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I have an hypothesis that the same could happen with deflationary cryptocurrencies if they become used widely enough in financial institutions that central bank

I have an hypothesis that the same could happen with deflationary cryptocurrencies if they become used widely enough in financial institutions that central banks decide they should tie part of the monetary system to them. https://benoitessiambre.com/specter.html https://benoitessiambre.com/specter.html

remarkEon 5y ago
I don’t think you’re the only one with this hypothesis. There’s a couple bag holders I know who share that view. It’s a confusing one, IMO, but it’s interesting to think about.
andrewmutz 5y ago
100% Agree. From everything I've read, our being able to print money is an indispensable tool during financial crises. Fixing the great depression and the great recession depended on this ability. If the world transitions to cryptocurrencies whose supply is unmanaged or fixed, that will not be possible and presumably will be stuck during financial crises.
- Lifelarper 5y ago
  Venezuela, once one of the richest coutries on Earth with more oil than Saudi Arabia thought this way too. Turned out great for them. By all metrics they should be Western Europe level rich and yet many young kids find it more profitable to mine coins in runescape 12 hours a day rather than actually get a job, strange how that happens hey, if only they printed more Bolivar this all could have been avoided?
  - colinmhayes 5y ago
    Venezuela also nationalized every sector of the economy and handed the reins to Chavez/Maduro's corrupt buddies. Not sure why you think hyperinflation is a problem as opposed to a symptom of their failed institutions.
  - rovolo 5y ago
    There isn't 1 kind of economic crisis. Monetary expansion works well when you're dealing with a credit crunch, but it doesn't work great when your issue is lack of supply.
    - dnautics 5y ago
      name a country that did monetary expansion during a credit crunch and also didn't do monetary expansion when there was a lack of supply. Note my bar is low: In "classical keynesian" theory, there should be monetary contraction during lack of supply, but I REALLY don't recall any country just "burning" reserves (deleting zeros off of ledgers at the biggest banks).
- ur-whale 5y ago
  > From everything I've read, our being able to print money is an indispensable tool during financial crises. You might want to add to your reading list the history of the Roman empire.
  - inglor_cz 5y ago
    Not the OP, but this is a smug and not very helpful comment. The Roman empire era covered 1000 years in the West and 2000 years in the east. Can you be more concrete?
    - ur-whale 5y ago
      since we're apparently being smug: https://www.google.com/search?q=currency+debasement+roman+empire https://www.google.com/search?q=currency+debasement+roman+em...
    - deleted 5y ago
      [deleted]
- louloulou 5y ago
  All printing money does is transfer wealth from savers (people long the currency) to debtors (people short the currency) without their consent. Large financial crises occur because this keeps happening. Bitcoin is a way out, as savers learn it's foolish to be long fiat currency.
  - lottin 5y ago
    This is not true. Printing money may or may not cause inflation. And inflation may or may not benefit debtors at the expense of creditors. Unexpected inflation usually does. Expected inflation usually doesn't.
  - mohanmcgeek 5y ago
    "printing" money does not cause inflation. Low interest rates can cause credit expansion, they don't necessarily cause inflation. Inflation rate higher than the deposit interest rate (negative real interest rate) is causes the wealth transfer. "Savers", in reality, lenders have always had a way out in this situation: investing. As in every investment boom, there are Ponzi schemes and during this one it happens to be Bitcoin.
    - cheeseomlit 5y ago
      I don't understand how printing money could not cause inflation, it sounds like mental gymnastics to me. Expand the money supply without expanding the value that money represents and the money now represents less value than it did before, I don't see how that could ever not be the case.
      - JumpCrisscross 5y ago
        > Expand the money supply without expanding the value that money represents and the money now represents less value than it did before Prices are a function of money supply and velocity. Inflation can rage while no money is printed because velocity surges. Just as deflation can fester while central banks print as velocity toys with absolute zero.

remarkEon 5y ago

I don’t think you’re the only one with this hypothesis. There’s a couple bag holders I know who share that view. It’s a confusing one, IMO, but it’s interesting to think about.

andrewmutz 5y ago

100% Agree. From everything I've read, our being able to print money is an indispensable tool during financial crises. Fixing the great depression and the great recession depended on this ability. If the world transitions to cryptocurrencies whose supply is unmanaged or fixed, that will not be possible and presumably will be stuck during financial crises.

Lifelarper 5y ago
Venezuela, once one of the richest coutries on Earth with more oil than Saudi Arabia thought this way too. Turned out great for them. By all metrics they should be Western Europe level rich and yet many young kids find it more profitable to mine coins in runescape 12 hours a day rather than actually get a job, strange how that happens hey, if only they printed more Bolivar this all could have been avoided?
- colinmhayes 5y ago
  Venezuela also nationalized every sector of the economy and handed the reins to Chavez/Maduro's corrupt buddies. Not sure why you think hyperinflation is a problem as opposed to a symptom of their failed institutions.
- rovolo 5y ago
  There isn't 1 kind of economic crisis. Monetary expansion works well when you're dealing with a credit crunch, but it doesn't work great when your issue is lack of supply.
  - dnautics 5y ago
    name a country that did monetary expansion during a credit crunch and also didn't do monetary expansion when there was a lack of supply. Note my bar is low: In "classical keynesian" theory, there should be monetary contraction during lack of supply, but I REALLY don't recall any country just "burning" reserves (deleting zeros off of ledgers at the biggest banks).
ur-whale 5y ago
> From everything I've read, our being able to print money is an indispensable tool during financial crises. You might want to add to your reading list the history of the Roman empire.
- inglor_cz 5y ago
  Not the OP, but this is a smug and not very helpful comment. The Roman empire era covered 1000 years in the West and 2000 years in the east. Can you be more concrete?
  - ur-whale 5y ago
    since we're apparently being smug: https://www.google.com/search?q=currency+debasement+roman+empire https://www.google.com/search?q=currency+debasement+roman+em...
  - deleted 5y ago
    [deleted]
louloulou 5y ago
All printing money does is transfer wealth from savers (people long the currency) to debtors (people short the currency) without their consent. Large financial crises occur because this keeps happening. Bitcoin is a way out, as savers learn it's foolish to be long fiat currency.
- lottin 5y ago
  This is not true. Printing money may or may not cause inflation. And inflation may or may not benefit debtors at the expense of creditors. Unexpected inflation usually does. Expected inflation usually doesn't.
- mohanmcgeek 5y ago
  "printing" money does not cause inflation. Low interest rates can cause credit expansion, they don't necessarily cause inflation. Inflation rate higher than the deposit interest rate (negative real interest rate) is causes the wealth transfer. "Savers", in reality, lenders have always had a way out in this situation: investing. As in every investment boom, there are Ponzi schemes and during this one it happens to be Bitcoin.
  - cheeseomlit 5y ago
    I don't understand how printing money could not cause inflation, it sounds like mental gymnastics to me. Expand the money supply without expanding the value that money represents and the money now represents less value than it did before, I don't see how that could ever not be the case.
    - JumpCrisscross 5y ago
      > Expand the money supply without expanding the value that money represents and the money now represents less value than it did before Prices are a function of money supply and velocity. Inflation can rage while no money is printed because velocity surges. Just as deflation can fester while central banks print as velocity toys with absolute zero.