In earlier societies, community kept people sane. I mean this in a real sense. Interaction with others is how we stay sane. Fidelity to reality means more than recognising and responding appropriately to inanimate matter. Interaction in the experiential realm gives us constant dynamic feedback to our words and actions, our behaviour; helping us to be rational.
That stabilising factor is, for many, now absent.
In the digital realm, it’s too easy to interact almost exclusively with like-minded people who reflect back at you not correction, but amplification, of your psychosis.
Hi All, bit new to this. Anyone interested in this:
The very term, "lending", implies an underlying asset; the value being borrowed. All borrowing is borrowing against an asset. For every debt there is both an asset, AND a liability. Except...
In fractional reserve banking clown world.
In cartel banking land, debt has been issued, ad nauseum, with no counterbalancing asset; other than the promise of the US government and the "Federal Reserve" to tax citizens and inflate the currency, respectively. Make no mistake, future labour and paper currency are not assets. An asset is value ALREADY earned.
When I was a kid working bars in Melbourne in the Eighties, a ponzi scheme called the Pilot Game was a viral fad for a few months.
Go read this real quick:
http://tinyurl.com/AirplanePonzi
then come back.
The thing petered out as soon as it became impossible to find the exponentially increasing number of noobs willing to part with 1K, which didn't take long. I was only on the first layer... my cash was gone. A fool and his money are soon parted.
Back in clown world, the middle and lower classes are now just like I was back then. The bankers and bureaucrats have filled their bags and taken off. Mr and Mrs Schmuck & the little Schmucks will be left with no plane, and their savings evaporated.
Don't be one of the schmucks.
Educate yourself about money, especially about how corrupt money and banking (Fiat and FRB) always lead to a debt unwind spiral.
If governments can tax our capital gains on crypto currency, when the latter gain in purchasing power against fiat, should we not also be able to claim a capital loss on our inflated fiat, when it loses purchasing power against real stuff?
Say's Law - production IS demand - applies only in a fixed supply monetary system.
In a fiat system (which, by definition is inflationary AND deflationary), new money (debt) creates (counterfeit) demand (see quantity theory of money). This is inflation (of the money supply). When the debt is extinguished, demand is reduced, i.e., the money supply undergoes deflation.
In a fixed money supply system, only new production can stimulate increased demand, as demand created artificially by the creation of more money - inflation of the money supply - is impossible.
NB: Rising prices are not in and of themselves inflation, and falling prices are not in and of themselves deflation. It is a shame that this is not more widely understood, even by many "economists".
I love that formulation: "credit culture versus savings culture"
I've been thinking a lot about the difference between an inflationary/deflationary debt-based fiat system and the coming fixed-supply hard money system.
That sums it up nicely.
The most repeated arguments I've heard against Bitcoin are: 1/ it's deflationary, and 2/ it has no "intrinsic" value.
Let's address them one at a time.
1/ Bitcoin is deflationary
What the people who make this argument are mistakenly referring to when they say "deflation", is generally falling prices of goods and services. The latter does occur during a period of economic deflation, but it can also occur for another, very benign, reason.
An economic deflation is characterised by three "symptoms": falling business profitability, falling prices, AND, a reduction in the ability to service debt.
We'll take these one at a time... but first...
What causes an economic deflation in the first place?
Answer: inflation. What goes up, must come down. And, you guessed it, inflation does not simply mean rising prices.
It means: an increase in the money supply, diluting the real value of each unit of currency already in circulation, and resulting in increased monetary velocity (the number of times a given unit of currency is spent in a give period of time).
This increase is effected by "central banks", via the issuance of debt, and so benefits debtors. Savers, on the other hand, see the real value of their saved wealth eroded.
The unintended consequence of cheap money is a mis-pricing of risk. The lower the rate of interest charged on new debt, the less real return is required to service said debt, so people get careless; or at least less careful.
People who can borrow money cheaply mistakenly think they're rich, and spend accordingly, on consumption and luxuries they can't really afford. Businesses become less efficient, and take undue risk, investing in ventures based on illusory demand.
This is what causes economic"bubbles".
Asset classes, industries, markets are all built on an ever increasing ponzi of debt, growing to "valuations" far higher than in reality they are worth.
What happens when a bubble gets blown too big? It risks bursting. So what do central bankers do?
Deflation.
Decrease the money supply and reduce monetary velocity, by increasing the cost of the "cheap money".
And that's when the 3 symptoms kick in.
The most logical first: it gets more expensive to service debt, and debt becomes harder to buy (risk is re-priced higher).
Secondarily, and as a result, business costs increase and business profitability declines.
And three, as private debt payments increase, discretionary spending decreases, people buy less, and prices fall.
Each symptom compounds the others, resulting in a "debt spiral".
So what does this have to do with Bitcoin?
The argument that Bitcoin is deflationary rests on the premise that the falling prices caused by increased productivity due to technological advances, are synonymous with economic deflation, that is, not only will prices fall, but debt will be more "expensive" to repay and business profitability will be negatively impacted. This is an honest mistake they're making, but it's false none the less.
Firstly, ask yourself: how could the rising value of saved wealth and falling prices of goods and services, ever be bad? It literally means that the work you put in now will reward you more in the future, and the things you need and want will become easier to afford over time. That's the way it should be.
In such an economic environment, making profit is easier, not harder. Prices AND costs fall; profitability rates are not affected, other things remaining equal, and debt is no harder to service.
Falling prices are not synonymous with deflation.
The fact that your unconsumed wealth, stored in bitcoin will, over time, buy you more, is not "deflationary".
I also given to understand that due to limited blockspace, it will be impossible for more than a small fraction of the population to have personal bitcoin wallets.
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