I think he is saying that if you can buy 1 btc for $0.25 from A and sell 1 btc for $9 to B, people will buy like crazy from A until A has raised the price to $9.
No, he said that more miners = lower bitcoin exchange rate.
Unless he was saying that more miners = higher difficulty = higher costs, in a very difficult to understand way?
The two are more or less equivalent. It doesn't matter much if the cost of production rises or the value of exchange falls. Over time, the spreads will tend to fall. The only time spreads don't fall is when production is limited in some way. Dollars are limited, in a way, so they maintain value above the cost of production. What picollo7 refuses to acknowledge is that BTC production is also limited, and so they can maintain a value above their cost of production.
I've been trying to lead him by the nose to this understanding, but he's refused my efforts.