Bitcoin is government and banks' savior

[johnyj]

Debt based money creation will result in a bigger and bigger debt, and that in turn require exponential growth of the economy, and due to limited resource and space on the planet, that is not sustainable

Housing is the biggest investment/consumption for average person right now, and it has already exhausted its potential in driving economy. Japan is a good example of economy losing steam after full saturation of housing market. In order to keep the exponential growth, there must be a new type of investment/consumption that at least double the value of housing, and another type of investment/consumption which has even higher value later on... What will those investment/consumption targets be?

The answer is money. People will lose interest for house/boat/plane after they acquired and enjoyed them, but they will never lose interest for money, which can satisfy any kind of interest at any time

Unfortunately, in today's monetary system, society as a whole can not acquire more money because that will collapse the whole system, they can only support it by borrowing more and spend more thus keep the lifeline of the system - exponential growth

Now with Bitcoin, the society as a whole can acquire more money, and that will not affect exponential growth, even better, bitcoin created an endless market for exponential growth

[Zarathustra]

Bitcoin is Gold 2.0 and therefore an asset. If existing debt/money will be changed in bitcoins, then there will be less debt/money in the market.

[Adrian-x]

..., even better, bitcoin created an endless market for exponential growth

I'd agree it is a just in time solution, but Bitcoin as a money, potentially enables Austrian Business theory and if it gains traction it will self regulate, and thus won't be subject to exponential growth, but will equalise somewhere around maximum efficiency allowing people the maximum benefit money can provide, and it won't be exponential anything.

[Le Happy Merchant]

I'd agree it is a just in time solution, but Bitcoin as a money, potentially enables Austrian Business theory and if it gains traction it will self regulate, and thus won't be subject to exponential growth, but will equalise somewhere around maximum efficiency allowing people the maximum benefit money can provide, and it won't be exponential anything.

Given enough time, if it is increasing in value in any way, it would most likely follow an exponential curve. The exponent may be relatively small, but it is almost certain that it won't be linear.

[Adrian-x]

I'd agree it is a just in time solution, but Bitcoin as a money, potentially enables Austrian Business theory and if it [Bitcoin] gains traction it ["an endless market for exponential growth"] will self regulate, and thus won't be subject to exponential growth, but will equalise somewhere around maximum efficiency allowing people the maximum benefit money can provide, and it won't be exponential anything.

Given enough time, if it is increasing in value in any way, it would most likely follow an exponential curve. The exponent may be relatively small, but it is almost certain that it won't be linear.

Sure the price of Bitcoin will grow exponentially, I guess my language and understanding wasn't clear, "it" bold above meaning economic system won't grow exponentially.  

[ukuna]

amen

[TheGovernedSelf]

But they (Bankers/journalists/CEOs/politicians) own a small fraction of BTC.

If I had to guess, 10-30%.

[johnyj]

..., even better, bitcoin created an endless market for exponential growth

I'd agree it is a just in time solution, but Bitcoin as a money, potentially enables Austrian Business theory and if it gains traction it will self regulate, and thus won't be subject to exponential growth, but will equalise somewhere around maximum efficiency allowing people the maximum benefit money can provide, and it won't be exponential anything.

I think it's possible to have an economy with slower and slower growth after reaching certain maturity level, when everyone on the planet can have a decent comfortable life without worrying about illness, jobless or retirement. But the banks and governments have went too long in the current path of exponential growth, and have built many financial infrastructures that are dependant on exponential growth, there is no exit for them, so they must seek the next biggest area of exponential growth, which IMO is virtual economy

[bb999]

Creating an ultimately fixed supply medium of exchange and store of value (like bitcoin) will mean an economy based on it will grow due to innovation and competition rather than asset bubble blowing, which means less volatility and more predictability, which is what entrepreneurs need to take the risks they do.

[Adrian-x]

Creating an ultimately fixed supply medium of exchange and store of value (like bitcoin) will mean an economy based on it will grow due to innovation and competition rather than asset bubble blowing, which means less volatility and more predictability, which is what entrepreneurs need to take the risks they do.

/\ this.

In addition, you create a market driven solution to environmental destruction, by restoring balance to economic growth. 

[Adrian-x]

, which IMO is virtual economy

I'd happily give then [banks and governments] the Virtual economy, because you can just start another.  Also until Ray Kurzweil singularity is a reality, I'd add financial infrastructures dependant on exponential growth of the finite earth needs reform.

[kodo]

It is indeed :-)

[johnyj]

Now FED just indicated an intention to tighten, we immediately see the price of stock/gold/oil crash, the current economy is purely dependant on the continuously inflated money supply

Another problem is jobless. Last time the big wave of industrialization pushed many people from production to service sector, and now computer and software squeezed people out from service sector again, where should they go?

A rational step is to scale back the production and reduce the working hours, but the huge debt caused by money printing made this impossible

Bitcoin seems the only hope for them, they have to grow this new economy to be able to create more income and jobs

A very scalable model: 50% people are creating money, while 50% of people are doing various kind of production/service (since productivity is too high, 50% of labour force are enough to satisfy all the demand on earth), all have a good income. If the productivity rises even higher, then 80% of people are creating money while only 20% of people are doing production. Since everyone wants money, the demand for money is much higher than any other product/service, so this business should have the largest amount of labor force

But in such a model maybe the supply of money should be constant

[Adrian-x]

Now FED just indicated an intention to tighten, we immediately see the price of stock/gold/oil crash, the current economy is purely dependant on the continuously inflated money supply

Another problem is jobless. Last time the big wave of industrialization pushed many people from production to service sector, and now computer and software squeezed people out from service sector again, where should they go?

A rational step is to scale back the production and reduce the working hours, but the huge debt caused by money printing made this impossible

Bitcoin seems the only hope for them, they have to grow this new economy to be able to create more income and jobs

A very scalable model: 50% people are creating money, while 50% of people are doing various kind of production/service (since productivity is too high, 50% of labour force are enough to satisfy all the demand on earth), all have a good income. If the productivity rises even higher, then 80% of people are creating money while only 20% of people are doing production. Since everyone wants money, the demand for money is much higher than any other product/service, so this business should have the largest amount of labor force

But in such a model maybe the supply of money should be constant

At the end of the day we need to eat and enjoy stuff (prosperity), almost all that we enjoy is subjective, and what isn't is biological (natural selection) and some small present is mental illness.  It is human nature to eat and enjoy and avoid discomfort (including conflict) the resulting actions of perusing those ends is the economy and analysing the economy reflects how those ends are achieved.

Lack of innovation in supply or conversely high demand = conflict or discomfort, and forms of control have historically accelerated or hindered innovation.   ( a nice theses for a history paper.)

There is no drought we have become the most deluded animals on the planet and we have derived ways to eliminate conflict through force but most impressive is through innovation.  

The idea of managing the economy may have been a valid one when demand outstripped supply but the whole idea of managing anything implies that someone or some group (the powers that be) has experience in what should and shouldn't be done to maximise prosperity.    

I relate to your approach and conclusion, but I think the 50/50 ratio is fare worse. I think technology as employed today requires about 11% of the work force to provide 90%+ of the needs of society, and the other 89% that are contributing (working) are just managing the system in a parasitic manner.

If I was an economics university professor I'd have my class modeling some cool stuff some ideas for another thesis.

The powers that be fear the undisciplined mind, and prefer to manage needs, we hold many memes that affect our very evolution and have allowed a parasitic existence to metastasize. The solution isn't more money.  

In your model where you suggest the supply of money be constant is correct, it has been and the results are showing. Money is just a meme and it only works to eat away at society if the producers believe it to be constant, while the parasites produce more of it.  

[johnyj]

Now FED just indicated an intention to tighten, we immediately see the price of stock/gold/oil crash, the current economy is purely dependant on the continuously inflated money supply

Another problem is jobless. Last time the big wave of industrialization pushed many people from production to service sector, and now computer and software squeezed people out from service sector again, where should they go?

A rational step is to scale back the production and reduce the working hours, but the huge debt caused by money printing made this impossible

Bitcoin seems the only hope for them, they have to grow this new economy to be able to create more income and jobs

A very scalable model: 50% people are creating money, while 50% of people are doing various kind of production/service (since productivity is too high, 50% of labour force are enough to satisfy all the demand on earth), all have a good income. If the productivity rises even higher, then 80% of people are creating money while only 20% of people are doing production. Since everyone wants money, the demand for money is much higher than any other product/service, so this business should have the largest amount of labor force

But in such a model maybe the supply of money should be constant

At the end of the day we need to eat and enjoy stuff (prosperity), almost all that we enjoy is subjective, and what isn't is biological (natural selection) and some small present is mental illness.  It is human nature to eat and enjoy and avoid discomfort (including conflict) the resulting actions of perusing those ends is the economy and analysing the economy reflects how those ends are achieved.

Lack of innovation in supply or conversely high demand = conflict or discomfort, and forms of control have historically accelerated or hindered innovation.   ( a nice theses for a history paper.)

There is no drought we have become the most deluded animals on the planet and we have derived ways to eliminate conflict through force but most impressive is through innovation.  

The idea of managing the economy may have been a valid one when demand outstripped supply but the whole idea of managing anything implies that someone or some group (the powers that be) has experience in what should and shouldn't be done to maximise prosperity.    

I relate to your approach and conclusion, but I think the 50/50 ratio is fare worse. I think technology as employed today requires about 11% of the work force to provide 90%+ of the needs of society, and the other 89% that are contributing (working) are just managing the system in a parasitic manner.

If I was an economics university professor I'd have my class modeling some cool stuff some ideas for another thesis.

The powers that be fear the undisciplined mind, and prefer to manage needs, we hold many memes that affect our very evolution and have allowed a parasitic existence to metastasize. The solution isn't more money.  

In your model where you suggest the supply of money be constant is correct, it has been and the results are showing. Money is just a meme and it only works to eat away at society if the producers believe it to be constant, while the parasites produce more of it.  

IMO, it's very natural that if there is no demand, one does not need to produce anything. But the problem is, one must produce something in exchange for what he need. If all what he need have been produced by someone else, he just lost the means of make a living

So there should be a branch in society, its product has endless demand, this branch can always absorb the excessive labor force

That endless demand is money. In principle, the business of creating money should be able to absorb all of the excessive labour force thus keep almost 0 jobless rate constantly. Because, if too many people went to create money, then the supply of other products/services will drop thus increase the profitability and demand for labour in those branches

Unfortunately, central banks has taken the job of creating money, and they create money out of nothing, that's the reason they don't providing work to the labour market at all

So, the business with the biggest demand, have the least amount of people working, that's a twisted structure of today's society

[Adrian-x]

IMO, it's very natural that if there is no demand, one does not need to produce anything. But the problem is, one must produce something in exchange for what he need. If all what he need have been produced by someone else, he just lost the means of make a living

I'd say you opinion in bold above is more a result of deductive reasoning, your solution seems to be an opinion that is still cemented in a few crippling ideas.  You are looking at the business boom bust cycle, and the fundamentals behind the Keynesian and Austrian theories. ( you are dealing with the problem with the Keynesian toolkit.)  

While I have come to learn Keynes, was correct in his understandings of how to build strong relationships to foster good economic prosperity, (my former leftist liberal self) it requires a management style that is inconsistent with human nature, and has subsequently been perverted by the Monetarists (my former Conservative self)

Ultimately this problem can only be fixed with the tools in the Austrian toolkit, and if you don't like them, then you will have to endure the inevitable consequences, unfortunately so do I, fortunatly I can plan accordingly.  
 
Demand drives production. You work to get what you need; you don't work to need what you get, and you don't not exist to have your need.  
 "If all what he need have been produced by someone else" he is content and happy and creates no demand because he has no needs, (this is most probably over production - malinvestment on the part of producers)

It is probably more like: If he thinks " what he need is produced by someone else" and he cant afford to buy it because 1) he can't find a job, or 2) isn't willing to work for $20 per day.  He needs to: A) adjust his needs, B) work to fulfill his needs.  C) both


IMO, you have some of the variables jumbled in the wrong way.  We'r heading into the 1930 style of problem, where the producers in society can't afford the products they produce, and stop buying them - this lack of demand is a result of centrally managed over investment in the wrong economic sectors.  The solution is the monopolies have to give way to the workers and allow for a grass roots re-emergence of entrepreneurship. And allow prices to plummet so workers can afford the products they produce.

It's a lot more complex but without the correct toolkit you can't fix the problem, Bitcoin is one of the tools, in regenerating the economy, increasing the money supply is one of the tools that creates poverty and suffering and therefore is not.  

[johnyj]

It is probably more like: If he thinks " what he need is produced by someone else" and he cant afford to buy it because 1) he can't find a job, or 2) isn't willing to work for $20 per day.  He needs to: A) adjust his needs, B) work to fulfill his needs.  C) both

A little bit off-topic now, this has nothing to do with money supply

Suppose that one day all the work can be done by robots, and it takes only two or three companies to manufacture those robots, then rest of the people will have no work thus no income

So an increase in productivity always cause less and less demand for labor and it is also bad for the robot producer, since they will now face a society with less and less purchasing power

Keynes noticed the drop in demand but he did not focus on the reason behind it (very uneven distribution of productivity), so he tried to stimulate the investment/spending through a lower interest rate, affecting all the producers the same way). That could give some stimulus, but did not really solve the root of the problem

As Austrian economists' view, this uneven distribution of productivity has to be corrected by the market itself, just like your solution "the monopolies have to give way to the workers and allow for a grass roots re-emergence of entrepreneurship. And allow prices to plummet so workers can afford the products they produce". But I just don't see how those robot companies would easily give up their position. And even worse, maybe they are already extremely efficient and barely brake even, if you let them down and replace them with many unefficient small enterprises, the whole society's productivity will step back many years, you just reset the whole game to the beginning and lost every progress

And I don't think bitcoin could give much help, bitcoin just provide people with a good way of saving so that they can successfully reduce their debt