Quote from: Artemis3 on December 22, 2021, 08:33:25 PM

Quote from: teosanru on December 22, 2021, 07:47:05 PM

I think El Salvador is becoming like an example for the rest of the world that how can you manage your economy by creating crypto currency a legal tender, many people even including me had argued that it's impossible to have bitcoin as a legal tender as you will always be under a chance of loss due to fall of value, but El Salvador have handled everything very intelligently and are hedging their positions very nicely.

There is no "loss" unless you sell or buy something with it. The way you deal with money that doesn't lose value over time, is to hold your buys of unnecesary things when its "down". Simply that, save more when its down.

A few online games let you experiment this kind of economy (if the devs are not intervening like some govs do), what people do is save until they can purchase things, since there is no danger of their purchasing power plummeting overnight, which is what makes people go desperate getting loans in the first place.

So turn around your mindset, and go from the debt economy to the savings economy. Read authors from the Austrian school of economy, there lies the answer of how the world will work with this kind of money, everyone else is afraid of from their decades of dogma because they need inflation to force people get in loans, yadda yadda. Bubbles and crashes distorted markets that act on falsehoods.

Thanks to bitcoin, this current dominating trend will slowly end, and El Salvador is paving the way, so kudos to them, they deserve to reap the profits from taking this bold action others, better informed, were too afraid to do...

Well looks like you have been quite involved in studying the deflationary economy, would love to know from you that how you intend to solve the problem of the deflationary spiral in a deflation-based economy? If I know my purchasing power would improve tomorrow, wouldn't I just defer my purchase to tomorrow every time? Basically deferring the overall economic production too, moreover, people would eventually stop spending on their "wants", will only spend on their needs. So if in such an economy, where everyone is just "Saving" and not Investing, how will economic growth take place?