[cryptography] Digital cash in the news...
nico at cryptonector.com
Sun Jun 12 23:51:23 EDT 2011
On Sun, Jun 12, 2011 at 9:44 PM, James A. Donald <jamesd at echeque.com> wrote:
> On 2011-06-12 8:53 AM, Nico Williams wrote:
>> A fiat currency with no capital controls and reasonably free
>> trade is probably the best currency system yet. Details do matter
> If operated by far sighted men with an eye for the long term - for example
> if operated by a hereditary monarchy.
> Operated by the current lot of crooks who can scarcely see as far as the
> next election ...
Clearly. The nice thing about the U.S. was, and still might turn out
to be once the current statist episode is over, that its political
system didn't stray too far in the direction that so many democracies
have tended to in the 20th century.
> Fiat currencies are subject to wild gyrations, which gold was not.
Clearly, but at least as long as you have property rights and there's
no capital controls to speak of you can work around those gyrations
(really, long periods of low, but higher than gold inflation, followed
by short but sharp credit contractions, with occasional bouts of
hyperinflation, but with the degree of inflation being a political
problem, thus manageable in countries with institutions and political
traditions that value low inflation).
You might note that in the long run all fiat currencies will be
debased, but you might also note that in the long run all gold
standards tend to get abandoned. The problem is democracy, which you
might remember is the worst form of government _but for all the
>> Which isn't to say it will
>> continue, but if it doesn't, it won't be due to any flaws in this
>> currency system.)
> I would say that giving total power to the people who brought you
> affirmative action lending is a flaw. The people operating the system are
> printing money to benefit cronies and voter blocks.
Let's not exaggerate, total power looks a bit different than what you
see here, so far. Granted, it's getting there, but there's hints that
the ship of state might yet right itself, and if not, well, there's
not a lot of options (obcrypto: and crypto won't get you any real
> Greece is going broke from too much vote buying. Governments are reluctant
> let Greece go broke, for fear of contagion. So they lend the Greeks more
> money, which is another form of contagion.
> That governments keep bailing out Greece is a sign of weakness and
> fragility. They fear that if Greece goes, then the next weakest government
> will go, and then if the next weakest goes, then the one after that, the
> dominos falling all the way to Washington.
The real issue in Europe is that if Greece (and Portugal, and Ireland,
...) default then most of the banking system in the rest of Europe
will be insolvent, which means that either they are allowed to fail,
and people are allowed to lose part or even most of their deposits, or
their debt (deposits) will have to be nationalized and monetized, all
in a credit contraction environment (deflation). Either way real
wealth has been frittered away, destroyed, and no one wants to be the
one to tell the public that they are poorer, thus the game is to make
the process by which the loss of wealth becomes apparent take much
longer, which only delays real recovery, thus making things worse.
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