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No one cares about USD-denominated wealth either. People care about real wealth, which is a physical quantity. USD wins here because its volatility is much lowe

No one cares about USD-denominated wealth either. People care about real wealth, which is a physical quantity. USD wins here because its volatility is much lower. But it's also nonzero. I'm shopping for a car this month, and I'll decide whether to borrow or pay cash by comparing the expected real cost of the loan vs the expected real return on cash. Regarding the apple example, the customer and grocer do not disagree on the value of apples. The trade takes place because of the marginal value of apples and the pre-existing difference in apple inventories between the parties.

joe_the_user 5y ago
Well, I agree with your basic point. I'd just offer that Siegels paradox (which is interesting to read about)[1] applies if you have two currencies where some consumers price their end-consumption good in each of those currencies. But crypto currencies aren't something you want to consume later. If bitcoin has a 50% chance of doubling and 50% chance of halving in value, it is simply a good investment (expected payoff = 5/4 of investment) best held by dollar current dollar holders and bitcoin holders alike. So, yeah, wealth is what matters and the Siegel's argument is a red herring. But erudite one, ha. [1] https://en.wikipedia.org/wiki/Siegel%27s_paradox https://en.wikipedia.org/wiki/Siegel%27s_paradox
vba616 5y ago
>People care about real wealth, which is a physical quantity Real wealth is in relationships. There isn't any other kind. For instance, if you have a relationship with someone who has a list of cars, that says you own a car, then that's wealth. If you have a relationship with someone who has a list of accounts, that says you have $20,000, then that's also wealth. Property is always abstract and dependent on other people.
landemva 5y ago
' ... the customer and grocer do not disagree on the value of apples. The trade takes place because of ... difference in apple inventories between the parties. ' Wrong, and wrong. The trade does not occur due to inventory differences between the parties. For example, I have zero apples in my household inventory and no amount of inventory disparity (grocery store vs my house) causes apple trade to happen with me. Trade happens because each party has a coincidence of wants AND each party values the item differently. Each party believes they are gaining by the trade, so the value of the item is different in the minds of each party.

joe_the_user 5y ago

Well, I agree with your basic point. I'd just offer that Siegels paradox (which is interesting to read about)[1] applies if you have two currencies where some consumers price their end-consumption good in each of those currencies. But crypto currencies aren't something you want to consume later. If bitcoin has a 50% chance of doubling and 50% chance of halving in value, it is simply a good investment (expected payoff = 5/4 of investment) best held by dollar current dollar holders and bitcoin holders alike. So, yeah, wealth is what matters and the Siegel's argument is a red herring. But erudite one, ha. [1] https://en.wikipedia.org/wiki/Siegel%27s_paradox https://en.wikipedia.org/wiki/Siegel%27s_paradox

vba616 5y ago

>People care about real wealth, which is a physical quantity Real wealth is in relationships. There isn't any other kind. For instance, if you have a relationship with someone who has a list of cars, that says you own a car, then that's wealth. If you have a relationship with someone who has a list of accounts, that says you have $20,000, then that's also wealth. Property is always abstract and dependent on other people.

landemva 5y ago

' ... the customer and grocer do not disagree on the value of apples. The trade takes place because of ... difference in apple inventories between the parties. ' Wrong, and wrong. The trade does not occur due to inventory differences between the parties. For example, I have zero apples in my household inventory and no amount of inventory disparity (grocery store vs my house) causes apple trade to happen with me. Trade happens because each party has a coincidence of wants AND each party values the item differently. Each party believes they are gaining by the trade, so the value of the item is different in the minds of each party.