Topic: Hi Excuse me Are currencies a "store of value (Read 1806 times)

right, I think every country has its own problems, so it requires different treatment, like in Japan, they don't face the problem of terrorism, so it's different from the countries that face the problem, and also in Japan there is minimal corruption, this is different from many countries corrupt

Cryptocurrencies serve to be store of value, and this is all upon the trust. It functions the way its been taken forward, all with the trust bitcoin as the base currency have survived more than ten years just with its virtual presence. One who believe in technology development and the need for the same will prioritize it as a store of value.

It seems to me, if we are talking about saving money, then I would invest my money in real estate or my own land plot. Or some useful business. Because in this case there is no difference which currencies are depreciating, because you have all your money invested in a business or a specific thing, which in any case will cost as much as it is compared to other things in the world.

There is no ideal storage for value they all have their own advantages and disadvantages, you should know what is best for you and how much risk you are able to take. I do invest in a lot of things as a means to store values and at times they do disappoint.

I do invest my money in mutual funds, and apart from mutual funds I buy stocks (gold, silver) and currencies (dollar, Euros, Yuan) and assets (mainly Bitcoin). It’s not all them that are profitable at the end, the good thing with the others is that they are less risky than Bitcoin which has a high volatile nature. And despite that, Bitcoin is still the most profitable among them, for me.

Very few people understand that

A manageable inflation (in single digits annually) is not really hurting the economy as long as it remains constant and predictable so businesses as well as households can reliably count it in. On the other hand, deflation, however small it might be, is very destructive on its own since businesses are straightaway discouraged from producing goods and providing services (as their profits depend on inflation/deflation rates non-linearly), while common people are in fact encouraged to postpone spending (hence the infamous deflationary spiral)

Not all countries are alike, not all needed inflation to develop, every country have their own uniqueness that makes them different from other. All countries have their different view on development, others focus on building and others on their crops. Inflation should not be treated as a good thing.

Currency and their values changes overtime based on the status of their economy. Physical money or fiats are just a representation of a true value of money.

Yes i understand that. But that's the rule for an economy to grow. A common currency needs to have a plentiful, stable supply and not fluctuate excessively to affect people's lives. But besides fiat money, we have assets that increase in value over time, such as real estate, gold and Bitcoin. We can use fiat money to buy these assets and hold on to inflation. As for inflation, it should still be, because without inflation, people will become lazy and do not want to grow anymore. Japan has suffered from deflation for many years and has made the country unable to develop as well.

true money is a precious metal (gold) for example is a dinar currency that has no impairment. I think, if the application of currency in the world uses gold, it is not impossible that the distribution of prosperity throughout the world is affordable. the scenario of paper money is to control a weak country against the economy. so that they are able to control and control the countries underneath. Today Bitcoin is struggling as a digital gold based. but again, the ruling state does not want to lose their power. thus rejecting the presence of bitcoin.

Everyone tries to measure when a dollar's value goes down to determine its value It is good for trading silver and gold but it has been used by people for many years. As the price of Bitcoin goes down again the same goes for gold If fixed by the government as a fiat currency it would be better to save the cost and reduce inflation in the country BTC has lost a lot over the years of existence but will help to increase prices later.

No one prints banknotes these days

Well, actually central banks still do, but the amount of paper money is tiny compared to all the money in the economy today. So it is not a revolutionary strategy in the least as this is exactly how money is created in the modern economy (via credit). What goes for money these days wouldn't even count as money 100 years ago (read, it has nothing to do with the Keynesian economic theory)

Regardless, money is what money does, and it doesn't really matter what form it currently exists in as long as it performs its major functions like being a means of exchange and payment. To be clear, money necessarily has to be a store of value if it is to serve as a medium of exchange

Sounds reasonable, but it's not peculiar to bitcoin. Any globally recognized asset can become a hedge to failing currencies but doesn't necessarily mean that such hedges can hold value for long.

You need to hedge to assets that have proven their stability over extended periods of time. Gold and a host of other precious metals have done so. But can bitcoin do same, it's still too early to tell.

Bitcoin is the leading currency of time and it is better than all assets. If you want to exchange your currency because it does not have a good value or for a difficult time, you can change it in digital currency. Bitcoin can easily be converted into all other currencies and can be used in this form so in the time of need you can either change it into your fiat or can use it the same way.

In the case of an economic crisis in which the value of your fiat is going down dramatically the ideal solution is to find an asset class that goes up faster than inflation and gold is perfect for this, but in those desperate circumstances even if the asset you are holding is not growing as fast but it is losing value at a lesser speed than fiat that could be good enough as a store of value in those difficult circumstances since it will allow you to exchange it for something useful and it will never lose all its value.

Fiat money's price is being declared by the government and the price of it will gonna go up or down to their country since it has been dictated by the government. Unlike bitcoin or cryptocurrency that the dictator of the price of it is the consumer itself that is why it has been called volatile meaning continuously changing.

First of all, how the value is measured.? The value itself is measured in terms of Fiat then how would you store your value with such currencies. The fiat is always depreciating because of the inflation so to hedge our value against the inflation and store it, we need a better asset class which beats the inflation thereby creating value. Whichever asset that beats the inflation is a store of value asset

Fiat is no value store at all, but gold is the world's best value store event, when compared to bitcoin. Gold loses its value from time to time but that's very rare and manipulative, normally gold is scarce and there's not enough gold in the world to spend at the rate that we keep spending, people think gold is only used to store wealth and sometimes accessories, but there's stuff in technology that uses gold as well, hell there's gold in every computer even if it's super tiny.

It is true that Bitcoin has a negative impact on Dollar's value or FIAT in general I would guess. Plus, I literally predict that the era of FIAT will disappear in the near future ( maybe after few years ) especially when some strong governments recognize Bitcoin as a legal currency like, China, We  can't expect happening that at this time to be honest due to there are many obstacles that negatively affected on Bitcoin's value.

If what you mean is to print banknotes not by underlying gold or USD but by guaranteeing productive projects, then I hope that there is a government that dares to carry out this revolutionary strategy. Now there is the emergence of anti-mainstream economic theory that is counter to Keynesian economic theory because it is considered ancient and not applicable.

Since 1971, the United States has not printed dollars with an underlying gold. China has two currencies namely Renmimbi and Yuan. One of the two currencies is the official currency of the Chinese trade, while the other is part of the main currency, so both are the same and only have different mentions. That's according to general knowledge, but in truth the two are different from their own currency while the yuan itself.

Renminbi in the country, and Yuan abroad. In its application Yuan is printed based on IMF regulations with underlying debt, USD, gold, etc. while Renmimbi is printed based on the project. The simulation is like this. The Chinese government is targeting Vietnam to be included in its OBOR program. So China will lobby so that the Vietnamese government makes many infrastructure or manufacturing projects in the long run, such as toll roads, airports, power plants, or the metal processing industry. China will be happy to finance the project by starting to print Renmimbi for the amount of the project.

But China will require, the technology must be 100% from China, 100% of the raw materials must be from China, even if the workforce can be 100% from all China. Once the project is completed, China only needs to wait for Vietnam to pay China by using the dollar, every dollar that comes from the project's payment then the dollar bill will be destroyed to avoid inflation. Because the foreign exchange dollar continues to enter the Yuan value will be stronger. Therefore China is carrying out large-scale industrial development in the country to sustain its expansion to many countries. That is an explanation of what China has done for Yuanization and after almost four decades China began to adjust the renminbi to Yuan to 1:1.

What if this strategy was copied by Vietnam to solve its domestic problems without debt. The illustration is that the country of Vietnam will build 1 million livable homes for the poor. and for this project, 10 trillion is needed. then the Central Bank of Vietnam scored 10 trillion. The 10 trillion was handed over to the official in charge of building houses (the public works department) and then the money was used to build housing until completion. But all raw materials must be from local Vietnam, so that the steel industry, cement industry, industry, bricks, paint industry, and Vietnamese workers enjoy the results of printing money.

After the project is completed and the house starts to be sold, the money generated from the sale of the house must be returned to the Ministry of Finance up to 10 trillion Dong (VND), and each dong that enters from the project will be burned immediately. If it practices like this, it will not cause inflation in Vietnam.

So the printing of the underlying money is not gold or dollars but projects owned by a country. It's just that the state must make strict safeguards against the use of money so as not to be misused. China and America have carried out this practice so far.

You can only see how its value loses is if you play on currency trading. Like for instace if you are into FOREX market, USD loses its value by the slightest few percentage but doesn't affect its purchasing power locally. If you store your USD in the bank while inflation strikes this is when you mostly feel the value will terribly lose when your $1 can't buy you a burger anymore.

Bitcoin is a popular value store. But there is a better definition. Bitcoin is a store of excitement. Cryptocurrency is a very difficult investment tool. Price movements are huge. This may not be good for everyone.