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If the government goes to pure crypto?
Do you think they would make their own crypto currency?
Lets say $20 converts to 1 coin. How would that solve the inflation problem?
- ZirpLv 51 month agoFavorite Answer
It is widely believed that money-creation by any government would be automagically nullified by inflation. That's why we leave moneycreation to BANKS who demand back every penny with interest (as if that does not cause inflation....)
Crypto-currencies would not solve anything.
Some (rightwing) economists don't see inflation as a problem, but as a way to stimulate the economy
- Spock (rhp)Lv 71 month ago
it would create as different set of problems. one of the 'features' of crypto is that the difficulty of creating the next one is incrementally more than the prior one. At some point, with a fixed in real terms value, the cost of creating more crypto would exceed its value -- and at that point, the total value of money in circulation would become frozen. That's only workable if the transaction speed of money keeps up with the economy's need for money -- if it fails, transactions cease being done because people can't pay [no money despite having plenty of value stored in other assets]. The logical next step then is for an alternative 'money' to be created that isn't so limited in number. You need not worry about this in America, since Congress is imbued with the power to create money and regulate the value thereof by the Constitution and Congress is certainly not going to give up the ability to inflate its way out of a debt crisis. [inflate its way ==> reduce the value of money or devalue the currency]
- harveyhLv 51 month ago
That would be a very stupid thing to do.
- Anonymous1 month ago
If people stop pouring money into it, it will disappear. All the investment is making it stronger.