Anyone can address this note and let all (I am the only one) know comments and/or explanations. I do not have a clue !!
By poking for a while into the forex markets, I did understand that the trading between fiat currencies was to be done by pairs ALWAYS. If the play was the EURUSD, I would know when I would be long euro (short USD) and/or short euro (long USD). That is, for every dollar there was a certain amount of euros in exchange; a value that was determined by a global market, called forex. Long euros, I could spend them in Europe; long USD I could spend this in the USA and so on for every pair in the world.
What I see these days is that the BTC is traded vs the USD as many other c-coins, +850 of them so far; even if your trade let’s say a monero vs a dash, you would always, for now, use the dollar or euro as a frame of refence to consciously know how much money you really have at your disposal.
So my not-so-clear-issue(s): these days the federal reserve keeps printing money as if there was no end and because of this, too much money in the streets tends to reflect in an ever increase of cost services, goods and products, i.e. inflation; and yes plus the aggregate that there must be demand for those products, goods and services.
Now what if the fed keeps printing money AND starts buying a lot of bitcoins, and I mean a LOT. Perhaps they run out printed bills, but since they are the fed, they can print some more and voila they are owners of the 25M BTC’s. So now we all have again USD in the pockets and are worth next to nothing, correct?
Also what if no one pays anything with USD; only use the c-coins they in their wallets. The c-coins will still be created as transactions keep happening between buyers and sellers. Meanwhile de fed continues printing money devaluating the purchasing power of the c-coins, correct? In order to decouple the c-coins from all of the fiat currencies in circulation, we all humans on earth, would have to arrive to an agreement on what is the value of things in c-coins. Point in time at which definitively fiat will be a thing of the past, correct?
Would sure appreciate your comments to this. What will be the future if any of bills and coins.
A short answer is yes and no... while the FED can keep printing money(and decreasing the value) there has to be a buyer of that debt, or devaluation. so in essence the FED is simply, at any point creating debt that someone else is buying. This isn't a problem until someone stops buying that debt. As we continue to weave the global economies together the ability to create more debt becomes increasingly difficult because doing so eventually hurts the global economy. eventually we will have another global economic crash in which we suffer a devastating repeat of the "great depression" in which everyone loses. when that happens the global community will do as before and will simply write off the debt and start over from scratch again...what should scare you the most is that global depressions are cyclical and normally happen about every 80 to 100 years. the problem is we are overdue a global depression by about a decade or so based on an 80 year cycle or will have one in about 10 years if you base it on a 100 year cycle. The global central banks, including the FED, have manipulated the global economies, and managed to stave off the global economic colapse that would have likely have happened in 2007, which means that having manipulated it, and the slow rate in which the central banks are returning to "normal" interest rates mean that it will almost be impossible for them to stave off the next trigger that sets off a global economic collapse....when you begin to see global economies begin to falter be prepared to buy precious metals before the trigger events begin. because when it happens it will happen quickly, and even crypto-currencies will collapse and owning precious metals will once again be the way to weather the collapse...
you mean buy the hard gold/silver coins..?? correct ...
Txs. & Rgds.
@indepthstory
you are correct... and are welcome.
Nice @bolang
Congratulations @indepthstory! You have completed some achievement on Steemit and have been rewarded with new badge(s) :
Click on any badge to view your own Board of Honnor on SteemitBoard.
For more information about SteemitBoard, click here
If you no longer want to receive notifications, reply to this comment with the word
STOPBy upvoting this notification, you can help all Steemit users. Learn how here!
This is very nice @indepthstory
Txs.
thanks for this post @indepthstory it was quite educative. i have given u an upvote and i hope you'll follow back
Txs. & rgds.
Hi @indepthstory
I'm not gonna claim to be an professor of economics, but I don't think the fed will be able to buy all the bitcoin without bankrupting the entire country. I think if they print more dollars, the value of the dollars decrease and if they buy bitcoin, the value of bitcoin increases. So to buy all the bitcoin will make the dollar worthless which is something they don't want. This is my guess with my basic understanding of supply/demand. If anyone can confirm/correct me, please do so!
Its hard to say what the relationship will be. Fiat money will coexist with cryptos for the next foreseeable future.
.
Once cryptos start to compete at a level close to that of the usd the governments of the world are going to fight back hard. really hard
Hi,
First thing is that there can only ever be 21 000 000 BTC in circulation so it is impossible for the fed to own 25M BTC.
Secondly: It is not in the fed
s best interest to buy up loads of bitcoins because they have control over printing dollars so buying bitcoin would only drive up bitcoins price and rendering their ability to create dollars worthless.And lastly, be careful if you trade cryptocurrencies against one another by watching what their worth in dollars because that can be misleading. Rather use what they are worth in bitcoin as a frame of reference.
Peace!