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The US Dollar area (i.e. the US) has come closer to default than the Eurozone.
yep. But can the largest military power really default?
I would love to participate in this discussion, but I feel like I don't know enough about the economics of currency to make any real contribution. Does anyone know of some good resources (online courses, books, etc)?
IMHO, you should listen to economists that (a) emphasize looking at the operational realities of what actually happens in the monetary system, and (b) tell you that banks matter for what happens in the economy.
(If you find it hard to believe that a majority of economists ignore banks in their models of the economy, good for you and your common sense!)
This means you should read what Steve Keen writes and listen to what he says (he blogs at http://www.debtdeflation.com/blogs/), and what the Modern Monetary Theory crowd write, as they explain such basic things as what role reserves and bonds play, from first principles (start here: http://neweconomicperspectives.org/p/modern-monetary-theory-...).
More generally, "endogenous money" is an important keyword to look out for, because our monetary systems are endogenous in the sense that money is mostly created by banks, not by the government.
If you venture into online economics resources, you will run into a lot of (economic) Austrians. I believe this is mostly because of the Mises institute, which is well funded by people with an ideological ax to grind. It's good to reflect on their messages occasionally, but they should be taken with a grain of salt. (And since they are hardcore gold bugs, they don't get endogenous money, which means that much of what they say simply doesn't apply to our current economic framework.)
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yep. But can the largest military power really default?
Easier than anyone else, I'd say. "Hi Everyone, POTUS here. About those treasury bonds a lot of you are holding... we're not going to pay interest on them. Or pay back the princiapl. Ever. On a totally unrelated note, here are some pictures of our 11 carrier strike groups. Impressive, aren't they?"
The US would never need to default on its debt, since its debt is in USD. Worst case, it would just print more money, leading to inflation.
Another part of the global anti-cybermoney-publicity-campagne that we can see right now starting is a study of the European Central Bank on "Virtual Currency Schemes", Oct. 2012. Read it: http://www.ecb.int/pub/pdf/other/virtualcurrencyschemes20121... Edit: BTW, if you are interested in international monetary policy you can find many important publications on the ECB site: http://www.ecb.int/pub/html/index.en.html
But if you actually read those publications, you'll notice that they aren't very urgent at all. Their stance is basically that they want to keep up with the development, but don't see a reason to act right now.
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Totally agreed, but I think it's worth pointing out that you could technically "own" the Bitcoin "printing press" if the $BTC distribution is skewed drastically to a particular majority (who could then corrupt the protocol/subsequent block chains). This is why initially, many people were told to use different mining pools or exchanges, as I recall there were a few majority cases a year or so ago (even Mt. Gox still h…
assuming that everyone plays fair, uses common sense Big assumption.
One I would argue is a necessary evil.
I would love to participate in this discussion, but I feel like I don't know enough about the economics of currency to make any real contribution. Does anyone know of some good resources (online courses, books, etc)?
This is always a contested subject because economics has so many competing branches, many of them with more or less overt ideological overtones. IMHO, you should listen to economists that (a) emphasize looking at the operational realities of what actually happens in the monetary system, and (b) tell you that banks matter for what happens in the economy. (If you find it hard to believe that a majority of economists ig…
I would love to participate in this discussion, but I feel like I don't know enough about the economics of currency to make any real contribution. Does anyone know of some good resources (online courses, books, etc)?
* "End the Fed" by Ron Paul
* "Economics in One Lesson" by Henry Hazlitt
* "The Mystery of Banking" by Murray Rothbard
* "What has government done with our money?" by Murray Rothbard
* "Debt: The First 5000 Years" by David Graeber
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yep. But can the largest military power really default?
Easier than anyone else, I'd say. "Hi Everyone, POTUS here. About those treasury bonds a lot of you are holding... we're not going to pay interest on them. Or pay back the princiapl. Ever. On a totally unrelated note, here are some pictures of our 11 carrier strike groups. Impressive, aren't they?"
If the U.S. decided to completely default on it's debt it would be more destructive to the U.S. economy since the majority of the debt is held by U.S. citizens & institutions. Insurance companies & banks would collapse instantly since the a very large percent of their asset bases would be wiped out.
We (meaning U.S. citizens) owe more to ourselves than to any foreign entity. Default is, at least right now, a political non-starter.
I would love to participate in this discussion, but I feel like I don't know enough about the economics of currency to make any real contribution. Does anyone know of some good resources (online courses, books, etc)?
I felt the same way when I discovered bitcoin last year. Here are some books that I read that helped: * "End the Fed" by Ron Paul * "Economics in One Lesson" by Henry Hazlitt * "The Mystery of Banking" by Murray Rothbard * "What has government done with our money?" by Murray Rothbard * "Debt: The First 5000 Years" by David Graeber
This wikipedia link could be a good start in addition to the selection of books above: http://en.wikipedia.org/wiki/Federal_Reserve_System
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You really do not have a clue how our monetary system works, do you?
So enlighten us all, rather than posting snarky comments.