Post
Topic
Board Economics
Re: Bitcoin could revolutionize the world's economy!
by
Hydrogen
on 24/02/2021, 16:27:00 UTC
If Bitcoin becomes the world's reserve currency, it could change the world. The daily price of goods and services is decreasing. This will lead us from an inflationary to a deflationary economy. The exact opposite of what we see today!



I'll contend there is nothing intrinsically flawed in inflationary economic models. Both deflation and inflation have roles they are uniquely suited to fill. They're different tools useful in different circumstances.

During the Great Depression investment banks gambled and lost with the money of depositors. This lack of separation between commercial banking and investment banking was blamed for the melt down. As a result certain protections were implemented to prevent investment banks from gambling with the money of depositors.

These protections rolled out in 1933 were known in the USA as glass steagall.

Quote
Glass-Steagall Act

The Glass-Steagall Act, part of the Banking Act of 1933, was landmark banking legislation that separated Wall Street from Main Street by offering protection to people who entrust their savings to commercial banks.

https://www.history.com/topics/great-depression/glass-steagall-act

Where the US inflationary economy began to go wrong is when glass steagall was repealed in 1999. Less than 10 years later a banking crisis would emerge.