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Future Theoreticians,<br>
<br>
Multiple thoughts have been percolating in my mind that has
further falsified my fears of a Bitcoin Deflationary Catastrophe.
Help me see if I'm making any mistakes with this line of
reasoning.<br>
<br>
Currently, economies have a general instability in them, causing
destructive boom and bust cycles. During the boom, everyone is
spending all their cash, to get into the stock market. This tends
to cause currency to become worth less, or inflation, since
everybody is getting rid of it, to purchase stocks. But when the
herd goes to far in this direction it creates a bubble. When a
pull back starts the 'bubble' pops. This is compounded as people
want to sell stocks (or not buy them), but instead put the capital
into something like Cash. reversing everything in a compounding
the problem unstable way.<br>
<br>
All this causes people to reduce spending and investing, which
causes jobs to be lost, real estate values, where most wealth is,
crash, the stock market crashes, and governments attempt to
counteract this cycle buy pumping more money into the system.
They attempt to stop the deflation, and further drive down
interest rates, hoping to motivate people to move money back into
the stock market and real estate.<br>
<br>
What scared me was thinking of a fixed size inflexible currency,
like Bitcion, if it was prevalent enough, it would really compound
these unstable cycles. I believe when the next recession hits, it
will really drive up Bitcion valuations, and no government will be
able to counteract this flow of capital out of everything else
into rapidly increasing in value Bitcoins.<br>
<br>
But what I realized was that this would make at least some people
significantly more wealthy, and make them want to spend that much
more money. In other words, instead of the government being the
only one spending and putting people to work, Bitcion holders
would likely fill this responsibility.<br>
<br>
The one problem would be, like most things, it makes the rich or
those holding the most Bitcoins richer, making everyone else
poorer. Where as governments tend to spend money to help the
poor, the rich would spend money on what they want, helping the
poor the way they wanted, after funding themselves.<br>
<br>
Also, when the rich really do get richer, eventually the people at
the bottom, revolt, taking all the wealth away from the wealthy,
as has occurred in so many revolutions in the past. But Bitcoins
would make this impossible. As no government can steal a Bitcion
from anyone, like they can a factory or farm.<br>
<br>
So, what does everyone think? Would Bitcion becoming the dominant
currency increase or decrease boom bust cycles in the economy, and
by how much?<br>
<br>
Brent Allsop<br>
<br>
<br>
On 5/29/2013 8:57 AM, James Carroll wrote:<br>
</div>
<blockquote
cite="mid:CALbjWndrT8KJKnQzK6safR9-E+_ctVS-0sne1zeKfiXtZwB3+A@mail.gmail.com"
type="cite">
<div dir="ltr">On Wed, May 29, 2013 at 3:25 AM, Carl Youngblood <span
dir="ltr"><<a moz-do-not-send="true"
href="mailto:carl@youngbloods.org" target="_blank">carl@youngbloods.org</a>></span>
wrote:<br>
<div class="gmail_extra">
<div class="gmail_quote">
<blockquote class="gmail_quote" style="margin:0 0 0
.8ex;border-left:1px #ccc solid;padding-left:1ex">
<div dir="ltr">James, all I'm saying is that I don't think
bitcoin will cause the human race to go extinct against
our wills. Anything more than this is beyond my claim.
If you do think that bitcoin will probably cause the
human race to go extinct, then you disagree with me.
Otherwise I think we agree.</div>
</blockquote>
<div><br>
</div>
<div><br>
</div>
<div style="">I think we generally agree that bitcoin is
unlikely to have that effect. I simply took slight issue
with your stated reasoning for why. But I think we agree
in general. </div>
<div style=""><br>
</div>
<div style="">James</div>
<div style=""><br>
</div>
</div>
-- <br>
Web: <a moz-do-not-send="true"
href="http://james.jlcarroll.net" target="_blank">http://james.jlcarroll.net</a>
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</blockquote>
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