Even if you assume that those assets keep up with inflation the problem is that only protects your savings, it doesn’t protect your wages. Most people are wage earners who only receive pay increases in line with CPI not real inflation and hence in real terms their wages go down over time meaning they can buy fewer and fewer assets. If Bitcoin replaces fiat and people eventually get paid in Bitcoin (or some currency backed by Bitcoin) their wages will be maintained and stop going down in real terms.
Money Creation and Central Banking
- Thread starter Read_Lives_of_Saints
- Start date
Bitcoin cannot simultaneously function as a currency/money and as an asset/store of value. It theoretically can function as the latter, but as a deflationary asset with a built-in production limit of 21 million, it is inadequate for serving the monetary needs of a modern economy. There is no reasonable mechanism for lending and borrowing Bitcoin, and further, the 21 million cap means that any sort of lending at interest is impossible in a Bitcoin monetary system, because the fixed supply necessitates that the interest accrued on the loan must be directly taken out of the fixed supply of Bitcoin.
You all like to decry the nature of fiat as being "backed by nothing" or "money created out of thin air", but these criticisms are shallow. The operation of fiat is actually quite elegant and sophisticated, because in practice fiat currencies actually end up being backed by labor and investment. When loans are issued (meaning, when new money is created) they are issued with some productive economic purpose in mind, and the borrower must engage in some sort of productive economic activity in order to repay both the loan and the interest due. This economic activity, in broad sum across the entire economy, is the foundation of real wealth creation. And this is why fiat is so effective at growing economies versus hard money, and why every economy in the world uses fiat and not gold (or Bitcoin) as a currency.
This is simply not possible in a Bitcoin system because borrowing and interest repayment is impossible. In a theoretical Bitcoin monetary system, all wealth would very quickly flow toward those who already hold the most Bitcoin and lend it out. Because of Bitcoin's fixed supply, all excess Bitcoin would necessarily be sucked up to pay the interest demanded by the lenders. It's simply not a workable monetary system.
The main problem with fiat and fractional reserve, or any other medium, is the cheating. Any system that was honest and transparent, and created by half-way competent people, like the way ours is supposed to work, would be fine and would sort its kinks out in a short time.
The problem is the chicanery and the ability of those who can side-step the rules, like the lead-up to the 2008 financial crisis with exotic and absurd financial instruments, and the reaction to it, essentially unrestrained money printing well outside any FRB limitations.
But there's no way around that any more than there is a way to create utopia on earth. Whoever is in a position to make or break the rules of the monetary system and get away with it will do so, no matter if it's bitcoin or physical gold.
We'll predictably discover the corruptibility of bitcoin and, just as discovering the side-effects of a new "wonder drug" dispels the notion that, within a certain period of time, disease will be eliminated, we'll be reminded that it never will, nor will money remain honest.
Better to store up your treasure in Heaven.
The problem is the chicanery and the ability of those who can side-step the rules, like the lead-up to the 2008 financial crisis with exotic and absurd financial instruments, and the reaction to it, essentially unrestrained money printing well outside any FRB limitations.
But there's no way around that any more than there is a way to create utopia on earth. Whoever is in a position to make or break the rules of the monetary system and get away with it will do so, no matter if it's bitcoin or physical gold.
We'll predictably discover the corruptibility of bitcoin and, just as discovering the side-effects of a new "wonder drug" dispels the notion that, within a certain period of time, disease will be eliminated, we'll be reminded that it never will, nor will money remain honest.
Better to store up your treasure in Heaven.
How? It was already done with physical gold so we do know how that happened, but the other, can you explain it? If not, why do you make this claim?
That's true.
Still, BTC as monetary protocol and technology is incorruptible in its network. Outside the network may be a different issue as humans are part of that outside part. But the point therefore is proven, which other monies cannot claim.
If you're asking about bitcoin, I don't follow it that closely, but there have been instances of markets getting hacked or nuking people's accounts, but that's not exactly what I'm talking about.
There are two major problems with money, one is that loving it is the root of evil, and the other is the temptation to be dishonest with its creation, and there are many ways to do so, going back to the first bankers who issued more paper receipts than what gold they had in deposit because it seemed to them unlikely that the depositors would figure out the scam.
The major problem now is that money can be created outside of rules and without transparency so that the value of the existing money is decreased, which is a type of theft that occurs on the scale of many trillions of USD$ of value sucked out of the wallets of normal people every year.
Wall Street, for example, can effectively create money through both its reported and totally unreported exotic financial instruments, like those that led to the financial crash of 2008, e.g. collateral debt obligations (fractionalized mortgages from unqualified borrowers re-sold under false pretenses of high ratings). Because it is not required to report some categories of this type of money creation, partly enabled by the repeal of Glass-Steagall, the general rules of operation are broken for the benefit of a few and at the expense of the many. It's theft on an unimaginable scale.
The Federal Reserve system has immense power to create money, especially since the initial 2008 TARP where Congress increased the Fed's authority, so they gave TRILLIONS out in near-zero interest loans to the too-big-to-fail banks (I linked Ben Bernanke's 2009 admission of this earlier), and afterward just ran the printing presses for "quantitative easing" to provide liquidity for their endless Ponzi schemes, which they continue to do according to new rules they make up as they go.
Sometimes they break the letter of the law, sometimes the spirit, and this is inevitable without transparency mechanisms functioning constantly, which will never happen because the temptation to create money for oneself and the few who are in the position to do it in relative secrecy or the obscurity of complex check-kiting operations at Wall Street and the central banks is too great.
As far as bitcoin and blockchain technologies, how many instances of rug pulls do we need to see its vulnerability?
In addition to that, I believe that every technology that makes it into the public domain was created many years before its availability and is only allowed because it ultimately serves the purpose of those in control at the top. I am sure that whatever security blockchain tech appears to provide can be circumvented by another technology not in the public domain, either directly by a hack or indirectly by a legal control.
Therefore, I do not believe that blockchain money solves the inherent problems of the temptation of covert money creation, ie. the breaking of the rules made for the plebes to follow under threat of law, but always broken by the elites who worship mammon.
EDIT: After re-reading this and my earlier comment, I see that I'm being repetitive, but I hope I gave more detail that helps.
You don't understand BTC.
I didn't write above to be obtuse. Bitcoin cannot be created out of nothing, that's the point and why your nice post otherwise is actually incorrect. Money to this point, and especially fiat, does fit into your description, though, absolutely.
Why include BTC here? There has been no rug pull. tick tock, another block. Zoom out, up and to the right. Yes, it's hard for people to believe. I highly recommend you looking at my, @chance vought and @Australia Sucks posts and explanations on the dedicated thread.
Keep knocking, seeking, finding.
My argument is that temptation and human nature in the fallen world can not be solved or stymied by a created technology of any kind, which is why every technology, from money to steel has its down side.
The counter argument is essentially an appeal to utopianism.
One of the worst things about factional reserve banking is the amortization schedule. Most of the interest is paid up front and the principle is horribly back-loaded. As a man pays on his 30 year mortgage he works to pay the bank who ends up taking his money for years and still owns the vast majority of the asset the man is paying for. All without the bank having the money to loan in the first place. It's a form of slavery.
Back to Bitcoin, BTC was created as a currency to facilitate the Silk Road which was primarily illegal activity which needed a way to send payments anonymously and quickly with no middle man. I don't think anyone including Satoshi could have seen what BTC has become. It's a store of wealth but easily transferable. I buy things with BTC here and there so it's a currency and so far it's an appreciating one.
Back to Bitcoin, BTC was created as a currency to facilitate the Silk Road which was primarily illegal activity which needed a way to send payments anonymously and quickly with no middle man. I don't think anyone including Satoshi could have seen what BTC has become. It's a store of wealth but easily transferable. I buy things with BTC here and there so it's a currency and so far it's an appreciating one.
Of course you cannot create actual Bitcoin out of nothing but you can create paper Bitcoin (derivatives, etc), re-hypothecate it, etc which I think is the point Read Lives of Saints is trying to get at indirectly i.e. the derivatives markets and exchanges, ETFs etc custodying Bitcoin that are rehypothecating the Bitcoin etc.
With the gold markets they created a huge amount of paper gold derivatives to manipulate the physical gold price downwards.
They are trying to do the samer thing with Bitcoin but it does not work anywhere near as well. It works with gold because in bulk quantities gold is hard and costly to store and transport so it incentivizes people to accept fake paper gold claims. With Bitcoin its fast, easy and cheap to store or transact your Bitcoin so there is far less incentive to accept paper derivatives not backed by real Bitcoin and its very easy for people to demand/take delivery of the actual Bitcoin.
In any case all the current fake paper Bitcoin manipulation will only keep the price down for so long (the sham will be up within the next 5 years) and long term it will not affect those who own and self custody actual Bitcoin. I think that with the next 10 years Bitcoin will have the mother of all short squeezes and the manipulators will absolutely get wrecked possibily even to the point of insolvency.
Yes, thank you for clarifying, I did mean to say this as one of the problems with money in general, from which bitcoin is not immune.
Urkel liked your comment because there is a part of it is correct, but also because he likes to be a fail for our BTC position. Frequently, he'll project a lot of stuff on us BTCers that isn't exactly the case. None of us believe that BTC will create a utopia, as you get at here. The way that I look at things in life at this point is that there are checks and balances or tradeoffs, as we have recently seen with what I believe to be the origin of modernity (beyond human nature), which is the population boom. It turns out that you can't go as far as you might hope without massively changing median or average quality, especially with human populations. Beyond that, with each "positive" increment you get in a society, you set up the larger population for manipulation, as there really aren't a super high number of people that are either smart enough, principle enough, or both, to fight the control systems.
And so here is where we come full circle. No, there won't be a utopia, BUT BTC will offer at least a smaller portion of the population who realizes it is what it is, the opportunity to change their lives in ways not previously possible. This is the point. And it is denied entirely on this forum by quite a few people, which I find sad because it is a major innovation for the betterment of humanity. You can make that point and not be some utopian dream seller. Some don't get that, either.
If BTC can enable some people protection from other problems of the monetary system, like inflation, that's great. I think that very soon those who want to make any of their own significant life choices will need independence from the various systems of control, including money, as well as food, medicine, housing, energy, etc. I pray that BTC will enable that even a little bit, as I'm sure it already has for some.
Yes, this is the main point of all of what us pro BTC people have been stating. The naysayers like to project on us some sort of greed or mammon god thing, but it really is just the belief in freedom and integrity in saving your work, time and energy.
Inflation : Who was Hugo 'The Inflation King of 1920's Germany' Stinnes?
What’s Going on with Money Printing?At the time of writing this article, newly minted president Joe Biden has announced another stimulus package in the amount of $1.9 Trillion dollars. Trillion with a Capital T! A Trillion dollars (let alone almost 2) is a freaking lot of money. A Trillion...
www.wealthplaybook.ca
Speculative Attack | Satoshi Nakamoto Institute
Bitcoin will overtake weak currencies like the dollar through speculative attacks and currency crises, not through the careful evaluation of tech journalists and 'mainstream consumers'.
Indeed I have seen some analysis before that portrays Michael Saylor as the modern day Hugo Stinnes.Inflation : Who was Hugo 'The Inflation King of 1920's Germany' Stinnes?
What’s Going on with Money Printing?At the time of writing this article, newly minted president Joe Biden has announced another stimulus package in the amount of $1.9 Trillion dollars. Trillion with a Capital T! A Trillion dollars (let alone almost 2) is a freaking lot of money. A Trillion...
Speculative Attack | Satoshi Nakamoto Institute
Bitcoin will overtake weak currencies like the dollar through speculative attacks and currency crises, not through the careful evaluation of tech journalists and 'mainstream consumers'.nakamotoinstitute.org
This! One of my co-workers that I've been friends with for 20 years had invested in BTC when it was $6k or so. Me and her have always talked about silver and investments for years. She had been out of my sections at work for years now but is finally back and we've been catching up on investments. She had acquired 2 Bitcoins! She now has over $200k because of her early investment in it which she let sit and grow. She is blue collar like me and now has serious money for retirement. This is a big win for her. Imagine is she had just let that investment sit in a 'high yield' savings account. It would have been eaten away by, or at best a break even by inflation. BTC made this possible. I'm not a cultist. I see the results of the past 10 years and they are undeniable.
That's because you were early adopters... plenty of good news for early adopters who held. But "investing" in anything is gambling which is a jewish mindset in nature. It is about getting more by doing less. "Making your money work for you" and all that jewish nonsense. Jews Invented our current economic system (including btc) and there are some good things about it (constantly flowing electricity, roofs that dont leak, boomer 401K millionaires, JQ insurance that sometimes pays out to the gravely injured, etc.), but primarily the jewish banking/financial/insurance/lawfare scam of investing is about (((them))) getting us to give up our cash for 20 year stretches while they use our cash against us to fund globohomo faggotry and white Christian replacement via unfettered H1B and illegal immigration.
Don't give (((anyone))) your cash. Spend it on tools that make you more physically, and hence more spiritually/emotionally comfortable and safe (guns and land).
That being said I'm going to be buying $500 a month in bitcoin because I can afford to lose it and because I'm sick of Blade Runner's and Chance Vought's btc sh*t talking
. But I would advise most normies to do what I say (cash out and move to the woods), not as I do. 
That last paragraph ruined it for meThat's because you were early adopters... plenty of good news for early adopters who held. But "investing" in anything is gambling which is a jewish mindset in nature. It is about getting more by doing less. "Making your money work for you" and all that jewish nonsense. Jews Invented our current economic system (including btc) and there are some good things about it (constantly flowing electricity, roofs that dont leak, boomer 401K millionaires, JQ insurance that sometimes pays out to the gravely injured, etc.), but primarily the jewish banking/financial/insurance/lawfare scam of investing is about (((them))) getting us to give up our cash for 20 year stretches while they use our cash against us to fund globohomo faggotry and white Christian replacement via unfettered H1B and illegal immigration.
Don't give (((anyone))) your cash. Spend it on tools that make you more physically, and hence more spiritually/emotionally comfortable and safe (guns and land).
That being said I'm going to be buying $500 a month in bitcoin because I can afford to lose it and because I'm sick of Blade Runner's and Chance Vought's btc sh*t talking
Purple, you should know better, we keep having to take you to school on the basics. At least you are buying some BTC now though.
Life is a risk. Doing things is a risk. Not doing things is a risk. You could call all of that "gambling" it's just semantics. No one is promoting you goingto a casino where you KNOW the math long term is going to get you.
Investing in a business is a risk that you do to eventually have more time, control, money, etc. You can do that to build your own business, or research other businesses, etc. That's all that is going on. But you paint this broad brush with simpleton stuff so commonly, it's embarrassing.
Your points are always destroyed by the clear thinkers, just remember that. Or stop posting nonsense. Your choice.
ps - don't get mad that I said that at the end. It gets ridiculous suffering this foolishness over and over, though.
"It was during the Inflation that the Germans forgot how to rely on themselves as individuals and learned to expect everything from "politics", from the "state", from "destiny." They learned to look on life as a wild adventure, the outcome of which depended not on their own effort but on sinister, mysterious forces. The millions who were then robbed of their wages and savings became the "masses" with whom Dr Goebbels was to operate. Inflation is a tragedy that makes a whole people cynical, hardhearted and indifferent. Having been robbed, the Germans became a nation of robbers." Inflation: The Witches Sabbath, Thomas Mann, 1942