how modern money is reckoned. It's a neat aside, but it has nothing to do with a modern currency. > Over the long term, Bitcoin can only gain and has only gained purchasing power, algorithmically. True. As of this moment it's gained before. Day to day it's an entirely different matter. > Unlike with fiat, your proportional share, based on your stack of coins, of the total value in the economy has not changed. This assumes a Bitcoin Standard where bitcoin is the world currency. (Some of us already live on a Bitcoin Standard preemptively.) Bitcoins are being generated. It's a planned inflation - how do you reckon that with the share not changing? You have less porportions of the total Bitcoin supply. Unless wealth is created from nothing with every bitcoin generated you've lost a proportion of the wealth. It only works right now because it's being measured against things, if it ever became the determining standard, you'd be experiencing inflation with it. > With fiat, your share has been debased. 1 usd is not equal to 1 usd over time. With Bitcoin, your ruler is always accurate. 1 satoshi = 1 satoshi over time unto eternity. Fiat cannot make that claim. Again, this is a nonsense argument. You either have to accept that the 1973 $1 bill is still worth a dollar (relative to the dollar) or you have to admit that a 2010 Bitcoin is not worth the same as a 2021 bitcoin. > Now you see why gold was the world's hardest money. It's chemical stability guaranteed this statement. Hardly any other commodities behave this way. Unless you have examples? Silver. Sheep, salt. 1 measure of any commodity has always equaled itself. Bitcoin is just a commodity right now. That's it. If it becomes the standard currency it'll experience deflation as the supply grows just like any other currency.
  - noch 6y ago
    Lol. Okay. You win. You are right about everything. Thanks for your time.

iso1631 6y ago

M3 money supply in 2004 was 6.41T M3 money supply in 2009 was 8.48T M3 money supply in 2014 was 11.67T M3 money supply in 2019 was 15.32T So 60% of money in existence in 2019 was created in the previous 15 years Are you imply that means that the purchasing power of the dollar has dropped 70% then, and a dohicky that cost $1 in 2004 would cost $2.40 in 2019 in line with M3 increase? The cost of bread in 2004 was 97c, and was $1.36 in 2019 - increasing at 2.3% per year. [0] A pound of chicken went from $1.03 to $1.45 - 2.3% per year [2] A gallon of milk dropped from $3.23 to $3.19 in that time period [1] Official inflation figures for 2004-2019 are $1.35, about 2% per year, and that includes the time period of the 2008 crash. Rental price for an acre of cropland across the US in 2004 was $76.5, in 2019 it was $140, increase of 4.1% per year [4] Rental price for a primary residence has increased 3.05% per year [5] In that time GDP has increased by about 3.8% per year [3] Median wages have increased by about 2.6% per year [6] That period included the massive money printing of 2008 crash, none of it says hyperinflation, despite the federal reserve "printing" $3.9T between 2009 and 2014. [0] https://www.statista.com/statistics/236635/retail-price-of-white-pan-bread-in-the-united-states/ https://www.statista.com/statistics/236635/retail-price-of-w... [1] https://www.statista.com/statistics/236854/retail-price-of-milk-in-the-united-states/ https://www.statista.com/statistics/236854/retail-price-of-m... [2] https://www.statista.com/statistics/236834/retail-price-of-fresh-chicken-in-the-united-states/ https://www.statista.com/statistics/236834/retail-price-of-f... [3] https://countryeconomy.com/gdp/usa?year=2019 https://countryeconomy.com/gdp/usa?year=2019 [4] https://quickstats.nass.usda.gov/results/58B27A06-F574-315B-A854-9BF568F17652#7878272B-A9F3-3BC2-960D-5F03B7DF4826 https://quickstats.nass.usda.gov/results/58B27A06-F574-315B-... [5] https://www.in2013dollars.com/Rent-of-primary-residence/price-inflation/2004-to-2019?amount=1000 https://www.in2013dollars.com/Rent-of-primary-residence/pric... [6] https://www.ssa.gov/OACT/COLA/central.html https://www.ssa.gov/OACT/COLA/central.html

noch 6y ago
> That period included the massive money printing of 2008 crash, none of it says hyperinflation, despite the federal reserve "printing" $3.9T between 2009 and 2014. [chuckle] Now do assets as well. Do healthcare and school fees and energy for good measure. > […] dohicky […] Also see Jeff Booth's "The Price of Tomorrow" for a discussion on the deflationary effects of technology. Also consider velocity of money and if it slows as governments and commercial banks print. Also, M3 contains illiquid assets. Perhaps, better to think in terms of base money? https://cryptovoices.com/basemoney https://cryptovoices.com/basemoney For fun, the history of McDonald's menu prices. > Official inflation figures for 2004-2019 are $1.35, about 2% per year, and that includes the time period of the 2008 crash Inflation is perhaps a vector.[0] > Median wages have increased by about 2.6% per year US centric but consider also https://wtfhappenedin1971.com/ https://wtfhappenedin1971.com/ [0]: https://www.lynalden.com/fiscal-and-monetary-policy/ https://www.lynalden.com/fiscal-and-monetary-policy/