Article via Peter Ferrara at Forbes
It is not Bitcoin that will arise as the alternative global reserve currency, because as discussed above, it has no inherent value either, so it is subject to wide swings in market value too. The real threat to the dollar is a different, private, alternative currency that can arise, that is based in real commodities with inherent value.
Such a currency will not be rooted only in the imagination of cyberspace, but will look more like the currencies of old that gave rise to booming capitalism. A foreign financial institution free from meddling, destabilizing, self-interested, U.S. policy interference can issue a currency where each unit entitles the bearer to specified quantities of a diversified basket of precious commodities, like gold, silver, copper, oil, diamonds and similar commodities that inherently hold their value over the long run.
The market value of such a currency will inherently be stable, tied to real value in the real world. When the market value of the underlying commodities declines, the issuer of the currency can buy more, and expand the currency, which will stabilize its value, and accommodate a growing economy. When the market value of the commodities rises, the issuer can sell some commodities, and retire some currency, which will again stabilize its value. The rest of the world can and will see the value in such a new reserve currency, which would be designed more on the hard money, supply side model of Nobel Laureate Robert Mundell, and his former student Art Laffer.
The remainder can be found here.
It is not Bitcoin that will arise as the alternative global reserve currency, because as discussed above, it has no inherent value either, so it is subject to wide swings in market value too. The real threat to the dollar is a different, private, alternative currency that can arise, that is based in real commodities with inherent value.
Such a currency will not be rooted only in the imagination of cyberspace, but will look more like the currencies of old that gave rise to booming capitalism. A foreign financial institution free from meddling, destabilizing, self-interested, U.S. policy interference can issue a currency where each unit entitles the bearer to specified quantities of a diversified basket of precious commodities, like gold, silver, copper, oil, diamonds and similar commodities that inherently hold their value over the long run.
The market value of such a currency will inherently be stable, tied to real value in the real world. When the market value of the underlying commodities declines, the issuer of the currency can buy more, and expand the currency, which will stabilize its value, and accommodate a growing economy. When the market value of the commodities rises, the issuer can sell some commodities, and retire some currency, which will again stabilize its value. The rest of the world can and will see the value in such a new reserve currency, which would be designed more on the hard money, supply side model of Nobel Laureate Robert Mundell, and his former student Art Laffer.
The remainder can be found here.
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