well, we've seen plenty of volatility over the last 5 yrs and part of it has to do with the ongoing issuance/distribution of new coins. that will probably continue going forward but at a decreasing rate as the curve flattens out. thus, the supply is constantly changing, whereas with gold it for the most part (except for new finds) has stayed steady for hundreds of years and provided a stable supply backing for various fiat currencies.
but like i said above, perhaps if there was an official fixed exchange rate that was high enough to fill up the huge debt hole of USD that the Fed has helped build up, perhaps that would give worldwide investors confidence that the US will finally exert some discipline on what heretofore has been pretty reckless and aggressive expansion of the money supply for hegemonic purposes.
but like i said above, perhaps if there was an official fixed exchange rate that was high enough to fill up the huge debt hole of USD that the Fed has helped build up, perhaps that would give worldwide investors confidence that the US will finally exert some discipline on what heretofore has been pretty reckless and aggressive expansion of the money supply for hegemonic purposes.
cypherdoc, I think we are mostly in agreement on the big picture and agree a lot with what you've said. Regarding an official fixed exchange rate, I think that could only happen once bitcoin's value was realized and settled down. Once that happens then nations with x amount of bitcoins can fix an exchange rate to y amount of fiat, but that's largely the only way it can happen.
For example when the US fixed the gold to currency price, it also had enough stored gold to back all of the dollar claims in gold and as a result there was little reason to exchange dollars for physical gold (which you could do at any bank). However once the FED was created and they started to print more and more dollars, entities which could exchange dollars for gold did so in very significant amounts. In the 60s US citizens could not exchange dollars for gold, but foreign nations could, and they started to withdraw significant amounts of gold because it was well known that there was not enough gold to back all the new dollar at the "official" exchange rate. Nixon only closed the gold window because otherwise within less than 10 years the US would have zero gold left and would have gone bust.
That is the problem with fixed official exchange rates, they only work if the fixer sets and honest exchange rate to match the ratio of both assets. The FED could fix an exchange rate, but they then could not print new dollars because doing so would throw off the ratio and start an exit from dollars as more and more people exchange out until the FED ran out of bitcoins. This is exactly what happens every time Argentina or a similar country fixes a dollar exchange rate and then has a currency crisis.
I don't know, and I could be wrong, but I really think we are ahead of, and maybe even surfing a Tsunami.
https://goldswitzerland.com/swiss-gold-initiative-2014/
http://www.zerohedge.com/news/2014-10-28/things-make-you-go-hmmm-swiss-gold-status-quo-showdown
November 30, 2014 is the date. Check back and be prepared, because this could set it off...
But this will never happen, there are strong interest to some people to avoid bitcoin use.
