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There's nothing black swan in an inflationary environment that leads to hyperinflation, even if it's for a country with a reserve currency. Every empire hyperi

There's nothing black swan in an inflationary environment that leads to hyperinflation, even if it's for a country with a reserve currency. Every empire hyperinflated itself in the past, people just ignore history and how returning to sound money is inevitable. The only black swan part is that now we have a better alternative to gold.

edmcnulty101 5y ago
What happened to the countries that hyperinflated? We're they able to get it under control historically?
- xiphias2 5y ago
  Quite often people fled with gold to other places, as the countries confiscated gold from people. US was trusted to hold gold in the world wars, but of course Nixon renegged on the gold standard. Right now people are starting to hold Bitcoin, and it's much harder to take away from them (flying out with a billion dollars of Bitcoin is trivial, as metal detectors won't catch you), so I'm optimistic that the transition will be more peaceful. Also Bitcoin adoption in US is highe than in other countries.
  - throwaway9952 5y ago
    As inflation continues to grow, Bitcoin is down close to 40% from its highs. I'm not saying you're flat out wrong about potential benefits to holding Bitcoin but a lot of recent value has been washed out from people selling, not buying it.
    - xiphias2 5y ago
      Professional investors who look at the sharpe ratio (return compared to standard deviation), can see that its performance is far better than any other asset in the world. Generally in modern portfolio theory you can just decrease the asset in the portfolio if the volatility is too big for you (for example to just 2% of the portfolio). I'm 100% in, but for other people I generally suggest it to be 5% of their portfolio.
mellavora 5y ago
"better alternative to gold" as in tech stocks? (just kidding, I know you mean crypto, but its superiority to gold is a bit debatable).
- xiphias2 5y ago
  Bitcoin, not crypto, but sure, you can try gold, the basic economics are the same (money that can't be printed to infinity)
dang 5y ago
We detached this subthread from https://news.ycombinator.com/item?id=29920088 https://news.ycombinator.com/item?id=29920088.

edmcnulty101 5y ago

What happened to the countries that hyperinflated? We're they able to get it under control historically?

xiphias2 5y ago
Quite often people fled with gold to other places, as the countries confiscated gold from people. US was trusted to hold gold in the world wars, but of course Nixon renegged on the gold standard. Right now people are starting to hold Bitcoin, and it's much harder to take away from them (flying out with a billion dollars of Bitcoin is trivial, as metal detectors won't catch you), so I'm optimistic that the transition will be more peaceful. Also Bitcoin adoption in US is highe than in other countries.
- throwaway9952 5y ago
  As inflation continues to grow, Bitcoin is down close to 40% from its highs. I'm not saying you're flat out wrong about potential benefits to holding Bitcoin but a lot of recent value has been washed out from people selling, not buying it.
  - xiphias2 5y ago
    Professional investors who look at the sharpe ratio (return compared to standard deviation), can see that its performance is far better than any other asset in the world. Generally in modern portfolio theory you can just decrease the asset in the portfolio if the volatility is too big for you (for example to just 2% of the portfolio). I'm 100% in, but for other people I generally suggest it to be 5% of their portfolio.

mellavora 5y ago

"better alternative to gold" as in tech stocks? (just kidding, I know you mean crypto, but its superiority to gold is a bit debatable).

xiphias2 5y ago
Bitcoin, not crypto, but sure, you can try gold, the basic economics are the same (money that can't be printed to infinity)

dang 5y ago

We detached this subthread from https://news.ycombinator.com/item?id=29920088 https://news.ycombinator.com/item?id=29920088.