Why governments love fiat system
https://ift.tt/3EfgknI
I’m not sure if btc will be the worlds reserve asset. Mostly because governments around the world love fiat based monetary system. A gold or btc standard limits their power. Also does a poor job at stabilizing capitalisms inefficiencies. And social stability.
When we look into Karl Marx’s socio-economic theory specifically (crisis theory) we see that capitalism is doomed to fail.
(Or have recessions or financial crisis.)
The reason is simple. The ratio of profit vs the amount of money invested decreases over time.
This becomes an issue because now I have to go into debt to sustain my business expenses. I would have to constantly innovate and keep profits high to stay in business.
This is unsustainable. Why? Because you can’t grow forever. Eventually the whole system collapses. Modern economist call this the boom and bust cycle
This is also observable in the physical universe. Under the term entropy (the law of thermodynamics) it seems not even the universe can evade this problem
“Loss over time is inevitable”
https://ift.tt/3yYKtGN
As we take a look at this graph we see that more capital over time is needed to sustain growth. – Source federal reserve
The fed money printer saves us from doomsday.
The government has no choice but to print money to sustain growth. Debt has to grow larger and larger to keep up with innovation and new technologies in order to stay competitive globally.
The CBDC or a crypto dollar. Will solve the governments problem. They are already in the works of making this a reality. Whatever you opinions on this form of currency is irrelevant as the government wants this. Bitcoin may or may not become a reserve asset it all depends
HOPE YOU LEARNED SOMETHING!!!
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