And in no debt land you cannot get a mortgage so don't expect to own a house unless you inherit it.
Unless no one else has debt also. In which case houses wouldn't be used as speculative assets. Imagine that, affordable houses. |
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Yes, cause deflation is always a great sign too right?  That's purely due to the sick debt based system that overly inflated asset prices. So the solution is more debt right? Or maybe we're going to finally fix this problem with a debt free currency like bitcoin. Being debt free doesn't solve a deflation problem. And all I am implying is that deflation is not necessarily a good thing, neither is inflation. Historically, some of the worst economic times happened while an economy was in a state of deflation. Here in the U.S, the Great Depression is just one of those cases. Again, you distort the facts. The Great Depression was caused by excessive debt. Exactly the same problem we have today in the fiat world. |
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This is because everything is expensive in the fiat money world because debt has already inflated up asset prices. Best thing you can do is to buy some bitcoins and store it until it hits x value.
Then convert bitcoins to fiat to start your business.
Alternatively, do a business plan and see if anyone on havelock will invest into it.
I'm not looking for a loan. Therefore, you must want to provide loans. Instead, invest your equity. |
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Yes, cause deflation is always a great sign too right? That's purely due to the sick debt based system that overly inflated asset prices. So the solution is more debt right? Or maybe we're going to finally fix this problem with a debt free currency like bitcoin. |
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deflation in the usa would not be pretty. they will try to avoid that
Sure they will. And they will also widen the gap between rich and poor, which creates a political problem. We are near the end of this game. |
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It is unlikely there will ever be a large number of bitcoin loans as bitcoin is deflationary. The implied interest is likely over 12% (ok I pulled that figure out of thin air but it's an educated guess).
Instead we will have equity financing. If it works, you're good, if it doesn't you go down with the ship.
If there is no debt, there will be no debt crises. There will be no bank runs. All the bad stuff that has plagued other financial systems in the past can be ended by removing debt from the system.
The problem of inadequate liquidity will instead be handled by infinite divisibility. At the moment, Satoshis as the smallest monetary unit will cover our economic system for the rest of my lifetime.
Real productivity will rise because we won't have to contend with the destabilising forces of debt resulting in financial crises.
I think there will be large numbers of loans - just far off in the future, assuming Bitcoin stabilises. I don't see divisibility solving the liquidity issue. Divisibility doesn't allow me to start my new business venture. I'm not sure removing debt instability will improve productivity. Even if it does, I see not being able to start new business ventures as a bigger detriment to the economy than any possible improvements. This is because everything is expensive in the fiat money world because debt has already inflated up asset prices. Best thing you can do is to buy some bitcoins and store it until it hits x value. Then convert bitcoins to fiat to start your business. Alternatively, do a business plan and see if anyone on havelock will invest into it. |
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No the fall in asset prices means that the money goes *poof* as in never existed in the first place.
However, the debt stays, so everybody has no money.
Which debt are you referring to? All debts. Government debt, mortgage debt, commercial property debt, stock margin debt... |
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No the fall in asset prices means that the money goes *poof* as in never existed in the first place.
However, the debt stays, so everybody has no money.
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I can't remember the thread I read it in (it was very recent) but someone explained how deflation would reduce productivity because only businesses that could generate extremely large returns could ever afford a loan to get started.
The only way I could see a deflationary currency working is in the very long term.
Let's imagine Bitcoin is eventually the only currency in use and after some time, 1 yottaBitcoin is worth 1USD in today's money.
At this point I see deflation being close to 0% - people can now freely spend their Bitcoin because there's little value in hoarding and waiting for increased future spending potential.
Now people can take out affordable loans.
At what point in time can we see Bitcoin loans being affordable? 10 years? 100?
It is unlikely there will ever be a large number of bitcoin loans as bitcoin is deflationary. The implied interest is likely over 12% (ok I pulled that figure out of thin air but it's an educated guess). Instead we will have equity financing. If it works, you're good, if it doesn't you go down with the ship. If there is no debt, there will be no debt crises. There will be no bank runs. All the bad stuff that has plagued other financial systems in the past can be ended by removing debt from the system. The problem of inadequate liquidity will instead be handled by infinite divisibility. At the moment, Satoshis as the smallest monetary unit will cover our economic system for the rest of my lifetime. Real productivity will rise because we won't have to contend with the destabilising forces of debt resulting in financial crises. |
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Then please state what kind of nature you believe money SHOULD have, you have said you feel that money should never be diluted, even in the face of economic expansion and an increase in purchasing power. The only thing that matches that description is the Earth itself. Their are only 3 choices
Hard money: Gains in value, can never be diluted, like the Earth
Neutral money: Neither increases or decreases in value, supply will need to expand with economy
Soft money: Declines in value like all man-made things, also experiences supply expansion and or demurrage
Everything you've said leads me to believe your defending Hard money and calling Neutral and Soft money 'theft', but for what ever reason your rejecting my assertion that hard money is analogous to land. This is very odd from a historical perspective hard money advocates have understood and acknowledged the 'hard money is like land' argument and even promoted this as a 'natural' thing and as a 'sound basis' for money.
Basically you need to understand the simple concept of DIVISIBILITY. Your little mind needs to be expanded to understand that digital currencies are infinitely DIVISIBLE. Therefore, there is a fourth category. Hard money that is infinitely DIVISIBLE, which is not like earth at all. |
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People must remember that money has LIQUIDITY and that has value independent of the underlying change in value. Everyone who holds money is enjoying liquidity and inflation is what you pay for that. Expecting liquidity for free is expecting to be subsidized by the rest of society.
Bitcoin has liquidity. Yet it doesn't have inflation. So your logic does not hold. Liquidity can be provided via divisibility. Expecting inflation for free is expecting subsidisation. I.e. rich people enjoy ever inflating asset prices is pure subsidisation from society. Such a sick system. |
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I believe that there should be zero intervention into the effective interest rate. Fix supply, take Bitcoin-like system with "zero" friction of transfer and near-zero intertia of V
This is your logical falicy you call a Fixed supply 'zero intervention' as if a fixed supply were the natural state of things. Their is nothing natural amount money, it is a man made system of symbols and math and the supply is determined purely by human choice. In the case of BTC a human chose to make a fixed supply and that choice was completely arbitrary, Satoshi could have chosen to do an unbounded supply as lots of alternatives have done. That arbitrary choice by Satoshi constitutes a massive and ongoing intervention on the interest rate. Because people create money and interest rates it behooves us to create the BEST rate of interest that will serve to create maximum productivity. I find you deflation people to be so intellectually sloppy, when I demonstrate that Deflation lowers productivity you respond that you don't want economic growth, it is in fact 'bad'. When I ask how you think it is fair to profit from holding deflationary currency you respond that your deferred consumption is encouraging investment and you then deserve to receive the fruits of thouse investments. Your beloved deflation can not be both causing and rewarding you for hugely profitable investments AND causing economic growth to cease. If you believe growth will be halted by deflationary currency then you can't believe that your speculative profit from holding it is anything but a transfer from other people. That's right but Satoshi didn't choose an unbounded supply. Thank God for that. Nothing that Satoshi did was arbitrary. It was carefully planned and thought out. It is the work of a genius that you can only begin to comprehend after the fact. The problem is you are still thinking like a fiat creature, stuck in your three dimensional fiat world. Debt is not the best response for productivity. You have been conned. Debt creates artificial increases in GDP growth that people pass off as real economic growth because the GDP number measured in dollars is getting bigger. The reality is that real economic growth comes from research, hard work, population growth and general productivity increases. The debt based system distorts real economic growth by adding credit to it. Some dumb fuck borrowing a billion dollars to build some condos is suddenly a superhero because the value of those condos rise due to speculation caused by yet more debt. What a sick fucking system. Bitcoin will increase in value as the Bitcoin economy expands. Yes, there will initially be a transfer of wealth from new adopters to early adopters but this will sort itself out over time because the rich fucks will need to spend their Bitcoins to get economic value. They can't just make more Bitcoins out of thin air, as the banks can do right now with credit-money under the current fiat monetary system. I think you haven't considered that 16% interest in Bitcoin world was a design feature, not an arbitrary choice. Someone understood that debt is deleterious to society as a whole and that person did something about it. Now, that is the mind of a genius. |
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Economists are the types of pseudo-intellectuals that create mathematical models, which almost never work in the real world. Anyway, as far as my understanding goes, today we live in a debts-driven-and-debts-stimulating society, where inflation has a soothing effect. Let's say the GDP is €1 trillion, inflation is 2%, debt is €0.6 trillion, which is 60% of GDP, and economic growth is 0% then next year GDP reads €1.020 trillion and debt is still €0.6 trillion, which has magically become 'only' 58.8% of GDP. Isn't that great ?! No, it isn't, because someone needs to pay the bill, at the end of the line. Debts do exist in the real world, but they are anonymous, transformed, transferred, disguised and encapsulated within the totality of the money-system and this results in an intrinsic value of contemporary conventional currencies; each coin (real or virtual) hides this shared debt proportionally.
Now, wouldn't the world change all that if we gradually change into a debts-discouraging society driven by a deflationary currency like Bitcoin?
You have demonstrated a perfect example why many do not know how to use percentages properly. 60% - 58.8% - looks good, fooled the people, but the actual amount is what more important. 99% of the people i've met thinks inflation (in their mind CPI) is good as it makes the debts appear smaller and it is the creditors who suffer. Creditors are those who have a legal future claim on money. Hence those who lend out money as debt have a claim for that debt to be repaid in the future. What 99% do not understand is that they are also creditors, i.e. those who have insurance policies, pensions, savings.......people have a legal future claim on that money and they also suffer from inflation and not just those who lend the money out. No, actually the 1% hold a lot of assets, which are being driven up by the debt based system. Most of the 99% own a tiny amount of assets per person in comparison. They are creditors but not in any meaningful way. The 99% will never be able to become the 1%. This is the system. It is unfair and it has been in place for the last fifty years. 99% of people you meet liking inflation indicates you are probably working in finance, economics or government. Real people with real jobs hate inflation. Especially the millions of unemployed people in the US and Europe. Debt is just a civilised version of slavery. Maybe we don't need debt. At least now we have a choice in an alternate monetary system called bitcoin. |
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Consumption is the one and only goal of all economic systems, thus deflationary currency is a poor system.
We're going to disagree there. Which is okay, I suppose, but just remember that not all advocates of ---- actually, screw that too, I'm not a deflation advocate; I believe that there should be zero intervention into the effective interest rate. Fix supply, take Bitcoin-like system with "zero" friction of transfer and near-zero intertia of V, and there's no way that it will be less efficient, and will almost assuredly be more so. Less human labor involved in tampering with the money, let the machines do the work transferring and securing value, and we get more free time to either pursue hobbies, work on projects that benefit humanity, etc. Janitorial duties that can be left to machines, should. If a Roomba can vacuum just as well, that's not stealing jobs from anywhere, that's doing work that used to cost money, for much less money; freeing that labor for other things. It makes no sense that this wouldn't work for value transfer systems too. Anyway, by my study, money is a token, and it is *itself* a proof of work. Work done in the past, by you, or someone who gave it to you. You trade it for someone else's work, and we come to mutual agreements in the open market about what a piece of work is worth. That changes with time and variables like supply and demand. But it eliminates trying to figure out whether the work involved in creating three oven-ready 12-lb chickens of a certain quality, is worth ten pounds of raspberries from this particular farm and reputation during a fantastic season for growing berries etc etc. We just trade proofs-of-work (this is why it's so intriguing that mining and the chained-hashes model is called performing proof-of-work to me) and call it a day; and it doesn't matter whether it was really my work or not. It is of course important that proofs-of-work cannot be faked. Work can't be faked, so it's troublesome if the proof can. Likewise, if I sweep your floor for 3 hours, we come to an agreement on the value of that work, and you pay me in... a proof of it, a token, money. Over time, the net amount of work is the sum of all previous work, and even more happily, its value is greater than just the sum of the raw parts. Knowledge on top of knowledge. The global GDP is going up as long as humans are learning and discovering and inventing and becoming more efficient. So, firstly, using Bitcoin therefore directly accelerates our rate of acquiring efficiency, thereby raising global "wealth". There's a lot to write on this... I hope this makes sense. I have a massive paper on the grand unified economic theory tying together the reasons why time is money, and proofs of work, etc. Those are some great economic concepts. Economic systems will continue to gain value as long as they are allowed to expand by building on population growth and productivity. Very elegant. |
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If the OP actually wanted a serious explanation of why Deflation is bad for the economy then he should not be asking the deepest darkest fever-swamp of inflation haters in the world for the answer, if on the other hand he was looking to get his biases confirmed (as I suspect) he has come to the right place. That being said I'll give him the in depth answer In a deflationary currency the rates of interest will be very high because few people wish to loan money and borrowers will be very rare because the rising value of the currency can make their debt burden huge. BTC matches expectations with very little loan activity and very high rates, in this link you can see a 16.33% rate offered https://www.bitbond.net/buyer/listings?utf8=%E2%9C%93&qThe effect of high interest rates are that only business ventures that have a very high rate of return will be funded, either by outside investors or with savings, the motivation to invest is equal, the act of loaning money just connects money with entrepreneurs. In BTC world this has generally meant ASIC miners, drugs, gambling, currency exchanges and financial processors are the only things funded. We do not hear about normal 'main-street' businesses like a retail store or a restaurant taking out BTC loans, these things are just not profitable enough to pay that kind of cost. Everything else gets neglected and the lack of investment will cause productivity to drop even as average return on investment goes up, the lower overall productivity will lower total consumption in the future. And Consumption is the one and only goal of all economic systems, thus deflationary currency is a poor system. You mean millions of empty apartments in china counting as GDP growth is good? Wow. You mean property prices rising by more than 10% and out of average income families is a good thing? Wow again. Are you saying that Coffee shops selling coffee for btcs are not real businesses? Gimme a break. Just because businesses are not taking out loans does not mean that business is not happening. It is called equity financing and it works perfectly fine. Yes, it does require a thought adjustment but it works perfectly fine. There will be zero possibility of debt crises. Consumption is not the goal of all economic systems. That is the biggest lie of the current monetary system. See Bhutan. The economic system there is not based on consumption. Economics is actually about the allocation of scarce resources for the benefit of all. I see a deflationary system as being able to achieve this objective better than the current fiat money system. Can we prove that a deflationary system is better? Well, we are sure going to give it a try. I for one am sick of the top down inflationary system that enriches the 1% at the expense of the rest of us. I hate debt with a passion. I think it is equivalent to slavery. |
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I suspect your inflationary alt coin argument will go something like this:
Please use my alt coin because you must trust us to manage the alt coin for the justice of all.It will be inflationary and your purchasing power will devalue over time. Thanks.
Or, you can choose bitcoin where your spending power is preserved and even increased as the bitcoin economy expands.
Lets see what people really want.
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Since you take the conversation to a higher ground  I cant help but to agree... But I think bitcoin is not the way Beyond capitalism. For me holds the truth that "Money is Trust". From there I derive my inner convictions about how money should be treated. the lemas of the above go like: 1) A person/entity with a lot of money, has a lot of trust placed upon him by society and should act accordingly. 2) If person/entity cannot be trusted, it must not be allowed to keep the money either 3) Trust requires constant action (revalidation) to be preserved, so must money Those are propably the reasons that I intuitively don't like bitcoin, as it starts with arbitary/disproportional distribution of trust and that very prematurely. It allows that trust to grow without reason. Later entrants are regarded with mistrust. Then what are you doing here? Do you even own bitcoins? Who pays you to troll these boards? Don't like bitcoin? Why don't you create your own alt coin! The rest of us like bitcoin. We like deflation after having given inflationary fiat currency a go for the last fifty years. We like alternatives. We're not going to give it up easily. There is nothing you can do stop people voting with their feet and their wallets. lol woah man, calm down. Just because someone lists some cons about bitcoins doesn't make them any less relevant than your pros. There are legitimate concerns with bitcoin that need to be addressed. Dismissing them outright just because you don't agree is not the way to go about it, sorry to say. No dismissing them outright because they are not genuine attempts to understand bitcoin and deflationary monetary systems is okay with me. I have lived in the fiat inflationary system long enough to observe that it is a sick and oppressive machinery. In any event, this is a debate no? There is no way to silence anyone here. The problem is this: fundamentally, Thaaanos repeatedly fails to recognise that you CANNOT change bitcoin. You can only create alternatives and hope that people gravitate to it because it is a fairer system. This is how a real democratic system works. Not by some person shoving their ideas down on the rest of us. Bitcoin is deflationary. Get used to it. If it is actually a worse economic system as you and Thaaanos say then people will naturally stop using bitcoins over time. Please don't assume that ordinary people are ignorant of the consequences affecting their lives. I for one have really had enough of top down planning. It's broken. It's oppressive. And it's just fucking cruel. So let me try and understand this. He's wrong because he wants to change bitcoin. Yet your not wrong because you want to change the current financial system. How is there a difference? Your doing the same thing you claim he is doing. And it doesn't sound like he's shoving anything down your throat, it looks more like he's being reasonable and intelligent and willing to discuss the topic like an adult, and it sounds more like you are trying to push some agenda you have Sure, I might have some growing up to do, dad or big brother. Here it is: bitcoin is changing the financial system. I like that. We are not talking about it, whining about it, theorising about it. We are fucking doing it in real time with real fucking money. Thaaanos and you are too fucking stupid to realise that bitcoin is a protocol. It cannot be changed. Sure my agenda is simple: tell everyone that fiat sucks, which it does and that you have an alternative in bitcoin. And if you don't like bitcoin, you can even create a coin that you personally like. All I know is that humans should not be trusted with central banking. Justice this and trust that, all somehow ends up raping the 99%. It is clear satoshi realised that centralised third parties who people had to trust were the real fucking problem. |
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Do we have tapeout news from black arrow at this stage? Tia.
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In a bitcoin world the only diffrence is that he wouldnt have a job
This may be true, and if it is it highlights the source of the problem. If “he” is unemployed, and is capable of contributing to society but is prohibited because he can’t find a Job, (people with capital are reluctant to put it to work for “valid” economic reasons) or “he” can’t get hold of the means of production because people who own the means – the land and tools are reluctant to share. The Neoclassical economic model is to create debt with interest (treasury bonds) to encourage and benefit those with capital to lend to those who manage the economy so they can create money to lend, to be paid back with interest and taxes so those who have the means, can partake in the economy. The simplified problem above and its proposed solution is what led Marx to ridicule capitalism. Although Marx had insights as worthy as Keynes as and Hayek, he undermined entrepreneurship and innovation to the determent of his ideas. The problem is a meme of Human rights, sustainable rights do not infringe on each others rights. except for the right of property provided by god. A claim to have a right to god given property, denies all otter human that right, and thus should come with some responsibility. And as long as we construct economic systems to preserve that meme, they will fail, Marx, Keynes as and Hayek, all saw the benefits and perils of right to god given property, Mark sort to eradicate it, Hayek sort to strengthen it, and Keynes sort to manage it with tax and a welfare state. Untested to date is Hayek’s approach your comment above suggests we will all wind up unemployed, I bet we won’t all wind up unemployed but we will test the limits of the meme of private property and what responsibilities are fair and emerge with a sustainable system. Since you take the conversation to a higher ground I cant help but to agree... But I think bitcoin is not the way Beyond capitalism. For me holds the truth that "Money is Trust". From there I derive my inner convictions about how money should be treated. the lemas of the above go like: 1) A person/entity with a lot of money, has a lot of trust placed upon him by society and should act accordingly. 2) If person/entity cannot be trusted, it must not be allowed to keep the money either 3) Trust requires constant action (revalidation) to be preserved, so must money Those are propably the reasons that I intuitively don't like bitcoin, as it starts with arbitary/disproportional distribution of trust and that very prematurely. It allows that trust to grow without reason. Later entrants are regarded with mistrust. Then what are you doing here? Do you even own bitcoins? Who pays you to troll these boards? Don't like bitcoin? Why don't you create your own alt coin! The rest of us like bitcoin. We like deflation after having given inflationary fiat currency a go for the last fifty years. We like alternatives. We're not going to give it up easily. There is nothing you can do stop people voting with their feet and their wallets. lol woah man, calm down. Just because someone lists some cons about bitcoins doesn't make them any less relevant than your pros. There are legitimate concerns with bitcoin that need to be addressed. Dismissing them outright just because you don't agree is not the way to go about it, sorry to say. No dismissing them outright because they are not genuine attempts to understand bitcoin and deflationary monetary systems is okay with me. I have lived in the fiat inflationary system long enough to observe that it is a sick and oppressive machinery. In any event, this is a debate no? There is no way to silence anyone here. The problem is this: fundamentally, Thaaanos repeatedly fails to recognise that you CANNOT change bitcoin. You can only create alternatives and hope that people gravitate to it because it is a fairer system. This is how a real democratic system works. Not by some person shoving their ideas down on the rest of us. Bitcoin is deflationary. Get used to it. If it is actually a worse economic system as you and Thaaanos say then people will naturally stop using bitcoins over time. Please don't assume that ordinary people are ignorant of the consequences affecting their lives. I for one have really had enough of top down planning. It's broken. It's oppressive. And it's just fucking cruel. |
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Yes my friend thaaanos. Get used to real democracy in action.  |
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