Post
Topic
Board Economics
Re: Global Financial Crisis scenarios
by
ShakyhandsBTCer
on 06/07/2014, 01:50:48 UTC
In order to see the price of bitcoin, gold and all commodities goes up, we need the dollar's price (or value) to go down. In other words : inflation. With QE infinity, the world is heading towards inflation !. So good news for US  Cheesy

There is certainly a correlation (and sometimes a strong one) between the strength of the dollar and the price of commodities and other currencies, but it's not a perfect correlation.  If the dollar weakens, that could help the price of bitcoin rise, but not necessarily.  Ultimately, the price of bitcoin in USD is simply determined by how much USD people are willing to pay for it.  The price of bitcoin in USD will only rise as a result of USD weakness if people believe that bitcoin will hold its value better than USD.

And btw, the US is still on course to continue tapering its bond purchases, so QE infinity is (theoretically) coming to an end.  The Fed is also expected to start raising interest rates within another year or so (of course that prediction keeps getting moved back), which will remove the last of the stimulus.
This is true regarding the value of the dollar. However in times of economic (and geopolitical) crisis the dollar tends to rise as it is considered the least risky asset class.