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by wintersFright 4631 days ago
Decide what you think would replace assets in Central Bank balance sheets to allow world trade to continue - ie: what would settle world trade deficits.

Yuan, gold, silver or bitcoin?

Hint: Bitcoin and silver are not held by central banks as assets. Yuan's value is subject to the policy of China's politburo. Fool me once on the USD...

That leaves one asset that can't be printed into existence: http://www.ecb.europa.eu/press/pr/wfs/2013/html/fs130924.en....
1 comments
oleganza 4631 days ago
World trade does not need any central bank to continue. People only need freedom to do transactions without constant interference. If gov currencies are to collapse, there are only to choices: private IOUs in private banks backed or not by gold (either way, a huge amount of trust is needed to be placed in the banks, almost no one is going to move gold across the world all the time); or bitcoin - which enables world trade without necessary placing trust in intermediaries.
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wintersFright 4631 days ago
Gold doesn't need to move, only the name under which it is stored needs to change. Bitcoin - a four year old currency invented by a pseudonym - is not going to be used to clear trades at a sovereign level. Arabs are not going to ship oil in the ground for bitcoin.
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oleganza 4631 days ago
If gold is not moved, it's as good as a promise of the vault owner that holds it for you. History shows that this promise was constantly broken before and after invention of central banking.

To own either bitcoin or gold you need to move it in your personal vault. But in case of bitcoin, it's many times cheaper to move it and have many vaults with extra protections.

Arabs will happily ship oil for bitcoin when both buyers and sellers of oil will no longer be able to use USD or trust banks standing in the way. And, of course, when they learn about bitcoin and we have better infrastructure to support secure storage and trade.

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