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Author Topic: Bitcoin + TEM = BitTem?  (Read 4584 times)
Etlase2
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April 20, 2012, 04:04:50 PM
 #21

Of course it does. As I said, it's just obfuscated due to a lack of a centralised system and specialised markets. Let's say that someone in the community is selling radios for 100 TEMs and someone else apples for 1 TEM each. If a radio costs 90 EUR outside

How am I supposed to follow your logic of it being fixed when you set up an example where it floats. LOL.

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If they deviate from the equilibrium (stop treating them as having the same value), either the arbitrageurs will reestablish the equilibrium again, or the whole system will collapse.

How then has the world currency market not collapsed since the removal of the gold standard? No major world currency is backed or pegged, yet amazingly commerce still occurs.

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You have failed to provide a response to my points, and continue to ascribe to me positions which I never expressed.

You quite clearly expressed that you believe TEM is a bad idea. Bandied about terms like "misallocation of resources" even, all the while the majority of the "resources" are going to the banks as interest payments. Good spot for them to be.

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lonelyminer (Peter Šurda)
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April 20, 2012, 05:06:28 PM
 #22

Etlase2,

How am I supposed to follow your logic of it being fixed when you set up an example where it floats. LOL.
I don't understand your objection at all. My example showed that an attempt to deviate from the exchange rate will force it back, as long as some people treat TEM and EUR as having the same value. You contradict yourself, on one hand you claim that people do treat them as same value, on the other hand you deny that they are exchanged at a predefined exchange rate. It's an illogical construct. The referenced articles clearly explain that these people still use Euros for quoting prices and accounting, and merely use TEM as an alternative payment method.

Furthermore, you fail to address the economic issue: if person A does treat TEM and EUR at a particular exchange rate, and person B at another one, that creates an arbitrage opportunity.

How then has the world currency market not collapsed since the removal of the gold standard? No major world currency is backed or pegged, yet amazingly commerce still occurs.
The main reason is, in my opinion, that the amount of new money created by the credit system is still restricted, i.e. there are still certain limits to expansion of credit, be it through regulation or the fact that only banks rather than anyone, can create new money. Someone might claim that legal tender laws are also a factor, but I think that the credit restriction is a more important factor.

LETS systems are essentially a different way of how money enters the economy. It's a mix of being planned centrally (which has the obvious disadvantages of central planning) and allowing anyone to create new money. It only works because there is a peg to another currency, which prevents the expansion from occurring too quickly (again, arbitrage). If there is no peg, then either the economy will convert into a closed, increasingly centrally planned one, or the money supply will increase arbitrarily until it reaches hyperinflation and collapses. If the peg suffers from hyperinflation, the LETS is also affected by the problem. Theoretically, they can react by re-pegging it at a different exchange rate, essentially creating a new central bank.

It may be possible that LETS have a way of restricting the supply that I'm missing, i.e. that their supply cannot increase arbitrarily. If this is the case, then I consider it possible that something else than centralisation or collapse would follow a decoupling (i.e. I cannot logically exclude that).

You quite clearly expressed that you believe TEM is a bad idea. Bandied about terms like "misallocation of resources" even, all the while the majority of the "resources" are going to the banks as interest payments. Good spot for them to be.
"bad" is a normative term. I try to avoid making normative statements as much as I can. You on the other hand are obsessed by ideological baggage which I'm completely indifferent to. My main point is not that TEM is bad. I merely attempt to analyse the consequences thereof. The main consequence that I deduced is a decrease in the size of the economy (even though there could be, but not necessarily, an inflationary boom at the beginning). If that's what people want, let them have it. I'm the last person who would object to that.

In any case, once the EUR and USD collapse, we'll see how it affects the LETS systems on one hand, and gold/bitcoin on the other.
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April 21, 2012, 10:34:53 AM
 #23

The problems the Euro caused in Greece was that it made international goods available cheap, killing the local economy. Wouldn't have been much different with Bitcoin.

Discussions about economic systems in general are mostly about how to optimize efficiency  (re "Misallocation of resources"). But we could say the problem is that today's global economy has already become too efficient.

That's why people like Bernard Lietaer do propose dual currency systems. There'd be "patriarchical" currencies for long distance trading (Bitcoin would be among the best we ever had in this regard), and local currencies.

http://www.scribd.com/tesasilvestre/d/34659324-The-Monetary-Blind-Spot-by-Bernard-Lietaer

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Patriarchal Value Coherence

All patriarchal societies in history have had the tendency to impose a monopoly of a single currency, hierarchically issued, naturally scarce or artificially kept scarce, and with positive interest rates. This was for instance the case in Sumer and Babylon, in Greece and Rome, and from the Renaissance onwards in Western societies all the way to today. The form of these currencies has varied widely, ranging from standardized commodities, precious metals, paper or electronic bits. But what they all have in common is that governments accepted only that specific currency for payment of taxes, that this currency could be stored and accumulated, and that borrowing such currencies implied payment of interest. [...]

Matrifocal Societies

In contrast, matrifocal societies have tended to use a dual currency system: one currency (typically identical to the surrounding patriarchal societies) for trading long distance with people one doesn’t know; and a second type of currency for exchanges within one’s own local community. This second type of currency, with Yin characteristics, was usually created locally (often by the users themselves); was issued in sufficiency; and didn’t have interest. In the most sophisticated cases, this currency even had a demurrage fee - a negative interest equivalent to a parking fee on money -, which would discourage its accumulation. In short, it would be used as a pure medium of exchange, not as a store of value. This was the case, for instance, with the corn-backed currencies that lasted for well over a millennium in Dynastic Egypt that was one of the secrets of the wealth of that ancient society.

http://www.scribd.com/doc/26248658/Is-Our-Monetary-Structure-a-Systemic-Cause-for-Financial-Instability-Bernard-Lietaer

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Sustainability curve mapped between the two polarities of efficiency and resilience. Nature selects not for a maximum of efficiency, but for an optimal balance between these two requirements. Notice that resilience is roughly two times more important than efficiency at the optimum.


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