The problem with Krugman's argument is that he is taking the price increase in bitcoins due to massive speculation and applying it to a case of deflation that occurs when there is a decrease in the ratio of gold to goods in an economy. They are two separate things and no conclusions can be drawn from one and applied to the other, especially if you are not going to discuss the elasticity between present and future consumption. The problem with the Keynesian critiques of deflationary currencies is that they look for the most extreme cases of deflation and assume that all deflation will set off a deflationary spiral.

The argument that Krugman is making is that because people hoard money when deflation is 50% or more then its obvious they will completely hoard all their money when its 2%-3%. Its not a fair comparison at all and assumes an unreasonably high rate of intertemporal consumption elasticity. To believe this would mean that people are not willing to pay the 2% opportunity cost of consuming in the present which is almost identical to saying that people will not substitute future consumption for present consumption they face an opportunity cost of 2% or more, ie they would not take out a loan if the interest they are paying is 2% or more. Obviously no one is going to use a credit card that charges 50% but I am pretty sure that a 2% charge on present consumption is not going to stop a lot of people from thinking twice about consuming in the present.

What Krugman is really critiquing is that a deflationary currency is going to prevent people from being incentivized to drastically reduce their savings rate. As we can see in this quote: "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."

We dont want hoarders (aka savers) from making risk free profits? Why not? When people pull their money out of the economy it doesnt prevent others from making transactions as long as the currency is divisible, which is completely effortless with bitcoin and only faces a modest cost under the gold standard. Luckily for us these evil hoarders will eventually dis-hoard their money in retirement and provide an even flow of savings and consumption over their lifetime. What Krugman wants is for our current generation to get the benefits of past savings while at the same time preventing future generations from having the same priviledge that we do. It works for a while and has been in operation for the past 20 years but we are quickly coming to a period in time when there will be no more dis-hoarding of savings and no hoarding to divert into present consumption. The shell game that Krugman constantly promotes on his blog is quickly coming to an end and we are soon going to have to figure out how to run an economy through a deflationary recession without recourse to inflation or borrowing.

In addition it has been shown empirically that times of mild deflation have not been the catastrophe that Krugman claims they would be. See: Milton Friedman's Monetary History of the United States.

Have you tried it? You criticisms are very exaggerated.

I gave it a go just for interest sake and I was pleasantly suprised even though I went in with extreme sketicism. Are all the criticism valid? To a certain degree but onlive achieves about 95% of the goal it claims to achieve and its no where near as bad as the haters claim.

The mouse lag to me was most noticeable when in the main starting screen with the game mode select but it dropped to barely noticable once I actually got into the main game (Played Just Cause 2 and Arkham Asylum). I am not sure if it would be playable for competitive online FPS like Call of Duty but for a single player 3rd person action game it was completely fine and way better then I thought it would be.

As for compression, its actually not that noticeable once you are playing. If you stop and really pay attention you can notice some compression here and there but its not like you are playing via youtube. Again way better than I thought.

The real problem of onlive is more with their business model than with their tech (which I am sure will be completely fixed to 100% given a year or two). There are very few games that I would be interested in playing, with most of their selection being older games. The only new game that I saw was the new Deus Ex. It could be that this also gets rectified in the coming years but as of now its similar to how netflix streaming started out, terrible selection. Even if their selection improves its going to be hard to compete with Steam since OnLive's only real advantage is that you do not have to download the games, but as more ISPs provide larger download caps this becomes less of a problem. The only market I could see onlive target is for the person who wants top of the line PC graphics without upgrading their system all the time.

All in all I went in skeptical and came out suprisingly optimistic about their tech, I dont think they will be successful long term but its interesting tech none the less and way better than most people would probably give them credit for when just looking at their business model on paper.

If you arent an expert how do you know who to talk to? How am I gonna know im getting top class electrical work done or getting ripped off by some shady contractor.

Just because you talked to "experts" does not excuse you from the mistakes that are eventually going to be made, especially when it comes to a field as controversial and dynamic as economics and finance. I think someone in this thread is not thinking, I'll leave it as an exercise to the reader to decide who it is.

1 million barrels per day. A new video released shows the largest hole spewing oil and natural gas from an aperture 5 feet in diameter at a rate of approximately 4 barrels per second.

4 X 60 X 60 X 24 = 345600

learn math slashdot!