I don't think we are in search of a problem to solve, the problem is smacking us in the face. We have inflation the likes of which we haven't seen in close to 50 years. The government is printing money at a rate like never before. 40% of the total U.S. dollars ever created, have been created within the last 18 months. Inflation means that your store of value is worth less as time goes by. That doesn't sound like a great deal to me, I wan't the work i have previously done to be worth the same tomorrow as it is today, or at least as much as possible.
Thats what money is right? When we break it down to the basics you are exchanging your work or store of value for someones elses work or store of value.
As for your example, you say that "if the dollar lost 10% of its value in one day" .... inflation is the exact same thing as volatility of the dollar. Its no different than the price of bitcoin varying on a daily basis. Inflation is coming in at 6-7% a year.
Im not saying the dollar is a bad product or that it should disappear. I just think a digital payment system is probably the future and BTC and ETH are first to market so are most likely to succeed. Competition is almost always a good thing and there is room for both the dollar and Crypto. Just as there is the yen, ruble, peso, mark, remnibi, etc
No currency is not suppose to store value and never has been. It’s just supposed to not be volatile and have wild swings over short periods of time. Apparently you didn’t read my Ben Franklin thread because you would understand that inflation isn’t really a boogeyman either.
Citizen Ben figured out how to make paper money as valuable as gold or silver coins—and got rich in the process. In September 1723, in the port of Boston,
www.historynet.com
On April 3, 1729, Franklin published a pamphlet with the falsely humble title
A Modest Enquiry into the Nature and Necessity of a Paper Currency. It may be the least known of the great founding documents of the American experiment, but in it, he eviscerated his wealthy opponents. They had no real principle at stake, he wrote. Rather, they were greedy, relentlessly pursuing their own self-interest. The rich love currency crises because a lack of coins in circulation allows those who hold gold or silver to “practise Lending Money on Security for exorbitant Interest.” And, when times are tough, the wealthy can scoop up property at fire-sale prices. Without the trade that a robust money supply evokes, “the Common People in general will be impoverished, and consequently obliged to sell More Land for less Money than they will do at present.” Worse, Franklin predicted, when the land grab ends, those same purchasers will support expansion of the money supply, boosting the value of their new property.
Franklin argued that a well-run paper currency would ultimately benefit everyone:
An adequate money supply lowers interest rates, encourages trade, creates more demand and raises the value of the colony’s products. He insisted that “labouring and Handicrafts Men (which are the chief Strength and Support of a People)” would move to Pennsylvania and those who were present would stay. Otherwise, skilled workers would seek “entertainment and Employment in other Places, where they can be better paid.”
Franklin simply made a pragmatic case: Paper money would solve the particular problem at hand. But what came next was his great revelation. How could paper currency ever be “real” money?
Franklin’s answer was to recognize that money itself was simply a medium of exchange, a measure of value rather than its storehouse. Money allows the three pennies worth of bread Franklin bought on his first day in Philadelphia to become three pennies worth of laundering the baker needed done. The three coins Franklin handed to the baker served as a way of measuring how much the bread or the laundry was worth to each buyer and seller. Franklin argued that what was actually being exchanged was the work involved in making bread or washing clothes. That, and not the melted-down price to be had for the metal within the coins, gave the term “three pence” its true measure.
Franklin concluded that money in circulation derived its value from the sum of all such transactions—all things made and all the services people exchange.
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And no “competition” with The People’s will and choice of currency isn’t good. Every American should be doing everything in their power to build up the dollar as opposed to creating private products to undermine the sovereign will and rights of The American people.
Suggesting other sovereign currencies are the same as those private products isn’t accurate. Those currencies are the will and official tender of those sovereign peoples. The greatness and demand for the Dollar, as well as it being the world’s reserve, allows for conversion of those currencies while allowing the people of those countries to enact the monetary and economic policies they choose for themselves.
www.zerohedge.com
