Bullion and Bitcoin

Triggerfinger via Comments at Shall Not Be QuestionedNothing is perfect, but freedom from fiat currency is usually better.

The problem with metals-based currency (or, really, any scarcity-based commodity) is that it’s hard to get more of it without putting a lot of work into it. That’s also the benefit of metals-based currency.

Fiat currencies present not a problem of physical or computational effort, but a mere command: PRINT MORE MONEY! And so it is done. The problem is not one of scarcity but one of moral hazard. And we know humans are flawed, immoral beings; eventually, and often, the holder of the currency will succomb to temptation.

I’m not convinced that deflationary cycles are the bugaboo that some economists seem to think they are. However, I’m willing to concede that no solution is perfect. I just prefer a financial system where the incentives are aligned in the right direction.

This entry was published Fri Jan 30 11:54:28 CST 2015 by TriggerFinger and last updated 2015-01-30 11:54:28.0. [Tweet]

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