| > The market cap is a counter argument because it shows the trust people See also Enron, WorldCom, Nortel, Bre-X (for the Canadians out there). > […] and lately corporations put into Bitcoin as a store of wealth and a hedge against inflation. Given its volatility, I'm not sure how useful it is as a store of wealth. Less than a year ago it lost half its value in two days (before the recent run-up): * https://www.cnbc.com/2020/03/13/bitcoin-loses-half-of-its-va... If you think inflation is coming, then you need to stop working in economics and/or finance, as you're burning up returns hedging against it, at least in the US/industrialized world. The last time it was a problem was >40 years ago (mostly due to OPEC): * https://fred.stlouisfed.org/series/FPCPITOTLZGUSA Outside of specific circumstance, deflation is the predominant force: > But Inflation is not inevitable. There are numerous countervailing forces that have been at work for much of the past 50 years. The three big Deflation drivers: 1) Technology, which creates massive economies of scale, especially in digital products (e.g., Software); 2) Robotics/Automation, which efficiently create more physical goods at lower prices; and 3) Globalization and Labor Arbitrage, which sends work to lower cost regions, making goods and services less expensive. > Put into this context, Inflation is periodic, driven by specific events; Deflation is consistent, the background state of the modern economy. To fully understand this requires grasping how scarcity and abundance act as the drivers of the price of labor and goods. My suspicion is many economists who came of age during earlier eras of inflation fail to discern how the world has changed since. * https://ritholtz.com/2021/02/stop-stressing-about-inflation/ |
As for inflation, I’m guessing the exact opposite argument to yours was being made in the 80s.