Bitcoins and gold standard dollars -- was Re: Anyone want to make a housecall?

Daniel Fussell dfussell at byu.edu
Tue Jun 4 18:19:28 MDT 2013


On 05/31/2013 10:54 AM, Levi Pearson wrote:
> On Fri, May 31, 2013 at 9:43 AM, Michael Torrie <torriem at gmail.com> wrote:
>
>> I guess time will tell.  I don't believe having a prime rate of zero is
>> sustainable.  Though it's doing a great job of enriching people at the
>> expense of those who are frugal savers.
> If by "frugal savers" you mean people who essentially stuff their
> money in a mattress, I've already explained why that's not *really*
> helping anyone, even in the absence of inflation.  Money was invented
> to be a liquid asset to facilitate trade, not to "store value".
> That's what goods/commodities with real value are for.
Except goods and commodities are harder to secure and keep from spoiling 
than currency.

In a way, the depression-era mattress hoarders (and other forms of 
lost/non-circulating currency) act as a form of anti-Fed regulation.  
While the Fed is basing it's decisions on "reliable" statistics and 
market signals, printing cash to cover the treasury which is covering 
government budget deficits, the mattress hoarders are decreasing the 
supply based on emotion and lack of trust in the banks (and, by 
extension, the Fed).

Granted, this is a hair brained idea, and I don't have time to flesh it 
out more than that.  I'm losing purchasing power as I write this as it is.

To make a long thread short (too late), people scurried to buy bigger 
homes as values went up (sometime in greed, sometimes in fear).  Banks 
lent to keep interest coming in to repay investors and interest.  Fed 
bought treasuries so government could continue covering-up the largest 
ponzi scheme ever.  It doesn't take long for Joe Schmoe to wise up to 
the fact that there's no way out of the rat race, abandoning any 
confidence in currency or investment.  Trade slows or stops.  Things 
will probably even out eventually anyway, another generation of suckers 
will be born, we'll all reminisce to our grandkids about the time when 
anyone on the street would gladly shave your back for a nickel, and how 
we never paid $200 for dinner and a movie (while secretly remembering we 
paid twice that for prom!), and the reality will be, the currency number 
representing bread price still represents the same hours of work for the 
same societal classes, and nothing has really changed; except maybe for 
the number of bits in your ciphers.  People will still work till they 
die, whether middle-aged, or not.

;-Daniel Fussell


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