Howard R. Gray
Bitcoin will have one potent chance to insert itself into the economy as savior, no more so when the US dollar reaches the Weimar moment which is very likely to be soon. Is Bitcoin real enough to do that?
What is the point of a fiduciary currency when there is no faith left? Bitcoin, or one of its competitors or co operators, may well create a way to survive a valueless currency when the moment arrives. Legal tender laws could be amended to accommodate novel currencies and money, which may well be the only way a government, can survive a currency melt down without a political meltdown. I suspect we are about to find out soon how all this will work.
Merely switching one dud currency for another won’t go down well, there will be a need for money backed by value, bitcoin is one entity that might not pass muster on this one but an amalgam of bit-money and bitcoins could make it to the table instead. If there is a unique way to print out cash with an encrypted graphic similar to a bar code then there may be ways to transfer cash outside of the net in the open market in real as well as cyber space. Is any of this possible, you tell me?
Cyber-ducats, Barter-Bits, Info-Franks or whatever the money may become, the result will be the first stages of removing state monopoly from value exchange. Liberating interest rates and exchange rates from the power of the banking classes would be a huge advance in liberty. Government would have to operate on value of the services it provides rather than the favours it bestows on those it corrupts to support it. Yes they can bust in and arrest the miscreants who use cyber money, which will only work so long as they can pay the black flack suit guys and gals, not so easy when you are playing the Zimbabwe gambit.
Hayek and his view of private money has laid the foundation of why private or non state money is a good thing. The technology of doing it may just be about to emerge. Now let us imagine how to run a deficit spending Keynesian economy should any of this happen. Hmmmmmm…..
Evolve, if you will, to a world where there are free market interest and exchange rates, how would that work out? Imagine a wee bit further where there is private money and public or government currency in a situation where the arbitrage between the two might just create a stable monetary system to replace the Breton Woods model. Amended legal tender laws to accept viable money in competition with state currencies would add a deep dimension to the international currency exchange trade. Which way would Gresham’s law operate here?
Honestification of currencies to ensure that they become more like money would be a real advance. No more coin clipping, printing press or computer key currency fraud, wouldn’t that be nice?
The SWATistas in the black outfits might be better off if they stay home when this one goes down. An emergent natural monetary order might permit very rapid recovery from a transnational fiscal meltdown. Entitlements will be gone, government grants will be gone, overseas aid will be gone, Keynesian economics would be gone, no IMF or UN and so on and so forth. Then what? Perhaps Mr. “Spooky dude” Soros just might put his feet up and retire.
None of this is vaguely viable but one can dream!