Really?  Plan administrators restrict the ETFs you can buy in a 401(k)?  I didn't know that as my retirement plan only allows investment in mutual funds.  Maybe I was thinking of IRAs.  In any case, thanks for pointing that out.

Yes, I'm just talking about the way things are, not the way they ought to be.  I completely agree that there is a lot of unnecessary waste that should be cut out, even though it would hurt the economy in the short term.  My family and I generally try to drive things into the ground before we replace them.

This doesn't have to do with preference or what's better in the long run.  I, too, would prefer a more stable system that's full of producers and savers.  But the fact is that credit and consumption drive economic growth faster and "easier"--they are shortcuts to greater wealth.  And with today's prevalent instant gratification attitude, that's the path most people pick.  It's a lot easier to take out a loan and get that shiny new car now than it is to work hard, save for it, and pay cash later.

If inflation was -0.4% in 2009, how was that not deflation?  If you want a better example of how bad deflation can be, look at the first part of the Great Depression.

1929 0.0%
1930 -2.3%
1931 -9.0%
1932 -9.9%
1933 -5.1%
after 1933 it turns positive again for a few years


Yes, that's a better way of putting it.  Thank you.


I suppose it would be possible for such countries to do ok, but there aren't many countries like that (can you think of some examples?), and they would have to be very isolated from the global economy.  Usually countries with strong economic growth and a good industrial base (e.g., China) are exporters.  If a significant portion of a country's economy depends on demand for their exports, they get screwed during a global crisis because no one has the money to buy their exports anymore.


This doesn't have to do with desire.  This has to do with capability.  There were some good price breaks/sales during the 2008 crisis.  I would have loved to have taken advantage of them, but I couldn't because I was unemployed for a couple months at the beginning of 2008.  As a result, my family and I didn't have extra money to spend on cheaper products.  The whole reason they're cheaper in the first place is that fewer people can afford them.

Probably true, but direct investment will have a much larger effect on bitcoin price than adoption.  Additionally, a bitcoin ETF would grant access to a lot more capital as people could then invest with 401ks and other retirement savings.

It's generally true that assets and commodities go down during economic crises, but that's not true all the time.  In 2008, oil did crash, but only after it spiked to all-time highs.  US Treasuries, because of their safe haven status, went up in value quite a lot.  It just depends on where people decide to put their money.  If everyone decided to pile into bitcoin during the next crisis, it could shoot up.  But if people need fiat to pay their bills, bitcoin might crash if everyone cashes out.

And btw, there's still some risk in money market securities.  We haven't seen a crisis bad enough to really jeopardize the money markets, but it's possible.


This will only work as long as investors have faith in government, the world reserve banks, and that there's enough room to print more money.  The US has been printing money at an insane rate the past several years, and it's worked so far, but it can't go on forever.  No one knows exactly where, but there is a tipping point at which investors will seriously start to lose faith in the ability of the US to repay its debts.  If that happens in a disorderly, crisis-like fashion, the whole world is screwed.  No amount of money printing will be able to save the situation.

The unemployed will certainly do better with lower prices, but the overall loss of wages hurts a lot more than the gain from lower prices.

Let's step back for a moment.  Where are you from, and what are economic crises like for you in your country/region?  I live in the US where it's not uncommon for the savings rate to be negative.  For a lot of people, if they lose their job for any significant amount of time, they've got nothing except for some government assistance, and are very likely to default on their debts.  The 2008 crisis resulted in an increase in the US real unemployment rate (U6) of almost 10%.  Additionally, many homeowners finance 80% or more of their home, and then they further borrow against what little equity they have with home equity loans and lines of credit.  So when the economy turns sour, a lot of people have no money left and no way to borrow more to make it through the crisis.  So it's not that the unemployed are just buying less--they're hardly buying anything.


At least in the US, this is simply not true.  During the 2008 crisis, everything turned negative, including retail sales (see this chart: http://www.macrotrends.net/1371/retail-sales-historical-chart).  US consumers bought less in 2008 and 2009 than they did in 2007, despite any reduction in prices.


Credit is a double-edged sword.  You're absolutely right that it can be bad for the economy, but it does increase growth when used well.  Lots of easy credit leads to spectacular busts, but it also leads to spectacular booms.  The economy would be a lot more stable without it, but it would grow more slowly.


Consumer prices are very much affected by some markets, especially the commodities.

This is why SPN shouldn't have been paired up with LTC in a prominent way.  It's taken away some of the hope that existed before.  However, such a dump can still be avoided if interest in the coin is revived before it's listed on Mintpal.  We've still got time.

SpartanCoin, I have a question for you.  Have you put some thought into how to protect this coin if/when it starts to be noticed?  With Scrypt ASICs coming out and a network hashrate that's generally only a few tens of MHashes, a single person with a modest ASIC miner could easily take control of the network.

Oh, and one other thing about waiting for lower prices--even if this doesn't have a large impact on some sectors of the consumer economy, it has a HUGE effect on the stock, bond, and commodity markets.  While I may not care about whether I can get a TV a little cheaper a couple months from now, you bet I'm going to care if I think I can buy stocks cheaper if I wait a little while.

You do bring up another very important point that was only touched on briefly in one of the above posts: credit, which is probably much more important to this discussion than fear of job loss or waiting for lower prices.  I should have brought this up earlier.  The world runs on credit.  Without it, the world would come to a virtual standstill.  During economic crises and deflation, credit dries up.  Banks don't want to lend for fear of borrowers defaulting.  If few people can get loans for cars and houses, that removes a lot of demand from the economy, which greatly exacerbates a deflationary death spiral.

But what about all the people that lose their jobs?  Where are they going to get the money to take advantage of the lower prices?

How do you know he paid over 700?  I haven't been able to find that info.

Actually, I'd say a country is rich when its people really care about one another and help each other out.  But that's a different topic.

Setting aside governmental manipulation, a country's currency is strong when its economy is doing well (generally speaking, anyway--technically, from a value standpoint, a country's currency will increase in value relative to other currencies as long as its economy is doing better than that of other countries).  As deflation and economic contraction generally go hand-in-hand, it would be hard for a country's currency to do well during deflation.

True.  Smartphones are convenient, not necessary.

Technology in general, especially electronics, is always getting cheaper because of how fast it evolves.  If you want a smartphone, then yes, you eventually have to buy one, even though you know it will cost less next year.  But the question is, have you ever delayed a purchase or bought an earlier generation product because of that fact?  When I look for new computer parts (I build my own), I decide on what I want to get to meet my needs/desires.  Then I wait a little while either for a good sale or for prices to drop when the next generation comes out.  If I were really concerned about money, I'd wait even longer.  If hard economic times lead to consumers buying every other generation of a smartphone rather than every generation, that will have a significant economic impact.

As for the effects of an economic crisis, if prices and wages drop a small amount, that can be beneficial for most (with the exception of those that lose their jobs due to the crisis).  But the danger with deflation is that it's very easy to get into a deflationary death spiral.  People spend less which causes prices to drop and people to lose their jobs, which leads to less spending, lower prices, and more jobs loss, which leads to even less spending, lower prices, more jobs lost, etc.

Saving is indeed wise and important.  But there's a difference between saving and hoarding.  I'm talking about the latter.  Even good savers will still spend a little money here and there on unnecessary things like going to movies or occasionally getting a new computer or smartphone.  But if everyone cuts out all those extras, it will hurt the economy.

Thanks.  I think you make a good point here that I'm a little surprised more people don't agree with.  Yes, a ridiculous number of coins have been created, and most of them are clones that die out after a few weeks or months.  But there is a lot of innovation taking place.  And while most of the coins that include some novel idea won't themselves survive, the ideas do.  As long as the whole area of cryptocurrencies doesn't die out, I think we will eventually start to see some more "professional" coins emerge that bundle together a lot of these innovations to make some really good currencies that are better than Bitcoin.  Either that or some of the major coins like Bitcoin will be modified to incorporate some of the better ideas.

Most of your examples are necessities that have fairly inelastic demand.  Without major lifestyle changes, you still need about the same amount of gas, food, electricity, etc.  When you need to cut expenses, you generally look at optional purchases.  Can a new computer wait until next year?  Can I get by with this old car for another year?  And all of that aside, have you never waited for a sale, or a better sale than the current sale, to buy clothing or a vacation trip?  Have you never postponed filling your gas tank because prices are falling and you have a pretty good idea from experience that they will be a few cents cheaper next week (assuming you don't need to fill your gas tank every week)?

Also keep in mind that in a deflationary environment, as a whole, wages also drop along with prices (where a "drop in wages" may come in the form of job cut).  If I think I'm going to be making less next year, or if I fear I will lose my job, then I'm going to save every penny I can this year.  That kind of mentality leads to less spending and further slowing of the economy.

I think that there are a number of things that are necessary for a coin to even have a chance at being successful.  You have to have a dedicated dev/dev team and community.  The coin needs to work well from a technical perspective (e.g., not forking every thousand blocks).  And there has to be real demand, not just speculator trading.

The real demand part is the tough one.  If you can come up with a technical innovation or a novel use, your coin will likely at least have a moment in the sun.  But it's unlikely that that would be enough for mass adoption (e.g., see AuroraCoin).  You need more than that.  To really last, a coin needs to be useful in the real world in ways that no other coin is.  Bitcoin has achieved its status by being first.  LiteCoin was one of the first alt currencies and has been adopted as "the silver to bitcoin's gold."  DogeCoin has been adopted as a prime choice for things like tipping.  DarkCoin might have a shot at being a better LiteCoin.

So the question is, what do you want to be able to do with cryptocurrencies that can't already be done with BTC, LTC, DOGE, or DRK?  If you can come up with a good answer to that question, then you have a shot at creating a truly successful coin.  Otherwise, it will probably won't be around a few years from now.

Yes, there needs to be an easy way to sell stocks and buy bitcoin (or a proxy thereof) on the same platform.  If/when a bitcoin ETF becomes tradable, it will then be possible for average investors to buy into bitcoin easily.