Fascinating information on saving vs. consumption

[Adrian-x]

I'm not sure how two can be controllers of new money when both Morgan and Rockefeller were alive during the gold standard era.

The gold standard is a form of fractional reserve banking; fractional reserve banking is theft.

I have been making the same argument over and over and over: control over a significant portion of the money supply by a few, wealthy or well-connected people means that they will manipulate that supply to their own ends. This results in stealing productivity and wealth from poor and middle classes and drags it up the chain. A situation that is not that unlike feudalism, though its theft was much more prominent.

Ok I'll stop harping on but by definition this is the (Cantillon effect), the problem with fractional reserve banking; the gold standard and fiat. (the gold standard just adds physical limits)

Even if the supply of money does not start out skewed as it did in bitcoin, the property of the currency still allows for the situation to develop because of lending, or big industry as in the case with Rockefeller. Just as the situation did not start out so skewed with gold, but we ended up with a few financiers controlling the world.

They were financiers, using newly created money (fractional reserves) I can't see this happening with Bitcoin because of the concept inherent in Productive and unproductive labour

This, however, is not particularly the subject of this thread. I only brought it up because you realized the problem of bitcoin distribution then attempted to solve it without really considering that nothing has changed in your solution, except perhaps who might be in control.

I understand the problem, I think the economic situation today is a result of the Old Powers. We have a paradigm shift with Bitcoin, just like the financiers of the industrial revolution had a paradigm shift and took power away for the land owners (commodity backed money).  This time it is going to be for good.

And many bitcoin proponents will argue that this is just another opportunity. However, this is the same mentality that got us to an inflationary crash in the first place. To compound the effect, bitcoin is a voluntary currency and no one will likely ever need it to buy food for a very long time.

Total agree.
Bitcoin is just a good idea if no one adopts it for economic use, it needs to propagate and be used to have any effect.
There is a problem with adoption. The "early adopters" and "early majority" who adopt it have to give unthinkable amounts of wealth the Bitcoin rich. So much so I think it will never happen. For the reasons you outlined. The free market principles which Bitcoin enables are prissily preventing its adoption as a lubricant for the economy. I think I have a lot of "pet electronic rocks" in my .dat file now.  (I think Gausscoin is a more viable idea. )   

[Etlase2]

The gold standard is a form of fractional reserve banking; fractional reserve banking is theft.

FRB being theft is pretty debatable. It allows people who store their wealth in banks to earn interest rates. Central-banking interest rates is absolutely, unequivocally theft. Instead of free market competition, nobody earns anything now on saving money, and they in fact lose value because of these uncompetitive interest rates and the inflation caused thereof.

Ok I'll stop harping on but by definition this is the (Cantillon effect), the problem with fractional reserve banking; the gold standard and fiat. (the gold standard just adds physical limits)

Again, this is a problem of a centrally controlled economy, not FRB. While FRB started out under false pretenses, that is hardly the case now and in a competitive market people would earn competitive interest. However, FRB does have its own problems such as bank runs, but I don't think that it is the root of all economic woe. FRB does compound the problem of low interest rates from a central bank and quantitative easing because it maximizes the "Cantillon effect" if you want to keep calling it that. Again, the problem still lies in central banking. And if a way to do FRB in Bitcoin can be accepted by the general population, it is going to happen there too. It benefits everyone but large holders of bitcoin.

They were financiers, using newly created money (fractional reserves) I can't see this happening with Bitcoin because of the concept inherent in Productive and unproductive labour

I'm sorry, but this is a bullshit rationalization with no evidence whatsoever. "It happened before, but it won't happen again just because!" ? Does bitcoin ring some kind of Marxist vibe for you?

I understand the problem, I think the economic situation today is a result of the Old Powers. We have a paradigm shift with Bitcoin, just like the financiers of the industrial revolution had a paradigm shift and took power away for the land owners (commodity backed money).  This time it is going to be for good.

Was it you I asked about what made you so sure that the New powers will be any better than the old? Because in a fixed supply of currency, the new power certainly isn't going to be democratic in any way, shape, or form. It may take time (then again, probably not with the big bitcoin players that already exist), but as bitcoins accumulate in certain hands, they will gain power exponentially instead of linearly, at least assuming a closed system. The reality is that bitcoin will probably crash when people see the manipulation and they will flock to another another currency, but in the mean time a lot of wealth will be transferred.

[Adrian-x]

Let me get this out the way

Does bitcoin ring some kind of Marxist vibe for you?

LOL.  No. This forum distracts me from my subjective reality.
As a Vegetarian Buddhist, I couldn't be more Laissez-faire'ist. (I am only a moral vegetarian, in that I know I wouldn't be hungry either if my plane crashed in the Andes with no food and a few survivors.) 
I do hold the view that some 99.99% of people live life subjectively (myself included), we are almost hypnotise to avoid objective reality I could say my interest is: Bitcoin gives me some kind of reality vibe! (i.e. the possibility to live in the magic of creation not some closed deluded and pitiful religious construct of it)

Thanks for the heads up I did some reading on Hayek,s Free-Market Monetary System, and while it has merits over a central bank,( I stand to be corrected) it is in effect the system that existed prior to the Fed.

I was somewhat enlightened when I was introduced to Mises regression theorem of money it gave me a new perspective on Anthropology and economics. (I think you may have mentioned an understudied area of credit and the industrial revolution (or the mercantile class), I would go further - and say Money and Anthropology is understudied.) Money is probably the single greatest form of cooperation that allowed us to evolve. 

My understanding is money originates from a food commodity (Adam Smith) the price that is paid for everything including smelting copper or any other metals.  True commodity money like corn always has the intrinsic value of food.  When a prehistoric economy had excess food that commodity had the value of money, when that economy shrunk to nothing the money (food) still has the intrinsic value, therefore savings are key to our prosperity and innately they do not bear interest. Excess saving therefore lead to a diversity of human ingenuity art and insight through creativity. (As we evolve the interdependence would be defined as economy and it is based on savings).  A regression theory of triad.

As metals have an intrinsic value they can magnify productivity of food several times when forged into tools they also generate commodity status based on the founding commodity food.    Metals eventually become money because of their longevity and enabling characteristics. When an economy contracts for any reason you need access to the food and even saving metal commodities (money substitutes) can represent a misallocation or over investment of food recourses and not enough savings. (Excess in commodity metals demand will drop to nothing if you have misallocated recourses and insufficient commodity food savings.)  So therefore in a free market all commodity food money substitutes can in effect default to have "0" value.
 
With FRB when the economy shrinks (there is drought in prehistoric times) or people stop cooperating - you get a run on the bank,( to get your stored food) and there isn't any, the theft is revealed.  At the level of commodity food money I prefer not to debate if there are benefits to FRB, because it is obvious the presumed reserves aren't there.  So FRB is dependent on under consumption and continued growth. It looks like to me this is where Hayek didn't regress his thinking enough, and Keynes intuitively understood the problem but couldn't identify the broken logic. 

From this perspective Central Bank is insurance, it pads the system ironing out the misallocation of individuals to the benifit of individual banks. I see FRB will eventually lead to a Central Bank because droughts or misallocated recourses don't happen everywhere at the same time, this is a natural evolution.

Within a regression theory of triad ( or the economy), the creation of money supply is not necessary, it creates an elastic that counteracts the direct market feedback loop. (This leads to manipulation of the banks lending policies)  FRB also increases the money supply, (causing inflation) and I don't regret its invention it was as timely and revolutionary in history as Bitcoin is today, but its time has ended. 

... bullshit rationalization with no evidence whatsoever. "It happened before, but it won't happen again just because!

? help me understand. I have come to interoperate: you see a concentration of wealth in the hands of a few as destructive for the good of society, am I correct in assuming you feel, adding a mechanism to the money system could prevent this and therefore make for a more just system?

Problems I see in your perspective:
Allowing anyone to create money is in effect allowing them to steeling wealth - and the opposite would then be true if no one could create money, except if money was a direct result of labour expressed as a commodity food and everyone could create it, provided they had access to land. (land ownership is at the center of the problem I see, but that is another thread.) 

Bitcoin solves that problem (and I have a big problem that vast amounts of the coins were created while I was ignorant to its existence, but fortunately it was worthless back then) So I think it is the best money substitute history has created, except for the fact that millions were created before I and most people had even heard about it.
Its value has been given to it by the people and can be taken away at will (in that people can switch to namecoin or something) if Bitcoin sucseeds the vast discrepancy of wealth can't be recreated it is a once off problem.  (so: I imagine if you can / will agree that it if it was given freely you just have to accept it)

you fear having control of the capital allows you to control the economy. this is true with any monopoly, if you have a monopoly on the land you control the food and everything that grows in society for there. Same is true for other services create a monopoly and you can extort a disproportionate amount of recourses for it based solely on the subjective value associated with it and all other dependent benefits. Monopolies are bad and having a monopoly on money would also be bad! How to maintain a monopoly on Bitcoin? 1 it is voluntary; it is easy to replace it using the open source code; anyone can make it - at this moment; once you spend it, it is gone, if you have them all, you have nothing. Not so easy if we have a free market. (do you have evidence to suggest a manopoly is likely?)

Just as creating money transfers wealth disproportionately to the receivers of new money, so the opposite is true wealth moves to the producers of goods and services in the absence of new money creation. (this discrepancy of Bitcoin Rich will eventually even out the onetime disproportional distribution of coin provided there is a free market, in the absence of a free market or manipulation of a monopoly the value will collapse to "0" because of the voluntary nature, greed will keep it going for a while but that only provides opportunity  to the likes of those who see the underlying value structure. not the greedy.) I have my droughts it can succeed as Bitcoin has for the first time in history manifested a worthy example of the paradox of thrift and the lure to Bitcoin is largely based on a subjective reaction a simplified understanding of the eventual benefits . Time will tell.
   

but as bitcoins accumulate in certain hands, they will gain power exponentially instead of linearly, at least assuming a closed system

this is true if you can get a monopoly on anything that is the key to human productivity. I don't see anything to suggest that is possible.  So just in case an adjustment should be made to our view of the world. As Bitcoin evolves so does our concept of human rights have to evolve? or we will eventually come full circle and whomever controls the food controls the money, and we all become peasants again.   

The reality is that bitcoin will probably crash when people see the manipulation and they will flock to another currency, but in the mean time a lot of wealth will be transferred.

For Bitcoin to crash there must be an imbalance of payments, i.e. the majority of money must be converted from Bitcoin to fiat, the los of wealth will be big and the meek shall inherit Bitcoin. I dont fear that scenario as to truly control the wealth you need to control the key sustaining commodities in the word, while this is happening now. I believe we will see a change in understanding, resulting for the converging tipping points, environmental, ideological (political) and economical, we should expect a new renascence even a defining of a new "geological age". And a new Bitcoin based on my earlier presented distribution rate. would solve the early adopter problem presuming Bitcoin is going to grow to have billions of members.   

[Etlase2]

Let me get this out the way

Does bitcoin ring some kind of Marxist vibe for you?

LOL.  No. This forum distracts me from my subjective reality.
As a Vegetarian Buddhist, I couldn't be more Laissez-faire'ist. (I am only a moral vegetarian, in that I know I wouldn't be hungry either if my plane crashed in the Andes with no food and a few survivors.)  
I do hold the view that some 99.99% of people live life subjectively (myself included), we are almost hypnotise to avoid objective reality I could say my interest is: Bitcoin gives me some kind of reality vibe! (i.e. the possibility to live in the magic of creation not some closed deluded and pitiful religious construct of it)

Fair enough. But don't go around using the term "productive and unproductive labor" if you don't want Marxism being brought up.

Thanks for the heads up I did some reading on Hayek,s Free-Market Monetary System, and while it has merits over a central bank,( I stand to be corrected) it is in effect the system that existed prior to the Fed.

It is not the system that existed prior to the fed, that was still based on gold. A free market monetary system is not, it is "voluntary fiat" or whatever you'd like to call it.

Money is probably the single greatest form of cooperation that allowed us to evolve.

I agree.

When a prehistoric economy had excess food that commodity had the value of money, when that economy shrunk to nothing the money (food) still has the intrinsic value, therefore savings are key to our prosperity and innately they do not bear interest. Excess saving therefore lead to a diversity of human ingenuity art and insight through creativity. (As we evolve the interdependence would be defined as economy and it is based on savings).  A regression theory of triad.

I don't really think you can compare a food-based economy to a growth-based economy. We have, at least in many countries, considerably reduced the need for food as a primary incentive. Now we need to advance as a society. Bastiat is quite famous for debating how interest on capital is a good thing. But it is only a good thing, imo, when the money supply can't be manipulated and the interest can't be manipulated.

With FRB when the economy shrinks (there is drought in prehistoric times) or people stop cooperating - you get a run on the bank,( to get your stored food) and there isn't any, the theft is revealed.  At the level of commodity food money I prefer not to debate if there are benefits to FRB, because it is obvious the presumed reserves aren't there.  So FRB is dependent on under consumption and continued growth. It looks like to me this is where Hayek didn't regress his thinking enough, and Keynes intuitively understood the problem but couldn't identify the broken logic.  

From this perspective Central Bank is insurance, it pads the system ironing out the misallocation of individuals to the benifit of individual banks. I see FRB will eventually lead to a Central Bank because droughts or misallocated recourses don't happen everywhere at the same time, this is a natural evolution.

This is all well and good, but as I've stated before, FRB exists because the opportunity for it to exist is there. It effectively creates new money but it has the big catch of the money not actually existing. But it works because people are willing to pay the interest--there is demand to grow. If the free market can create currency, there is no need for FRB. Bitcoin doesn't allow for new currency, so I see FRB as a foregone conclusion.

Within a regression theory of triad ( or the economy), the creation of money supply is not necessary, it creates an elastic that counteracts the direct market feedback loop. (This leads to manipulation of the banks lending policies)

Except that the direct market feedback loop can be manipulated by those with exceptional wealth (or control of it) in a closed supply. So it's not so direct as it first seems. Central banks were created by the Rothschilds and Morgan, people who were heavily in tune with how to manipulate the supply of money. So the "regression theory of central banks" leads back to "wealthy manipulators". Something they were only capable of doing because gold is relatively fixed.

? help me understand. I have come to interoperate: you see a concentration of wealth in the hands of a few as destructive for the good of society, am I correct in assuming you feel, adding a mechanism to the money system could prevent this and therefore make for a more just system?

It is what Hayek has essentially said with regards to free market money.

Referring to Sweden's effort to stop minting gold coinage and the predicted rise in value of that coinage above the value of gold:

"I quote this only as illustration of what among the economists who understand their subject is now an undoubted fact, namely that the gold standard is a partly effective mechanism to make governments do what they ought to do in their control of money, and the only mechanism which has been tolerably effective in the case of a monopolist who can do with the money whatever he likes. Otherwise gold is not really necessary to secure a good currency. I think it is entirely possible for private enterprise to issue a token money which the public will learn to expect to preserve its value, provided both the issuer and the public understand that the demand for this money will depend on the issuer being forced to keep its value constant; because if he did not do so, the people would at once cease to use his money and shift to some other kind."

Problems I see in your perspective:
Allowing anyone to create money is in effect allowing them to steeling wealth - and the opposite would then be true if no one could create money, except if money was a direct result of labour expressed as a commodity food and everyone could create it, provided they had access to land. (land ownership is at the center of the problem I see, but that is another thread.)

Counterpoint: Allowing capital accumulation to get to a point where a large portion of currency is in the hands of the few, not allowing anyone to create currency is in effect allowing them to steal wealth. Because all they have to do is stop investing or stop spending and then the currency deflates--forcing unnecessary bankruptcies and theft of productivity because of the increased value of currency which is unilaterally more beneficial to the rich than the poor or middle classes. What have the uber wealthy done in recent years with capital accumulation? Play games. Credit default swaps, deca-trillions derivative markets, and other "unproductive labor" that squeezes the economic progress of society to the top. More money is used only to chase more money, not economic progress--to not only the detriment of society as a whole, but also its regression.

Should this unproductive money not be devalued? (See: Demurrage) It stalls progress and causes misery to the vast majority of people so that a few can increase their balance sheets. What is the human capital cost of thousands of intelligent minds going to work on Wall Street because "it's where the money is at" rather than aerospace, pharmaceuticals, or what have you?

(do you have evidence to suggest a manopoly is likely?)

See: history. Yes bitcoin is a free market currency and that makes all the difference in the world. It means it will fail. It might stick around through a few excessive deflation/inflationary boom cycles, but people will get tired of it and switch to something like Decrits.

Just as creating money transfers wealth disproportionately to the receivers of new money, so the opposite is true wealth moves to the producers of goods and services in the absence of new money creation.

You've forgotten finance again. In a sane economy where half the money was not dropped in a helicopter over the Hamptons, financiers would have a hard time making deflationary loans. But when you have multiple people or groups with 500k+ bitcoins, they can loan at 0% interest down the road to expand the economy, then decide to stop lending or raise interest rates significantly and cause a credit crunch, and boom the wealthy get wealthier. If they don't do this, it's just as likely that the economy will never grow significantly because of the catch-22 of deflationary growth causing difficulty and bankruptcy in paying back loans for business. Either way, people aren't going to put up with this shit when it's optional.

For Bitcoin to crash there must be an imbalance of payments, i.e. the majority of money must be converted from Bitcoin to fiat,

No, the bitcoin wealthy could buy businesses and durable goods as well. Assuming the world economy somehow manages to get through the massive amounts of stumbles along the way to make this possible.

I dont fear that scenario as to truly control the wealth you need to control the key sustaining commodities in the word, while this is happening now. I believe we will see a change in understanding, resulting for the converging tipping points, environmental, ideological (political) and economical, we should expect a new renascence even a defining of a new "geological age".

I don't know why you're so optimistic that it won't happen again even though the setup is primed and ready with the new elite.

Here's another fake quote, "from" Albert Einstein, for you: Only two things are infinite, the universe and human stupidity, and I'm not sure about the former.

And a new Bitcoin based on my earlier presented distribution rate. would solve the early adopter problem presuming Bitcoin is going to grow to have billions of members.  

Aaaand the initial distribution is not "the" problem, only one problem. It doesn't fix the long-term effects of a closed currency, no matter how you might hope and wish it will be different this time.

[Adrian-x]

It is not the system that existed prior to the fed, that was still based on gold. A free market monetary system is not, it is "voluntary fiat" or whatever you'd like to call it.

Ok I have got it.

When a prehistoric economy had excess food that commodity had the value of money, when that economy shrunk to nothing the money (food) still has the intrinsic value, therefore savings are key to our prosperity and innately they do not bear interest. Excess saving therefore lead to a diversity of human ingenuity art and insight through creativity. (As we evolve the interdependence would be defined as economy and it is based on savings).  A regression theory of triad.

I don't really think you can compare a food-based economy to a growth-based economy. We have, at least in many countries, considerably reduced the need for food as a primary incentive. Now we need to advance as a society. Bastiat is quite famous for debating how interest on capital is a good thing. But it is only a good thing, imo, when the money supply can't be manipulated and the interest can't be manipulated.

One man with access to all the technology today is capable of providing calories for over 10,000 people, so yes we are not an agrarian economy, (not aspiring to be "growth-based economy" either) but all that means is for every 1 farmer there could be 10,000 people doing other things in the economy what should give you a metric by which to calculate the actual benefits of the division of labour.  (my point being wealth is created by ones applied labour and saving it by any means that doesn't lose value is inherent in the principal Meme that is money.   So yes I do believe we are still a food based economy (everyone needs to eat every day) dont forget there are some 2 billion who are lucky to find enough food to make it through the day, they are victims of government enforced monopolies and inflation.

With FRB when the economy shrinks (there is drought in prehistoric times) or people stop cooperating - you get a run on the bank,( to get your stored food) and there isn't any, the theft is revealed.  At the level of commodity food money I prefer not to debate if there are benefits to FRB, because it is obvious the presumed reserves aren't there.  So FRB is dependent on under consumption and continued growth. It looks like to me this is where Hayek didn't regress his thinking enough, and Keynes intuitively understood the problem but couldn't identify the broken logic.  

From this perspective Central Bank is insurance, it pads the system ironing out the misallocation of individuals to the benifit of individual banks. I see FRB will eventually lead to a Central Bank because droughts or misallocated recourses don't happen everywhere at the same time, this is a natural evolution.

This is all well and good, but as I've stated before, FRB exists because the opportunity for it to exist is there. It effectively creates new money but it has the big catch of the money not actually existing. But it works because people are willing to pay the interest--there is demand to grow. If the free market can create currency, there is no need for FRB. Bitcoin doesn't allow for new currency, so I see FRB as a foregone conclusion.

FRB doesn't work as I have illustrated, it exists not because of demand but by decree because the average university graduate is ignorant as to the mechanism and of the damage it does. (I am happy for FRB to exist, in the Bitcoin world - I for one won't use it, and the ignorant can use it all they want, and suffer the consequences until they are no longer ignorant. (we almost got there at the turn of the century, we may still get there again 100 years later.)

Within a regression theory of triad ( or the economy), the creation of money supply is not necessary, it creates an elastic that counteracts the direct market feedback loop. (This leads to manipulation of the banks lending policies)

Except that the direct market feedback loop can be manipulated by those with exceptional wealth (or control of it) in a closed supply. So it's not so direct as it first seems. Central banks were created by the Rothschilds and Morgan, people who were heavily in tune with how to manipulate the supply of money. So the "regression theory of central banks" leads back to "wealthy manipulators". Something they were only capable of doing because gold is relatively fixed.

I am not saying we don't need reform I think we do. History is clear, controlee the source of wealth and you controlee the wealth. Money isn't the source of wealth so as long as you create a system that prevents a monopoly of the individual's productivity you are free. (with Bitcoin I don't see a role for a bank, so I feel the future is good, I can save by myself, be free as long as I have dominion over my productivity.)   

? help me understand. I have come to interpret: you see a concentration of wealth in the hands of a few as destructive for the good of society, am I correct in assuming you feel, adding a mechanism to the money system could prevent this and therefore make for a more just system?

It is what Hayek has essentially said with regards to free market money.

Referring to Sweden's effort to stop minting gold coinage and the predicted rise in value of that coinage above the value of gold:

"I quote this only as illustration of what among the economists who understand their subject is now an undoubted fact, namely that the gold standard is a partly effective mechanism to make governments do what they ought to do in their control of money, and the only mechanism which has been tolerably effective in the case of a monopolist who can do with the money whatever he likes. Otherwise gold is not really necessary to secure a good currency. I think it is entirely possible for private enterprise to issue a token money which the public will learn to expect to preserve its value, provided both the issuer and the public understand that the demand for this money will depend on the issuer being forced to keep its value constant; because if he did not do so, the people would at once cease to use his money and shift to some other kind."

Ok I have got it, and I think it is viable, but a little complicated to navigate as a consumer and triad internationally or over the internet.

(do you have evidence to suggest a manopoly is likely?)

See: history. Yes bitcoin is a free market currency and that makes all the difference in the world. It means it will fail. It might stick around through a few excessive deflation/inflationary boom cycles, but people will get tired of it and switch to something like Decrits.

My interpretation of history differs from you, I don't see an accumulation of wealth through productive contributions to society, I see the accumulation of wealth as something that has been plunders and stolen throughout history, bankers just did it when people started believing the meme that money = wealth.

Just as creating money transfers wealth disproportionately to the receivers of new money, so the opposite is true wealth moves to the producers of goods and services in the absence of new money creation.

You've forgotten finance again. In a sane economy where half the money was not dropped in a helicopter over the Hamptons, financiers would have a hard time making deflationary loans. But when you have multiple people or groups with 500k+ bitcoins, they can loan at 0% interest down the road to expand the economy, then decide to stop lending or raise interest rates significantly and cause a credit crunch, and boom the wealthy get wealthier. If they don't do this, it's just as likely that the economy will never grow significantly because of the catch-22 of deflationary growth causing difficulty and bankruptcy in paying back loans for business. Either way, people aren't going to put up with this shit when it's optional.

I agree Bitcoin economy cannot grow while the currency is experiencing such deflation and there will be boom bust cycles, - we need to change our values i.e. we need to understand the role of money, we need to understand, what is and what isn't a monopoly created through a meme. You have to draw on history again, the wealthy did not come by the majority of there wealth through fair and honest means, it was stolen or plunders, and when the system becomes fair the wealth erodes.

No, the bitcoin wealthy could buy businesses and durable goods as well. Assuming the world economy somehow manages to get through the massive amounts of stumbles along the way to make this possible.

Is it going to succeed or isn't it?... You can't be allowed to buy a monopoly, all businesses need to provide value to stay in business, good ones succeed bad ones fail - the end result is, if the Bitcoin wealthy have businesses that provide a benefit through triad we all benefit. 

I dont fear that scenario as to truly control the wealth you need to control the key sustaining commodities in the word, while this is happening now. I believe we will see a change in understanding, resulting for the converging tipping points, environmental, ideological (political) and economical, we should expect a new renascence even a defining of a new "geological age".

I don't know why you're so optimistic that it won't happen again even though the setup is primed and ready with the new elite.

I don't understand what will happen again? Are we all going to war to enslave our enemy rape there women and steel there land? Or are we are all going to inflate the money supply and enslave ourselves to the bankers again? Or are we going to create an inflationary economy and consume the planet? Bitcoin doesn't enable those things, it disables them. It still looks to me that the manipulation power of the rich is limited, I think the only think they have control over is killing the system by cashing out.

And a new Bitcoin based on my earlier presented distribution rate. would solve the early adopter problem presuming Bitcoin is going to grow to have billions of members.  

Aaaand the initial distribution is not "the" problem, only one problem. It doesn't fix the long-term effects of a closed currency, no matter how you might hope and wish it will be different this time.

I am still not getting this, what are the problems of a fixed currency?

The only currency I think that should be traded is an individual's productive output ( a result of his efforts, education, creativity, multiplied by technology) I know that will never be quantified so a fixed measure (currency) of the quantifiable output is the next best thing. If the measure (currency) ever changes then quantifying the value of the output gets complicated as the time dimension has 2 variables.

[Etlase2]

FRB doesn't work as I have illustrated, it exists not because of demand but by decree because the average university graduate is ignorant as to the mechanism and of the damage it does.

I'm not really sure how you've illustrated that FRB doesn't work. You've agreed at some point that it was probably key to spurring the industrial revolution. FRB did not begin by decree, you should know that, it began because of greedy goldsmiths giving out more slips of paper than gold in their vaults. But once people got wise, the goldsmith paid them interest, and modern FRB was born without any coercion from the state.

This time I will quote the post you did not reply to:

The story is not so simple. There is currently a hard limit on the amount of data each block can have; this leads to rising transaction prices. Bandwidth usage for bitcoin is horribly inefficient; this leads to higher transaction prices and fewer people serving the network which means less competition which is never a good thing when it comes to prices. Most people will argue, "well then there will be a banking layer on top of bitcoin! This solves everything!" Except then fractional reserve and digital/paper money becomes easy. And people will accept it because interest rates will be lower. High tx fees and high interest or low tx fees and low interest?

FRB will allow for significantly lower interest rates. More money available to loan = lower interest. But it may not even matter if hoarding is the norm because commerce will just be asinine.
 

I am not saying we don't need reform I think we do. History is clear, controlee the source of wealth and you controlee the wealth. Money isn't the source of wealth so as long as you create a system that prevents a monopoly of the individual's productivity you are free. (with Bitcoin I don't see a role for a bank, so I feel the future is good, I can save by myself, be free as long as I have dominion over my productivity.)

I don't know how you can possibly believe banks have no place in a capitalistic society.

Just as creating money transfers wealth disproportionately to the receivers of new money, so the opposite is true wealth moves to the producers of goods and services in the absence of new money creation.

I don't want to repeat myself, so I'll just post a link: https://bitcointalk.org/index.php?topic=112269.msg1224110#msg1224110

No, the bitcoin wealthy could buy businesses and durable goods as well. Assuming the world economy somehow manages to get through the massive amounts of stumbles along the way to make this possible.

Is it going to succeed or isn't it?... You can't be allowed to buy a monopoly, all businesses need to provide value to stay in business, good ones succeed bad ones fail - the end result is, if the Bitcoin wealthy have businesses that provide a benefit through triad we all benefit.

I'm just giving an "if it could happen" scenario that I don't believe is possible.

I don't understand what will happen again? Are we all going to war to enslave our enemy rape there women and steel there land? Or are we are all going to inflate the money supply and enslave ourselves to the bankers again? Or are we going to create an inflationary economy and consume the planet? Bitcoin doesn't enable those things, it disables them. It still looks to me that the manipulation power of the rich is limited, I think the only think they have control over is killing the system by cashing out.

https://bitcointalk.org/index.php?topic=112269.msg1224110#msg1224110

JP Morgan didn't enslave his enemies and rape their women; Mayer Rothschild didn't enslave his enemies and rape their women. They were men that became powerful from big business and turned to finance. Satoshi likely has 1-2 million bitcoins. knightmb has 300-400k. Pirate may have 500k. MtGox must have at least 200 or 300k. Deepbit operator has at least 50-100k. Even if the distribution was gaussian, it just means that early big businesses become the JP Morgans and the Mayer Rothschilds, if they so choose. If they don't, eventually someone will come along that sees the market manipulation opportunity. Where there's an opportunity, greed will find a way.

I am still not getting this, what are the problems of a fixed currency?

The only currency I think that should be traded is an individual's productive output ( a result of his efforts, education, creativity, multiplied by technology) I know that will never be quantified so a fixed measure (currency) of the quantifiable output is the next best thing. If the measure (currency) ever changes then quantifying the value of the output gets complicated as the time dimension has 2 variables.

But the measure of the currency does change as more people or more value is added to the economy (or money is taken out of circulation). This is a silly argument when tied to a fixed supply of currency.

[pretendo]

People calling inflation or FRB theft are just making themselves looks silly. You are disservicing your arguments and the rhetoric of libertarianism by stretching the epithet of theft to places where it doesn't belong, then making legitimate complaints about taxation looks equally silly. FBR could and would exist in systems without a monopoly on currency, it would just be up to you to choose to use that current or enter into such a contract. And money supply inflation is not theft; you are not entitled to the value of anything you own, especially for a libertarian point of view. If I own 10 cows that are valued at $100 each, and someone shows upside his own 50 cows and the price drops, no theft occurred.

[johnyj]

Either way it does not work, since the core problem now is over-production, even people have enough money, they will not consume, since after housing there is no more desire that is so eager to fulfill.  even banks loan out the money, it will not create new projects

People should have more time to consume, we must decrease working hours, should be written into law, 4 days working week then over production will be corrected

[Etlase2]

Either way it does not work, since the core problem now is over-production, even people have enough money, they will not consume, since after housing there is no more desire that is so eager to fulfill.  even banks loan out the money, it will not create new projects

People should have more time to consume, we must decrease working hours, should be written into law, 4 days working week then over production will be corrected

I wholeheartedly agree with you. Without the banks stealing our wealth and productivity (or, if you listen to me, the bitcoin rich as well), there are a few scenarios I can come up with to how society might change:

1. Less hours per workweek - this has the added side benefit of making the unemployment problem much easier to handle
2. Earlier retirements as savings are easier to accumulate and do not devalue over time
3. People who are politically or altruistically motivated can work more and longer if they so choose for a seriously enhanced ability to donate to political causes and humanistic pursuits (I like the idea of an open-source pharmaceutical company as being something that could be possible)
4. As a caveat to 3), with the power of the ultra wealthy reduced, governments will be less persuaded by corporate interest lobbying groups. The people will have much more of a voice in government.
5. Uncontested megacorps will be much harder to form without the financial system being able to back these moves.


There is always a balance that can be found when the free market is allowed to function freely. When the general population is allowed to focus beyond making ends meet every month, who knows what the limitations of society could be.

[pretendo]

Banks don't "steal" wealth or even reduce a society's wealth. In fact, the very phenomenon of inflation is able to be fought using savings in banks, which account for inflation in their rates. There's nothing wrong with the idea of banks, only how the current system is executed. Which is in a semi-monopolistic manner

[Etlase2]

I am aware of what banks should do in an honest economy, pretendo, and I am also aware that we are not a part of one.

[Adrian-x]

People calling inflation or FRB theft are just making themselves looks silly. You are disservicing your arguments and the rhetoric of libertarianism by stretching the epithet of theft to places where it doesn't belong, then making legitimate complaints about taxation looks equally silly. FBR could and would exist in systems without a monopoly on currency, it would just be up to you to choose to use that current or enter into such a contract. And money supply inflation is not theft; you are not entitled to the value of anything you own, especially for a libertarian point of view. If I own 10 cows that are valued at $100 each, and someone shows upside his own 50 cows and the price drops, no theft occurred.

I like cows they are used as money where I am from, people today still pay there Lobolo in cows.   

So my cows are money I have 10 cows (worth $100 each*), they represent all the cows in my village, a community with a stable population, I lend them to the bank who milks them for me in exchange for looking after them.  The bank then makes 50 paper cardboard cut ousts of cows through fractional reserve banking and introduces (spends or loans) them into my community.  By your admission the value of my cows just dropped and there was no theft.  But in reality there are still only 10 cows and the value of my cows just dropped to about $16.66. By what mechanism was the value of my cow diminished? If there are still only 10 cows (or $1000 value of cows ) in this community but mine are now only worth $16.66, (my wealth was taken without perdition?) this is by definition theft.
The theft will only be problematic when there is a drought or hard times and the 60 cows are needed. (a run on the bank due to the economy shrinking) 

FRB is like Keynesianism it requires perpetual growth to be sustained.

*while the $ is a subjective unit of measure, for this argument I will presume it is a fixed and objective unit of measure. ( a more objective unit of measure would be how many steak dinners per cow) 

[Adrian-x]

Either way it does not work, since the core problem now is over-production, even people have enough money, they will not consume, since after housing there is no more desire that is so eager to fulfill.  even banks loan out the money, it will not create new projects

People should have more time to consume, we must decrease working hours, should be written into law, 4 days working week then over production will be corrected

We have a work less party here they tout the same mantra, but they too don't see the problem.
You can't force people to work less, people today need to work more to pay for the inflation caused by fractional reserve banking.  (I consume as much if I work 3 days a week as I do working 6)
If you were able to reap the benefit of labour magnified by technology, you would work less, and if you didn't you would accumulate savings which would facilitate a delayed benefit- working less.
Savings represent the accumulation of wealth.  (Wealth is all the things you need and want in abundance)  in a highly diversified economy like today with technology changing all the time it is beneficial to accumulate your wealth by saving money.  Adjusting the system with inflation forces investment and misallocation of resources and I have to work more not because I like it but because I have too.

[Adrian-x]

I'm not really sure how you've illustrated that FRB doesn't work. You've agreed at some point that it was probably key to spurring the industrial revolution. FRB did not begin by decree, you should know that, it began because of greedy goldsmiths giving out more slips of paper than gold in their vaults. But once people got wise, the goldsmith paid them interest, and modern FRB was born without any coercion from the state.

Here is a simple illustration, on how FRB destroys an individuals wealth, save corn, deposit the corn in said bank. Use the receipt as money; have the bank use RFB to multiply the receipt. Everyone collect your corn from said bank when the economy contracts, my corn is gone, it is not there, I had corn - I now don't have corn it was stolen?

As with some imagination and the cow illustration two posts above you can see how misleading the interest is and how imposable it would be to calculate accurately form a value perspective. The bank paid out 3% interest, but increased the money supply by 5x, as an unwise invested I think I am getting 3% on 100 steak dinners value (per cow), but in fact I am getting 3% on 16.66 steak dinners (per Cow because the money supply devalued my savings) . 

FRB was instrumental in eroding the monopoly the Feudal Kings and Warlords had over commodity money. The Mercantile class shifted the wealth through the control of money by leveraging greed, it made possible huge industrial projects that had resulting benefit to the labour class that were liberating. It wasn't the catalyst for the Industrial revolution (but none the less important) it was most probably the catalyst for democracy today.  We are now as enslaved to FRB as the peasants were to Feudal Kings and warlords in the dark ages. 

This time I will quote the post you did not reply to:

The story is not so simple. There is currently a hard limit on the amount of data each block can have; this leads to rising transaction prices. Bandwidth usage for bitcoin is horribly inefficient; this leads to higher transaction prices and fewer people serving the network which means less competition which is never a good thing when it comes to prices. Most people will argue, "well then there will be a banking layer on top of bitcoin! This solves everything!" Except then fractional reserve and digital/paper money becomes easy. And people will accept it because interest rates will be lower. High tx fees and high interest or low tx fees and low interest?

I can't argue if Bitcoin can handle large amounts of transactions, but if it doesn't deliver on the promise it is then just the precursor to the version that does.   I got into Bitcoin because it promised no need for banks. And I will dump it if that is a falsehood.

FRB will allow for significantly lower interest rates. More money available to loan = lower interest. But it may not even matter if hoarding is the norm because commerce will just be asinine

.
I think this is currently the case, I don't think we even need a banking layer for that. (Real tangible wealth in the economy comes from saving not access to money per se)   

I don't know how you can possibly believe banks have no place in a capitalistic society.

Sure banks have a role they can lone out money 1:1 with interest and split the difference, they are going the way of the Horse and buggy, use one if you must, but I prefer the car.

I don't want to repeat myself, so I'll just post a link: https://bitcointalk.org/index.php?topic=112269.msg1224110#msg1224110

Your equation has some bad data.

Say person A is a wealthy businessman who maintains a running personal savings of about 1000BTC. He spends a lot of it but brings the balance back up through his business venture.

The bold part is missing from your equation (the word business venture can have 2 meanings )
1) dishonest means - a "people" enforced monopoly,
2) honest means by providing goods and services to the community.
I will presume it is by honest means he can't maintain personal savings of about 1000BTC without contributing to the economy (providing goods and services) and spending (consuming). 

I agree the system eventually breaks down if he is (1) afforded a monopoly by the people. 

we'll completely ignore the unemployment implications and the fact that the businessman is unlikely to announce his plans to give the market perfect information

you can't ignore these people, this is the correction also missing from your equation. These people now work for less money but take advantage of the fact that the gap "business man A" left in the economy the economy shrinks down and grows to its former size.

10 years later, new products, new people, new whatever has entered into the economy and it has doubled. To adjust for this, the price level has fallen further.
2000*0.5 = 0.25*4000

why did it grow?  Maybe people stopped having 8 children and started having 1.7 children and the economy shrank.  "Mr. Wealthy businessman Person A" would lose net worth if he was able to exist for 10 years without consuming a morsel of food.

He got to buy everything before the prices double to account for his money being put back in circulation. The market can't possibly adjust instantaneously. And everybody who saved a dime now has a nickel's worth.

and FRB is less damaging? I think this guy is kept in cheque by natural forces in the economy.
If he (Person A) providing goods and services to the community and it flourished as a result, let's say he made shoes and everyone became more productive as a result the economy grew he gets a good return on investment, through deflation. Let's say he made fancy blue frocks and they went out of fashion and people stopped buying them and the blue die factory went out of business and the lace maker lost their job, no one needed blue frocks and the economy shrank as a result, (there would be inflation and he would have lost on his savings investment as a result) if  Person A was a good business man he would not save during inflation - (economic colas) he would invest in something new. Or he wouldn't be a good business man and would lose his value to inflation (presuming he can't live for 10 years on just air).

JP Morgan didn't enslave his enemies and rape their women; Mayer Rothschild didn't enslave his enemies and rape their women. They were men that became powerful from big business and turned to finance. Satoshi likely has 1-2 million bitcoins. knightmb has 300-400k. Pirate may have 500k. MtGox must have at least 200 or 300k. Deepbit operator has at least 50-100k. Even if the distribution was gaussian, it just means that early big businesses become the JP Morgans and the Mayer Rothschilds, if they so choose. If they don't, eventually someone will come along that sees the market manipulation opportunity. Where there's an opportunity, greed will find a way.

This doesn't bother me* if your wealth is generated by contributing to the economy it should be reworded proportionately to the contribution the market affords it. 

* The exception being a business venture being granted a monopoly by the people.   

[Etlase2]

Here is a simple illustration, on how FRB destroys an individuals wealth, save corn, deposit the corn in said bank. Use the receipt as money; have the bank use RFB to multiply the receipt. Everyone collect your corn from said bank when the economy contracts, my corn is gone, it is not there, I had corn - I now don't have corn it was stolen?

This is not how modern FRB works. If I deposit $1000 at a bank, the bank deposits $100 with the central bank and can now loan $900 out. It can't loan out $10,000. Many types of deposits, including savings accounts, have no reserve at all. Under your scenario they could loan out an infinite amount of money, but the reality is they can only loan out the amount deposited (minus the reserve if it is required). Yes there is the money multiplier effect where if someone takes the $900 and deposits it at another bank, that bank puts $90 in reserve and can loan out the rest and so on, but all this really means is that the money supply is elastic. When the central bank creates $10B, expect anywhere from $10B to $90B to be created as credit.

It is what it is, and if it weren't for all the other factors involved (the unpaid interest to depositors, the central bank creating more reserves when credit shrinks, the long duration of loans vs. on-demand deposits, etc.) it could function as an honest system. It isn't particularly necessary in a system where more money can just be printed by the central bank, but it is not theft in and of itself.

We are now as enslaved to FRB as the peasants were to Feudal Kings and warlords in the dark ages.  

We are enslaved to the entire money process. FRB is only one part of it.

you can't ignore these people, this is the correction also missing from your equation. These people now work for less money but take advantage of the fact that the gap "business man A" left in the economy the economy shrinks down and grows to its former size.

Then deflation is less drastic. I should correct this though, you are right. The amount of goods and services he produces can't be equal to his wealth though, or he is not doing anything productive. If the economy were bigger, it is likely he would sell the business to someone who got a loan, from a bank, then he can remove his entire 1000BTC without causing a shrink in the economy.

why did it grow?  Maybe people stopped having 8 children and started having 1.7 children and the economy shrank.

I will do an example where it does not matter if the economy grows.

"Mr. Wealthy businessman Person A" would lose net worth if he was able to exist for 10 years without consuming a morsel of food.

What if he pays USD that he has saved? This is obviously already a fictitious scenario and silly things like this muddle the picture. Bitcoin is always likely to be an alternative currency, so the mindset must be what will people do with an alternative currency. The bare amount of money he needs to survive can be considered inconsequential for a wealthy businessman. The economy shrinking is always a risk no matter what you do with your money. The only way you could hedge your bets slightly is to invest at interest, which of course might course might counteract the shrinkage, but these are the unpredictable things of macroeconomics.

What is predictable is that in a growing or stable economy, it is far more profitable to hoard than save (invest). Considering that bitcoin doesn't need to "grow", it only needs to "absorb" the already existing economy, the opportunity for growth is insane.

This doesn't bother me* if your wealth is generated by contributing to the economy it should be reworded proportionately to the contribution the market affords it.

It doesn't bother you that the power of the limited supply commodity gave a couple of individuals the ability to change the world for the far worse? It seems like you are just spewing another line without any regard to the implications. Whatever, I'm done banging my head against the wall on this subject.

[runeks]

I can't defend the argument. It's hard to know if a particular person's consumption is useful or not. Hence my caveat that what he is deferring is not "the building of a factory". The resulting opportunity to to others is presumably split between useless consumption and growth producing consumption. Why the deferred consumption is not similarly split, I don't know.

A factory is not a consumption good. It's a capital good. Building a factory is not consuming, it's investing.

However, in the real world, prices are sticky. Hence the remaining “moving” money will not be enough to sustain economic growth when there is an increase in the demand for cash. Furthermore, there seems to be positive feedback where demand for cash lowers economic activity which increases the demand for cash (race to liquidity when times are uncertain.)

• Businesses charge what customers want to pay. If sustained, low (~1% p.a.) price deflation is the norm, no business in competition can afford to not lower its prices. We just haven't seen such a scenario for well over 100 years.
• An increase in the demand for cash induces price deflation. When prices decrease, people find out that their need for a larger cash holding has been satisfied not by more money, but by more purchasing power (of the same amount of money). In addition, businesses find that their monetary holdings have become more valuable, and will start investing.

[ffe]

I can't defend the argument. It's hard to know if a particular person's consumption is useful or not. Hence my caveat that what he is deferring is not "the building of a factory". The resulting opportunity to to others is presumably split between useless consumption and growth producing consumption. Why the deferred consumption is not similarly split, I don't know.

A factory is not a consumption good. It's a capital good. Building a factory is not consuming, it's investing.

You miss the point. A person hording bitcoins is neither consuming nor investing.

However, in the real world, prices are sticky. Hence the remaining “moving” money will not be enough to sustain economic growth when there is an increase in the demand for cash. Furthermore, there seems to be positive feedback where demand for cash lowers economic activity which increases the demand for cash (race to liquidity when times are uncertain.)

• Businesses charge what customers want to pay. If sustained, low (~1% p.a.) price deflation is the norm, no business in competition can afford to not lower its prices. We just haven't seen such a scenario for well over 100 years.
• An increase in the demand for cash induces price deflation. When prices decrease, people find out that their need for a larger cash holding has been satisfied not by more money, but by more purchasing power (of the same amount of money). In addition, businesses find that their monetary holdings have become more valuable, and will start investing.

Again you miss the point. Businesses will not borrow to invest to increase capacity if the nominal return is decreasing as happens during deflation. This was as true 100 years ago as it is now.
Your last point is just an assumption on your part. We've never seen businesses starts investing because deflation has finally become deep enough.

[runeks]

I can't defend the argument. It's hard to know if a particular person's consumption is useful or not. Hence my caveat that what he is deferring is not "the building of a factory". The resulting opportunity to to others is presumably split between useless consumption and growth producing consumption. Why the deferred consumption is not similarly split, I don't know.

A factory is not a consumption good. It's a capital good. Building a factory is not consuming, it's investing.

You miss the point. A person hording bitcoins is neither consuming nor investing.

That's true, although I think I'm still missing your point.

However, in the real world, prices are sticky. Hence the remaining “moving” money will not be enough to sustain economic growth when there is an increase in the demand for cash. Furthermore, there seems to be positive feedback where demand for cash lowers economic activity which increases the demand for cash (race to liquidity when times are uncertain.)

• Businesses charge what customers want to pay. If sustained, low (~1% p.a.) price deflation is the norm, no business in competition can afford to not lower its prices. We just haven't seen such a scenario for well over 100 years.
• An increase in the demand for cash induces price deflation. When prices decrease, people find out that their need for a larger cash holding has been satisfied not by more money, but by more purchasing power (of the same amount of money). In addition, businesses find that their monetary holdings have become more valuable, and will start investing.

Again you miss the point. Businesses will not borrow to invest to increase capacity if the nominal return is decreasing as happens during deflation. This was as true 100 years ago as it is now.
Your last point is just an assumption on your part. We've never seen businesses starts investing because deflation has finally become deep enough.

If businesses can't adjust to falling prices then sure, they will fail in an environment with falling prices. No surprises there. I'm sure we could get used to it again, it's not rocket science. Prices go down a bit every year instead of up a bit every year.

Wrt. to your second point, how many places have you looked? Many Japanese corporations have recently gone on a shopping spree, because their savings currency has appreciated significantly vs USD/EUR.

[Etlase2]

If businesses can't adjust to falling prices then sure, they will fail in an environment with falling prices. No surprises there. I'm sure we could get used to it again, it's not rocket science. Prices go down a bit every year instead of up a bit every year.

The "a bit" part is a pretty big assumption. If bitcoin were pervasive throughout the world economy, sure "a bit" could happen. Prices only go up "a bit" every year because central banks have finally figured out that they need to target the inflation rate rather than anything else (or unemployment when things go extremely out of whack, like now). Without a central bank and without even the basic ability to mine more gold by opening up more mines, the deflation rate can only be volatile. Assuming there is somehow a market for credit in this volatile economy, any insolvency could be absolutely disastrous with magnificently far-reaching consequences.

Wrt. to your second point, how many places have you looked? Many Japanese corporations have recently gone on a shopping spree, because their savings currency has appreciated significantly vs USD/EUR.

They aren't going on a shopping spree in Japan. If bitcoin were pervasive, this doesn't work. If it isn't pervasive, it means people are leaving the currency and causing inflation to counteract some of the deflation. Not exactly a ringing endorsement of deflation's success.

[runeks]

If businesses can't adjust to falling prices then sure, they will fail in an environment with falling prices. No surprises there. I'm sure we could get used to it again, it's not rocket science. Prices go down a bit every year instead of up a bit every year.

The "a bit" part is a pretty big assumption. If bitcoin were pervasive throughout the world economy, sure "a bit" could happen. Prices only go up "a bit" every year because central banks have finally figured out that they need to target the inflation rate rather than anything else (or unemployment when things go extremely out of whack, like now). Without a central bank and without even the basic ability to mine more gold by opening up more mines, the deflation rate can only be volatile. Assuming there is somehow a market for credit in this volatile economy, any insolvency could be absolutely disastrous with magnificently far-reaching consequences.

I'm not talking about bitcoin. Bitcoin is obviously not stable enough to base an economy on right no, and simultaneously it isn't stable because an economy isn't based on it.

I realize that we have inflation because private banks create credit, though I disagree that we would see increased volatility if it were not for central banks. The volatility we see in stock markets, commodities prices, real estate prices are exactly because of our monetary system. Houses rising 10% per year isn't price stability. Without a centrally managed currency I think we would, after a settlement period, see more stability, without the opaque interference of a central bank.

The problem is that the money that is injected into the system must go through private banks; it isn't evenly distributed throughout the economy. This uneven injection of money creates capital misallocations, which we see exemplified in - among other things - an oversized construction sector and vacant apartment buildings, which only become apparent when the injection of credit slows down, as it did from 2005-2008 through the increase in interest rates.
The sector that is able to borrow the most money - which is primarily the banking sector itself - is where prices are affected most severely. Basically, anything the sector closest to the monetary spigots will see the greatest amount of price distortion. Earlier it was primarily stocks, later it became real estate, and now it's also commodities.

Wrt. to your second point, how many places have you looked? Many Japanese corporations have recently gone on a shopping spree, because their savings currency has appreciated significantly vs USD/EUR.

They aren't going on a shopping spree in Japan. If bitcoin were pervasive, this doesn't work. If it isn't pervasive, it means people are leaving the currency and causing inflation to counteract some of the deflation. Not exactly a ringing endorsement of deflation's success.

Several Japanese corporations have chosen to buy out foreign firms because of their increased financial strength. Off the top of my head I can think of Sony buying ST Ericsson's half of SonyEricsson, and a large Swiss pharmaceutical company was recently taken over by a Japanese counterpart.

Again, I'm not talking about bitcoin here. If people "leaving the currency" isn't a sign of endorsement I don't know what is. The entire purpose of money is to leave it when you feel you have too much, and increase your holdings when you feel you have too little. That's the very reason we use money.