Topic: Can bitcoins break $5,000 in 20 years? (Read 11907 times)

Quote from: dree12 on August 31, 2012, 08:51:46 PM

Only in flawed economic thinking is it a burden. The Triffin dilemma is based on one of the greatest misconceptions in modern-day economics: "a trade deficit is bad".

The USA has been a hungry importer, receiving a huge influx of useful goods, lasting commodities, and safe securities in exchange for its depreciating, produced-on-demand USD, all because it owns the world's reserve currency.

There is no such thing as a trade deficit, not really. In the long run, there is always balance. As the dollars flowed out, our capital, our saved production, our means of future production, flowed out with them. We didn't rebuild Europe and Asia after the war with tricky accounting, we poured out our sweat and blood, because no one else would.

In a hundred years, or two hundred, future historians will note the last several decades as the era when the United States impoverished itself to catapult the rest of the world into the modern age.

This is a very American-centric view, and does little to quash the stereotypes surrounding American self-centric thinking.

The hilarious part is that you'll find that what I'm saying is very unpopular in the US. But I guess, haters gotta hate... I'm pretty sure I know how history will understand this era when personal jealousy is no longer an issue.

As USD became the reserve currency, other countries scrambled to provide non-depreciating assets. As USD depreciated and countries acquired more USD to compensate, more commodities and sound securities were provided. The USA has been feeding off this, and "exploitation of the globe" is without a doubt a crucial reason the USA remains the world's largest economy amidst development of harder-working, stronger-producing, and less-consuming markets in Asia and Latin America, and eventually Africa.

You are going to have to explain this part to me, I can make no sense of it. In particular:

What non-depreciating assets?
Who are they being provided to?
If dollars are so bad, why exactly are they gathering more of them instead of getting rid of them?
Again, what was being provided? By who? And to whom?
How has the US been feeding off of whatever you are talking about?
Do you mean exploit in the good sense, or the bad sense?

dree12

legendary

Activity: 1246

Merit: 1077

Quote from: kjj on August 31, 2012, 06:28:13 PM

Quote from: DeathAndTaxes on August 31, 2012, 07:30:20 PM

Only in flawed economic thinking is it a burden. The Triffin dilemma is based on one of the greatest misconceptions in modern-day economics: "a trade deficit is bad".

The USA has been a hungry importer, receiving a huge influx of useful goods, lasting commodities, and safe securities in exchange for its depreciating, produced-on-demand USD, all because it owns the world's reserve currency.

There is no such thing as a trade deficit, not really. In the long run, there is always balance. As the dollars flowed out, our capital, our saved production, our means of future production, flowed out with them. We didn't rebuild Europe and Asia after the war with tricky accounting, we poured out our sweat and blood, because no one else would.

In a hundred years, or two hundred, future historians will note the last several decades as the era when the United States impoverished itself to catapult the rest of the world into the modern age.

This is a very American-centric view, and does little to quash the stereotypes surrounding American self-centric thinking.

As USD became the reserve currency, other countries scrambled to provide non-depreciating assets. As USD depreciated and countries acquired more USD to compensate, more commodities and sound securities were provided. The USA has been feeding off this, and "exploitation of the globe" is without a doubt a crucial reason the USA remains the world's largest economy amidst development of harder-working, stronger-producing, and less-consuming markets in Asia and Latin America, and eventually Africa.

DeathAndTaxes

donator

Activity: 1218

Merit: 1079

Gerald Davis

Why would the next 80 years be any different? I mean it isn't like this has snuck up on anyone. The purchasing power of one $1 USD has slowly been eroded for decade after decade after decade. It isn't like the US is throwing a curve ball at the last minute. Do you honestly think there is any central bank that doesn't know that $1 USD will buy ~30% to 40% less in a decade? Do you think any central banker didn't know that a decade ago, two decades ago, eight decades ago? I mean you don't need to be an economist to figure that out you just need to be able to read a graph.

30 year bond rates tend to be above the rate of inflation so bondholders don't really lose (the naive ones just make less than they think). They get more dollars but the dollars are worth less (but not worthless). Net-net they break even. It is a store of value in a weird kinda way.

The debt is less important than the deficit. Our current year deficits are simply unsustainable but that is a lot easier to solve. Paying down the debt is tough but we never will. At one time a billion was a lot of money. Did we pay down our billion dollar debt (circa 1918). No we just let inflation solve it over the next century.

jojo69

legendary

Activity: 3318

Merit: 4606

diamond-handed zealot

Quote from: jojo69 on August 31, 2012, 03:35:37 PM

Aha, very well, your SAE is actually a bit more than a dollar, and I will admit to being pedantic.

I am interested to know how you think the current debt load is going to be repaid?

Simple. Inflation.

The dollar has lost 99% of it's value over the last 80 years. It will lose that much over the next 80. $15T is only $150M in real terms if the dollar devalues 99% over the next 80 years.

That was my point, and kjj agrees. He just somehow sees the USD surviving it.

DeathAndTaxes

donator

Activity: 1218

Merit: 1079

Gerald Davis

Quote from: jojo69 on August 31, 2012, 03:35:37 PM

Aha, very well, your SAE is actually a bit more than a dollar, and I will admit to being pedantic.

I am interested to know how you think the current debt load is going to be repaid?

Simple. Inflation.

The dollar has lost 99% of it's value over the last 80 years. It will lose that much over the next 80. $15T is only $150M in real terms if the dollar devalues 99% over the next 80 years.

lebing

legendary

Activity: 1288

Merit: 1000

Enabling the maximal migration

Quote from: jojo69 on August 31, 2012, 06:01:59 PM

Quote from: kjj on August 31, 2012, 05:20:55 PM

Quote from: labestiol on August 31, 2012, 06:27:18 PM

Painfully obvious inflation mostly, obscured slightly by bogus statistics. The usual. Remember that the debt in question is denominated in a currency that we can print at will (and have!). The repayment amount isn't a fixed value, but a fixed quantity.

Who would buy or hold a debt like that? Turns out that everyone does, because the alternatives are mostly worse. That may change in the next 20 years, maybe it will even be Bitcoin that brings the system down. But those are both long shots.

The alternatives are mostly worse...for now.

I see other world powers losing patience with the fed's monopoly on, and inevitable devaluation of their holdings. Being "the best looking horse at the glue factory" is no way to run a world reserve currency. Already China, India, Russia and others are making noises about some "basket of commodities" system. Once the rush to get out begins I just don't see how the dollar survives.

This is curious; we seem to largely agree on the facts of the matter but have come to diametrically opposed conclusions.

Except that being the world's reserve currency isn't a gift, it is a burden. A huge fucking burden. The price that the USA has paid over the last 40 or 50 years to support, build and rebuild the world is mind boggling.

Only in flawed economic thinking is it a burden. The Triffin dilemma is based on one of the greatest misconceptions in modern-day economics: "a trade deficit is bad".

The USA has been a hungry importer, receiving a huge influx of useful goods, lasting commodities, and safe securities in exchange for its depreciating, produced-on-demand USD, all because it owns the world's reserve currency.

further, all oil transactions occurring in USD is a HUGE boon to the US banking industry

Yep, worth going to war (iraq) over keeping it that way as well.

kjj

legendary

Activity: 1302

Merit: 1026

Agree. De Gaulle was expressing it in 1965, at the time France was exchanging most of his dollars for gold

http://www.youtube.com/watch?v=j58gikUjyIo

Ha! I love hearing his speeches. He talks so slow that I can almost keep up despite knowing virtually no french.

He was mostly right, too. There really was no way that the USA could both provide dollars in the quantity the world needed and redeem them for gold. There simply isn't enough gold to go around. That is the di part of Triffin's Dilemma. And the resolution of that problem led us directly into the bizarre situation we are in now.

When Nixon closed the gold window, that rest of the world had the chance to get off this crazy ride. For the most part, they chose to stay. And they continue to stay because staying is better than leaving. Creating a better system is a long, difficult road, paved with mistakes and uncertainty.

I think it would be absolutely awesome if bitcoin could step up as the global reserve currency. It would fit the bill perfectly, even better than gold.

kjj

legendary

Activity: 1302

Merit: 1026

Quote from: jojo69 on August 31, 2012, 06:01:59 PM

Only in flawed economic thinking is it a burden. The Triffin dilemma is based on one of the greatest misconceptions in modern-day economics: "a trade deficit is bad".

The USA has been a hungry importer, receiving a huge influx of useful goods, lasting commodities, and safe securities in exchange for its depreciating, produced-on-demand USD, all because it owns the world's reserve currency.

There is no such thing as a trade deficit, not really. In the long run, there is always balance. As the dollars flowed out, our capital, our saved production, our means of future production, flowed out with them. We didn't rebuild Europe and Asia after the war with tricky accounting, we poured out our sweat and blood, because no one else would.

In a hundred years, or two hundred, future historians will note the last several decades as the era when the United States impoverished itself to catapult the rest of the world into the modern age.

further, all oil transactions occurring in USD is a HUGE boon to the US banking industry

I see this one a lot. Sadly, it is really silly. The unit of account for oil sales is meaningless. In what way do you imagine that it helps the banks? Do you think that oil purchasers are able to buy dollars through FOREX when they want to buy oil, but oil producers are unable to sell them when they want to buy something else?

labestiol

sr. member

Activity: 434

Merit: 251

Agree. De Gaulle was expressing it in 1965, at the time France was exchanging most of his dollars for gold

http://www.youtube.com/watch?v=j58gikUjyIo

jojo69

legendary

Activity: 3318

Merit: 4606

diamond-handed zealot

Quote from: kjj on August 31, 2012, 05:20:55 PM

Quote from: btcnode on August 13, 2012, 01:13:51 PM

Painfully obvious inflation mostly, obscured slightly by bogus statistics. The usual. Remember that the debt in question is denominated in a currency that we can print at will (and have!). The repayment amount isn't a fixed value, but a fixed quantity.

Who would buy or hold a debt like that? Turns out that everyone does, because the alternatives are mostly worse. That may change in the next 20 years, maybe it will even be Bitcoin that brings the system down. But those are both long shots.

The alternatives are mostly worse...for now.

I see other world powers losing patience with the fed's monopoly on, and inevitable devaluation of their holdings. Being "the best looking horse at the glue factory" is no way to run a world reserve currency. Already China, India, Russia and others are making noises about some "basket of commodities" system. Once the rush to get out begins I just don't see how the dollar survives.

This is curious; we seem to largely agree on the facts of the matter but have come to diametrically opposed conclusions.

Except that being the world's reserve currency isn't a gift, it is a burden. A huge fucking burden. The price that the USA has paid over the last 40 or 50 years to support, build and rebuild the world is mind boggling.

Only in flawed economic thinking is it a burden. The Triffin dilemma is based on one of the greatest misconceptions in modern-day economics: "a trade deficit is bad".

The USA has been a hungry importer, receiving a huge influx of useful goods, lasting commodities, and safe securities in exchange for its depreciating, produced-on-demand USD, all because it owns the world's reserve currency.

further, all oil transactions occurring in USD is a HUGE boon to the US banking industry

Aggro

donator

Activity: 296

Merit: 250

http://www.shamoon.me/post/29347988378/bitcoins-to-break-5-000-btc-in-20-years - based on this post, it seems economically sound to predict that the price will break $5,000 in 20 years. What do you think?

The real question is: Would there be $ in 20 years?

dree12

legendary

Activity: 1246

Merit: 1077

Quote from: kjj on August 31, 2012, 05:20:55 PM

Painfully obvious inflation mostly, obscured slightly by bogus statistics. The usual. Remember that the debt in question is denominated in a currency that we can print at will (and have!). The repayment amount isn't a fixed value, but a fixed quantity.

Who would buy or hold a debt like that? Turns out that everyone does, because the alternatives are mostly worse. That may change in the next 20 years, maybe it will even be Bitcoin that brings the system down. But those are both long shots.

The alternatives are mostly worse...for now.

I see other world powers losing patience with the fed's monopoly on, and inevitable devaluation of their holdings. Being "the best looking horse at the glue factory" is no way to run a world reserve currency. Already China, India, Russia and others are making noises about some "basket of commodities" system. Once the rush to get out begins I just don't see how the dollar survives.

This is curious; we seem to largely agree on the facts of the matter but have come to diametrically opposed conclusions.

Except that being the world's reserve currency isn't a gift, it is a burden. A huge fucking burden. The price that the USA has paid over the last 40 or 50 years to support, build and rebuild the world is mind boggling.

Only in flawed economic thinking is it a burden. The Triffin dilemma is based on one of the greatest misconceptions in modern-day economics: "a trade deficit is bad".

The USA has been a hungry importer, receiving a huge influx of useful goods, lasting commodities, and safe securities in exchange for its depreciating, produced-on-demand USD, all because it owns the world's reserve currency.

alexanderanon

full member

Activity: 210

Merit: 100

Look guys, the only way bitcoin won't one day (soon) hit a market cap of $100 billion ($5000/ea), is if it completely fails. I can't see a middle of the road option here. But then, if it does fail, would that be so bad? I am fairly confident bitcoin will succeed --- I am unquestionably confident that digital, peer-to-peer currency will succeed. And who better to find the one, true "bitcoin perfected" if satoshi's bitcoin fails than the original bitcoin community? What community on earth knows more about peer to peer technology applied to currency than we do? If we must jump ship on bitcoin because of something catastrophic, who could better locate a superior vessel than we, the originals?

kjj

legendary

Activity: 1302

Merit: 1026

Painfully obvious inflation mostly, obscured slightly by bogus statistics. The usual. Remember that the debt in question is denominated in a currency that we can print at will (and have!). The repayment amount isn't a fixed value, but a fixed quantity.

Who would buy or hold a debt like that? Turns out that everyone does, because the alternatives are mostly worse. That may change in the next 20 years, maybe it will even be Bitcoin that brings the system down. But those are both long shots.

The alternatives are mostly worse...for now.

I see other world powers losing patience with the fed's monopoly on, and inevitable devaluation of their holdings. Being "the best looking horse at the glue factory" is no way to run a world reserve currency. Already China, India, Russia and others are making noises about some "basket of commodities" system. Once the rush to get out begins I just don't see how the dollar survives.

This is curious; we seem to largely agree on the facts of the matter but have come to diametrically opposed conclusions.

Except that being the world's reserve currency isn't a gift, it is a burden. A huge fucking burden. The price that the USA has paid over the last 40 or 50 years to support, build and rebuild the world is mind boggling.

jojo69

legendary

Activity: 3318

Merit: 4606

diamond-handed zealot