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by qwytw 1189 days ago
Imagine an economy with both ultra high interest rates and very high deflation at the same time. Let's say CPI growth somehow falls to - 20% and the Fed decides to hike interest rates to + 20%* (and has no way to tweak or stop this policy anymore) what do you think would happen? (hint: the Great Depression would just be viewed as a mild temporary slowdown in relation)

Something like that is really not avoidable if btc replaces $/€/etc.

> debt away and print money as needed.

Which on balance has been a positive development compared to the system that preceded this (permanent boom and bust cycles prior to 1930 accompanied by extreme price swings in either direction)

Look at the 'USD inflation since 1800' chart. Would you really prefer the worth of your saving to swing up and down by 10% or more every few years compared to the relatively stable inflation after 1980s?

https://www.officialdata.org/us/inflation/1800?amount=1#:~:t....
1 comments
csomar 1189 days ago
You got it wrong. The interest rate is used to manage the supply based on the rate/velocity of the economy. Not the other way around. If people want to build businesses, get married, have kids, build products, buy/sell, speculate, etc... having an interest rate, bitcoin, paper or gold, it simply doesn't matter. Places where the financial system is broken will use alternative means of payments.

Bitcoin is flexible. If there is a certain demand or necessity, people can build on top of it.

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qwytw 1189 days ago
> If people want to build businesses, get married, have kids, build products, buy/sell, speculate, etc

Yes. 2-10000x (or whatever, depending on how rich you are) less than they do now. If hoarding money always provides a better return than investing or borrowing it why do anything else besides spending the bare minimum?

> Bitcoin is flexible

How exactly? AFAIK it has close to zero flexibility compared to Fiat money.

I'm sorry but overall I really don't understand what are you trying to say. Supply of money in relation to economic growth matters and it matters a lot. It's not just about 'means of payments' that is the easiest part.

> If there is a certain demand or necessity

Well there is no way to increase the supply of bitcoin? Is there?

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