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Author Topic: Trade Deficits  (Read 816 times)
breandan81
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February 15, 2011, 10:06:11 AM
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A thought occured to me today.  For the most part, actual goods have to be purchased somewhere along the line in some sort of national currency.  That is to say, even those who do business in bitcoins, at least have to buy raw materials in dollars/euros etc at the moment, and probably will for quite some time.  This automatically leads to a trade deficit between the bitcoin community, and the various national currencies.   For the time being, lots of people have been wanting to join, and have been buying bitcoins for national currency, this has more than equaled any deficit due to spending bitcoins on other things, as evidenced by the sharp increase in value.  Eventually this will level off.  In order for this not to become a problem in the long run, there would have to be goods/services that could only be (or at the very least are much better to be) purchased in bitcoins, forcing people to exchange fiat currency for bitcoins and closing the trade deficit.  Maybe this isn't a problem at all, once the bitcoin community becomes big enough a large enough number of people will prefer to store their wealth that way that when they are paid in FRN they will exchange that to bitcoin?

Electronics and components at http://avrthing.com
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February 15, 2011, 10:09:48 AM
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Actually, replying to my own post, the obvious answer occurs.  Bitcoin is better than any other medium of exchange for cheaply transferring money from anywhere to anywhere in the world.  People purchasing bitcoins in order to conduct business easily over the internet would be the reason there wouldn't be a net flux out of the bitcoin economy.  Yes?

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