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Comment by jcranmer | Hacker News Reader

Fun fact: there exist currencies that have maintained stability despite the country in question lacking any kind of military.

Funner fact: there exists one fiat currency that maintained stability despite the government in question effectively ceasing to exist.

Funnest fact: the energy invested in the maintenance of appropriate armed forces appears to have no correlation with the stability or lack thereof of a currency.

I mean, there's just no evidence that stability of fiat currency is driven by military considerations as opposed to, say, fiscal and monetary policy.

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> Fun fact: there exist currencies that have maintained stability despite the country in question lacking any kind of military.

Such as?

And for a further question, would they have remained stable if other countries had not invested in their military to the point that the world in general remained peaceful?

The US gets a lot of criticism for military spending, but the fact is, the rest of the world leeched off this by enjoying the peace and prosperity that was created by having one country be such an overwhelming superpower that it discouraged wars everywhere.

Now, the US is starting to show weakness and with the Ukraine we immediately see the effects of not having a 500 pound gorilla in the room to keep everyone else in line.

> Such as?

https://en.wikipedia.org/wiki/List_of_countries_without_arme...

Mostly the European microstates and several Caribbean and Pacific islands, but if you don't count a gendarmerie as armed forces, you could include Costa Rica and Panama--two not-tiny countries--in the list. (If you do count them, the largest is the Solomon Islands).

> And for a further question, would they have remained stable if other countries had not invested in their military to the point that the world in general remained peaceful?

That this question is being asked is I think a concession of the underlying point: fiat currencies aren't maintained by military investment, not in the same way that Bitcon is maintained by hashing power.

Furthermore, it's not at all clear that the decrease in active conflicts over the past century or so is really due to military investment. One can argue that the establishment of international communities such as the EU, or the UN charter forswearing territorial changes via war has had as much, or more, of an impact on reducing the outbreak of wars such as the War of the Pacific as American military might did.

> Mostly the European microstates and several Caribbean and Pacific islands, but if you don't count a gendarmerie as armed forces, you could include Costa Rica and Panama--two not-tiny countries--in the list. (If you do count them, the largest is the Solomon Islands).

None of these places have a currency that is widely used. They may be offshore banking havens, but people keep their money there in US dollars.

The only possible exception might be the Swiss Franc and they do have a military as well as the leverage of holding everyone's money.

Many of those small countries don't even have their own currencies. Andorra uses the Euro, Kiribati uses the Australian dollar, Panama uses the US dollar in addition to its own currency and so on. The countries are able to exist without a military because they're under the protection of a country like the US with one.

>And for a further question, would they have remained stable if other countries had not invested in their military to the point that the world in general remained peaceful?

You can leverage that criticism against Bitcoin because that is exactly what it depends on.

You're creating a really difficult causal link. Does the US' military create peace and prosperity?

I would disagree with your assessment of that for Ukraine.

Actually, look at the deal Kissinger cut with the Saudis in the early 1970s, creating the petrodollar system: the US dollar became the world's reserve currency because the Saudis agreed to only accept dollars in exchange for oil.

The costs of the US 7th fleet in the Gulf and the entire military industrial complex behind it are what backs the global strength of the US dollar.

https://bitcoinmagazine.com/culture/the-hidden-costs-of-the-...

Funniest fact: Fiat money was invented to wage war more easily.

That reflects poorly on Bitcoin because it has the exact same design as fiat. It doesn't neutralize liquidity preference so a society adopting Bitcoin would be equally prone to go to war.

No way you understand the connection to war based on your comment.

> The Bank of England was incorporated by act of Parliament in 1694 with the immediate purpose of raising funds to allow the English government to wage war against France in the Low Countries

https://www.britannica.com/topic/Bank-of-England

Bitcoin is fundamentally different origin of money and absolutely not would a society adopting it be equally prone to war. Total nonsense sorry.

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