Post
Topic
Board Economics
Re: The Future of Money?
by
BobK71
on 15/11/2016, 13:33:48 UTC
I think it is very unlikely that we will see a worldwide crypto currency issued by a central bank since that will require a government so powerful that it can impose his will above the will of the other countries and while the U.S is very powerful is not that powerful.


It is possible if the central bank finds a way they can still control the crypto currency.

Central banks only care about if they can control the currency they issue, they don't care too much whether it is crypto or not.

The last 400 years of modern money and finance shows that central banks can use a small amount of hard money (gold, silver, and maybe Bitcoin in future) to enable themselves to issue a large amount of currency (by 'backing' the currency.) 

The whole idea of the gold and silver standards (up until 1971) was to suppress the value of the hard money by selling the amount they held at a fixed price.  The goal of this suppression was to enable the elites to benefit from issuing currency and debt out of thin air.

The softer gold standards since 1914 and the fiat system since 1971 turned out to be more difficult to hold together, and so this argues for going back to a hard peg against a hard money.

If they do that, the price of the hard money will have to be much higher to keep the peg stable.