Topic: Peter Schiff exposes himself as a fraud ? (Read 4671 times)

He is just a fraud, scammer, idiot whateva its not that complicated.

Bitcoin has provided an exciting challenge to those who think intently about economics and money, so I've had to wrestle with every pro and con argument that's out there relating to cryptocurrency.

Will BitCoin last forever (as in a thousand years)?  Read your history.  The answer is No.

The Austrian school holds that all economic value is subjective. Since economic value is subjective, i.e., in the mind of the subject, all we need to know to do objective economic analysis is that someone values something. The way human beings express that they value something is that they seek to acquire it, either through some type of original appropriation or through exchange. So properly observing human action is what gives us an objective view of what people subjectively value.  That's all we need.

Note that this approach to economic value is merely methodologically subjective. It is not an attempt to philosophically deny objective value, rather it is simply seeking to explain human action as it pertains to the field of economics.

Economics is a narrow discipline while exploring the notion of value in general is a wider philosophical endeavor. Not understanding this is what leads people into endlessly arguing the semantics of every conceivable notion of value. We do not need to go there. The use of the term "intrinsic value" leads us away from the narrow field of economics because it strongly implies a philosophical worldview where objects are constitutionally endowed with value in themselves apart from the human subject who values them. While this may be appropriate in another context, it doesn't help us within the discipline of economics.

That many people, including Peter Schiff, will use this term at times to refer to market or exchange value should be viewed merely as the use of a colloquialism. It simply fails as a technical term to describe economic value because people routinely misunderstand and misapply it when it's taken that way, and so go far afield of the narrow purpose of economic inquiry. You only need to search this forum for "intrinsic value" to see how useless and distracting the term can be. Language is supposed to help us clarify thought. So if a term produces more heat than light in a given context, then it's not working for us and we should abandon it.

I don't want to go into the question of what intrinsic value is. Read up on it, if you want to continue this discussion.

That's not really correct. Austrians hold that economic value is subjective. The regression theorem is simply an inference about the emergence of money from barter. It's saying that a medium of exchange must have been valued for itself by the market prior to being adopted for use as a money. From the point of view of monetary theorists, it was necessary to break the perceived infinite regression of saying that something always had value as a medium of exchange. Obviously you have to close the loop somewhere, so this is just a logical inference which keeps you out of the circular logic of saying that something always had medium-of-exchange value when discussing the emergence of money.

Peter unfortunately does use the term "intrinsic value," but he's not an academic. What he means is market value apart from its use as a medium of exchange. What people in the hard money crowd find it hard to grasp is that human beings can quite easily ascribe value to something that was initially valueless (no market price) like the tokens produced by the Bitcoin software on Day 1 of its launch. No bickering about monetary theory can contradict what we actually observe in the marketplace. We see clearly that people started valuing Bitcoin for itself due to its perceived utility or novelty or whatever. It's irrelevant what the reason to value it was in the minds of the participants. The relevant point is that they then form the market for Bitcoin, and it's off to the races. Bitcoin is being used as a medium of exchange now, and so it obviously had to have had a value to people (if not a price) before it started being traded for pizzas and such. That's the point of the theorem. It's expressing the idea that this is a logical necessity. But the regression theorem should not be used as a predictor. It just says that if something becomes a medium of exchange then it was valued for itself immediately prior to that. People tried to use it as a predictor when it came to Bitcoin and got confused.

So one persistent error is in thinking that if something did not always have a market price (like the original BTC tokens), then it was never really valued for itself in the marketplace, and therefore can't become a money (due to the regression theorem). This is obviously a misunderstanding of the theorem, but it's hard to catch when you've focused on the virtues of hard money for so long. We never think of gold and silver as being valueless at one time because most pat explanations of the emergence of money start with precious metals being valued commodities already. But originally they did not have prices at all - just like Bitcoin. They were newly discovered curiosities at one point too. So this failure to go back to the beginning of the story of precious metals led to confusion when people analyzed Bitcoin as being merely valueless tokens with "no intrinsic value." Add to that the fact that Bitcoin was engineered on a computer and you get an understandable resistance in people who have been immersed in classical monetary theory.

He is just a fraud, scammer, idiot whateva its not that complicated.

He does not understand bitcoin completely yet. Like many libertarians, he is locked up in the intrinsic value controversy. Austrian economics requires the money stuff to have intrinsic value. It was Mises who expressed it with his regression theorem. Bitcoin has no intrinsic value. Gold glitters.

We think either it doesn't matter, or that there is a miniscule intrinsic value, enough to satisfy the requirement.