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If you have anything for which banks will take the value seriously enough to borrow against - stocks, for instance, fit in this category - then the path of goin

If you have anything for which banks will take the value seriously enough to borrow against - stocks, for instance, fit in this category - then the path of going from non-money -> money creation is pretty direct. I'm not sure if banks would let you point to 100k in bitcoin or such as assets that would help qualify you for a mortgage, but doesn't seem too out there. Or do the 2-step route and sell the crypto and use it as your downpayment to leverage up into that mortage from an initial investment of $100 or so in 2011. Still inflationary - you've turned your initial tiny investment into purchasing power for a house and all it took was someone else deciding to invest in the crypto you were selling instead of more traditional vehicles, so they also feel like they have the same amount of assets/wealth as they would've otherwise. EDIT: putting it another way. Money is one thing. Consumer behavior is another. People spend not just based on their "money" but based on their total assets and expected income as well, so things that pump up those on-paper asset values will lead to higher spending and inflationary pressure in the same way that "giving them money" would.

preseinger 4y ago
Borrowing against a Ferrari 458 doesn't turn Italian supercars into ersatz currencies, in any meaningful sense. Money isn't just something you exchange for goods and services. It's directly linked to the sovereignty and economic soundness of its issuing authority. Imagine if a country started accepting tax payments denominated in something they have no influence over. Holding Bitcoin reserves necessarily means ceding economic power, and therefore autonomy, to a third party. For failed states without any economic autonomy to begin with, this bargain might be fine. But for everyone else on the international stage, this is a total nonstarter. Wars have been fought over monetary authority! We've had this discussion as a species already. What we have now isn't some pathological problem that needs to be disrupted. It's actually the outcome of a rational evolutionary process over thousands of years. Does it have problems that can be improved, yes. Should it be thrown away in favor of a new system built from first principles, absolutely not. That would be a new dark age, a dystopia.
- majormajor 4y ago
  I am not pro-crypto, was simply agreeing with the poster two levels up that crypto is inflationary, despite it's proponents claims, because once you open that door you open it to any number of new supplies of "money." I'd wager the average car and average house both would be cheaper if you couldn't borrow against them. Property might even be a large enough asset class that that would impact other things.

preseinger 4y ago

Borrowing against a Ferrari 458 doesn't turn Italian supercars into ersatz currencies, in any meaningful sense. Money isn't just something you exchange for goods and services. It's directly linked to the sovereignty and economic soundness of its issuing authority. Imagine if a country started accepting tax payments denominated in something they have no influence over. Holding Bitcoin reserves necessarily means ceding economic power, and therefore autonomy, to a third party. For failed states without any economic autonomy to begin with, this bargain might be fine. But for everyone else on the international stage, this is a total nonstarter. Wars have been fought over monetary authority! We've had this discussion as a species already. What we have now isn't some pathological problem that needs to be disrupted. It's actually the outcome of a rational evolutionary process over thousands of years. Does it have problems that can be improved, yes. Should it be thrown away in favor of a new system built from first principles, absolutely not. That would be a new dark age, a dystopia.

majormajor 4y ago
I am not pro-crypto, was simply agreeing with the poster two levels up that crypto is inflationary, despite it's proponents claims, because once you open that door you open it to any number of new supplies of "money." I'd wager the average car and average house both would be cheaper if you couldn't borrow against them. Property might even be a large enough asset class that that would impact other things.