What if the government of a country is irresponsible？

[franky1]

When I see this picture, should I feel very happy, because I basically use mobile phones for all my living expenses now. If buying a piece of bread requires the money of a cart, I would like to know if the materials used to make banknotes are more expensive than this cart?

satire:
he is taking that 80lb of paper to a retailer to buy a 0.1lb of toilet roll

[hd49728]

What if the government of a country is irresponsible and issues a large amount of currency to buy Bitcoin?

Be responsible or irresponsible, be knowledgeable, experienced and skillful to manage their inflation or not, governments always lead their countries inflation. They can not stop it and it is how governments manage their national economies.

It is possible that governments use their fiat currencies to buy Bitcoin. So far we have yet known that who is (are) Satoshi Nakamoto? The founder of Bitcoin can be a person, a government or any entity.

No matter what the reason is, inflation is already very serious now. If some unscrupulous governments print a lot of money in order to repay debts and fight inflation, of course it will not be one time.

Two topics about inflation on Bitcointalk
Inflation and Deflation of Price and Money Supply
[CHART] Bitcoin Inflation vs. Time
Bitcoin Block Reward Halving Countdown

[BALIK]

It doesn't work in such a simple way, indiscriminate printing of money only makes the economic situation worse. If a country could print money to buy bitcoin, it would have done it long ago with gold or other assets, they don't need to wait until now to print money to buy bitcoin as a national reserve asset. Because you can't buy gold or bitcoin directly with your country's currency, instead, you need to convert to USD or euro, or yuan to be able to buy. Look at countries with high inflation like Venezuela, the more money they print, the more their currency depreciates.

[wxa7115]

What if the government of a country is irresponsible and issues a large amount of currency to buy Bitcoin?
No matter what the reason is, inflation is already very serious now. If some unscrupulous governments print a lot of money in order to repay debts and fight inflation, of course it will not be one time. Credit money no longer has credit.
When a chain of interests is formed between big countries, behind the crazy printing of money is the harvesting of countries that are not rich. What would it look like if it were all exchanged for Bitcoin?

To find the answer to your question we only need to look at the past, what has happened when a country behaves in an irresponsible way and they print a lot of money to buy what they want or to pay their debts?

And the answer is clear, other countries stop accepting their currency as it is not worth the paper in which it was printed, besides even if during such circumstances there will be people willing to sell their bitcoin for useless fiat, a great deal of long term holders have been preparing themselves for that scenario, and they will do what they know how to do best, which is to hold so no country should be able to abuse their power and get away with it as easily as you think.

[Solosanz]

If the government can do that, we can say the government structure is really bad since they can bribe the auditors and the other people who have huge power in their country, it mostly will came from third world countries where the security and discipline is really bad. Although Bitcoin could be used to hedge against inflation, but I predict if those government did that, it will cause huge problem to the countries and people will lost their trust since the government is fan to play with the monetary regulation.

[LittleBitFunny]

If the government can do that, we can say the government structure is really bad since they can bribe the auditors and the other people who have huge power in their country, it mostly will came from third world countries where the security and discipline is really bad. Although Bitcoin could be used to hedge against inflation, but I predict if those government did that, it will cause huge problem to the countries and people will lost their trust since the government is fan to play with the monetary regulation.

They don't need to bribe anyone, the government can still freely print money, but they won't because they will know what the consequences will be. You look at two countries, Venezuela and Zimbabwe, they print money out of control, and as a result, their currency is almost worthless, and the country is in a constant state of crisis.

Printing more money is no different from a double-edged sword, on the one hand helping the economy overcome the crisis, but it also increases the risk of high inflation when the amount of money circulating outside is overloaded. Running an economy isn't as simple as we think, so I never blame the government because we don't know what they're going through.

[Sheaila]

What if the government of a country is irresponsible and issues a large amount of currency to buy Bitcoin?
No matter what the reason is, inflation is already very serious now. If some unscrupulous governments print a lot of money in order to repay debts and fight inflation, of course it will not be one time. Credit money no longer has credit.
When a chain of interests is formed between big countries, behind the crazy printing of money is the harvesting of countries that are not rich. What would it look like if it were all exchanged for Bitcoin?

Wouldn't this be the same idea if the government just printed money for buying their own stuff? Not even necessarily limited to Bitcoin, but rather a lot of other stuff. It'll just end up killing their entire economy. With more prints the more they'd need to spend not just for buying Bitcoin but for more stuff, plus it reduces the idea that the government is incapable, leading to more and more problems down the road. In an extreme case I don't think them being overthrown would be an impossibility.

[Diuyen Kim]

Even if your country is irresponsible, you are still a part of the country, right?
The country will think carefully before making any plans, and they will definitely consider many consequences. Bitcoin itself is a means of fighting inflation. Bitcoin is volatile, and it would be a risk that no one could understand if it were all converted to Bitcoin.

[ModestyKK]

This will definitely not happen. Excessive money printing will only make inflation less and less valuable, which will make the country worse. Bitcoin will not be excessive, but will be halved every four years.

[Pmalek]

Finally, not all bitcoins are for sale. Only a fraction of it is available on exchanges to be sold if someone is making huge purchases and cashing them out, the supply shortage on exchanges would be an even bigger force to push the price to the moon.

If Bitcoin started a bull run, I am sure we would see an increase in deposits to centralized exchanges from holders willing to sell at the new and higher price. It's a good thing that more and more people are withdrawing their coins from custodians, but as soon as the value reaches a target they have set in their heads, people will be back to depositing, congesting the network to take advantage of the situation and cashing out.   

[Upgrade00]

I wouldn't necessarily put this one up as a good example. I have some sympathy for Bukele, but so far, the decision to purchase bitcoins at an average price of around $31k was not a good decision.

I guess we understood OP differently.
The way I saw it, acting irresponsibly would be trying to destroy Bitcoin through any means possible, so as to ensure there's no threat to the dominance of fiat.
I was then replying to the part which tagged buying Bitcoin in large amount as being irresponsible (as explained above), and the way I see it, it wouldn't be the same thing and buying Bitcoin would infact make Bitcoin more popular.

[pooya87]

Hey professor, what is your opinion about the recent devaluation of Iranian rial currency? last week exchange rate was 1$= 370,000 Rials, today the exchange rate is 1$= 430,000 Rials. Do you think your doomed beloved government made the stupid move by printing money to buy bitcoin or they are just devaluing Rial in order to make up for budget shortfall?

It has nothing to do with buying bitcoin but in any case there are no exceptions to the rule.

Any government in anywhere in the world and in any point in the history that has printed money to save its own ass has caused inflation. Why do you think US and EU have high inflation rates these days? That's not because two other countries are fighting each other. That's because they went on a printing spree over the past 2 years and now they reap what they sow. They will have more inflation in the near future because they are printing even money now.

I don't want to go off-topic but inflation in Iran is a lot more complicated than just government printing money (although that's one of the reasons). It is a century old problem (97 years to be exact) with reasons ranging from heavy reliance of oil sales/price that causes inflation when the sale drops like the inflation ATH record in 1950's where oil sales reached absolute 0. All the way to the broken banking system that was copied from West on 1925 and was made a lot worse when they introduced "private banks" during 1990's and let them inflate "liquidity". This is all on top of the economic war that has been fought ever since 50's (ie. nationalization of the Iranian oil industry).

If Bitcoin started a bull run, I am sure we would see an increase in deposits to centralized exchanges from holders willing to sell at the new and higher price. It's a good thing that more and more people are withdrawing their coins from custodians, but as soon as the value reaches a target they have set in their heads, people will be back to depositing, congesting the network to take advantage of the situation and cashing out.   

That's a good point, people always start selling when price rises specially after a long bear market.
In long bull runs however, I think (based on what I've observed in the past bull runs) the sell pressure decreases as the price goes higher. For example in 2017 there was a lot more sell pressure around $1000 than $2000 and as time went by and rise continued the pressure decreased to the point where it was very little above $10,000 which is why we saw a very smooth 2x rise. By that time more people were buying than selling.