Bitcoin vs. Inflation - Forbes

Digital Currency for a Digital Age

[Digitalcoin](http://digitalcoin.tech/) is a diligently maintained cryptocurrency intent on market stability, making it ideal for commerce and saving. Possible changes to Digitalcoin's parameters can be implemented upon community rule.
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Still think Bitcoin deflation is bad for the economy. Switzerland beg to differ

Still think Bitcoin deflation is bad for the economy. Switzerland beg to differ submitted by love_eggs_and_bacon to Bitcoin [link] [comments]

The Custodian Menace - a small number of custodians hold the private keys to a large amount of bitcoin. This is not good for Bitcoin (article by Jameson Lopp)

The Custodian Menace - a small number of custodians hold the private keys to a large amount of bitcoin. This is not good for Bitcoin (article by Jameson Lopp) submitted by TheGreatMuffin to Bitcoin [link] [comments]

Bitcoin Deflated Like a ‘Soap Bubble’: Russian Economy Minister https://goo.gl/W5Up7K - Crypto Insider Info - Whales's

Posted at: November 30, 2018 at 08:15AM
By:
Bitcoin Deflated Like a ‘Soap Bubble’: Russian Economy Minister https://goo.gl/W5Up7K
Automate your Trading via Crypto Bot : https://ift.tt/2EU8PEX
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submitted by cryptotradingbot to cryptobots [link] [comments]

Bitcoin Deflated Like a ‘Soap Bubble’: Russian Economy Minister

Bitcoin Deflated Like a ‘Soap Bubble’: Russian Economy Minister submitted by ulros to fbitcoin [link] [comments]

Bitcoin Deflated Like a ‘Soap Bubble’: Russian Economy Minister

Bitcoin Deflated Like a ‘Soap Bubble’: Russian Economy Minister submitted by cryptoallbot to cryptoall [link] [comments]

Bitcoin Deflated Like a ‘Soap Bubble’: Russian Economy Minister

Bitcoin Deflated Like a ‘Soap Bubble’: Russian Economy Minister submitted by Ranzware to BitNewsLive [link] [comments]

Russian Economy Development Minister Says Bitcoin Bubble Has Deflated https://goo.gl/HJ3kAg - Crypto Insider Info - Whales's

Posted at: November 30, 2018 at 03:52PM
By:
Russian Economy Development Minister Says Bitcoin Bubble Has Deflated https://goo.gl/HJ3kAg
Automate your Trading via Crypto Bot : https://ift.tt/2EU8PEX
Join Telegram Channel for FREE Crypto Bot: Crypto Signal
submitted by cryptotradingbot to cryptobots [link] [comments]

Bitcoin Deflated Like a ‘Soap Bubble’: Russian Economy Minister

Bitcoin Deflated Like a ‘Soap Bubble’: Russian Economy Minister submitted by n4bb to CoinPath [link] [comments]

Refuting the myth that a Bitcoin economy would experience "deflation," causing depressions

With Bitcoin getting more attention, there has been more spreading of the myth that any fall in prices is "deflation" and thus the cause of depressions and low economic growth.
What you must be absolutely clear to distinguish are: monetary deflation and falling prices, sometimes called "price deflation". Most economists now use the word deflation simply as a synonym for falling prices; this however tends to be very misleading, since falling prices have no necessary connection to depressions. The original meanings of the words inflation and deflation were, respectively, an increase or a decrease in the supply of money; I will follow this usage.
Thus, it is vital to remember that, in the monetary sense, Bitcoin is not a deflationary currency. Nor is it inflationary (after its initial start-up period). It is invariable. That is, its supply is constant. (Sure, there may be a few coins lost here and there, but this is not significant.)
Price is essentially a relation of demand (money spent to buy goods) over supply (the quantity of goods sold). It is just a fraction: D/S. Like any fraction there are two possible ways that prices can change: a change in the numerator (more or less money spent) or a change in the denominator (more or fewer goods sold).
Prices can fall in two basic ways: either less money is spent, or more goods are sold. In a depression, prices fall because of the first reason: less money is spent. This can happen either because less money exists, or because the same money is not spent as often.
I am not going to elaborate this point (look elsewhere for a thorough explanation), but what precipitates a depression is that the quantity of money is artificially expanded, and the money that exists is spent more quickly because of "easy credit" policies. When these policies stop, spending slows down, causing banks to fail, which causes checkbook money actually to go out of existence. This causes spending to decrease even further, causing prices to crash and people to go bankrupt because they cannot pay back loans for a fixed sum of money.
The destruction of (bank created) money seen in a depression is real "deflation".
In a theoretical Bitcoin economy, there is no "monetary policy" (i.e. government intervention with the money supply). Or, to put the point a different way, there is an inherent policy of laissez-faire. Therefore, there is no tendency toward an artificial expansion of money and credit, and thus no ability for monetary deflation to occur.
The only possible source of falling prices in a Bitcoin economy would be from an increased number of goods sold: i.e. from increased production. This causes prices to fall. But wages stay the same, causing real wages (the goods you can actually buy) to increase. The only way someone will tend to earn a lower monetary wage (i.e. the same real wage) is if he does not keep up his own production to match the average economy-wide increase in production. Even though the money is more valuable, it is no more difficult for the average person to earn the same amount of money as he used to earn, since the increase in average productivity will necessarily cause the average person to be more productive.
Therefore, when you take out a loan of 1000 BTC and go to pay back 1100 BTC, it is no more difficult to earn back the principal that it was when you borrowed it. This is true even if 1000 BTC a few years later buys many more goods than it used to buy. The only difficulty lies in earning the interest, which is to be expected.
There is also no tendency to undermine savings and investment. In a Bitcoin economy, people would likely tend to keep more cash on hand, since it would be more valuable to hold and "easy credit" would not be available. But there would be no tendency to keep hoarding up more and more cash on hand (which is harmful). Bitcoin kept as cash on hand would, in a growing economy, gain value over time, true. But Bitcoin lent out to other people would gain even more on top of that. So everyone would rather loan out the larger portion of his savings, apart from the money needed for day-to-day expenses and for emergencies.
The average business, like the average worker, would find it no more difficult to keep earning the same amount of profit each year, even though that profit buys more goods. (Because to the very extent that money increases in value each year, the average business would find itself able to earn that money.) Thus, it would pay that business to take out a loan for 1000 BTC in exchange for 5% interest if it thought that it could make a 10% Bitcoin profit. This is true even if the real profit in terms of goods is 20% and the real interest 10%. The only thing that would be removed is the systematic tendency, in an inflationary currency, for profits to be overstated, since dollars earned at the end of the year are worth less than dollars spent at the beginning of the year.
In no respect would a Bitcoin economy have any tendency toward actual deflation (destruction of money) or toward economic stagnation.
submitted by Vox_Imperatoris to Bitcoin [link] [comments]

Bitcoin demonstrates the power of deflation and why fiat currencies are the only feasible way to run an economy.

All economic activity has effectively grinded to a halt in bitcoin land due to raging deflation. People should study economic history pre-federal reserve when we were on the gold standard. Bitcoin is basically an extreme example of what happened through-out the 1800s (except of course no credit expansion by private banks). There is a reason why all countries in the world are fiat, its because a fixed quantity of money leads to a very bumpy ride.
submitted by Truecoateh to Bitcoin [link] [comments]

Still think Bitcoin deflation is bad for the economy. Switzerland beg to differ

Still think Bitcoin deflation is bad for the economy. Switzerland beg to differ submitted by BitcoinAllBot to BitcoinAll [link] [comments]

/r/economy apparently does not share Bitcoin enthusiasm that much, citing issues with inherent deflation and volatility. How would alternative cryptocurrency, designed by actual economists instead of anarchist internet fans of Austrian school look like?

Lets say a few years from now a first world country with very good internet penetration decides to adopt some variant of cryptocurrency as a national currency, first as an experiment used along with the old one. It would be operationally pretty similar to BTC or LTC (proof-of-work/stake cryptographic algorithm used as a guard against counterfeiting), but the parameters such as the miner block reward and its change over time, time between blocks (confirmations), transaction fees, possible demurrage etc.. could be varied. What values would you choose?
Comparison of presently existing cryptocurrency projects for inspiration: https://bitcointalk.org/index.php?topic=134179.0
submitted by Maslo59 to AskSocialScience [link] [comments]

Putting $400M of Bitcoin on your company balance sheet

Also posted on my blog as usual. Read it there if you can, there are footnotes and inlined plots.
A couple of months ago, MicroStrategy (MSTR) had a spare $400M of cash which it decided to shift to Bitcoin (BTC).
Today we'll discuss in excrutiating detail why this is not a good idea.
When a company has a pile of spare money it doesn't know what to do with, it'll normally do buybacks or start paying dividends. That gives the money back to the shareholders, and from an economic perspective the money can get better invested in other more promising companies. If you have a huge pile of of cash, you probably should be doing other things than leave it in a bank account to gather dust.
However, this statement from MicroStrategy CEO Michael Saylor exists to make it clear he's buying into BTC for all the wrong reasons:
“This is not a speculation, nor is it a hedge. This was a deliberate corporate strategy to adopt a bitcoin standard.”
Let's unpack it and jump into the economics Bitcoin:

Is Bitcoin money?

No.
Or rather BTC doesn't act as money and there's no serious future path for BTC to become a form of money. Let's go back to basics. There are 3 main economic problems money solves:
1. Medium of Exchange. Before money we had to barter, which led to the double coincidence of wants problem. When everyone accepts the same money you can buy something from someone even if they don't like the stuff you own.
As a medium of exchange, BTC is not good. There are significant transaction fees and transaction waiting times built-in to BTC and these worsen the more popular BTC get.
You can test BTC's usefulness as a medium of exchange for yourself right now: try to order a pizza or to buy a random item with BTC. How many additional hurdles do you have to go through? How many fewer options do you have than if you used a regular currency? How much overhead (time, fees) is there?
2. Unit of Account. A unit of account is what you compare the value of objects against. We denominate BTC in terms of how many USD they're worth, so BTC is a unit of account presently. We can say it's because of lack of adoption, but really it's also because the market value of BTC is so volatile.
If I buy a $1000 table today or in 2017, it's roughly a $1000 table. We can't say that a 0.4BTC table was a 0.4BTC table in 2017. We'll expand on this in the next point:
3. Store of Value. When you create economic value, you don't want to be forced to use up the value you created right away.
For instance, if I fix your washing machine and you pay me in avocados, I'd be annoyed. I'd have to consume my payment before it becomes brown, squishy and disgusting. Avocado fruit is not good money because avocadoes loses value very fast.
On the other hand, well-run currencies like the USD, GBP, CAD, EUR, etc. all lose their value at a low and most importantly fairly predictible rate. Let's look at the chart of the USD against BTC
While the dollar loses value at a predictible rate, BTC is all over the place, which is bad.
One important use money is to write loan contracts. Loans are great. They let people spend now against their future potential earnings, so they can buy houses or start businesses without first saving up for a decade. Loans are good for the economy.
If you want to sign something that says "I owe you this much for that much time" then you need to be able to roughly predict the value of the debt in at the point in time where it's due.
Otherwise you'll have a hard time pricing the risk of the loan effectively. This means that you need to charge higher interests. The risk of making a loan in BTC needs to be priced into the interest of a BTC-denominated loan, which means much higher interest rates. High interests on loans are bad, because buying houses and starting businesses are good things.

BTC has a fixed supply, so these problems are built in

Some people think that going back to a standard where our money was denominated by a stock of gold (the Gold Standard) would solve economic problems. This is nonsense.
Having control over supply of your currency is a good thing, as long as it's well run.
See here
Remember that what is desirable is low variance in the value, not the value itself. When there are wild fluctuations in value, it's hard for money to do its job well.
Since the 1970s, the USD has been a fiat money with no intrinsic value. This means we control the supply of money.
Let's look at a classic poorly drawn econ101 graph
The market price for USD is where supply meets demand. The problem with a currency based on an item whose supply is fixed is that the price will necessarily fluctuate in response to changes in demand.
Imagine, if you will, that a pandemic strikes and that the demand for currency takes a sharp drop. The US imports less, people don't buy anything anymore, etc. If you can't print money, you get deflation, which is worsens everything. On the other hand, if you can make the money printers go brrrr you can stabilize the price
Having your currency be based on a fixed supply isn't just bad because in/deflation is hard to control.
It's also a national security risk...
The story of the guy who crashed gold prices in North Africa
In the 1200s, Mansa Munsa, the emperor of the Mali, was rich and a devout Muslim and wanted everyone to know it. So he embarked on a pilgrimage to make it rain all the way to Mecca.
He in fact made it rain so hard he increased the overall supply of gold and unintentionally crashed gold prices in Cairo by 20%, wreaking an economic havoc in North Africa that lasted a decade.
This story is fun, the larger point that having your inflation be at the mercy of foreign nations is an undesirable attribute in any currency. The US likes to call some countries currency manipulators, but this problem would be serious under a gold standard.

Currencies are based on trust

Since the USD is based on nothing except the US government's word, how can we trust USD not to be mismanaged?
The answer is that you can probably trust the fed until political stooges get put in place. Currently, the US's central bank managing the USD, the Federal Reserve (the Fed for friends & family), has administrative authority. The fed can say "no" to dumb requests from the president.
People who have no idea what the fed does like to chant "audit the fed", but the fed is already one of the best audited US federal entities. The transcripts of all their meetings are out in the open. As is their balance sheet, what they plan to do and why. If the US should audit anything it's the Department of Defense which operates without any accounting at all.
It's easy to see when a central bank will go rogue: it's when political yes-men are elected to the board.
For example, before printing themselves into hyperinflation, the Venezuelan president appointed a sociologist who publicly stated “Inflation does not exist in real life” and instead is a made up capitalist lie. Note what happened mere months after his gaining control over the Venezuelan currency
This is a key policy. One paper I really like, Sargent (1984) "The end of 4 big inflations" states:
The essential measures that ended hyperinflation in each of Germany,Austria, Hungary, and Poland were, first, the creation of an independentcentral bank that was legally committed to refuse the government'sdemand or additional unsecured credit and, second, a simultaneousalteration in the fiscal policy regime.
In english: *hyperinflation stops when the central bank can say "no" to the government."
The US Fed, like other well good central banks, is run by a bunch of nerds. When it prints money, even as aggressively as it has it does so for good reasons. You can see why they started printing on March 15th as the COVID lockdowns started:
The Federal Reserve is prepared to use its full range of tools to support the flow of credit to households and businesses and thereby promote its maximum employment and price stability goals.
In english: We're going to keep printing and lowering rates until jobs are back and inflation is under control. If we print until the sun is blotted out, we'll print in the shade.

BTC is not gold

Gold is a good asset for doomsday-preppers. If society crashes, gold will still have value.
How do we know that?
Gold has held value throughout multiple historic catastrophes over thousands of years. It had value before and after the Bronze Age Collapse, the Fall of the Western Roman Empire and Gengis Khan being Gengis Khan.
Even if you erased humanity and started over, the new humans would still find gold to be economically valuable. When Europeans d̶i̶s̶c̶o̶v̶e̶r̶e̶d̶ c̶o̶n̶q̶u̶e̶r̶e̶d̶ g̶e̶n̶o̶c̶i̶d̶e̶d̶ went to America, they found gold to be an important item over there too. This is about equivalent to finding humans on Alpha-Centauri and learning that they think gold is a good store of value as well.
Some people are puzzled at this: we don't even use gold for much! But it has great properties:
First, gold is hard to fake and impossible to manufacture. This makes it good to ascertain payment.
Second, gold doesnt react to oxygen, so it doesn't rust or tarnish. So it keeps value over time unlike most other materials.
Last, gold is pretty. This might sound frivolous, and you may not like it, but jewelry has actual value to humans.
It's no coincidence if you look at a list of the wealthiest families, a large number of them trade in luxury goods.
To paraphrase Veblen humans have a profound desire to signal social status, for the same reason peacocks have unwieldy tails. Gold is a great way to achieve that.
On the other hand, BTC lacks all these attributes. Its value is largely based on common perception of value. There are a few fundamental drivers of demand:
Apart from these, it's hard to argue that BTC will retain value throughout some sort of economic catastrophe.

BTC is really risky

One last statement from Michael Saylor I take offense to is this:
“We feel pretty confident that Bitcoin is less risky than holding cash, less risky than holding gold,” MicroStrategy CEO said in an interview
"BTC is less risky than holding cash or gold long term" is nonsense. We saw before that BTC is more volatile on face value, and that as long as the Fed isn't run by spider monkeys stacked in a trench coat, the inflation is likely to be within reasonable bounds.
But on top of this, BTC has Abrupt downside risks that normal currencies don't. Let's imagine a few:

Blockchain solutions are fundamentally inefficient

Blockchain was a genius idea. I still marvel at the initial white paper which is a great mix of economics and computer science.
That said, blockchain solutions make large tradeoffs in design because they assume almost no trust between parties. This leads to intentionally wasteful designs on a massive scale.
The main problem is that all transactions have to be validated by expensive computational operations and double checked by multiple parties. This means waste:
Many design problems can be mitigated by various improvements over BTC, but it remains that a simple database always works better than a blockchain if you can trust the parties to the transaction.
submitted by VodkaHaze to badeconomics [link] [comments]

Absolute proof that bitcoin is underpriced

submitted by Fiach_Dubh to BitcoinCA [link] [comments]

In a global bitcoin economy wouldn't the natural rate of deflation hit the bullseye?

Please correct me if you think me wrong, but I can't help noticing the following... Bitcoin works by far the best in the West (when I say West in this post, I really mean West+China) where high levels of computer literacy and internet use both facilitate the bitcoin ecosystem, and allow expensive ways to secure it against scamming. I conclude that the vast majority of it will remain in the West.for the foreseeable future so... In every Western country but the US and Israel, fertility rates are way below replacement levels (and in the US it is just below). The trend everywhere is for them to drop further. In the worst offenders, such as Germany and Italy, population growth is already negative even before baby boomers reach retirement. Everywhere in this region, active membership of the workforce is set to plummet. Meanwhile economic growth chugs along, but never for long at more than 4% per annum, so replace fiat with bitcoin and we can sustain up to 4% deflation per annum. Now... As most economists will tell you deflation is bad because of debt default, but as those here realise, bitcoin debt is so hard to run an economy on in the first place, that that won't be a factor here. However deflation is bad for another entirely different reasons – sticky prices. The worst of these is wages. For deep psychological reasons many so hate to see that figure go down that even unemployment is preferable to many, and that can create a problem. All I ask is this... I can see that a 4% deflation rate may cause problems for some employers, but with the labour pool shrinking at about 1-2% per annum over the next fifty years their will still be a lower fraction of total money in the system going to wage earners. Will it still be a problem for the TYPICAL company to hold wages of experienced longstanding employees at old, higher, rates? I am a bit mystified as to what is wrong with deflation under these circumstances, and I wonder if the economists among you might be able to help me out as to why you think this exact situation is so bad.
submitted by seatoun to Bitcoin [link] [comments]

What's going to happen with all the lost Bitcoins?

Just a shower thought I have, we are constantly hearing of losing bitcoins, which means that won't ever be recovered. If that's the case, does that mean that the total supply of bitcoin will be less than 21mil? How is that going to affect the price of bitcoin?
submitted by ignite333 to BitcoinBeginners [link] [comments]

A future with Bitcoin: What if tech's next big thing is unstoppable deflation?

A future with Bitcoin: What if tech's next big thing is unstoppable deflation? submitted by etmetm to Bitcoin [link] [comments]

Bitcoiners attempt a reasonable discussion on deflation, inflating optimism of future butt based economy.

Bitcoiners attempt a reasonable discussion on deflation, inflating optimism of future butt based economy. submitted by TulipCoins to Buttcoin [link] [comments]

I think I'm about done.

So, last wipe, I thoroughly enjoyed the game. I struggled until I got to about level 35ish, but eventually I got my bitcoin farm going (not full 50 GPU) and my booze generator going, and I was making some decent rubles.
I could buy decent gear, the scopes I wanted, the ammo I liked (which was rarely m995,7n37, or m61, btw). And then I could go in raid, do my quests, find items, kill players, take their stuff and leave. Or, I could die and lose all my gear, and it would sting, but not break me. But when I did raids, I almost ALWAYS stayed until <10 minutes remaining, sometimes even getting out with spare seconds left. Yes, by about level 45, I eventually started making more money than I could spend, but ONLY after 50 GPU's in the BC farm and booze generator combined.
Now this wipe, instead of enjoying the raids, I'm getting frustrated trying to find progression halting items. Then, when I do find them, I'm STRONGLY encouraged to turtle up, hide until the coast is clear behind counters or in bushes, then extract at 10:01. I'm also having to buy expensive weapons like SVD's to finish quests, which I had to do last wipe too, but my rouble flow was much much higher.
I can kill a 3 man squad, and make 200k, because their armor was zero'd out and too high cost to repair and their guns with all their fancy attachments are worth 75k. Or, I can die and lose about that much. There is no real risk/reward any more.
Then, when I'm having a particularly bad day dying, I can't even lean back on looting stuff like factory keys and fuel conditioners now, AND WHAT LITTLE BIT OF FIR I SELL HAS ATROCIOUS FEES. I sold 3 packs of bolts for 14k ea and the fee was 12k.
It's like BSG isn't even trying to micro adjust the game to dial back the ruble flow. Instead it's full on scorched earth. Only the people with the absolute best combat skills or the most time to rat around have the ability to make any decent money.
On top of that, I'm level 33 and JUST got my last FIR flash drive. I have crashed against the rocks to the tune of MILLIONS trying to get a LEDX and 3 FIR graphics cards from Interchange, thanks to RNG. I can't even start Shooter Born In Heaven, and I would be 3/4 done with it by now if I had it 10 levels ago.
I'm sure* 3/4 of the subreddit will come by to tell me to quit crying, git gud, it's hardcore, roubles are easy to make, its a BETA, etc..
Well here's my Beta feedback. The game isn't fun when I lose every ruble I scrape up trying to do quests with specific gun/armor requirements and finding FIR items in hotspots, and hiding to avoid losing those items, all while BSG -heavily- deflates the economy and punishes rule obeying players in the name of stamping out RMT.
*Left out a word.
Edit: let me just say, I don’t mean this as a personal attack towards Nikita or the other devs. It’s simply just my experience, and my thoughts. I don’t have answers on how to make the perfect balances and compromises, or fixes on RMT etc.
I just wish it had been publicized ahead of time, something like “Okay guys, next wipe we’re gonna experiment with making it real hard.”
Also I’ve gotten a lot of responses saying “you’re not supposed to run the best gear every raid.” And my reply is, my standard kit is a Vepr KM, 6B23 armor, a Ratnik helmet, and comtacs, with self made BP ammo from the hideout. I’ve just recently started adding TV10 armor rigs into the mix. I’m not a META player who has to have iglonik or M995 every raid. I’m not trying to say I want to do that either.
For one CONSTRUCTIVE bit, I feel like items should have two different FIR tags. One for flea/resell, one for quests, and the quest one staying if you died with it. That would make life better to me and to a very large population of power players.
Also, between FIR changes, reduced loot spawns, increased flea fees, reduced trader sell prices, any 1-2 of those are survivable but all of them together, with more to come I'm sure, are crushing. That's all I'm saying.
EDIT Again : I just saw what Jaegers giving for guns. THAT is nice. That makes up a little bit for the stuff like fuel conditioners.
submitted by killaho69 to EscapefromTarkov [link] [comments]

Thought Experiment: Post-Hyperbitcoinization Sudden Quantitative Tightening

Imagine a post-hyperbitcoinization world where all capital and labor is denominated in sats (or milli-sats). There was probably some kind of transitional shock the world went through to get adjusted to the new global monetary system. Virtuous technological deflation becomes the norm, bringing prices down on all assets as capital increases and technology improves. Money printing and monetary policy adjustments are no longer possible. Etc, etc... But let's assume that at some point the global economic system stabilizes in some steady state with its new bitcoin standard monetary system.
Now my thought experiment is:
We know that we can't increase the amount of available bitcoin, but we know it can be decreased (via lost keys). So what happens to the world economy and the world in general if there is a sudden reduction in the amount of available Bitcoin? For example: some major exchange or company with a meaningful amount of the total supply of bitcoin (let's say 5%) in a single multisig wallet actually lost the keys to it?
The price per coin would probably go up and savers would win, as a first order effect, but what are the second order effects? Does the whole economy suffer a sudden wave of deflation? What happens to debts denominated in btc? What happens when thousands upon thousands of debtors are suddenly underwater over night?
submitted by facepalm5000 to Bitcoin [link] [comments]

The Fed's Losing Battle with Technological Deflation

PART 1/4 - FREE MARKET?
First off, let's set the scene.
The stock market is telling you nothing about the real economy anymore.
Economic fundamentals have never mattered as little for the stock market as has been the case during this 11-year bull market.
The correlation between gross-domestic-product growth and the direction of the S&P 500 Index has only been 7% in this cycle - historically it has been 30% to 70%.
Why?
Well, it is the Central Banks, led by the Fed, who printed their way out of the Recession in '08.
In doing so, they have papered over the cracks, and we have seen the longest economic expansion in US history.
However, this is not a particularly meritocratic process: money creation itself increases inequality via the Cantillon Effect, as money printing leads to asset price inflation, which disproportionately benefits the rich and hurts the poor.
Former Federal Reserve Chairman Paul Volcker told the New York Times in 2018:
“The central issue is we’re developing into a plutocracy. We’ve got an enormous number of enormously rich people that have convinced themselves that they’re rich because they’re smart and constructive."
The reality of course is that this is largely not the case - it is because the game is rigged in their favour.
Now, it is important to emphasise the fact that the path we have taken has resulted in the highest living standards we have seen in human history.
However, the issue, particularly since the US completely abandoned the gold standard in 1971, is that debt has exploded to obscene levels.
We are not operating in a free market if it takes $185 trillion of debt over the last 20 years to create 'growth'.
In fact, the global debt to GDP ratio hit an all-time high of 322% in the third quarter of 2019.
Inflation means that your dollar loses value and thus your purchasing power goes down.
Deflation means that the value of your dollar goes up and your purchasing power goes up.
That's a good thing right? You get more goods and services for less.
Well, no.
If you have deflation, debt explodes in real terms and you can never pay it back.
As the economy is based on debt, if you allow deflation, then you have to reset the debt.
This is why central banks fear deflation so much.
However, the major force driving the human race is technological progress - and this stops for no mortal...
PART 2/4 - TECHNOLOGICAL DEFLATION:
The increased abundance created by technology will result in massive job losses.
Throughout history, doom porn enthusiasts have screamed that the machines are coming for jobs. This is not a new phenomenon.
All technological revolutions are deflationary - since they create "supply side shocks", meaning that they allow for more intensive use of resources and thus higher production. With more goods being produced, all other things being equal, the price of those goods will fall.
In the last 20 years or so, software has disrupted and replaced many established goods and services.
It is in the next 20 years that another disruptive technology is set to take the stage: AI
According to Steve Schwarzman, the co-founder and CEO of The Blackstone Group who has a net worth of $17.6BN:
"This is going to touch everyone's life....you're not going to be able to get away from this technology"
Moreover, this virus will only accelerate this trend towards tech. Zoom is a fantastic example of exactly this.
Old legacy economic systems were not built for this tech deflation, and the thing about exponential growth is that we humans do not intuitively understand it.
As an example, if you folded a piece of paper 51 times, of course you can only fold it seven times, but if you could fold it 51 times, it would reach the Sun!
PART 3/4 - IMPLICATIONS FOR SOCIETY:
The question is: how does this play out?
In the long term, it is the fundamental structure of the economic system that has a significant impact on people's lives, not who is President for 4 to 8 years.
In reality, politicians have limited power and are effectively all puppets. We have seen what happens when a President doesn't stay in their lane...
One could argue that the two main mechanisms of control are:
  1. Divide and Conquer and
  2. Order from Chaos
As we have seen many times in the past, herd psychology is worryingly easy to manipulate...
Speaking of the censorship, in his book Antifragile, Nassim Taleb discusses the anti fragility of information.
Information feeds more on attempts to harm it than it does on efforts to promote it.
A fantastic example of this process is what has happened with London Real: they were banned on LinkedIn and David Icke's interview was censored. Now, regardless of what you think of this particular channel or your thoughts on David Icke and the theories provided, censoring information in this way actually spreads it more virally.
It's fascinating to observe how many views the videos regarding the bans and censorship have relative to the others. And the impact this has had on subscribers.
It is always easier to blame a bigger enemy (or create a new one) rather than to admit it's a structural problem.
Therefore, you avoid short term pain...whatever the cost.
The real question is if and when this situation will lead to social unrest...
PART 4/4 - INTELLECTUAL CAPITALISM:
The depth and width of jobs impacted by AI will continue to increase in the future.
Now this will not necessarily happen straight away.
However, our transition from commodity capitalism to intellectual capitalism is inevitable and the people and nations who fight against this trend will be on the wrong side of history.
From a practical investment perspective, and disclaimer this is not investment advice, network effects are a crucial aspect to consider moving forwards.
Essentially, this means that the value of the network increases with each additional user - all of the tech monopolies have exhibited this property.
An asset which could in time demonstrate very strong network effects is Bitcoin.
Looking at the market cap relative to other asset classes, Bitcoin provides an asymmetric investment opportunity.
Only time will tell...
https://www.youtube.com/watch?v=7nFbKzt-uwE
submitted by financeoptimum to Bitcoin [link] [comments]

Bitcoin salvation for the evils of the FED. -> https://twitter.com/piratehash/status/1282049054239797249

Bitcoin salvation for the evils of the FED. -> https://twitter.com/piratehash/status/1282049054239797249 submitted by pedromvpg to Bitcoin [link] [comments]

#Bitcoin as a Hedge Against Inflation - Jeff Booth Was ist INFLATION VS. DEFLATION im Kryptomarkt ► BITCOIN BLASE PLATZT? Bitcoin News, Ethereum, btc BITCOIN nach der KRISE? Erst DEFLATION dann INFLATION! Meine Meinung! Krypto News Deutsch THE BITCOIN'S ECONOMIC MODEL. Understand Halvening, Inflation and What makes Bitcoin different Inflation versus Deflation - And why Bitcoin is changing economics forever

If deflation was to hit the United States today, it would actually be bearish for Bitcoin, as capital inflows to risk assets would decrease, causing prices to stagnate. When Debt Bubbles Accompany Deflation. Each instance of deflation in the last few decades has been different. Spain battled two bouts of deflation in 2009 and 2015-16. In part two, we will discuss whether or not this deflationary nature is a positive or negative for the Bitcoin economy, as well as the deflation vs. inflation argument in general. Free Bitcoin Crash Course. Learn everything you need to know about Bitcoin in just 7 days. Daily videos sent straight to your inbox. Your name . Your email. We hate spam as much as you do. You can unsubscribe with ... Bitcoin’s deflation is inherent because of its design that promotes a slow, methodical growth with a fixed end. This means that no matter what happens, not everyone can own bitcoin and as the number of people entering the crypto economy increases, the value will continue to increase. Bitcoin and Deflation Murray Gunn • September 21, 2018. If Bitcoin's the future of money, get ready for deflation. In 1820 a gloriously named Scotsman, Gregor MacGregor, invented a fictitious country. He then persuaded people to invest in said country and ran off with the loot. That country went by the name of Poyais. It's another story and, if you want to learn more click this, but we will ... But he thinks that won't apply in an economy where deflation is expected. "In a Bitcoin world, everyone would anticipate that, and they know what they got paid would buy more then than it would now." --MIT Technology Review: What Bitcoin Is, and Why It Matters, May 25, 2011 Alternative Argument. A deflationary spiral occurs when there is an incentive to hoard because of declining prices, which ...

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#Bitcoin as a Hedge Against Inflation - Jeff Booth

INFLATION VS. DEFLATION - Was ist das? Bitcoin News, Ethereum, btc Herzlich willkommen liebe Kapitalexoten zu einem neuen Video. Heute werden wir uns mit dem Thema Inflation und Deflation speziell ... THE BITCOIN'S ECONOMIC MODEL. Understand Halvening, Inflation and What makes Bitcoin different Understand Halvening, Inflation and What makes Bitcoin different The Freedom Protocol - Educational ... Money is what drives the world, but there is a huge problem with it...it's built upon debt, and there is more debt than there is money in the world. This situation is by design, as is what keeps ... Bitcoin (BTC) Update! Blick auf die Charts und die News des Tages! 💰 $1090 Bonus bei ByBit sichern: https://www.bybit.com/app/register?affiliate_id=1873&lang... TIP294: Inflation - Deflation - Which One Is It? w/ Jeff Booth author of The Price of Tomorrow - Duration: 1:06:28. The Investor's Podcast Network 3,439 views 1:06:28

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