And in other news, global debt now exceeds $100 Trillion dollars - up 40% over the last 7 years: http://www.bloomberg.com/news/2014-03-09/global-debt-exceeds....
Which is the bigger Ponzi?
Which is the bigger Ponzi?
The huge growth of debt is a sign that inflation has been too low for too long in too many places. As long as the ECB and the Fed treat 2% as scary-high inflation, paying back debt becomes far more difficult.
To start solving the debt problem, the central banks should start targetting 4-5% inflation for a decade or so, and allow it to go a little above the target, rather than trying desperately to hold it down to less than 2%. This would reduce debt while encouraging investment and economic growth, which would bring down unemployment, which would help pay off debt. It's a virtuous cycle.
In contrast, Bitcoin is a deflationary currency. Deflationary regimes favor hoarding, make it impossible to invest, and ultimately benefit only the wealthy. Reasonable levels of inflation on the other hand favor economic growth, investment in real assets, and they favor the productive working class over the idle rich.
This is IMHO the strongest argument against Bitcoin and the reason why a long-term economy could not depend on it. The problem with cryptocurrencies is the impossibility to control the monetary mass.
Not really. It is designed so that no individual can control the rate of inflations, however if it is in the vast majority[1] of miner's interests it can be changed.
[1] If a small majority of miners changed inflation it would cause a massive chain forkWouldn't that just cause lenders to increase their interest rates?
> Deflationary regimes favor hoarding, make it impossible to invest,
Most sound investments yield returns way above inflation, and they would also yield returns way above deflation
> and ultimately benefit only the wealthy
Unlike the current system?
Yes it would. Only unexpected inflation will affect debt repayment rates (in theory).
People are thinking in terms of the solution rather than in terms of the problem. You shouldn't think of Bitcoin as a thing, Litecoin as a thing, Dogecoin as a thing, and weigh each of these things on their own merits. Instead they're all just competing solutions to the same basic problem.
As problems with Bitcoin surface, the market will gravitate towards other currencies, and the infrastructure will gradually grow to accommodate them so as to provide the same level of services.
It's still a fantastic time to get into crypto-currency. Don't feel like you missed out just because you didn't buy thousands of BTC 2 years ago and saved it till today. The rough and rowdy prospectors are just now giving way to the frontier businessmen, but there's still lots of time and stuff to do until the big players emerge and start wrapping the markets up.
Who cares? It isn't a contest.
So, what are global assets worth, then? Why only talk about one side of the ledger? Debt doesn't exist in a vacuum.