People used to pay each other in gold and silver. Difficult to transport. Difficult to divide

People used to pay each other in gold and silver. Difficult to transport. Difficult to divide.
Paper money was invented. A claim to gold in a bank vault. Easier to transport and divide.
Banks gave out more paper money than they had gold in the vault. They ran “fractional reserves”. A real money maker. But every now and then, banks collapsed because of runs on the bank.
Central banking was invented. Central banks would be lenders of last resort. Runs on the bank were thus mitigated by banks guaranteeing each other’s deposits through a central bank. The risk of a bank run was not lowered. Its frequency was diminished and its impact was increased. After all, banks remained basically insolvent in this fractional reserve scheme.
Banks would still get in trouble. But now, if one bank got in sufficient trouble, they would all be in trouble at the same time. Governments would have to step in to save them.
All ties between the financial system and gold were severed in 1971 when Nixon decided that the USD would no longer be exchangeable for a fixed amount of gold. This exacerbated the problem, because there was now effectively no limit anymore on the amount of paper money that banks could create.
From this moment on, all money was created as credit. Money ceased to be supported by an asset. When you take out a loan, money is created and lent to you. Banks expect this freshly minted money to be returned to them with interest. Sure, banks need to keep adequate reserves. But these reserves basically consist of the same credit-based money. And reserves are much lower than the loans they make.
This led to an explosion in the money supply. The Federal Reserve stopped reporting M3 in 2006. But the ECB currently reports a yearly increase in the supply of the euro of about 5%.

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youtube.com/watch?v=F1Drj7-YeoY

Nice! I hope u keep posting more, specifically about the future

This leads to a yearly increase in prices. The price increase is somewhat lower than the increase in the money supply. This is because of increased productivity. Society gets better at producing stuff cheaper all the time. So, in absence of money creation you would expect prices to drop every year. That they don’t is the effect of money creation.
What remains is an inflation rate in the 2% range.
Banks have discovered that they can siphon off all the productivity increase + 2% every year, without people complaining too much. They accomplish this currently by increasing the money supply by 5% per year, getting this money returned to them at an interest.
Apart from this insidious tax on society, banks take society hostage every couple of years. In case of a financial crisis, banks need bailouts or the system will collapse.
Apart from these problems, banks and governments are now striving to do away with cash. This would mean that no two free men would be able to exchange money without intermediation by a bank. If you believe that to transact with others is a fundamental right, this should scare you.
The absence of sound money was at the root of the problem. We were force-fed paper money because there were no good alternatives. Gold and silver remain difficult to use.
When it was tried to launch a private currency backed by precious metals (Liberty dollar), this initiative was shut down because it undermined the U.S. currency system. Apparently, a currency alternative could only thrive if “nobody” launched it and if they was no central point of failure.
What was needed was a peer-to-peer electronic cash system. This was what Satoshi Nakamoto described in 2009. It was a response to all the problems described above. That is why he labeled the genesis block with the text: “03/Jan/2009 Chancellor on brink of second bailout for banks.”. Bitcoin was meant to be an alternative to our current financial system.

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your posts format hurt my eyes more than indian posting

I can't wait for the complete collapse of western society.

Old Reddit post summarising a recent bitcoin doco
> biz goes bananas thinking op is original

You and me both.

Gold has no inerent value you fucking mongoloid

Paper dollars have no inherent value too plonker.

FeelsBadMan to be a europoor. So little people know about QE, and rates are still absolute shit in Europe, what a fucking joke.

gold can't be created

You're using gold right now to shitpost you fucking monkey.
Gold is the best conductor and is used in PCs/phones/electronics, intact those old Nokias are worth quite a lot for the amount of gold they used to use in them.
Gold also has limited supply and cannot be created as another user said, therefore the desire to have gold alone makes it inherently valuable.

bump

Bitcoin starts off as a decentralized peer to peer system that has promise to add value to our lives. All of the early adopters mine most of the Bitcoins using CPU power in the beginning leaving control of the coin at their disposal. They try to promote natural growth but because of the internet, greed kicks in super early and the seeds of the future central banker get sewn in. Soon Bitcoin gets bored and creates Litecoin in another attempt to mirror the precious metals complex in attempt to fully divert any and all attention away from gold/silver sales rapidly increasing after the 2008 market fiasco "caused" by the housing bubble. To keep both coins from getting out of control the exchanges use their programmed algo hft bots to crash the volumeless market then blame it on some french guy. With ison passed they can now hide in the shadows while normies cook up a scheme to be just like Wall St. Some time passes and crooked Hillary gets John Podesta involved in maybe using the Bitcoin black market to fund her great rise to the top and become the first female US president. (wikileaks.org/podesta-emails/emailid/15589) The whole thing backfires and instead Donald Trump becomes president. The media freaks out and the programmed algos of Bitcoin spin off moar and moar coins in and attempt to take over the greedy little minds of the entire US population in a weak attempt to stop the buying of all things gold and silver.

>muh electronics

...and then ethereum was invented rendering all present and future cryptocurrencies obsolete. Bitcoin becomes an Erc20 in 2019 finally overthrowing the chinese communist mining cartel.

>The Federal Reserve stopped reporting M3 in 2006.
What's M3?

>gold cannot be created
Uhhhhh what is nuclear transmutation?

that is such a negligible amount that gold could be substituted for those purposes but they don't bother doing it anyway. So no, no inherent value you fucking retard

scarcity by itself does not make something valuable. There is a very small mount of my shit in existence, but that does not make it valuable. Only if people wanted to buy it would it have some.

I never said they do, there is literally no difference, it's OP the retard for thinking otherwise