Who is hoarding currency on a notable scale? Why would they at the very least not invest in short-term bonds/mmfs

It used to be called "savings".

But there's a huge difference. With old fashioned "savings", the money was in a bank, which in turn would use it to invest it elsewhere. In other words, the money would still circulate in the economy. On the other hand, these bitcoins that are hoarded in a bunker are extracted from the economy as long as they are there.

The implications are big: with the current trend of concentrating wealth to only a small fraction of the population, at least all that money is not 'gone'. Even though the rich probably don't pay much taxes over it, their banks will invest it in other companies. If this bitcoin hoarding ever becomes a trend, the consequences for the economy will be disastrous.

> On the other hand, these bitcoins that are hoarded in a bunker are extracted from the economy as long as they are there.

These bitcoins were bought with cash, which is now sitting in the sellers "savings" account. The dollars did not disappear in thin air.

Those dollars continue to circulate, contributing to a functional dollar economy. Those bitcoins don't, so we don't have a functional bitcoin economy.

At some point, after the last central bank and Buffet bought bitcoin reserves, it will stop appreciating in value. Then it can start to circulate.

But what bitcoin owner is going to be willing to sell up and lock in their losses? They'll keep HODLing to the end, with only the occasional sale (to someone else in the ever-shrinking circle of people who care about bitcoin) to meet immediate needs.

today's market cap for BTC is around 158 Billion$. so we're talking about something around 7% of the world supply, "locked in an underground bunker".

What's not clear to me: is this just the keys stored underground and clients have access? or is this "cold storage"?

I'd speculate that more than 7% of the world's gold is locked up in bunkers, where it can be accounted for and borrowed against.

Nobody is shocked to know that gold is stored in vaults. Nobody is shouting that the folks buying overpriced coins from stupid mints are going to decimate the world economy with their irresponsible hoarding.

We're all just totally comfortable that, yeah... in a situation where a-bombs start dropping, gold would probably be a functional store of value.

Nobody is shocked because at least gold has a historical value and won't dissappear. When the a-bombs start dropping, nobody is going to want a piece of steel with an engraved bitcoin wallet key

> When the a-bombs start dropping, nobody is going to want a piece of steel with an engraved bitcoin wallet key

But they'll want a bunch of a heavy yellow metal? At least the small piece of steel is easier to carry around.

Savings accounts were replaced by checking accounts after the great depression. They still called them savings accounts, but people had no idea that 'savings' meant people did not have instant + reliable access to it.

So now we have 0.01% interest 'savings' accounts! They are just as liquid as our checking accounts.

Do people still use savings accounts on any significant amount of money? I'll admit I live in a bubble and don't know how most Americans store wealth

Mostly drug traffickers and other people involved in illegal businesses. Hey, maybe Bitcoin isn't that different from other currencies after all.

The people who sell the short term bonds / mmfs? Is it a sign of a fraud when you can’t tell if comments are trolling or not?

They are not, they invest that money but have different liquidity requirements so they can invest in longer term vehicles with higher yield

Indeed. The stockholm syndrome of Keynesianism is pervasive and unnoticed by many. The correct response to erosion of value is hoarding.

The correct response to erosion of value is investing as long as there are good investments to be found. This is the idea behind inflationary money (which is a broader concept than Keynesianism).

The important ideas of Keynes in a nutshell:

* Monetary velocity: wealth is a verb, not a noun. The wealth of nations is measured in their rate of transactions, not how much cash or idle assets they are hoarding.

* Idle vs. productive investment: if currency is deflationary people will store currency, a non-productive investment. If currency is inflationary people will invest it in productive activities.

I don't agree absolutely 100% with these, but I think Keynes was at least onto something especially with the first. The problem with the first is that velocity also includes transactions that don't actually do anything or that even "create" negative value. Gambling increases monetary velocity but doesn't accomplish anything and may actually destroy value. A real value-centric velocity statistic is impossible because value is a biological/humanistic concept and is non-computable. The main problem with the second is that if people are pessimistic about investments they will still hoard, but using things like real estate and gold. Another problem with the second point is that over-using this strategy to drive investment creates bubbles, as we have seen.

Finally I must point out that Keynes gets a ton of flak for stuff he did not advocate, like insane levels of public and private debt. Keynes would have been shocked and horrified at the levels of debt in our current system, and in fact his whole counter-cyclic government spending strategy was designed to prevent this.

Blame politicians and banks for the debt problem, not Keynes. Politicians invoke Keynes when they want to ratchet up spending during downturns but then they conveniently forget the other part-- namely that Keynes also advocated reducing government spending and repaying debt proportionally during times of abundance. Keynes basically argued that government could be used as ballast against economic oscillation.

I said nothing about Keynes -- I said Keynesianism. You understood this meaning well.

Would you concede that the economic policies rooted in Keynes's ideas created an environment that allowed for the snowballing issues we have?

The issue that isn't present in your comment is top-down imposed order vs. bottom-up emergent order. To me, the former is degenerative, while the latter is sustainable.