Bitcoin Forum

Although it doesn't mention bitcoins...


http://online.wsj.com/article/SB10001424052748703313304576132170181013248.html


It is my belief that the current state of bitcoins worth being valued in it's exchange rate with other currency (especially the dollar) is only a superficial and temporary state of affairs, because the currencies it is being compared with are worth the might of weapons backing them up, but bitcoins need no backup from weapons.

So, the value of bitcoins becomes dependent on other factors. Obviously it's value will partly be defined by it's exchange rate with other currencies, but perhaps the uniqueness of it's qualities as a means of holding and exchanging (and representing) wealth will start to emerge.
It is not just another currency. It is being treated like one, but the differences are real and practical.

When this stops and the dollars come home, the dollar is f'd so hard and fast it'll be insane.

Yes, and America knows it.

This explains most of their foreign policy - The Iraq invasion being the most obvious example, almost so obvious as to be  intended as a blatant message to the world, "keep your oil in dollars or else..."

However, as soon as currencies are no longer backed up by armed force, or the armed force of friends with interests - the currency fails.
Bitcoin does seem to be the only candidate for a currency free from this one common attribute.
Or is it?

And while they can, both people and the government are taking on huge debts that will not be paid back or be paid back in collapsed dollars.

The US will invade Libya next. The jackals are already in there firing rocket launchers and stirring up problems.

Are you talking about the story of Saddam selling oil for euros?

Because I've heard this many times but there's simply one thing that doesn't stick: if that was the true reason for the invasion, why didn't Saddam ever cited it in his own defense? Just publicly saying: "They don't want to attack me because of inexistent WMD, it is because I'm going to sell oil for euros!".
And by the way, why was it so hard to just do it? I mean, why would it take so long to change the currency against which you sell oil that even gave the time for military action from a foreign nation?

I do understand the importance of dollar supremacy for the US government, but this story just doesn't stick very well.

You know, I've thought of that too.  But then, western media are hardly unbiased and I wonder if Saddam had ever said such a thing, would it ever have reached front page of the WSJ?  I think not.  It would've been buried and confined to extremist newsletters & websites and laughed at by the mainstream media.

Is there anyone here from Iraq?  Was this theory (admittedly a conspiracy theory) ever noted in Iraqi newspapers?  [See http://www.ratical.org/ratville/CAH/RRiraqWar.html for what I believe to be the original document outlining the theory].

Does anybody think it would be a big deal to price oil in Euro or sell directly for Euro?

The EUR/USD market is the most liquid in the world, so the difference would be purely psychological.

I doubt it. There are plenty of anti-american media and governments out there that would propagate such statement.

True. But, well, maybe not all currencies exchanges are that liquid, forcing oil buyers from different countries to have some dollar reserves. Such reserves could be changed to euros.
And also that would be bad for the dollar "image" and good for the euro's. Maybe other dollar reserves out there, not directly related to oil, would suffer a shift. Many central banks around the world hoard USD, for example.

Every nation that needs oil (i.e. all nations) have to compete for USD in order to buy oil.  This makes dollars very valuable.  If oil wasn't purchasable only in USD, USD would be in much less demand, its value would plummet and cheap (e.g.) Chinese goods would no longer stock the shelves of walmart.  Given that much of US domestic industry has been outsourced abroad and would take years to get back up to speed, there would be a shortage of just about everything in the US (and, by extension, Europe, UK, etc).  The market would be awash with dollars, usable only in the US, and the market for them would be much smaller (more money chasing less products), so the US would likely enter a period of hyperinflation like none ever before.

Yeah.  I'm sure you're right, but it's nagging at me just the same.

The trend has already changed. Over the last years they started hoarding gold.
China is probably desperate to exchange it's USD reserves for gold, but must do it as secretly as possible.
That's why I think gold will continue to rally.

It would have gotten on Al Jazeera.

Seeing as it seems to be of interest.
An entertaining and well sourced piece of stand-up by comedian Robert Newman found here:

http://video.google.com/videoplay?docid=-5267640865741878159#

is a good staring point for getting a handle on other interpretations of various bits of history.

Al Jazeera does tend to be impartial and has good breadth of coverage especially compared to American News, but it is still very selective about what it chooses to report - especially when it comes to financial matters, as is - for example, the BBC, whose impartiality is 'famous', only outside the UK.

I suppose I was mainly making a point about the uniqueness of bitcoin as being a currency not backed by military might - rather by the power of mathematics.