Daily Archives: July 21, 2019

Orange coin good, orange man bad

RT has the episode Orange coin good, orange man bad (E1412).

Bitcoin is gold.

It’s fun to watch Max Keiser going nuts over bitcoin.

Several hundred years ago you could have said “tulip bulbs are gold”. For a while it seemed to be true. Even saying “gold is gold” is hardly more meaningful. People have been searching for thousands of years for something that is a “store of value”. As Richard Wolff has said, many people have theories of value including Karl Marx, but nobody can connect a theory of value with a theory of prices.

This is not to say that some of the things that Max Keiser is predicting won’t actually happen. Where I think he is wrong is in thinking that Bitcoin isn’t subject to all the same problems. Bitcoin is only a store of value as long as enough people think it is a store of value. I have no way of knowing how long that will be, and neither does Max Keiser.

I wonder if people like Max Keiser are thinking that bitcoin is different because there is a theoretical limit on the number of bitcoins that can ever be found. When the idea of fractional reserve banking meets bitcoin and the world of financial derivatives meets the world of bitcoin, the idea that bitcoin is a stable store of value will go up in smoke with all the other things that were thought to be stable stores of value.

July 21, 2019

Labor Theory of Value — Richard Wolff.