What we want from a monetary system isn't to make people holding money rich; we want it to facilitate transactions and make the economy as a whole rich. And that's not at all what is happening in Bitcoin.
- that's the problem. The entire fiscal policy of USA destroys the value of savings by inflation and this is what destroys the economy.
Spending money is literally what drives the economy. Saving money in a bank does make it available for other people to borrow so that they may spend it. The "redistribution of wealth" is the benefit here, though, not the saving itself.
Bear in mind that dollar prices have been relatively stable over the past few years â" yes, some deflation in 2008-2009,
- RELATIVE TO WHAT, YOU DUMBO? Relative to other flawed currencies? :) Well, not to Swiss Franc. Not to Canadian dollar. Not to NZ dollar. Not to Australian Dollar.
Relative to the purchasing power of the dollar a few years ago. A Big Mac, or a loaf of bread, or a new car costs about as many USD today as it did a few years ago. The dollar is stable. A Big Mac costs a wildly different number of BitCoins today than it did a month ago. The BitCoin is unstable.
then some inflation as commodity prices rebounded, but overall consumer prices are only slightly higher than they were three years ago. What that means is that if you measure prices in Bitcoins, they have plunged; the Bitcoin economy has in effect experienced massive deflation.
- GOOD. Good for those who hold Bitcoins. Bad for those who hold dollars.
Good for those who hold Bitcoins without spending them. Bad for those who spent them. Pretty soon, people will realize that it makes more sense to hold onto Bitcoins than spend them, so no one will spend Bitcoins - they'll hoard them, and spend, say, Dollars instead. This weakens the Bitcoin economy, because no one is spending Bitcoins.
And because of that, there has been an incentive to hoard the virtual currency rather than spending it. The actual value of transactions in Bitcoins has fallen rather than rising. In effect, real gross Bitcoin product has fallen sharply.
- This Keynesian wants you to be poor, do you understand that?
He wants you to pay 3.50USD for your gas, and BTW, he doesn't think it's high enough. They have a target to make it much higher. But he doesn't want you to pay 10 cents for that gallon.
Absolutely. He wants you to have to pay $15 per gallon in 50 years. He also wants minimum wage to be $45 in 50 years. He wants inflation - the purchasing power of $1 to decrease - and for people to have more dollars. This is good for the economy, because it means that spending money is more sensible than hoarding it. This means that people have to keep on working to get more money, and more economic product is produced.