Should we worry about deflation in a Bitcoin standard world ?

A very interesting debate occurs last week between George Selgin and Saifedean Ammous about the concrete management of a deflation economy in case Bitcoin becomes the world’s monetary standard. Juice sumed up the points made by the two sides and adds some context about fractional reserve banking. He also states in his own view how Nash can reconciliate Selgin and Ammous’ views.

This made an excellent excuse for me to read some of Selgin’s work, which I have been contemplating for some time now. As he mentionned himself his book Less than zero: The Case for a Falling Price Level in a Growing Economy as a must-read to understand what he means in his debate with Saifedean, I read it first to have a balanced view as I’m already more familiar with Saifedean’s arguments.

I tried to figure things out and see if we should really worry about this kind of deflation, and what we can do about it. Continuer la lecture de Should we worry about deflation in a Bitcoin standard world ?

Survivre à Bitcoin

Bitcoin est un environnement incroyablement hostile, en particulier pour ceux qui le découvrent et n’en maîtrisent ni la technologie, ni les aspects économiques, c’est-à-dire tous les humains sur cette planète à des degrés divers.

Bitcoin est aussi un environnement anarchique et souverain, car il possède une règle et ne reconnaît aucune autorité supérieure à celle-ci. Cette règle est appliquée par chacun des pairs lorsqu’il choisit de faire tourner son propre nœud. Continuer la lecture de Survivre à Bitcoin

What Louis XIV, king of France, can teach us about Government, power, and money

This article was first published on Medium on the 15th of June 2018.


I think The Bitcoin Standard by Saifedean Ammous will be a milestone in the slow realization of what Bitcoin is, digital sound money, and why it is at least a subversion of the current monetary system, or more likely a revolution in the monetary realm.

In this book, Saifedean mentions the historical study of hyperinflation episodes by Hanke and Bushnell, and make his point that every one of them occurred during the era of government paper-money, with one exception being “the inflation in France in 1795, in the wake of the Mississippi Bubble, which was also produced through government money and engineered by the honorary father of modern government money, John Law.”

In fact, this sentence conflates two distinct experiences of paper money in France, the first being the “Mississippi Bubble” that was part of John Law’s System that went bankrupt in 1720, the second being the dramatic fall of the Assignats, a note created by the French Revolutionary Government in the wake of the 1789 uprising, badly inflated and then demonetized in 1795.

Whether the mistake is on Hanke and Bushnell or Saifedean doesn’t matter, what matters is that the two events are indeed connected, and both illustrates Saifedean’s point that hyperinflation is the disease of government paper money.

I wanted to know more about these two very important events in french history, and started reading about it. In two articles by the very much forgotten now Alphonse Vuitry, a french historian of the late XIXth century, I found a gold mine of information not only about John Law and his system, but also on the chain of events that made it possible in the first place. It was indeed Louis XIV, the Sun King, that paved the way to John Law’s then innovative fiat money by crushing France under a never seen before heap of debt.

It is frequently argued that paper money inflation is a better way to finance government expenditures and deficit because it is hardly noticeable by the public. I thought that this small piece of history made a good argument to prove this point, but also that precisely because of that it is vital that free men never ever let this convenient tool in the hands of any government, be it our modern and apparently good-meaning democracy, because it makes a lot of abuse possible and still keep the ruler from being held accountable for it.

Continuer la lecture de What Louis XIV, king of France, can teach us about Government, power, and money