Post
Topic
Board Economics
Re: Krugman makes some good points
by
rupy
on 25/03/2013, 09:06:52 UTC
A purely deflationary currency provides no incentive for investment or economic activity

I'd like to point out, that this might actually be a positive aspect. Right now the worlds monetary system is geared towards infinite growth. This strikes me as not very smart since last time I checked, we were living on a planet with finite resources. A deflationary (not sure, this technically applies to Bitcoin. Bitcoin does have inflation, but it's small, controlled, predictable and finite) currency might act as a catalyst for change in the way we think about the economy and lead us from a growth oriented to a sustainability oriented model. I don't see it as a threat to general prosperity if people stop spending currency like it's hot potatoes and going into debt in order to fuel consumption - on the contrary. A currency increasing in value over time encourages saving - delayed consumption, as in "lets' not strip the planet bare to the bones right now to have 5 ipads and 4 cars each but let's leave something for later generations". Just my two Satoshis.

Exactly! In an expanding world (resources and people) infinite value helps you exploit nature and grow population as fast as possible. But now finite is on the table, and decreasing population. Only gold and bitcoins work in that environment.