USD inflation affect on BTC?

[bitboyben]

So if the US economy has to print more $$$ to deal with this fiscal cliff I've been reading about in the news will the inflation of the USD cause an increase in BTC price? Or are BTCs relatively pegged to USD?

[adamstgBit]

lol

i think for ever point the USD goes down bitcoin gains 2 points  

it should be noted that the USD is still holding up pretty damn good despite QE3

[notme]

lol

i think for ever point the USD goes down bitcoin gains 2 points  

it should be noted that the USD is still holding up pretty damn good despite QE3

Indeed.  DXY is above 80 and climbing.  Dollar supply may be inflating, but nominal value (measured in other currencies) is gaining because everyone else is inflating their money supply too.

[adamstgBit]

lol

i think for ever point the USD goes down bitcoin gains 2 points  

it should be noted that the USD is still holding up pretty damn good despite QE3

Indeed.  DXY is above 80 and climbing.  Dollar supply may be inflating, but nominal value (measured in other currencies) is gaining because everyone else is inflating their money supply too.

that's why!
i just look at CAD/USD....
and it looked like the USD was recovering, but your saying CAD is being inflated as well 


thanks.

[smoothie]

lol

i think for ever point the USD goes down bitcoin gains 2 points  

it should be noted that the USD is still holding up pretty damn good despite QE3

Indeed.  DXY is above 80 and climbing.  Dollar supply may be inflating, but nominal value (measured in other currencies) is gaining because everyone else is inflating their money supply too.

DXY is based on other fiat. Horrible indicator as far as strength of a medium of exchange when all central banks are printing to infinity.

[notme]

lol

i think for ever point the USD goes down bitcoin gains 2 points  

it should be noted that the USD is still holding up pretty damn good despite QE3

Indeed.  DXY is above 80 and climbing.  Dollar supply may be inflating, but nominal value (measured in other currencies) is gaining because everyone else is inflating their money supply too.

DXY is based on other fiat. Horrible indicator as far as strength of a medium of exchange when all central banks are printing to infinity.

I agree, but it does indicate relative strength of various fiat currencies, which was the topic we were discussing.  As always, thanks for your contribution smoothie .

[obisunk]

Holding everything else equal, inflation in traditional currencies should directly increase the value of BTC.  A secondary effect of increased BTC demand will also lead to a more favorable exchange rate from BTC to traditional currencies.  That is, if more people who perceive that bitcoins  retain value better want in on the action, then they will compete with each other to get BTC, which drives up the exchange premium.

[molecular]

lol

i think for ever point the USD goes down bitcoin gains 2 points  

it should be noted that the USD is still holding up pretty damn good despite QE3

Indeed.  DXY is above 80 and climbing.  Dollar supply may be inflating, but nominal value (measured in other currencies) is gaining because everyone else is inflating their money supply too.

exactly. the fiat currencies of the west are fighting each other on a sinking ship.

[Crypt_Current]

My extremely amateur short term forecast for BTC is UP.
This is based slightly on the topic at hand, but also on the 8/18 EMAs crossing on the 12-hour chart (whatever THAT means)

[DeathAndTaxes]

lol

i think for ever point the USD goes down bitcoin gains 2 points  

it should be noted that the USD is still holding up pretty damn good despite QE3

If US inflates 5% and the EU central bank inflates 5% then everything else being equal the exchange rate shouldn't change.
If the US hyperinflates 50% and the EU central bank hyperinflates 50% then everything else being equal the exchange rate shouldn't change.

However you can't (at least yet) hyperinflate the gold supply (or the corn supply, or the oil supply, etc) so when failing central banks try to out compete each other in "inflation wars" the effect will be seen in the prices of commodities not in inter-currency exchange rates.

[molecular]

lol

i think for ever point the USD goes down bitcoin gains 2 points  

it should be noted that the USD is still holding up pretty damn good despite QE3

I just heard on CapitalAccount that the FED hasn't expanded it's balance sheet for the last 2 months (despite deciding QE3). Is that true?

[Chalkbot]

So the strategy is to have USD inflation happen slower than the other currencies, so that purchasing USD seems like a good idea, then print that money and leverage the demand to try to keep a stable value? I guess when you are running from a lion, you only have to worry about staying ahead of the slowest companion.

[myrkul]

[DeathAndTaxes]

So the strategy is to have USD inflation happen slower than the other currencies, so that purchasing USD seems like a good idea, then print that money and leverage the demand to try to keep a stable value? I guess when you are running from a lion, you only have to worry about staying ahead of the slowest companion.

Except every other central bank is trying to do the same thing.  I mean it is zero sum.   Manipulating currency doesn't generate wealth.  Increased productivity produces wealth.  All these central bank games do is rearrange the slices of the pie, usually to the benefit of the ultra rich (forget 1% more like 0.0001%) at the expense of the entire rest of the planet.   Parasitic class for the win.  Remember "money" is simply an accounting system.  If inflation is causing you to "lose" (harder to make ends meet, erodes your savings, etc) then it is causing someone else to "win".

"Give me control of a nation's money and I care not who makes the laws."
- Mayer Amschel Rothschild

[myrkul]

So the strategy is to have USD inflation happen slower than the other currencies, so that purchasing USD seems like a good idea, then print that money and leverage the demand to try to keep a stable value? I guess when you are running from a lion, you only have to worry about staying ahead of the slowest companion.

Except every other central bank is trying to do the same thing.  I mean it is zero sum.   Manipulating currency doesn't generate wealth.  Increased productivity produces wealth.  All these central bank games do is rearrange the slices of the pie, usually to the benefit of the ultra rich (forget 1% more like 0.0001%) at the expense of the entire rest of the planet.   Parasitic class for the win.  Remember "money" is simply an accounting system.  If inflation is causing you to "lose" (harder to make ends meat, erodes your savings, etc) then it is making someone else "win".

"Give me control of a nation's money and I care not who makes the laws."
- Mayer Amschel Rothschild

Aside from the fact that he probably never actually said that, You're dead right. Whether he said it or not, it's certainly the way things work.

[adamstgBit]

So the strategy is to have USD inflation happen slower than the other currencies, so that purchasing USD seems like a good idea, then print that money and leverage the demand to try to keep a stable value? I guess when you are running from a lion, you only have to worry about staying ahead of the slowest companion.

Except every other central bank is trying to do the same thing.  I mean it is zero sum.   Manipulating currency doesn't generate wealth.  Increased productivity produces wealth.  All these central bank games do is rearrange the slices of the pie, usually to the benefit of the ultra rich (forget 1% more like 0.0001%) at the expense of the entire rest of the planet.   Parasitic class for the win.  Remember "money" is simply an accounting system.  If inflation is causing you to "lose" (harder to make ends meat, erodes your savings, etc) then it is making someone else "win".

"Give me control of a nation's money and I care not who makes the laws."
- Mayer Amschel Rothschild

you have to believe that ONE DAY, this retarded system is going to be replaced.... i mean its build in such a way that make its doom inevitable. the rich know this... they are buying up assets, and banking on gold and silver (why do you think they have been shooting up for the past 10 years, why do you think china built ghost cities and bought 1 bazillion pounds of copper  )

gold and silver wont pan out as well as they planed... why? Because Bitcoin  

[bitcoinbear]

If 1 bitcoin will buy 1 gram of weed (on silk road), it does not matter what the price of USD is. If they print a bunch of USD, but the supply and demand of bitcoins and weed remain steady, then 1 bitcoin will still but one gram of weed, but that bitcoin will buy more dollars than before. So the USD inflation does not have any afect on BTC, but the USD/BTC rate will go up.

Taking a different view, if the USD starts going into faster inflation, then more people will start looking for places to put their money that are not subject to the inflation, so more people will want to put their savings into bitcoins. This will raise the value of bitcoins (maybe 1 bitcoin will then buy 2 grams of weed, or 10 grams of weed).

[molecular]

gold and silver wont pan out as well as they planed... why? Because Bitcoin  

Weird. At this point usually cypherdoc jumps in and posts something about the daaash for digital caaash.

[notme]

gold and silver wont pan out as well as they planed... why? Because Bitcoin  

Weird. At this point usually cypherdoc jumps in and posts something about the daaash for digital caaash.

He's travelling and likely hasn't seen the thread yet.

[Rudd-O]

So if the US economy has to print more $$$ to deal with this fiscal cliff I've been reading about in the news will the inflation of the USD cause an increase in BTC price? Or are BTCs relatively pegged to USD?

Ceteris paribus, the more USD available, the higher the BTC price.