When it has no inherent value and is just like a Ponzi scheme is, of course, the answer.
So that’s gold and fiat currency out the window too then.
Sigh.
When it has no inherent value and is just like a Ponzi scheme is, of course, the answer.
So that’s gold and fiat currency out the window too then.
Sigh.
Tim
I am loth to defend the guy and of course his motivation is very different but a not insignificant number of people even in the financial services industry have Crypto (or at least much of it) pegged as a Ponzi scheme. One point to note is that no conventional money supply measure was developed in the time of these instruments therefore assuming people can get their money out it goes straight back into the economy, driving up the money supply and the resultant inflation.
You are of course absolutely correct that you could apply the potato’s logic to the FX and Commodities markets….
Gold doesn’t have an inherent value?
Be very difficult for all our electronic gadgetry to exist without gold.
It’s sparingly used, but vital.
That gives it inherent value.
No iPhones!!!
What do people mean by “inherent value”? Do people who use the expression mean anything precise at all?
Why can’t you say that gold has an inherent value because lots of people enjoy wearing gold jewellery?
Why would enjoyment of gold jewellery be considered somehow an illicit claim to value, while enjoying twittering on a mobile phone be held to be genuine value? Seems daft to me.
It’s all “utility”, innit? Revealed preferences and all that.
When is a presentation not a presentation?
“I have presentations to make to PWC on tax justice and the EU parliament on the abuse of secrecy jurisdictions today” Spud today.
“Eric C says:
Are you able to share the presentations to PwC and EU?”
“Richard Murphy says:
Re this morning at PWC there was no presentation”
Andrew C
I particularly liked the idea that the discussion was ‘Chatham House Rules’ so he was going to blog about it later today.
Who the hell would invite him to any kind of gathering under Chatham House rules? Can only presume they have never read any of his output or watched a single second of his Youtube series on economics (in fairness 2.5K views of ‘An introduction to economics’ in 2 years perhaps suggests he hasn’t found his niche)
therefore assuming people can get their money out it goes straight back into the economy, driving up the money supply and the resultant inflation.
Er…no. To get one’s money out of crypto it’s necessary to sell it. So someone buys it. It’s a market. Matching buys & sells. Nets to zero.
VP – I presume he meant Fun House Rules, where he slid down the slippery slide, fell into the gunge tank, and then Pat Sharp had to escort him off the premises for leering at the twins.
<pendant>It’s the Chatham House Rule. There’s only the one – “When a meeting, or part thereof, is held under the Chatham House Rule, participants are free to use the information received, but neither the identity nor the affiliation of the speaker(s), nor that of any other participant, may be revealed.”</pendant>
“The Meissen Bison
May 10, 2022 at 12:06 pm
Gold doesn’t have an inherent value?”
Nothing has an inherent value. It value lies in what people need or want and how it can be used to fulfill those – which will change over time and with technogy.
Whale oil used to be highly valuable – now it’s worthless.
Lol used to be worthless and now it underpins the global economy.
“Van_Patten
May 10, 2022 at 11:48 am
Tim
. . .
therefore assuming people can get their money out it goes straight back into the economy, driving up the money supply and the resultant inflation.”
As it stands, crypto does not create or destroy dollars (or Pounds). To get crypto you have to pay money. To get money you have to sell crypto to someone who already has money. Net zero.
As long as crypto is not money (and right now, mostly it is not).
Now, once you can actually start buying real goods and services (not stunt purchases and more crypto) then all bets are off on it’s inflationary characteristics.
Agammamon
Both you and BiS made the point which I had thought about after the initial post but of course there is no edit function – my Bad. I had read of people indebting themselves to buy bitcoin (or indeed other Crypto assets in general) – by which token if you bought ‘hard’ assets having sold Crypto to someone leveraging themselves to buy it the inflationary impact could be very real (and to a certain degree I see that happening not just with Crypto but arguably other assets like Equities and Bonds)but the overall transactional effect would still be net zero of course. Thanks for your diligence as ever….
Steve
Fun House was entertaining although a little after my time watching programs of that ilk….. Sadly I do wish we could get Sharp out of semi-retirement to push Murphy into a gunge tank – preferably one filled with something radioactive
All the smart money is going into tulips.
I’d always understood that, as well as being pretty and not subject to corrosion, gold held its value because it was hard to counterfeit.
After all, modern monetary theory is certainly not modern. As soon as currency was invented, debasement was also invented. Paper money just made this easier.
Bit coin sounds easier still – at least to people whose computing skills are not a quarter century or so behind the times like mine.
dearieme – I assume he means intrinsic, as opposed to extrinsic. As usual, difficult to tell.
@boganboy you can’t counterfeit bitcoin. All bitcoin creation is equally real and counterfeit. So what you do is invent another crypto currency and get mugs to buy it with real cash.
What is a means of exchange?
Anything that somebody will accept in exchange for something.
What is a store of value?
Anything that is perceived to be able to have a value that can be used in the future.
What is something that is perceived to hold value?
Something that can be used to exchange for other things perceived to be of value.
So, a means of exchange is anything you can exchange with others for something of value.
And a store of value is anything that you can use in the future to exchange with others for something of value.
Money is money because people accept it as money, and it is a store of value because people perceive that in the future people will accept it as money.
Whale oil used to be highly valuable – now it’s worthless
Except as the very, very old schoolboy joke associated with beef.