[ExI] Gold

[Mirco Romanato]

Il 25/05/2013 00:06, Brent Allsop ha scritto:


> And others have expressed the insane desire of using gold, rather than
> "paper" or fiat currency.


> All economies grow at an exponential rate.  So the only good currency is
> one capable of being fairly close to that growth rate.

This is an opinion, but with no support.

A good currency is something that can not be manipulated, so people can
trust in its long term value.

> Another critical
> component, is being flexible.  In other words, when bubbles pop, and we
> head into a recession, we need the money supply to grow to help offset
> this contraction, and the reverse when bubble start forming.

In a recession, the value of the entire stock of money increase relative
to the value of the entire stock of good and services.
People prefer savings to consumption and investment because they
discover they have not enough savings and too much consumption and
investment.
More they save, less they gain from saving and less they consume or
invest more they lose from not doing so.
At some time, in the future, there will be enough savings and add to
them will not be worth enough to defer consumption or investment.

> Using anything completely arbitrary like gold, usually will work in
> exactly the opposite, making depressions dramatically worse, than if you
> had some flexibility.

In fact, we can see that QE did a splendid job in creating jobs and
increasing the purchasing power of people. <sarc off>

> And the most important part of all this, if you have a currency that
> can't grow at all, like Bitcoins, it would be catastrophic, since it
> would soon start to even suck money away form the stock market.

The stock market is like a big casino with QE to infinity and beyond.
If and when BTC will suck the US$ and € (and any other fiat currency)
dry, the increase of value will align to the increase of the economy
(the real economy, not the paper stuff).

So, if car become 3% cheaper to produce, you would be able to buy them
for 3% less BTC than before.

> You
> wouldn't get anyone willing to invest in any start up anywhere.  Why do
> that, or why invest in any other currency, when you have a guaranteed 10
> times in 2 year return, with Bitcoins, as the history is now showing and
> the current consensus "Law of Bitcoins" camp is predicting (see:
> http://canonizer.com/topic.asp/154/2 ) will continue.

As Gordon wrote:
Who guarantee the return? NO ONE.
As I said, the purchasing power increase will reflect the increase of
economic output. If the economy do not increase, there will be no
increase in purchasing power. No investment, no return.

So, people will be interest in investing some (not all) their bitcoins
in startups and new productions, if the promised or possible return is
enticing enough.

Do you want a loan to buy a home?
10% interest year, no more than half of the price/value of the home.

You know what is the other side of the equation?
people will be willing to sell their stuff to you at a discount
(compared to fiat stuff), to obtain a hard, inflexible currency.

This is the experience of people using it.

https://www.youtube.com/watch?v=M4tgNi5gle0

Mirco