Topic: Bitcoin deflationary? If yes..Good or Bad? - page 2. (Read 4125 times)
Isn't bitcoin being deflationary one of it's highlights and selling points?
Many in the community believe bitcoin is deflationary..so
1 Is it really and to what extent if it is?
1 Is it really and to what extent if it is?
I don't understand this question. The situation is quite clear. It has been visualized in this sticky thread: https://bitcointalksearch.org/topic/chart-bitcoin-inflation-vs-time-130619
So bitcoin offers a predictable monetary inflation rate that is diminishing over time. This monetary inflation is currently lower than the rate of adoption (and far into the future may be lower than the amount of lost coins) so the effect is deflationary.
2 Is that a good thing or a bad?
It depends on the perspective. If you are a debitor deflationary effects are bad, because the value of your debts keeps growing. If you are a creditor this effect works in your favor. I think overall deflation discourages loans and consumption of unnecessary goods. It encourages saving and preserves resources. Given the devastating effects of debt-bubbles that we have seen in recent years I think this is positive.
ya.ya.yo!
Deflation is good, because the assets will be worth more money, but at the moment there is still a high number of new bitcoins getting in the market.
Deflation is not a bad thing in the slightest if it's based on a currency that's got a limited supply, things become much cheaper all round and people don't need to work as hard to buy things they need, that goes for everyone. The Neo-Keynesian argument of "If you inflate the currency people will spend more" is totally flawed, the reason being is that inflation is forcing people to spend because the value of their currency is being destroyed and they have no choice and for some reason they think this is a good thing and quite honestly I think their arguments border or religious zealotry rather than being about any sort of mathematics.
With deflation as long as you don't have government interfering and price fixing everything becomes cheaper, one of the reason neo-keynesians I suspect seem to think that price falls are a bad thing for farmers etc. if because the profits they make will go down because of the system that they've created and the machinery they have to purchase etc. has gone up. They're trying to fix and mess with so much stuff out there that it's no wonder they haven't gotten anything right and everything is so fucked up.
It's a question of making a deflationary economy that the state and central banks can't mess with and yes, Bitcoin or at least an alternative to it could well be the answer, but with special interests like the shitty Bitcoin Foundation moving in and trying to take over everything I have my doubts it will be Bitcoin itself.
With deflation as long as you don't have government interfering and price fixing everything becomes cheaper, one of the reason neo-keynesians I suspect seem to think that price falls are a bad thing for farmers etc. if because the profits they make will go down because of the system that they've created and the machinery they have to purchase etc. has gone up. They're trying to fix and mess with so much stuff out there that it's no wonder they haven't gotten anything right and everything is so fucked up.
It's a question of making a deflationary economy that the state and central banks can't mess with and yes, Bitcoin or at least an alternative to it could well be the answer, but with special interests like the shitty Bitcoin Foundation moving in and trying to take over everything I have my doubts it will be Bitcoin itself.
FIAT money litteraly EVAPORATE from my wallet (physical, i mean)
Inflation is and always will be VERY BAD.
But, for bankster, they can generate credit ... and insane benefice every year from nothing.
That why bitcoin will be change the world.
Inflation is and always will be VERY BAD.
But, for bankster, they can generate credit ... and insane benefice every year from nothing.
That why bitcoin will be change the world.
Deflationary is good because infationary is bad. Just printing more money into the system has disaterous consequences for those that use it but not much for the megarich and the people who control it (and they hold much wealth in other stuff such as properties and land so they'll be fine if it ever goes tits up any way).
Many in the community believe bitcoin is deflationary..so
1 Is it really and to what extent if it is?
2 Is that a good thing or a bad?
I currently lean toward it being good for the population and not so good for the rich 5 %ish.( who arguably can afford to lose some of their "ill gotten" wealth.. tax avoided/evaded)...That's ok with me
Here is the start of the debate..
deflation is BAD
http://www.investopedia.com/financial-edge/0311/the-dangers-of-deflation.aspx
Possible Effects
There are many reasons to be concerned about a prolonged deflationary period, even without an event as devastating as the Great Depression:
1. Demand for goods decreases since consumers delay purchases, expecting lower prices in the future. This compounds itself as prices drop further in response to decreasing demand.
But they will buy what they need immediately and what they desire eventually so is not net consumption of all needed goods eventually the same? The only effect I can see here is that it slows things down and restricts wasteful un-necessary spending to a degree..isnt that good?
2. Consumers expect to earn less, and will protect assets rather than spend them. Since 70% of the U.S. economy is consumer-driven, this would have a negative effect on GDP.
Its ok to earn less in nominal terms if your buying power increases accordingly ?? Negative GDP may not be so bad If basic food and utility cost inflation to the least well off is stopped and their standard of living actually rises as a result? Full employment is a more important issue.
3. Bank lending drops since borrowing money makes less sense in regards to the real cost. This is because the loan would be paid back with money that is worth more than it is now.
Time for the Banks, who due to their Govt license and central bank favoritism have the monopolistic opportunity to create money and profit from "thin air" for the wealthy few at the expense of everyone else..to be reigned in ?
4. Deflation ensures that borrowers which loot to purchase assets lose since an asset becomes worth less in the future than when it was bought.
Loot to purchase? Is looting good LOL?
5. The more indebted you are, the worse your condition since your salary will likely decline while your loan payments remain the same.
True..so lower interest rates for borrowing to even that out ?
6. During inflation, there is no upper limit on interest rates to control the inflation. During deflation, the lower limit is zero. Lenders won't lend for zero percent interest. At rates above zero, lenders make money but borrowers lose and won't borrow as much.
we are already at a point of zero or almost zero interest rate..it doesn't seem to bother the Fed /Japan and Eurozone when it suits them Borrowing should be sensible and limited..borrowing less is better for the public and worse for the banks..is that bad?
7. Corporate profits usually drop during a deflationary period, which could cause a corresponding decrease in stock prices. This has a ripple effect to consumers who rely on stock appreciation and dividends to supplement their incomes.
hahaha it effects the few at the expense of the many this is obviously an argument put forward to protect the wealthiest. There would be an issue on 401's /pension plans which now depend on the stock market...ask a final salary based pensioned person if he thinks that was a good idea to remove that long standing practice LOL
http://wallstcheatsheet.com/stocks/how-many-americans-even-own-stocks.html/?a=viewall
8. Unemployment rises and wages decline as demand drops and companies struggle to make a profit. This has a compounding effect throughout the entire economy.
Unemployment rises IF the Govt and private enterprise do not fill the gap with other products and services...are they really that dumb or lazy.... but its more work and less profit ( which = working hard for what you gain..end of EASY money)? Again a decline in nominal wages can be offset by higher purchasing power due to the lack of inflation..currently running at 20% + in 2014 for food and utilities which disproportionately affect the least well off majority
Deflation is not bad
http://www.zerohedge.com/news/2014-06-20/inflation-only-if-you-look-food-water-gas-electricity-and-everything-else
https://www.google.com.ph/search?q=inflation+in+2014&ie=utf-8&oe=utf-8&aq=t&rls=org.mozilla:en-US:official&client=firefox-a&channel=sb&gfe_rd=cr&ei=FwHnU87JL4ig8wfg9IGgDA#channel=sb&q=inflation+usa+in+2014+22%25&rls=org.mozilla:en-US:official
On the other side of the coin..which says there is little danger from deflation
http://www.zerohedge.com/news/2014-03-07/no-deflation-not-danger
http://www.zerohedge.com/news/2014-04-04/deflating-deflation-myth
http://www.zerohedge.com/news/2014-06-21/blaming-deflation
However, while swallowing Keynes' and Fisher's arguments central bankers are ignoring the law of the markets, commonly referred to as Say's Law. It states that we make things to buy things so you cannot divorce consumption from production, and money is just the temporary lubricant for the process.
so on balance I am currently pro deflation as a better option for PEOPLE than inflation but would wish to know others opinions.
Bitcoin being deflationary would be the start of this process and has been met with a lot of opposition .. Big Business,Banks and Governments will not want a deflationary environment..bonuses and pay for those in charge are directly impacted fr a start..
1 Is it really and to what extent if it is?
2 Is that a good thing or a bad?
I currently lean toward it being good for the population and not so good for the rich 5 %ish.( who arguably can afford to lose some of their "ill gotten" wealth.. tax avoided/evaded)...That's ok with me
Here is the start of the debate..
deflation is BAD
http://www.investopedia.com/financial-edge/0311/the-dangers-of-deflation.aspx
Possible Effects
There are many reasons to be concerned about a prolonged deflationary period, even without an event as devastating as the Great Depression:
1. Demand for goods decreases since consumers delay purchases, expecting lower prices in the future. This compounds itself as prices drop further in response to decreasing demand.
But they will buy what they need immediately and what they desire eventually so is not net consumption of all needed goods eventually the same? The only effect I can see here is that it slows things down and restricts wasteful un-necessary spending to a degree..isnt that good?
2. Consumers expect to earn less, and will protect assets rather than spend them. Since 70% of the U.S. economy is consumer-driven, this would have a negative effect on GDP.
Its ok to earn less in nominal terms if your buying power increases accordingly ?? Negative GDP may not be so bad If basic food and utility cost inflation to the least well off is stopped and their standard of living actually rises as a result? Full employment is a more important issue.
3. Bank lending drops since borrowing money makes less sense in regards to the real cost. This is because the loan would be paid back with money that is worth more than it is now.
Time for the Banks, who due to their Govt license and central bank favoritism have the monopolistic opportunity to create money and profit from "thin air" for the wealthy few at the expense of everyone else..to be reigned in ?
4. Deflation ensures that borrowers which loot to purchase assets lose since an asset becomes worth less in the future than when it was bought.
Loot to purchase? Is looting good LOL?
5. The more indebted you are, the worse your condition since your salary will likely decline while your loan payments remain the same.
True..so lower interest rates for borrowing to even that out ?
6. During inflation, there is no upper limit on interest rates to control the inflation. During deflation, the lower limit is zero. Lenders won't lend for zero percent interest. At rates above zero, lenders make money but borrowers lose and won't borrow as much.
we are already at a point of zero or almost zero interest rate..it doesn't seem to bother the Fed /Japan and Eurozone when it suits them Borrowing should be sensible and limited..borrowing less is better for the public and worse for the banks..is that bad?
7. Corporate profits usually drop during a deflationary period, which could cause a corresponding decrease in stock prices. This has a ripple effect to consumers who rely on stock appreciation and dividends to supplement their incomes.
hahaha it effects the few at the expense of the many this is obviously an argument put forward to protect the wealthiest. There would be an issue on 401's /pension plans which now depend on the stock market...ask a final salary based pensioned person if he thinks that was a good idea to remove that long standing practice LOL
http://wallstcheatsheet.com/stocks/how-many-americans-even-own-stocks.html/?a=viewall
8. Unemployment rises and wages decline as demand drops and companies struggle to make a profit. This has a compounding effect throughout the entire economy.
Unemployment rises IF the Govt and private enterprise do not fill the gap with other products and services...are they really that dumb or lazy.... but its more work and less profit ( which = working hard for what you gain..end of EASY money)? Again a decline in nominal wages can be offset by higher purchasing power due to the lack of inflation..currently running at 20% + in 2014 for food and utilities which disproportionately affect the least well off majority
Deflation is not bad
http://www.zerohedge.com/news/2014-06-20/inflation-only-if-you-look-food-water-gas-electricity-and-everything-else
https://www.google.com.ph/search?q=inflation+in+2014&ie=utf-8&oe=utf-8&aq=t&rls=org.mozilla:en-US:official&client=firefox-a&channel=sb&gfe_rd=cr&ei=FwHnU87JL4ig8wfg9IGgDA#channel=sb&q=inflation+usa+in+2014+22%25&rls=org.mozilla:en-US:official
On the other side of the coin..which says there is little danger from deflation
http://www.zerohedge.com/news/2014-03-07/no-deflation-not-danger
http://www.zerohedge.com/news/2014-04-04/deflating-deflation-myth
http://www.zerohedge.com/news/2014-06-21/blaming-deflation
However, while swallowing Keynes' and Fisher's arguments central bankers are ignoring the law of the markets, commonly referred to as Say's Law. It states that we make things to buy things so you cannot divorce consumption from production, and money is just the temporary lubricant for the process.
so on balance I am currently pro deflation as a better option for PEOPLE than inflation but would wish to know others opinions.
Bitcoin being deflationary would be the start of this process and has been met with a lot of opposition .. Big Business,Banks and Governments will not want a deflationary environment..bonuses and pay for those in charge are directly impacted fr a start..
Jump to: