the prerequisite of any workable medium of exchange is that it should be sufficiently scarce and finite.
Here's the blurb, much better than I can put into words:http://uk.businessin...currency-2017-2Ann Pettifor, leading economist and author of "The Production of Money" told Business Insider that bitcoin is flawed as money because it is a "finite asset."
Speaking about the origins and usage of bitcoin, she said: "Bitcoin was invented by some big bad guys on the dark web as a secret currency, for which they could exchange goods and services.
"The idea was similar to the gold standard which is that you would have a finite asset - which is your bitcoin, which would then increase in value over time because it is finite.
"The problem with a finite asset is that the economy is not finite, and if you have a limited amount of money to match this almost unlimited capacity of people in the economy to do things, money doesn't work."
But the medium of exchange we use is money.
However wealth isn't concentrated in money. In fact when we say someone is "worth something", we generally don't mean their bank account. We mean a total sum of assets.
At present there's though to be about $5 trillion in physical currency floating around. That's less than the US economy.
You're being precious, Leo. Whether that money is folding plastic, cold gold, or spinning electrons is immaterial (unintended pun), and if you just dumped a sufficient quantity of any of those forms on the market out of nowhere you can sink it badly enough to need an extended period of recovery. Kinda like water, it's necessary to life (economic, in this case), but dumping 20b litres (dollars) in one place without prepared drainage is going to fuck shit up for a while.
As we saw with George Soros fucking up Asia in the late 90s. Yes.
But that doesn't change the fact that money, in the broad sense of the word is infinite. There's no known limit to it's growth or contraction. Theoretically it might be possible for us to go into negative territory with a giant IOU to the Zerg of Alfa Centauri.
And you are partially correct, in that money is always being created, but that is not worth. A can of coke was not worth less in 1950 than now - but it cost a helluva lot less.
Something is worth no more and no less than what someone is willing to pay for it. In that sense a can of coke is worth exactly the same in 1950 as it is now, all things considered.
It did cost a helluva lot less but not because of inflation.
A can of coke in 1950, in today's dollars cost about 51c US. I don't know if the sizes were the same, but the reason why it's more expensive today is because of other factors.
"I'd rather die standing up than live on my knees." - Stephane Charbonnier (1967-2015)
"If liberty means anything, it means the right to tell people what they do not want to hear." - George Orwell