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by pjc50 4610 days ago
Except that finite money supply in a growing economy with positive interest rates is both deflationary and a driver of increasing inequality.

Sensible active monetary policy and "lender of last resort" activities are vital to functioning modern economies. That's why they had to be enacted in Europe during the financial crisis despite not being properly provided for by the existing Euro framework.
2 comments
oleganza 4610 days ago
The inflationary economy already created huge inequality. Do you think all Fed's printed dollars are equally distributed to the poor? In reality, they all go to banks that loan them to the poor. Increasing prices on energy and food + mortgage and other credits prevent poor people from saving money and becoming economically independent.

Bitcoin holders, on the other hand, have to sell bitcoin below tomorrow's price to eat something today. It is reversed trend: the more people want bitcoins, the more "equally" they will become distributed. Everyone who holds and doesn't spend bitcoins does not participate in the economy and thus doesn't earn his wealth yet. But to earn it he has to part with part of his stash, thus leaving less for himself in the future.

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yk 4610 days ago
( I am rather trying the argument, rather than actually believing it myself.)

There are not only BTCs, but also forks and other crypto currencies. So if BTCs hording becomes a problem the incentive to adopt one of the alternatives will rise. Diminishing the value of BTC relative to some other currency and therefore suppressing ( at least to some extend) hording.

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oleganza 4610 days ago
Hoarding (saving) will never become a problem because the value of currency is derived from all savers willing to hold it. Why would I store money in an altcoin if Bitcoin has bigger number of savers and I project that it will only increase (and thus increasing my own wealth)?

People want one money - the most marketable most liquid commodity to store their cash in. http://blog.oleganza.com/post/54121516413/the-universe-wants...

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grinnbearit 4610 days ago
Mencius Moldbug expands on this concept http://unqualified-reservations.blogspot.in/2011/04/on-monet...
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