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3 sats \ 1 reply \ @jamesviggy 19 Aug 2023 \ on: Thougths on national currencies as company shares bitcoin
I like to describe fiat currencies as being equity in the country (shares). It helps people understand what money printing really is - think of it like when a company is struggling so they raise new capital by creating new shares and selling them to new investors, except in this case they aren't receiving any new outside capital. They're creating the shares and issuing them to themselves for free, and then spending them quickly (cantillon effect) which has the effect of devaluing everyone elses holdings. e.g. you have a business with X amount of assets and 100 shares, each share owns 1/100 of x, then all of a sudden there's 200 shares but no new assets, so each share now owns 1/200 of x.
Money printing, like dilutive equity raises, are usually done in desperation, when there's no outside investors willing to invest in your country. I don't think this option is something any Administration will want to give up, so i've come to terms with the fact that fiat currency will continue to exist in the form of Central Bank Digital Currency (CBDC), i.e. nationalized banking, and the population just has to understand that it's not a savings tool, it's a social credit. You either use it or you lose it. Thankfully we have Bitcoin for our savings.
Nailed it. Thank you for your comment.
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