Post
Topic
Board Bitcoin Discussion
Re: John Nash created bitcoin
by
dinofelis
on 20/04/2017, 16:26:36 UTC
This is a naive vision of money.  The fiat system isn't as stupid and cheating as you think.  But it took me some time to understand that too.

The fiat system is indeed a CHEAT as I know (not think) it. Cheating through persistent devaluation of around 6% per year, every year, whereby it lost over 90% of its original value since almost 100 years ago. Please don't compare your understanding with mine. I am not an average joe when it comes to financial matter.

It is not a cheat to debase money.  Money is not a value holder.  It is a promise fluidifier, and the debasement serves for it to be spend.  The 6% inflation tax is nothing compared to all other taxes by the state.  The whole idea is that money is not a long-term value holder, because otherwise it would be hoarded, which is explicitly NOT the idea.  Money should go around quickly, between being earned, and being spend.  Any amount of money should lose value in the long term, and be a motivation to spend it.  Money is not a store of value.

The whole sound money doctrine doesn't take into account the fact that money then becomes an investment asset, with all the volatility that comes with it, and renders is essentially useless as a (constantly decreasing) unit of account.  If the devaluation rate (inflation rate) is known, there's nothing wrong with it, because it is taken into account when considering exchanges at different times.  It is just an exponential correction factor.  But at least, devaluating money cannot be used as a long term store of value, and will not be hoarded, because that's not the function of money.

It is true that the resulting seigniorage is lucrative for the privileged in the money business, but it is less so, than states taxing people around 50%, and it serves a purpose, namely getting money go around, and not being hoarded.

Quote
If you see the rothschilds' wealth is tied to the fiat currency, that shows how ignorant you are about money matters. I sincerely don't think you understand finance.

Because the Rothschilds are not in (fiat) banking and are not on the receiving end of the seigniorage flux ?