Quote:
Originally Posted by aka123
Pretty much all nations are concerned about the export and currencies impact to it. Not just China. For example Germany has greatly benefited from euro, as euro is much lower in value than would Germany's own mark be. If country has meaningful amount of export, it will not go after just currency's strength, as that would be "death toll" for its export industry.
About bitcoin, you couldn't buy shit with witcoin for example 10 years ago. Maybe the sea shells are just ouf of fashion, but who knows. 
Bitcoin's characteristics are the difference, the main difference, and also how accepted it is. Its main characteristic (deflatory) is the one that every other currency pretty much tries to avoid. It's kinda funny that Bitcoin fans keep it as its best quality, but it is in fact the worst. LOL. |
Like most economic levers, it is a teeter totter system. When a currency grows too strong, exports drop. The drop in exports decreases demand for the currency. Decreased demands weakens the currency. As the value of the currency drops, exports increase.
It is generally a cyclical system, not something which always goes in one direction.
I assume, when you talk about deflation, you mean the limit on the number of Bitcoin which will be mined, is that correct? What economic problems do you see stemming from Bitcoin gaining in value over time?
You are right that sea shells are out of fashion. A currency must be currently accepted to function as currency. You can't buy something for two bits in America any more, but that doesn't mean it wasn't currency in the Old West. The fact that I doubt my local restuarants would be pleased to take a gold doubloon does not mean it was not once currency, but it is out of fashion, so it is not currency now.
Currency is not some absolute thing. It is a currently accepted instrument, which is mutually agreed to represent a certain value.