46 sats \ 12 replies \ @grayruby 4 Oct \ on: The ethics of borrowing in fiat, in order to buy bitcoin bitcoin
I think it’s perfectly ethical to abuse an unethical system. Have at it. Just make sure you can meet your debt obligations. Stay humble.
I'd say it's perfectly ethical to exploit those inflicting an abusive system onto others. You want to make sure that the consequences either fall on you or on someone else who deserves it.
Borrowing fiat to buy bitcoin fits that mold. Either you're wrong and you pay or you're right and the bank pays (or it's win-win, I guess).
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But the bank never pays, because it creates money out of thin air and collects interest. If they buy bitcoin with that interest they can win too.
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It's not that the bank never pays. It's just that the bank would never have to pay if they made smart decisions.
If inflation outpaces the interest rates on a loan (as has happened on my mortgage) then the bank will end up with less purchasing power than it started with.
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If inflation outpaces the interest rates on a loan (as has happened on my mortgage) then the bank will end up with less purchasing power than it started with.
But is that really the case? From what I understand it creates the money to be loaned out of thin air through fractional reserve banking. They don't lend from their reserves or deposits.
They gain the interest and lose nothing, because it's not their own money that's being inflated away. But since the loans need to meet the fractional reserve requirements, one could view loans at rates below the rate of inflation as an opportunity cost.
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In the US, there are no reserve requirements on lending and there haven't been for several years, so clearly there's some other constraint. If banks could just spend arbitrarily out of thin air, why wouldn't each bank just buy every real asset in the world?
When the bank lends out money at a particular interest rate, it still needs the interest payments to cover its operating expenses. If inflation is outpacing the interest rates, then the bank will be operating at a loss.
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The part I don't feel like I understand very well is this...are you actually abusing the unethical system, or are you contributing to the abuse of the people who are already being slaughtered by inflation?
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It's hard not to follow the incentives, and there are incentives to short fiat.
To not follow the incentives you'd have to break your mind and become what the communists wanted people to become, an incentive non-following creature. Such a creature would end up taken advantage of, enslaved, abused and poor.
Shorting fiat also involves liquidation risk, so you're paying a price for it in the risk and the higher your leverage, the greater the risk.
Perhaps the idea that borrowing fiat to buy bitcoin is unethical is a psyop sowed by the powers that be to keep us from stacking more? Just a thought.
I tend to view it as a game. The goal is to maximize your score, which is the amount of sats stacked. If you don't play it well, others will and you'll be their victim.
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Abusing might not be the right word but you are taking advantage of the unethical system because you know it requires persistent devaluation of the money. But you bring up a fair point. By borrowing fiat you are contributing to the expansion of the money supply which could potentially harm others. This monetary supply expansion will happen with or without your involvement and your involvement is a mere blip but I think philosophically it is a reasonable question. I guess it comes down to if you think the positives outweigh the negatives.
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You alone are indeed a blip, but all the blips together make the majority of the inflation of the money supply.
Getting loans and shorting fiat is NOT the same thing. That would be the same (because it is) as saying that robbing someone to then go buy btc. Is it still ethical? Of course not. Never was, and never will be, regardless if there are other that also do it.
It's like that old saying: raping doesn't magically become a good thing just because the majority supports it.
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Getting loans to buy bitcoin is essentially shorting fiat.
Your robbery analogy sucks. Taking out a loan is not taking something that doesn’t belong to you. It is borrowing something that doesn’t belong to you that you must give back.
If you want to argue it is unethical fine but your robbery analogy and rape quote is just stupid.