BitShares Forum
Main => General Discussion => Topic started by: 天籁 on November 28, 2014, 02:11:04 am
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For example, BitUSD is just the USD base currency equivalent, not out of air, it is created with three times of the deposit. But modern banks can produce 10 times the flow of cash of base monetary by 10% reserve, which causes endless inflation. If people use BitUSD instead of USD, M2 will be greatly reduced, there would not be infinite inflation.
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And politicians will not be able to spend money they do not have (cannot tax) in order to buy popularity......... and they will HATE you.
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And politicians will not be able to spend money they do not have (cannot tax) in order to buy popularity......... and they will HATE you.
Correct!
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For example, BitCNY is just the CNY base currency equivalent, not out of air, it is created with three times of the deposit. But modern Banks can produce 10 times the flow of cash of base monetary by 10% reserve, which causes endless inflation. If people use BitCNY instead of CNY, M2 will be greatly reduced, there would not be infinite inflation.
+5%
This good video from 8:00-10:00 shows how modern banks inflate the currency with a 10% reserve ratio.
http://m.youtube.com/watch?v=iFDe5kUUyT0
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IDK, theoretically if the central bank didn't charge interest then the fractional reserve ratio would still not inflate the supply more than a finite amount. It's the fact that the central bank charges interest to force other banks to borrow even more dollars into existence from them that fundamentally fuels the inflation.
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Without interest there is no incentive to borrow or lend... its a catch 22.. its a ponzi scheme down to the roots.