Quote from: revans on October 28, 2013, 01:10:10 AM

Quote from: notme on October 28, 2013, 01:03:50 AM

Quote from: revans on October 28, 2013, 12:54:53 AM

Quote from: notme on October 28, 2013, 12:48:04 AM

Quote from: revans on October 28, 2013, 12:15:18 AM

Quote from: spiral_mind on October 27, 2013, 08:33:27 PM

Quote from: bitwhizz on October 27, 2013, 08:18:51 PM

bubble will pop sub 150 - the bitcoin value has risen to high too fast, a crash is inevitable, i know i won't be the bag holder, i'm looking forward to cheaper coins

Don't be the "bag holder" of US dollars when inflation from the fed's endless QE finally hits us.

Ans how exactly do Bitcoins insulate you from that inevitability? Joined up thinking Sunshine, why don't you try some?

Because the fate of bitcoin is not tied to any man or nation. This is it's greatest strength.

Right, but the fate of the wider economy is very much dependant on the dollar. When it collapses, all the Bitcoins in the world won't do you any good, not least because you won't even be able to power the devices on which your coins are stored as the power grid will be screwed.

Lol. Good luck with your zombie apocalypse fantasies. The world won't stop without the US dollar. Other nations are ready and willing to take the lead on managing their own relationships with other nations.

No zombies (apart from Bitcoin cultists perhaps) this apocalypse will be entirely fiscal in nature.

Exactly, which is why a US dollar collapse wouldn't cause long term damage to the economy. The economy runs on goods and services. The supply of and demand for these goods and services would not change. However, several alternative means of value transfer would have to pick up the slack. While such a transition would be a bit rough around the edges, between gold, silver, bitcoin, livestock, and produce people will find ways to transact.

Going over a "fiscal cliff" would save us from the artificial bubbles that have distorted the pricing mechanisms, and improve the efficiency of capital usage within the economy. This return to efficient markets is the only thing that will get the US economy going. A "fiscal cliff" is far from the smoothest way of achieving it, and personally, I don't see it happening this decade. However a return to sanity is the only cure for the economy. Cheap capital makes for inefficient markets.

Unfortunately, if easing is reigned in too fast, the private sector will start defaulting because of their malinvestments, which would actually be deflationary for the dollar. However, deflation is actually what a normal economy experiences when innovation displaces workers. Labor becomes less valuable, wages stagnate, and prices normally fall. Or at least, that's how Adam Smith described it in http://en.wikipedia.org/wiki/The_Wealth_of_Nations.

By easing, the Federal reserve is keeping housing and bonds inflated, so that banks can get cheap money to keep stock prices and commodities inflated. This in turn keeps consumer prices up while wages fall. This is why consumption has fallen off. So, who benefits? The homeowners, the banks, and the CEOs. The worker, as always, is shafted. This system will change, but we have a long road left to travel.

However likely you think a fiscal crisis is to wreck the USD, even if it does, things will improve for the man who makes his living by his sweat after a brief shock. Unfortunately, some may be knocked on their asses if something like that happens, but as long as you have skills, you can find a way to store value and transact.