Hahaha. Great idea. Someone should write to the producers.

Its not a good answer, for two reasons:

1. Price deflation does not stop growth. The answer to those people is pointing out that their theories are wrong, as multiple historic evidence show. In fact, inflation stops growth because it creates malinvestments.

2. You are asuming that growing means consuming more resources, but growing can mean consuming less resources. For example, we have today computers that consume less electricity and have more computing power than computers built 5 years ago. We have grown increasing productivity by discovering new technology and has allowed us to have more with less resources.

The problem is not with bitcoin, its with the Efficient Market Theory, that is basically wrong.

Dont get me wrong, markets are efficient, just not in the way described by the Effcient Market Theory.

Not only that. The Money Masters has big historical mistakes and is a very misleading film.

I actually got interested about central banking after watching The Money Masters and when I started reading about monetary history I got very deceived since I discovered that The Money Masters is a very misleading movie, with big big historical mistakes.

I would not recomend anyone watching it. The central banks must be criticized for the right reason, not with more lies.

Its not the same. The part that takes the decissions inside the Federal Reserve System are agencies of the federal government. Bernanke and the rest of the gang are nominated by the president and ratified by congress. How is that a private institution? How is a corporation any similar? Yes corporations get privileges from the government but they dont have a federal government agency as ruling institution...

+1

People dont understand value and money.

No. Most countries have legal tender laws which means you dont have freedom of contract. If you write a contract and demand to be payed in bitcoins, gold, blue shoes, whatever... you can not enforce it. If you go to court to demand payment the court will allow the counter part to pay you bank in the legal tender currency (dollar, euros, ...) because by law legal tender means its valid to reapy any debt.

Btw, when you voluntarely sign a contract, it is not initiation of violence if I demand that you fulfill your contract.

And please lets stop with this inernet meme that the Federal Reserve is a private bank. Its not.

And most of the central banks of the world are not private, like f.e. the European Central Bank. And even in the few cases where the central bank is private, it only gets the power because of the government charter.

Its quite irrelevant that the central bank is government owned or private, the problem is that a central bank exists.

No. Money always appears naturally and it is later that governments monpolize it. Study your history.


Most of them. During the middle ages there were numerous private mints for example.

Governements did not chose gold and silver as money, they just monopolized their use with regulations once they were widely used as money by the people.


So?

The whole point of bitcoin is that is not government backed. That is the reason most of us trust it. If you study history ALL governments have debased the currency. For some it has taken longer, for others shorter, but ALL have debased the currency. So if you trust the government currency you are up for a surprise. Because Bitcoin is not a government system I trust it. If the government issued a bitcoin similar system I would not trust it.

And if you have a currency not backed by the government but a centrallized organization backing it you have high probability of being regulated or even banned by the government to stop you from competing with their currency. Check the recent Liberty dollars case.

What you dont seem to like of bitcoin is the exact reason why I like it.

People tend to focus too much in the inflation is theft problem and leave asside the biggest problem of inflation: the discoordination that creates in the market that leads to inefficiencies, lower standard of living and boom and bust cycles.

You can have no increase in prices even if there is (monetary) inflation because of productivity increase. But that does not mean everything is fine and dandy. During the roaring 20's Fisher congratulated the Federal Reserve for how well they managed the money supply. There was no price increases in the CPI index. Keynes said in 1927 that they had now control over the economy and crsis were a thing of the past. On the opposed side, Mises and Hayek warned of a coming crisis. Mises even rejected a well payed job at a major bank and stayed in his low paying job as academic (his wife wasnt happy about it) because he said the banks were going bankrupt and he didnt want his name associated with it.

Then the 1929 crash arrived and developed into the Great Depression because of the interventionist policies of Hoover and FDR. And btw the bank Mises rejected did go bankrupt. What did Mises and Hayek saw or knew that Keynes and Fisher didnt? Why those two that are still today considered valid economists got it so wrong? Both Keynes and Fisher went bankrupt themselves in the Great Depression. Keynes came from a wealthy family so his parents came from England and rescued his mess. Fisher lost all of his family savings but was given a job at a elitist university so he could earn some money.

So again, the price index were flat under the Federal Reserve management during the roaring 20's. What did Mises and Hayek saw or knew that Fisher and Keynes didnt? Its simple. It does not matter if the price index is flat, (monetary) inflation can still cause changes in the relative price levels of the different goods in the market creating disbalances that produce inefficient outcomes and if continued for some time bring about a crisis as the only way to correct those inbalances. Fisher and Keynes focused so much in aggregates, analizing all the goods as if they were the same goods, that did not take into account the distortions inflation causes even when price index are flat.

As conclussion, inflation does finance the government and the banking sector at the expense of the rest, but so do taxes and people tend to accept them beter. The real problem with inflation is that distorsts the capital structure making the system less efficient, more wasteful and makes everybody poorer.

And vendors can easily adapt to having different e-currencies, because a website can automatically adjust prices and even automatically exchange from one e-currency to the one preferred by the vendor. I mean that the vendor could deal only in currency C, but accept currencies A, B, C and D. When someone goes to his/her website and pays in currency B, the system can automatically send that money to an exchange and receive payment in currency C. That way the vendor only deals with his preferred currency while still accepting a lot of them. In an unregulated economy the cost of the exchange would probably be minimal, there could even be vendor associations that exchange the currencies among themselves, a sort of vendor cooperative exchange.

PS: There goes my part to get the post back on track.

You really think someone has 95% of the bitcoins in existance? But lets assume it for the sake of the argument, what would he/she gain from crashing the value of bitcoins?

You are defining what a currency is: an object that by mutual agreement everybody starts using as means of exchange. It is only later that governments come and create a monopoly.

How do you know you will go to the supermarket next week and there will be food? There is no government law that forbids all supermarkets from closing. How do you know it wont happen? Are you actively planning for such an eventuallity? Same with Bitcoin.

Its quite sad that you think that only through government can things work, when reality shows us that its the other way around.

Hahaha, priceless threat.

So basically you want to ban lending but not stricly ownership. Now that you have stated what you think is moral, I would like to understand why (and please, for the sake of understanding, keep the clear and understandable language going on).

Bitcoin is not a monopoly by any means.

There are other currencies around. Even not countirng government imposed currencies (these are the true monopoly) there are other competing currencies around.

But even in the case you want to reduce the market to p2p anonymous currencies (and lets assume Bitcoin is the only one in this sub-market) its still not a monopoly, because any competitor can freely enter the market. Being the only producer is not a monopoly, being the only sactioned producer is a monopoly.


No, and big time no. Nobody here is unjustly enriching from others. Nobody is taking huge profits from anyone. We early adopters took a risk and also had vision to believe in this project, others didnt, and well see who was right and who deserve a reward.

If Bitcoin fails should I go and demand that the others compensate me for the benefits they got while I was dedicating time to Bitcoin? No, that would be unjust. I have dedicated a lot of time to study economics, specially monetary policy and history. All that kwoledge adquired by my own dedication, part of my personal and limited knowledge of the world, has led me to believe in this project. Also, I was there surfing the internet and kept myself informed. Then I spent time promoting Bitcoin and trying to collaborate with the community in this forum. Other people used their time in other things that, given their personal limited knowledge at that time, though it was better for them. If Bitcoin fails do I have the right to demand that they give part of their profits to me? Why am I being unjust, if Bitcoin finally takes off and my efforts are early adopter help to bring a better world with this new currency?

Everybody has limited and local information, and based on that we make our decissions and take our rewards and our lessons. Trying to play god, assume you have all the information and can judge the motivations and situations that led to this outcome is just for dictators.

PS: On more practical grounds, I highly doubt in the future a scenario like the one you describe happens. People just will start using bitcoins because it will be useful to them somehow. I am 100% sure that someone will try to fork the chain and create a inflationary version, but I am 100% sure as well he will fail. History proves that inflationary voluntary currencies just die. Only way you can keep inflating away a curency and having people accept it is using violence. Without government backing, a inflationary currency dies.

Imagine the situation in one or two years, where more and more business are starting to accept bitcoins. Now another group starts a new chain, and then another one, so we have three e-currencies. The problem for the two new ones is that nobody is accepting them, the companies only accept bitcoins. It would be difficult for the new currencies to be accepted by the business because no one uses them, and no one uses them because no business use them. So people will continue to use the original bitcoins and not the other currencies.

Now, lets imagine the new e-currencies are started by a group of merchants that accept them as a way to promote the new currency. Only in this case its posible that the new currency gets some traction and competes with the original bitcoin. But if there are already a bunch of e-currencies I doubt people will start using one more.

I personally think that having three or four e-currencies competing is good and I hope that with time appears competition. Having only one currency is probably not the safest situation.

Having competing currencies is normal in human societies, its how humans have lived most of the time. But presently we have grown so used to live under a money monopoly that its hard to think how it would work. Its funny and sad at the same time.

There is a difference. If you don't like the word lord, then think of rent, or loan with interest.[/quote]

You have not answered. Stop hiding behind rethoric and answer clearly.

In the example above, the original, how can I know if someone is just obtaining surplus in a moral way (according to you) or someone is obtaining a surplus inomorally (according to you)?

The other side of the story is that saving for yourself and then using that capital becomes easier, so people can start their own projects without going so much into debt and depending so much on the banks. Inflation on the other hand promotes debt.

About the farmers of dustbowl I guess you are referring to the incident during the Great Depression. The thing is that inflation propagandists always point to deflation for making loans more dificult to pay, but always hide that during the roaring 20's it was the inflationary policies of the Fed that promoted the creation of all that debt. Without inflation all that debt would not have been there and the crash of 1929 would not have happened.

No, most of the economists dont think like this. Still using the argument of "most people think like this" thus you are wrong is extremely weak, borderline manipulative.

There is nothing wrong with prices going down, no matter how many times you repeat the same idea. Repeat it again, still wrong.


Bretton Woods was designed in a way that this was unavoidable. The USA kept printing more dollars than gold had and finally it could not pay. In fact the story of how the USA government gradually took over the monetary system its very interesting. It shows why fiat currencies, even if they claim to be backed by gold dont work. Competing currencies dont suffer from this problems.