Money - store of value, unit of account and medium of exchange. It's always under attack by hacks that are called 'economists' by those who don't know better. Of-course here is the story and here is again my comment, again at 'troll' moderation for the reason that certain people disagree.
Of-course as always it is interesting to see that the people who are disagreeing are the ones that say they are for "the poor" on one hand, while being pro-Keynesian destruction of money and thus causing inflation and prices rising on the other.
Why do people care about what Krugman has to say? This is the guy who believes that destruction of wealth is the necessary stimulus that USA needs and that it would be great to have destruction even if by wars or natural disasters?
He believes there is a real difference in economics between 'micro' and 'macro', which is same nonsense as when the same differences are applied to evolution, so if you ask him - would he like his own house to be destroyed by a tsunami/tornado/flood, I am sure he'd answer - no. It's not good when done to a particular person. Only entire nations need to suffer altogether in wars and alien invasions.
This is guy is a Keynesian charlattan, he has nothing to do with economics, but his type of 'economics' is pervasive, because the politicians love these guys. The politicians invite these sort of 'economists' to be in the white house to help with policy, and this is the kind of help you get, while the universities then decide to have only these kinds of 'economists' propagate this nonsense further, so you end up with only Keynesian ideology in higher education. Thus all the underlying problems in the economy - because politicians use this charlatanism to give excuse for their only real agenda - stealing your money.
OK, from TFA:
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.
Bear in mind that dollar prices have been relatively stable over the past few years Ã" yes, some deflation in 2008-2009,
- RELATIVE TO WHAT, YOU DUMBO? Relative to other flawed currencies?
Besides, 2008-2009 is a TERRIBLE time to compare, as too many people completely misunderstood what was happening in the real economy and plunged head first into the dollars, which was the absolute wrong thing to do (and it is wrong thing to do now too, but now people understand it. Look at kitco.com) Too many people actually think that Keynesian charlatanism is economics, so they fall in this trap of following completely wrong ideas.
Anyway, yes, it's deflation of assets in real terms, so in terms of gold/silver assets are falling in price. It's cheapest gasoline ever today - under 10cents for a gallon, but those are silver cents.
But the inflation is in dollars, which is why real money is going up.
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.
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.
So to the extent that the experiment tells us anything about monetary regimes, it reinforces the case against anything like a new gold standard Ã" because it shows just how vulnerable such a standard would be to money-hoarding, deflation, and depression.
- Except there was NEVER a case of depression that had anything to do with the gold standard. Yes, bank runs happened, resource mis-allocations happened in some cases, but it took a fiat system to create case for real depression.
Depression is destruction of economy, it happens due to the business cycle that the federal reserve creates. Krugman is not an economist, and the Nobel Prize committee should be ashamed of itself for giving out prizes in Economics constantly to guys like him (and Obama, for peace?)