/liberty/ - Liberty

>These digital currencies might make fiat look good. That's how bad they are.

>>74727

The only thing backing fiat at this point is that they're in use. The government doesn't know how much to print, so prints too much, and can't bring it back in with interest rates or taxation since those don't apply on savings unless they want to enforce it at gunpoint like during the period from the 30s to the 60s, eventually crippling market efficiency with national cartels, or be overthrown.

The cryptos hold no value but they destroy excess fiat. If someone is stupid enough to borrow money to buy crypto, which doesn't have value, they're an imbecile and their money deserves to be destroyed. The higher the value of crypto is the higher the amount of excess cash in circulation. Since it's excess cash that's produced no value it's equivalent to the zero value of crypto anyway.

Until crypto becomes institutionalized as a unit of exchange the risk of a zero crash exists, when simply no one will buy it. However, fiat is continuously inflating forever, there isn't enough precious metals, and thus it will be bought. And once someone accepts it as something of value, like the debt sticks in Medieval England, it becomes something of value.

>>74755

They don't have anywhere else to put it. If they hold fiat as savings it generates zero value, in fact the alternative is burning it but that reduces the nominal value for spending purposes. Cryptos just hold it at zero until economic growth picks up and this is why the banks will love it. Of course, the banks will pull mass scale manipulation to steal people's money; as long as they keep out for scams (they won't) it "works".

Ultimately the money people have to spend, comes from the banks, so a cryptocrash would zero out excess value from the speculative loans and crash the banks in the process from the pursuit of speculative profits. Essentially the crypto growth rate can't exceed the inflation rate. If half the banks value is in cryptos and half of it in fiat, and they've promised profits, they won't be able to make it back. The government can't do another bailout because that would destroy the value of fiat, and a bail in is impossible since the nominal value was zeroed out in crypto.

Hold real assets.

>>74767

> the problem of accumulated capital and diminishing returns for investment in "productive" activities (which creates the incentive for speculative behavior) will continue the same as before

keep inflating the market to drive up nominal returns

>>74790

>Barring external market manipulation (as with a central bank)

so you are claiming what I said was wrong in an alternate universe which lacks central banks.