I'd actually prefer a thread with the premise that bitcoin isn't "screwed" and then I can stay out of the other threads that are full of people that don't understand what they are talking about. Those threads are stuck on arguing with bitcoin can "work", and I'd like to move into a dialogue based on the premise that it will, to understand and inquire into its possible positive effects on our banking system.
Quote:
Originally Posted by BooLoo
deflationary currency and widely accepted world currency doesn't really work together.
pick one.
See, I'd rather dialogue with you, then the other threads already. I agree with you WHOLEHEARTEDLY. But we HAVE had historical circumstances where gold was fairly relevant and although it didn't necessarily circulate it did have an positive effect on the quality of money that did circulate.
I think you would understand why most bitcoiners are unwilling to talk about how a deflationary currency won't circulate very well.
Quote:
Originally Posted by piepounder
If cryptocurrency becomes widely adopted, demand for fiats will be lower, tending to decrease their value and reduce their buying power. This effect would be inflationary. So the central banks just tighten up a bit to compensate - ie raise interest rates and buy fewer government bonds (unwind the QE).
There are also countering effects of technology and demographics. Techonolgy (across many industries not just banking) is very deflationary, and demographics is also in countries that dont have growth in the workforce.
So its a tug of war but central banks have the tools to deal with inflation. they may be light on tools to deal with low inflation and low growth but this crypto argument would help in that regard
This is what I want to go in to. Most bitcoiners think banks will print themselves out of business but that's just ignoring what central banking is. Banks can enact monetary polices as counter measures. And I would suggest its obvious they will do so rather than to fade out of relevance.
Some argue that people will take out fiat loans en masse and this will crash our banking system, but I think a fiat loan for bitcoin is sort of a good loan perhaps (good for the customer and the loaner). It wouldn't necessarily be bad for the economy if a nation was "importing" bitcoin via loans like this and so there wouldn't be a terrible inflationary pressure on the fiat that represents that nations economy.
Is this a sound argument? I've never read of bitcoiners considering it.
Last edited by Mike Haven; 11-16-2017 at 06:28 PM.
Reason: 3 posts merged