[ExI] Bitcoin effect on the Fed's abilities? (Was Re: Inflation graph)

[Brent Allsop]

Hi John,

Yes, Bitcoin is still closer to being worthless (what it was a few years
ago) than it is to being anything more than a rounding error.  But if the
historical growth rate of 10 times every year or so counties, it could get
there.

And I'd be very interested to hear more details about what you mean by "the
transition being UGLY".  I don't see it ever replacing fiat currency, as
you still need something to determine consistent valuations. You can't
expect anyone to get paid in bitcoin valuations, as that is always very
different.  As it has always worked, You'll get paid in X dollars worth of
Bitcion - whatever value Bitcoin happens to be at that time.  And some
people will just never switch to Bitcoin

I simply view it as another asset class, like Government Bonds, Cash,
Stocks, Real Estate, Gold, and so on.  When there is a recession, Gold is
about the only one that increases in value.  I just think that Bitcoin will
be way more extreme in this direction.  Instead of governments spending us
out of recessions, spending on crap like buying and destroying used cars,
holders of bitcoins will be getting rich, and they'll be the ones spending
us out of recessions.  Or at least one can hope - if they aren't spending,
there would be ever more extreme boom and bust cycles.  Is that the kind of
ugly you are talking about?


Brent Allsop




On Mon, Oct 28, 2013 at 10:22 AM, John Clark <johnkclark at gmail.com> wrote:

> On Sun, Oct 27, 2013 at 2:07 PM, Brent Allsop <brent.allsop at canonizer.com>wrote:
>
>  > It'll be very interesting to see how Bitcoin start effecting this
>> durring the next decade.
>>
>
> Maybe someday Bitcoin will be important, maybe not, but one thing is
> certain, right now Bitcoin is so microscopic compared with the dollar that
> to the world economy it's not even a rounding error. And if Bitcoin ever
> does take over from the dollar the transition phase is going to be UGLY!
>
>  John K Clark
>
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