Can the Dollar Survive Both Bitcoin and China? The sharp increase in the value of cryptocurrencies measured in fiat currencies indicates that many people trust in their store of value function. Or, as with the sharp increase in the value of assets like stocks, real estate, and precious metals, it indicates that ,1) many people DO NOT trust in the store of value function of fiat money, and/or 2) that suppressed interest rates and asset-price inflation further pushes an ever-increasing flow of dollars into asset markets by speculators. The cryptocurrencies are not forms of money, but are a new asset class. The arrival of zero interest rates policy as a permanent fixture does not just invite speculation by savers in assets, it virtually requires it, since no potential income streams of any significance can arise by way of simple compounding interest. The rise of the cryptocurrencies follows from the death of saving.
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