[cryptography] Bitcoin, was Nirvana

James A. Donald jamesd at echeque.com
Sun Sep 25 23:50:53 EDT 2011

On 2011-09-26 7:12 AM, John Levine wrote:
> Um, no.  This isn't the place for a historic treatise, but the 18th
> and 19th centuries were one boom and bust after another, with lots of
> inflation and deflation, and not just because of new gold mines.

No they did not have lots of inflation and deflation.  Prices remained 
astonishingly stable and predictable, and employment was persistently 
high by modern standards.  Their busts were not busts by modern 
standards of unemployment, their asset price fluctuations were 
unexceptionable by modern standards, and their commodity and labor 
prices were far more stable than in modern times.

What they had was not booms in the sense of alarming asset prices 
inflation, nor busts in the sense of high and persistent unemployment, 
but crises of bank liquidity.

Fiat money has stabilized the banks at the expense of grossly 
destabilizing everyone else.

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