New interview with Craig Rowland

[ArthurPooh]

By ‘switch sides’ you mean graduate from a serf to a nobleman?

Yes, exactly. Medieval peasants couldn't just frugal themselves into becoming knights, and actual slaves/serfs in many human societies had no chance of changing their situation at all. In contrast, in last several decades there were probably hundreds of millions of broadly middle class people who merely had to not buy stupid stuff and invest in widely available, mainstream assets to ensure their children, or grandchildren at most, would never have to work. Instead, I read FIRE bloggers who proudly proclaim their 20-something progeny have jobs or go to college and that they are going to leave their inheritance to "their favorite charities" and all that goes through my head is Jordan Belfort from the movie Wolf of Wall Street exclaiming "What a f***king idiot!" after successfully closing a sale.

[dualstow]

Yes, exactly. Medieval peasants couldn't just frugal themselves into becoming knights,

But squires could “feudal” themselves into becoming knights

[ArthurPooh]

Yes, exactly. Medieval peasants couldn't just frugal themselves into becoming knights,

But squires could “feudal” themselves into becoming knights

But I assume a passive squire would not get very far.

[yankees60]

Yes, exactly. Medieval peasants couldn't just frugal themselves into becoming knights,

But squires could “feudal” themselves into becoming knights

But I assume a passive squire would not get very far.

You are saying that type of squire would maintain a permanent status?

[gizmo_rat]

Good interview, everything completely consistent with what he was saying 15 years ago.

[Jack Jones]

Yes, exactly. Medieval peasants couldn't just frugal themselves into becoming knights,

But squires could “feudal” themselves into becoming knights

But I assume a passive squire would not get very far.

You are saying that type of squire would maintain a permanent status?

[Smith1776]

I wonder what it would take for Craig to accept Bitcoin as a potential PP component?

[dualstow]

I wonder what it would take for Craig to accept Bitcoin as a potential PP component?

Not to put words in his mouth, but he had expressed concern about how the governments can outlaw it if they want, or at least try to.

It would seem that it would take a lot for it to become a real pp asset, then.

[mathjak107]

well they did it to gold at one time

[dualstow]

well they did it to gold at one time

indeed!

[yankees60]

well they did it to gold at one time

indeed!

Someone better than me could probably make a good list of all the unique conditions that led to that and then either:

1) Show how it's impossible to replicate those conditions now

OR

2) Make a case of how a new unique set of conditions lead to it happening.

Of course, anything is possible, but we always have to evaluate the probabilities of those possibilities.

[Smith1776]

Yeah, like it was done to gold at one time... so if that's a criticism Craig has levied against Bitcoin, then how could gold be exempt from that?

[dualstow]

Yeah, like it was done to gold at one time... so if that's a criticism Craig has levied against Bitcoin, then how could gold be exempt from that?

Speaking just for myself- There are many governments that would like to create their own cryptocurrency. The digital dollar, perhaps a digital euro, and so on. So, there is a strong motive there to eliminate the competition.

Gold on the other hand, cannot be outcompeted. Perhaps it could be outlawed (good luck), but there is nothing physical that a government can put up against it.

[Smith1776]

Yeah, like it was done to gold at one time... so if that's a criticism Craig has levied against Bitcoin, then how could gold be exempt from that?

Speaking just for myself- There are many governments that would like to create their own cryptocurrency. The digital dollar, perhaps a digital euro, and so on. So, there is a strong motive there to eliminate the competition.

Gold on the other hand, cannot be outcompeted. Perhaps it could be outlawed (good luck), but there is nothing physical that a government can put up against it.

Very good point.

[Jack Jones]

Speaking just for myself- There are many governments that would like to create their own cryptocurrency. The digital dollar, perhaps a digital euro, and so on. So, there is a strong motive there to eliminate the competition.

This already exists. We’re already owners of inflatable digital dollars on government infrastructure.

Governments wouldn’t propose a money they cannot create more of at their whim. So a government cryptocurrency is a contradiction in terms for me.

Gold can be outcompeted in my opinion. In the same way that gold outcompeted silver. Gold has better monetary properties than silver.

[dualstow]

Gold can be outcompeted by Bitcoin or some form of crypto- is that what you mean? If so, I agree with the possibility. But, I don’t think it can be beaten by something physical, and even if it could, the government doesn’t control it.

Governments wouldn’t propose a money they cannot create more of at their whim. So a government cryptocurrency is a contradiction in terms for me.

I’m going to expose the shallowness of my understanding of crypto once again.
— Is that part of the definition of crypto, that you can’t make more of it? Serious question. I know that’s the beauty of bitcoin, but I don’t know if other crypto adheres to that system.
— In any case, a digital dollar, which is inflatable like you said, could never be more attractive than something like Bitcoin. But this is precisely why governments might be motivated to try and ruin Bitcoin.

In general, I don’t know why consumers would want to use a digital dollar when they already have things like credit cards and Apple Pay.

[D1984]

Speaking just for myself- There are many governments that would like to create their own cryptocurrency. The digital dollar, perhaps a digital euro, and so on. So, there is a strong motive there to eliminate the competition.

This already exists. We’re already owners of inflatable digital dollars on government infrastructure.

Governments wouldn’t propose a money they cannot create more of at their whim. So a government cryptocurrency is a contradiction in terms for me.

Gold can be outcompeted in my opinion. In the same way that gold outcompeted silver. Gold has better monetary properties than silver.

I think some of the confusion about so-called "government cryptocurrencies" is because many people say "cryptocurrency" when they are actually talking about a simple CBDC (Central Bank Digital Currency); said currency could be crypto/blockchain based but doesn't absolutely have to be; it could just be digital 0s and 1s that the government or central bank could create at will.

Hypothetically, if the Fed and/or the Treasury offered, say, to let any American citizen or legal permanent resident open an account direct with the Fed that had the following features:

1. You could keep a balance of up to, say, $60K in it and earn interest (with the provision that one was welcome to keep more than $60K in the account if for whatever reason one saw fit to do so but that it would earn no interest). Also, the $60K limit amount would rise with inflation each year.

2. The interest paid on the account would be the greater of the 30-day T-Bill rate, the Fed Funds Rate, or whatever inflation plus 0.01% was.

3. The account had access to the Fedwire system at no cost so that virtually instant transfers could be made to any account at bank (or any bank's ATM, for that matter) instantly) within the Federal Reserve system.

4. The account came with a check card (or ATM card, if you wanted that instead).

It would allow anyone who wanted to to have a bank account that always at least kept up with inflation (or perhaps did slightly better) and thus might "outcompete" BTC or other cyptocurrencies amongst those who simply held crypto as an inflation hedge.

I suspect, though, that most people who hold crypto don't really hold it as an inflation hedge per se; 99% of them are either speculators/investors or are holding it for other reasons (to hide money from tax authorities, to buy and sell goods/services in the black market, etc).

Whether or not said CBDC would cause any dent in demand for gold or other PMs is hard to say (although it probably wouldn't). Gold isn't really an "inflation hedge" except in the very long-term sense; I suspect that almost all gold is held a either an investment, a speculation, or simply as jewelry/ornamentation/luxury items....I know of no one who simply holds gold and actually keeps it as a day-to-day currency or tries to trade in some of his/her gold for dollars every time they want to buy something (it's a different story for those who hold gold as part of a balanced portfolio but again, that is either for investment or speculation purposes, not for everyday use as a monetary medium).

[ArthurPooh]

Yeah, like it was done to gold at one time... so if that's a criticism Craig has levied against Bitcoin, then how could gold be exempt from that?

It is much harder to do it to gold because gold is a physical item that does not rely on a centralized infrastructure for its continued existence.

[Jack Jones]

Gold can be outcompeted by Bitcoin or some form of crypto- is that what you mean? If so, I agree with the possibility. But, I don’t think it can be beaten by something physical, and even if it could, the government doesn’t control it.

I don't know how much they are in competition. I find it sensible to own both.

But yeah, if we recognize that gold is a better store of value than silver, we should accept that there may be better stores of value than gold. And these reasons would be technical in nature, about the properties of the commodities in question.

Governments wouldn’t propose a money they cannot create more of at their whim. So a government cryptocurrency is a contradiction in terms for me.

I’m going to expose the shallowness of my understanding of crypto once again.
— Is that part of the definition of crypto, that you can’t make more of it? Serious question. I know that’s the beauty of bitcoin, but I don’t know if other crypto adheres to that system.

I guess crypto is how you want to define it. But to me I want to see decentralization, no leader, fair distribution schedule/scheme. Gold has these same properties.

[ArthurPooh]

But yeah, if we recognize that gold is a better store of value than silver, we should accept that there may be better stores of value than gold. And these reasons would be technical in nature, about the properties of the commodities in question.

With stores of value there is also an issue of path dependency.

Platinum is more scarce than gold, yet it's hard to argue it will ever replace it, and the reasons for that have little to do with respective metals' physical or chemical properties and everything to do with ancient history. Gold is money because it always was.

Same phenomena are observable with fiat currencies. Why exactly are USD, EUR, JPY and GBP the predominant reserve currencies? Sure, the US is a global empire, but the rest? The euro does not make any sense. Japan and UK are just two garden variety declining developing developing countries; there's no rational argument why their currencies are better than say, the Swedish krona or the Korean won. And where's the Swiss franc, the hardest of hard currencies?

You wouldn't ever arrive at the current distribution of reserves by analyzing and comparing each fiat currency in circulation; because in fact these four just "happen" to be the currencies of four empires that fought the World War Two, with the euro inheriting German Mark's status.

[Jack Jones]

But yeah, if we recognize that gold is a better store of value than silver, we should accept that there may be better stores of value than gold. And these reasons would be technical in nature, about the properties of the commodities in question.

With stores of value there is also an issue of path dependency.

Platinum is more scarce than gold, yet it's hard to argue it will ever replace it, and the reasons for that have little to do with respective metals' physical or chemical properties and everything to do with ancient history.

Gold is better money than platinum because of the stock to flow ratio. For gold, today's mining activity is a drop in the bucket of total supply.

Compared to other precious metals such as platinum or silver, gold has a much higher stock-to-flow ratio: The ratio for platinum is approximately 1, while the ratio for silver stands at 22. Gold’s stock-to-flow ratio on the other hand highly outshines that of all other commodities and is documented as being over 70.

I suppose some of this is due to ancient history, but it's also due to the present use of platinum for industrial purposes (physical and chemical properties).

Gold is money because it always was.

And silver was money until it wasn't.

https://en.wikipedia.org/wiki/Global_si ... _centuries

[jalanlong]

I wonder what it would take for Craig to accept Bitcoin as a potential PP component?

Not to put words in his mouth, but he had expressed concern about how the governments can outlaw it if they want, or at least try to.

It would seem that it would take a lot for it to become a real pp asset, then.

The time for government to outlaw it would have been before the SEC approved bitcoin ETFs. Just the top 3 bitcoin ETFs alone have $30 billion in assets right now. Banning it now is not realistic.

[dualstow]

Good point. That was quite a long time ago that he made the statement, well before the advent of these ETFs.

[boglerdude]

Why outlaw when you can tax it. The off-ramps into spendable currency are controlled and google/apple are only gaining more control of the app environment.
https://mishtalk.com/economics/bitcoin- ... de-stupid/

[dualstow]

I think their desire to outlaw crypto stems from the fact that they can’t control it. They could completely control their own crappy digital coin that nobody wants. But maybe taxation is the next best thing.