Quote from: Theb on April 27, 2019, 06:08:11 PM

Quote from: Akash83 on April 25, 2019, 06:42:51 PM

Experts at Goldman Sachs Zack Pandle and Charles Himmelberg said that advanced monetary standards and, specifically, Bitcoin, can turn into a reasonable methods for installment in nations where conventional cash isn't adequately given.

If they are talking about countries who currently have hyperinflation like Venezuela then they might be wrong about it, you see in places just like this even any foreign currency is affected when use in that country, just by having a foreign currency doesn't mean it will be immune to inflation in that country. You see inflation here affects two things aside from the devaluation of money you will also encounter the increase in price for goods which is common when the supply runs out. So this means even let say the US Dollar is backed by its country it doesn't mean that it's value for that country will be the same all through out. Their statement might be partly through but it cannot be applied to all countries' respective economies.

Rising prices of imported goods in foreign currency are the result of supply and demand, not inflation. Few people import, therefore they can rise the prices given the demand is actually increasing, due to the shortage of local production. Of course all importers will tell you stories about customs, taxes, and the hyperinflation eating their profits so they need to rise prices to keep their business afloat, but in the end is lack of competition thanks to a socialist (distorted) economy.

Bitcoin is a deflationary currency, as a main currency it should only be used in countries willing to adopt Austrian economics. The USD like most fiat currencies manipulated by governments IS inflationary, because the main stream Chicago school of economy (and Keynesians) teach how fearful deflation is. So they actually try to induce a steady inflation of about 2% per year by various means, including printing more.

Truth is deflation is good, when combined with Austrian economics. Austrians do not let bubbles form in the first place, therefore there are no crashes. All these bubbles are the result of fractional reserve banking, which Austrians ditch in favor of full reserve banking. Yes Maduro kinda gave the order to do that, but without a free economy and the rest of the Austrian measures, its useless, specially within a socialist economy.

Most people don't even understand how a full reserve bank works so I'll explain it to you quickly: If you open a savings account, they have to keep 100% of your money, they cannot loan it to anyone unless you move it to a special loaning account. Unless you do that, the bank should charge you a fee for keeping all your money in their vault, instead of you getting interest rates. If you move your money to the loaning account, you understand the risk that you might lose it should the bank goes bankrupt. Also while being loaned, it won't be available to you until the loan ends or is cancelled due to other factors. Done correctly you should never lose any money but instead earn a bit of interest. In Venezuela something very similar is called "plazo fijo" (term deposit). Of course this would also need changes to bank law and their operations. I think many bankers don't even truly know how this system works, but they should take a look.

While the main stream economics want you to take debts to invest which in turn creates profit and growth and more people take more debt, etc; Austrians want you to save your money first, and then you invest from your own savings instead of getting in debt. And you will by your own motivation, knowing your money is actually increasing its purchase power everyday, so you will only spend what you must, and keep the rest.

This is very much like contrasting the Chinese and American cultures. A Chinese would rather spend 15 years living in a humble house and saving to buy a new one, while the American would take a loan get the new house now and then spend 30 years paying it back... Yes the Austrian way is "boring" and slow, but firm and solid. While the alternative is the roller-coaster that makes bubbles and crashes.

Take only Bitcoin but don't implement Austrian economics, and its not going to help much. That is not too different from adopting another country's money.