> Strong currencies are not the solution to poor governance. Good governance and democracy makes a country and its currency strong. Not vice versa.

That's a good point. Too many people propose individualist solutions to social problems, and all their "solution" would do is make the social problem worse.

I think that stems often stems from an overzealous faith in free markets, which leads to a distorted idea that individual self interest factored over all of society always results in social benefits, so you only need to consider things from the perspective of an individual (which is also far more familiar to most people). Sometimes individual self interest does lead to social benefits, but often it doesn't.

Markets only exist within the context of a political system. They are just a tool to reach a certain policy outcome. The idea of using the free market to replace poor governance is laughable. It's the opposite. You have to set the right policies and incentives and only then will the free market show its true beauty. Markets fail or succeed because of improper or proper governance.

It's like a genetic/ML algorithm that is optimizing for a cost function. If your cost function is awful your algorithm will be awful but that's not an argument in favor of getting rid of cost functions entirely.

Suppose you've got two political systems each vying for legitimacy. They each have their own currency, and their own set of policy outcomes.

Is it so laughable that whichever one achieves the best results for its users will be the one to establish both market and political dominance? Is letting such a competition play out via the value of their respective currencies any better than traditional means of resolving this kind of conflict (i.e. war)?

I'm not saying I have ultimate faith in the market to do the right thing--it frequently doesn't. But it sounds like you're saying that it can't.

Granted, BTC's political system involves allocating power based on who can waste the most energy--so it's a pretty laughable alternative to existing governments--but in principle I don't see why markets can't mediate the rise and fall political systems in a way that roughly mirrors the way that political systems mediate the rise and fall of companies.

There's that saying: - Those who make peaceful revolution impossible make violent revolution inevitable.

It seems to me that collectively changing whose currency we use based on their capacity for sound governance is the kind of peaceful revolution that we ought to strive for.

A market doesn’t work in countries without a strong government, since for a market to work, there needs to be faith that the other party isn’t going to break the rules of the market. If you’re trying to sell your goods and someone comes in with a gun, then you have to hope that either you have a gun or can call police. If you have to resort to using a gun, then that leads to huge costs and lots of dead people.

I'm not gonna say that that doesn't happen, but it's surely not the only thing that happens in places without an authority. People want to exchange goods, and they're typically willing to be clever in order to make that happen.

Already cryptocurrencies are implementing webs of trust to guard against this kind of thing (CirclesUBI). There are also things like MAD escrow (particl). And there's the old fashioned way, which is to get the community together and set up your own impromptu government.

I'm not saying that markets function well without readily available trust. But to say that they cease to exist in those contexts is surely taking it too far.

That's precisely the main innovation of Bitcoin. Without the aid of a central authority, people are able to decide on a set of rules that must be respected to play in the market. People can switch to different "markets" with different rules at will.

The value of these markets is itself decided through a free market.

Given a sufficient level of digitization, it's not hard to imagine how many kind of real world markets could be backed by Bitcoin-like systems.

Except for very narrow use cases I don't see how the rules you can enforce in a digital space like a blockchain network help when you don't have a stable meatspace system of law. A bitcoin transaction can be mathematically as bullet proof as you want, but that doesn't help make your meatspace assets any more bullet proof.

It doesn't take much law to make cryptocurrency secure for a person to hold: just protection from home invasion and torture. It can work quite well in otherwise highly dysfunctional societies.

Other forms of property ownership are much more fragile, and require a much more sophisticated legal system.

Ok, so no one can steal my crypto. But what if they accept my payment, and then they don't give me the items I payed for? Or vice versa - if I'm selling something and I give them the item, but they don't initiate the payment? What if the company I work for isn't transferring the BTC in our contract at the end of the month, because they ran out because their own customers haven't been paying?

With a regular currency, the government can print more money and at least have a chance for things going back to normal once the currency has a chance to go back up in value. But with a currency that's not controlled, you won't get payed in worthless money (inflation), you just won't get payed at all! And instead of getting back your lost value if the currency rises in power, you'll have to hope the contract will be honored at a later date, or massively overload the legal system.

Commerce generally works quite well, to the point that it works even when there is no legal compulsion to not cheat.

Bad actors are ostracized while good actors build followings, leading to reputation acting as an effective mechanism to find good actors to trade with, and incentivize people to become good actors.

In any case, when people are free to choose between government-recognized currency and non-governmental digital currency, they will choose the one that best suits each circumstance, leading to greater overall utility.

Yes, in a functioning economy. Here we are discussing what happens as an economy breaks down - as people stop being able to pay their debts, for various reasons.

I thought you were talking about economies with poorly functioning states, like say Ethiopia or Kenya. In these places, markets work quite well, they are just limited in the range of products and services they offer. They have limited access to the most useful financial and payment systems, like PayPal, due to undeveloped banking systems, blacklisting by governments of advanced economies, and bans by their own govermments.

Cryptocurrency offers a much more accessible alternative to global payment systems to the people living in these countries.

Usually, markets work quite well because they work face to face. Internet commerce on the other hand is usually extremely risky business if you don't have access to parties which can control that risk: strong, fair states that enforce complex laws in cases of disputes; 3rd parties that assume some of the risk, such as PayPal or eBay.

Bitcoin solves none of these problems. Sure, it allows you to at least assume this risk, which your country otherwise doesn't, so it's not nothing. But it's at best a band-aid.

It also doesn't protect you in any way from your employer not paying your salary on time, from being wrongfully terminated, from not being able to get a loan, from business partners not paying their debts because they can't sell their own products etc. These are usually the problems that a non-functioning state and non-functioning economy face.

>>Internet commerce on the other hand is usually extremely risky business if you don't have access to parties which can control that risk: strong, fair states that enforce complex laws in cases of disputes; 3rd parties that assume some of the risk, such as PayPal or eBay.

Cryptocurrencies can be used in person too.

With respect to eCommerce, EBay worked extremely well simply because of reviews. Not because of laws. And yes, people came to trust eBay, which was due to its faithful fulfilment of its obligations as a platform steward, not due to regulatory requirements imposed on it.

Will that be enough? AFAIK, every country's government (or some warlord) has a monopoly on violence and the law. If they wanted to, they could easily just draft a law mandating crypto to be stored in particular forms else can't be used/traded. Or they could simply invade your home on some bullshit pretext and seize all of your crypto. Both instances have happened before (and have been posted on HN too) and I've seen both of them in both autocracies and Western democracies.

Imo, there's nothing better to secure your assets better than some form of monopoly on the law, or a monopoly on violence, or even better a combination of the two. This is also why billionaire classes simply consider crypto a wealth store asset and not a secure store of assets.

In theory, there is nothing an autocratic government can't do to you.

But leaders pay a political price for instituting draconian enforcement measures, while their country pays an economic price, which makes them less likely. It's one thing to send armed agents to storm the homes of executives of a large private bank to shake down the bank. It's another to do it against end-users at a scale where it becomes effective.

You may be right about the most secure form of property. Many don't have access to jurisdictions that can offer people in their income class that kind of security of property. For them, I think in some situations cryptocurrency can be a very secure form of property comparatively speaking. Cryptocurrency can be thought of as a poor man's offshore bank account, literally speaking.

> Many don't have access to jurisdictions that can offer people in their income class that kind of security of property. For them, I think in some situations cryptocurrency can be a very secure form of property comparatively speaking. Cryptocurrency can be thought of as a poor man's offshore bank account, literally speaking.

Actually I didn't mean monopoly on the law and monopoly of violence that way. I meant that billionaires invest a lot of cash into politics and personal security (legal and otherwise) for good reason. It would be very hard for a politician to go head to head against a billionaire donor, since he would just donate to the other guy the next time. Similarly, they get to influence a lot of things including who might head the city's police force or what policies to implement on a regional or national level. It's the same thing everywhere, whether you're in the Indian or Pakistani badlands, the heart of the EU or smack in the middle of NYC or SF.

I agree with crypto being the poor man's offshore, but a poor man wouldn't need an offshore. Not to mention, the barrier to open an offshore account is much less than the cost of BTC right now.

>>It would be very hard for a politician to go head to head against a billionaire donor, since he would just donate to the other guy the next time.

Yes true.

>>I agree with crypto being the poor man's offshore, but a poor man wouldn't need an offshore. Not to mention, the barrier to open an offshore account is much less than the cost of BTC right now.

Offshore bank accounts are very costly and difficult to get. They are also not that secure, considering how many have given up on financial privacy in the face of the warrantless-financial-mass-surveillance aka AML push by the dominant political powers, and leaks like the Panama Papers.

> But leaders pay a political price for instituting draconian enforcement measures, while their country pays an economic price, which makes them less likely. It's one thing to send armed agents to storm the homes of executives of a large private bank to shake down the bank. It's another to do it against end-users at a scale where it becomes effective.

I don't think the political price is as high as you think, and armed agents don't have to storm the homes of end-users at scale. All they have to do is storm enough homes discourage people by making it clear the risk is real, and everyone internalizes the rules.

If cryptocurrency is contraband, it's the worse kind of contraband because it advertises that you use it to the authorities through easily monitored channels (since you have to connect to identifiable internet services to use it).

>>All they have to do is storm enough homes discourage people by making it clear the risk is real, and everyone internalizes the rules.

I suspect the scale of enforcement needed to discourage widespread usage would be very large, and incur political and economic costs that are prohibitive. That's corroborated by the fact that the USD circulates widely in countries suffering high inflation, despite it being in the best interest of the elite of these countries for people to only use the national currency.

>>If cryptocurrency is contraband, it's the worse kind of contraband because it advertises that you use it to the authorities through easily monitored channels (since you have to connect to identifiable internet services to use it).

Only if public access to strong encryption is prohibited, and there are economic costs associated with a country doing that.

> Without the aid of a central authority, people are able to decide on a set of rules that must be respected to play in the market.

What you mean to say: people will reinvent laws and governance.

That's right, but what's new about this time is that the "how bad things have to get before we rethink laws and governance"-threshold had changed, as has the "how efficient of a government we'll accept before we stop iterating"-threshold.

Governments run themselves but until recently, economies didn't. Now that there are two memes (besides violence) that are each independently capable of mediating coersion on a global scale, we can play them against each other and select for the one we like best.

Governments have always (always) been involved in economies. Rome imported hundreds of tons of grain a year and gave them out free to its citizens. Hammurabi’s code mandated fixed medical payments and regulated professions. Don’t get me started on China. And taxation has been around as long as there has been agriculture, although it’s much better nowadays since the taxman won’t come in and tax all the food you own just before winter, leaving you to starve.

> If you have to resort to using a gun, then that leads to huge costs and lots of dead people.

Is that more true for you using a gun than it is for police using a gun?

Yes. Police is regulated and has a lot of conventions (laws) and resources that enforce those conventions. Ultimately, it goes back to a fairly well-resourced court of law, which is willing to take a fairly high cost to make a decision, as a shared cost paid through taxes.

With individuals making those decisions, the decisions will be made at much lower cost, and this will result in lower quality of decisions.

If it’s you using a gun, you get Somalia. If it’s the police using a gun, you get the US. (If it’s the police using a baton, you get the UK). It works because the threat isn’t just physical harm but also social consequences. Even going back through history, there would be governmental consequences for not abiding by fair trade, whether that was the local lord throwing you in the stockades or the rest of your tribe ostracizing you.

> based on who can waste the most energy

not unrelated is the disk storage the block chain will eventually require, now ZFS and storage density arms races make sense

> Markets fail or succeed because of improper or proper governance.

I have yet to see proper governance last long enough to be of any note and worse governance tends to quickly flip to favor the powerful.

Hong Kong and Singapore might be great examples

TBH, I'm ignorant of these countries' regulatory systems. You may be right. What makes them good examples?

This podcast will do a much better job at explaining how solid economic policy lead success in Hong Kong: http://www.econtalk.org/neil-monnery-on-hong-kong-and-the-ar...

Of course Hong Kong is now different, but that's not because the government changed its policies, but there is a different government in power.

Singapore had the benefit of a trade port, but it kept importance as such and expanded into becoming a important financial center as well as punching well over its weight in terms of innovation. They have invested in education and provide a stable environment for business.

I will review. Russ Roberts is pretty good. He leans closer to no governance than any.

Still, Hong Kong being different now is because the powerful (China) changed the government to favor themselves. This is actually an example of government falling to powerful interests in short order.

Singapore has as bad or worse of income inequality as the US, and I wouldn't say the US is well governed. https://en.wikipedia.org/wiki/List_of_countries_by_income_eq...

Still, I don't want to take equality as a primary metric since I think inequality to some degree is natural.

Singapore is however a infamously repressive regime as mentioned by ardy42

The latter is famously authoritarian capitalist, and the former just gutted its civil liberties?

Also, IIRC, they both benefited from being trade gateways into the PRC economy, especially when it was more closed than it is now.

Thank you! Sure fine at some base level there is still technically market in a purely anarcho-capitalist system but that doesn't suddenly imply that the markets we have aren't essentially a pseudo-central planning systems that actually work.

A market is useless if it doesn't actually allocate goods and labor efficiently and in the way people want.

This is why I called Bitcoin “naive and antisocial”. I perceive a long-standing willingness on the part of crypto proponents to willfully ignore why monetary policy exists and how it is tied to society’s needs. Self-governance cannot be cast aside in favor of a currency managed by a network of miners remote from the Economic output, debt and other expressions of local social economy. I called it evil and I wasn’t being hyperbolic.

Of course monetary policy is good for the guys implementing it, crypto is here for the rest of us. Making monetary policy tied to a currency and immutable is one of the great benefits of crypto, akin to having monetary policies be part of constitution.

I don't believe it will be a benefit. Current monetary policy is to keep inflation positive and low, while addressing economic shocks that make money velocity low by increasing the supply.

A low positive inflation effectively makes all prices that are denominated in a fixed amount of the currency slowly lower. This helps the economy - ie, people and companies acting in the economy - deal with changes more easily, since their contracted prices are going down. It also avoids the problem with deflation: Keeping money to spend in the future makes more sense to an individual, thus money velocity goes down, thus less things happen (and all actors earn less.)

That's also why increasing the money supply for crises is good: It allows the same activity to go on, even if each unit of currency moves less. People can get paid the same even if everybody save up money. If there's a fixed amount of currency, they can't, since the currency that would be used to pay them is now bound up in their savings.

> A low positive inflation effectively makes all prices that are denominated in a fixed amount of the currency slowly lower. This helps the economy - ie, people and companies acting in the economy

This helps the people who have capital and is paid for by the people who only have wages. I am a person that only has a wage, so I choose bitcoin.

It helps ~everybody by making everything adapt. People that just earn wages too.

You can’t opt out of society without consequences

Do you mean society or big government?

(self-)governance is big topic in crypto. I predict that crypto will reinvent all the societal structures and processes to form a digital market+government+jurisdiction because a currency alone can't address all the problems you mentioned.

> As long as a country cannot print usd itself, this is a fast shortcut to unemployment, hunger, etc...

We don’t even need to make up hypothetical examples. We have a live one in Greece. The Greek citizens went through this exact ordeal for the exact reason you stated. They couldn’t print EUR and the ECB wouldn’t extent monetary support to Greek government.

The Greek citizens went through this because the Greek government has been lying for many years in its financial reports.

Both can be true (and are).

I agree.

Lol found the German

Is the assertion wrong? Cursory, recent research and my own recollection matches with the comment you were responding to.

https://www.ft.com/content/33b0a48c-ff7e-11de-8f53-00144feab...

I think the real reason is that Greece was more or less forced by the EU to accept austerity and a bad loan it can't possibly repay. The leadup to this was irrelevant.

They were eventually given the right to “print” EUR. One of the many problems with the euro system that periphery countries have unfortunately been subjected too.

Wait - so why are other countries like Germany in the EU fine despite also not being able to arbitrarily issue their own national fiat currency?

They are not. Germany is a net exporter, obviously not all the countries can be net exporter at the same time.

You can't have a stable monetary union without a fiscal capacity. The inevitable debt crisis in the Euro-zone are stopped by the ECB buying debt in the secondary markets.

The hypocrisy of the system is obvious to however takes the time to see how it works.

I don't think the answer to this question plays out the way you want it to...

1. Countries that have natural resources can raise capital when they need to, either by selling/taxing rights to those resources or by selling nationalized resources. Ecuador for example uses the dollar and also produces about a half of a million barrels of oil per day.

2. For many developing countries, the whole point of using the dollar is that it precludes monetary over-engineering or corrupt practices that give rise to inflation. This makes the economy safer for the have-nots, who have fixed local-denominated savings and/or earn a fixed local-denominated wage.

3. Simply using the dollar makes it easier to facilitate trade, tourism, and remittances. Panama does a lot of shipping and transit. Ecuador is a tourist destination. Remittances are the major source of foreign income to El Salvador.

Those countries that accept dollars and also maintain a dollar-pegged local currency are able to conduct monetary policy while also establishing a measure of confidence in the stability of their currency.

I think this is only half the story.

What you are missing in your detail is that ecuador actually got itself into a very serious currency bind precovid, and it seems to be staying that way.

So this would validate parent comment and actually negate your assertion that parent was incorrect.

That being said, this is half the story. And its the other part that matters. This is the first time ecuador gets in trouble post USD adoption. Where it goes from here will directly prove or disprove the very thesis, that parent comment assumed was a foregone conclusion.

Thus , your refutation may be correct after all, except for what i believe are different reasons.

> ecuador actually got itself into a very serious currency bind precovid, and it seems to be staying that way.

Ecuador had protests over removal of fuel subsidies to satisfy IMF debt conditions in Oct 2019. Hard to see how that's a "currency bind" in any sense.

> This is the first time ecuador gets in trouble post USD adoption.

Uh...what? You're just making stuff up.

Ecuador defaulted on two bond issues in 2008.

Ecuador had to borrow billions from China in 2015 when petroleum prices collapsed. This affected the country for two or three years. Public sector workers had to wait months for their salaries at times. In an alternate reality where Ecuador uses its own currency, the government would have printed its way through that problem and the resulting devaluation would have hurt everyone with savings or wages.

A currency bind as in, they have no reserves to pay for their expenses / debt. This specific sort of problem no country that can print their own currency has but that doesnt mean that such recourse does not cause problem on its own. But thats not my point.

I dont argue for printed currency. We are actually in agreement there. I'm responding to parent halukakin who said

"Strong currencies are not the solution to poor governance. Good governance and democracy makes a country and its currency strong. Not vice versa. "

I contend that ecuador could prove that statement wrong. The 2008 crisis caught everyone off guard. Once Ecuador comes out of this crisis, we will really see if this experience will be enough to institute good governance reforms which were elusive during the constant ups downs of local currency inflation.

This is an accurate statement when approached from a top down nation / state level. Approached from the level of an average person living in countries with highly volatile currencies, they just want a currency that is not reliably going to be less than it was the day before. It allows those people the opportunity to detach from the issue of "poor governance" over which they have no control and gives them some independence from it.

This is especially true for refugees. They run the very real risk of being killed for any money they are carrying but if one has one's keys memorized then no one knows you have funds and you are somewhat safer.

Over 1/3 of the world's population lives in countries with declining or unstable democracies, crypto currencies provide a small cushion from that in some situations.

If the economy is not working, people won't get the value they are used to. This can essentially be handled in 2 ways:

1. Inflation, which means that everyone is getting the money they are owed, but can't do as much with them

2. Defaults/bankruptcy/breach of contract - people and businesses just run out of money and stop paying their debts

If your country can print money, you will be in situation 1. If your country can't print money (e.g. because it is using BTC or USD or Euros or whatever currency they can't control), then you'll be in situation 2.

I for one prefer situation 1, because there is a chance of recovery from there, and normal life can go on somewhat naturally.

This is a fair point. I have never seen btc taking the place of a nations money. Rather I see it as an alternative means of storing value that can also be used as a means of exchange independent of the monetary supply. BTC will always be measured in dollars/euros/etc.

Well said. I believe this is why the US and many others abandoned the gold standard.

>>What happens? How can the government keep paying its own employees? How does it pay retiree checks? How does it subsidize farming when needed? As long as a country cannot print usd itself, this is a fast shortcut to unemployment, hunger, etc...

In these countries, those in power rob the public blind. They steal the country's wealth and do anything they can to hold on to and expand their power. Giving the state more power just means giving the elite more power to rob.

The point is that when a state is inept and driving the country into bankruptcy, the grey/black market can be a lifeline keeping people alive.

You don't want to chain the population to the efficacy of state, by closing off avenues to non-state payment-systems and currencies.

The internet, and the currencies built on it, can provide alternate, superior governance systems for financial and economic collaboration that can operate in parallel with state-administered ones.

"Strong currencies are not the solution to poor governance."

Yes they are.

It's really upside down that you'd point out that 'governments can just print money to pay people!' as somehow being an advantage of good governance.

Well, partly, but it depends on a high degree of integrity, if absent, will entail total dissolution.

In absence of a government with integrity, then a 'strong currency' such as one that the government has no control over, say a Caribbean Island that uses USD for example, is preferable to anything else.

"Good governance and democracy makes a country and its currency strong. Not vice versa. "

First - democracy has nothing to do with it.

Second - 'good governance' is the opposite of printing money to pay bills.

In an unstable economy, USDs or Euros are preferable to worthless paper or Bitcons.

> Say everyone in an unstable economy were paid in usd.

Then that country would be paying the unseen tax of inflation as the US banking system prints more and more USD. Said country would basically be a US colony.

Not at all.

It may not be optimal for certain reasons to use USD, and they'd lose some advantages, but there are others to be gained that might make it worth it.

To the extent there are no real capital controls on USD anywhere - and - the US Fed is separate from the government, then nobody is going to be a 'colony' of the US by using USD.

TIL Zimbabwe, Ecuador, El Salvador, Palau, East Timor and the British Virgin Islands are all "basically US colonies".

What about countries that don't use the dollar as currency directly, but keep a fixed exchange rate to the dollar - they would be paying the unseen tax of inflation too, right? With a fixed exchange rate if the dollar value falls, so will the value of their currency. So that would mean Hong Kong, Cuba, Jordan and the Netherlands are all "basically US colonies" too. (China may be kind of surprised about that first one.)

Does this work for other currencies, or just $USD? Are Martinique, Andorra, Montenegro and Kosovo "basically EU colonies"? - they all use the Euro as currency, but are not part of either the EU or the EEA.

We don't actually have to hypothesize about what would happen if an unstable economy switched everything over to dollars (or Euros), either directly or by exchange rate peg, because it has already happened, many times.

https://www.worlddata.info/currencies/usd-us-dollar.php

Montenegro and Ecuador are effective colonies in their most developed areas.

Most of the valuable property in major metros is owned directly by US-based or EU-based emigrees , who paid top dollar for property that has a ROC duration in excess of 20 years.

Most of the metro areas on these countries are rapidly turning hollow projects which cheap rents or undeveloped land. It is quickly becoming like paris.

Flat rental 2000 EUR. Buy price: 2M EUR.

When someone that is not a local is taking all your valuable land... Thats the textbook definition of colony

Your argument from incredulity doesn't make what I say less true. Maybe my language was a bit strong, but there's no denying if somebody can freely make more of something you value, then they're gaining from your use of said valuable.

Andorra is definitely a EU colony, or more precisely, a France/Spain colony used for fiscal evasion.

yes, calling them colonies are a stretch but there is a relation of dominance there, not just because of inflation but the whole credit system

This happens in many countries already, the inflation tax of the US banking system is 2% and not an issue. That does not make Panama or Hong Kong US colonies.

It makes them economically dependent. Explicit rather than implicit client states of the US. Colonies in all but name.

When President Arnulfo Arias tried exercising his nation's right to issue sovereign currency, he was deposed in a US-backed coup on October 2, 1941.

Switching from one currency you can’t control to another doesn’t sound good

Exactly. The Bitcoin folks like to point to a "shadow cabal" that controls US currency as though that same problem doesn't exist in Bitcoin's architecture. At least we know the names of everyone serving on the Federal Reserve's board.

Bitcoin, on the other hand, can be controlled by any miner or group of miners having over 50% of the network's hash rate[1]. We don't know the identities of the miners and we have seen them engage in political actions that change the behavior of the currency[2].

1. https://www.investopedia.com/terms/1/51-attack.asp

2. https://en.wikipedia.org/wiki/List_of_bitcoin_forks

That 2% number depends upon whether you trust the people inflating the USD to tell you what the inflation rate is.

Feel free to call shadowstats crazy, but nothing in it is false. It's just another perspective. http://www.shadowstats.com/alternate_data/inflation-charts

“Shadow government statistics” is indeed nutters and not all perspectives deserve equal footing.

asks for evidence, gets link with evidence, dismisses as "nutters" without addressing the evidence at all. He is showed you the CPI as calculated pre-1980 with a page explaining the changes in methodology and why they're flawed. How is that "nutters"? You aren't having a discussion in good faith.

You are right. The official inflation rate is wrong and misleading.

Why don’t you provide some data instead of conjecture. We generally don’t accept that the government inflation numbers are just plain wrong without substantiation.

Sometimes common sense trumps data.

You dont need data to know that the sky is blue.

That being said parent did not help himself throwing statements out there without a foundation.

Here is what i believe he should have said:

CPI for goods fails in the following:

Accounting for changes in sizes and quality of certain products (i.e. instead of raising prices vendor will lower quality or amount of product )

Accounting for healthcare costs is fundamentally flawed. This only factors out of pocket costs when the majority of americans are effectively paying 80% of healthcare premiums via reduced grosd wages in the form of "employer contributions"

Accounting for substitutions of products in the cpi itself which are not reliable substitutes, or the exclusion of certain items (housing) which are clearly inflationary.

There is also a lot of criticism made for the boskin commision changes https://en.m.wikipedia.org/wiki/Boskin_Commission to cpi which messed with base prices and thus with true measurement of cpi.

> Sometimes common sense trumps data.

Data always trumps common sense, that's why we have science :) - if science had a motto that would be it! Sometimes we need more data, but common sense is often trivially wrong.

I would argue we do in fact need data to show the sky is blue. The data shows us the sky is not in fact "blue" but rather a blend of various peaks and valleys of radiation. [2] It's not so much blue as a bunch of colors at once that happen to be blue-dominant. Further it’s actually the “inverse of blue” in that blue is allowed to pass but all the other colors are absorbed.

> Accounting for substitutions of products in the cpi itself which are not reliable substitutes, or the exclusion of certain items (housing) which are clearly inflationary.

Housing on a $/sqft basis has tracked inflation since the 1970s across the US. What's changed is zoning policy, but zoning policy isn't a function of money supply. [1]

A reduction in welfare is not necessarily inflation or monetary policy, it can just as easily be social policy. You can't pin all society's ills on the evil Fed and their consistent and predictable 2% rate of inflation.

> Accounting for healthcare costs is fundamentally flawed.

Healthcare costs exceed inflation. That's not a function of monetary policy, it's a function of a fundamentally flawed healthcare system in the US that needs to be fixed. That's not the Fed's job, that's social policy.

> There is also a lot of criticism made for the boskin commision changes https://en.m.wikipedia.org/wiki/Boskin_Commission to cpi which messed with base prices and thus with true measurement of cpi.

Peoples needs, wants and expectations change over time. In the same way the S&P 500 and Dow Jones cycle through companies that are no longer relevant, doing so with the CPI basket is the only rational thing to do. For instance, Caviar and Lobster used to be crap food for poor people -- they're crazy expensive now. Is that inflation? Of course not. Totally fair to eject them from the basket.

[1] https://fee.org/articles/new-homes-today-have-twice-the-squa...

[2] https://www.antenna-theory.com/tutorial/whyistheskyblue/purp...

>Good governance and democracy makes a country and its currency strong. Not vice versa.

The issue with this argument is that good government is a very hard problem that in many cases has no clear immediate solutions. While things like crypto many not be a solution they are a vood stopgap solution for the problems created by bad governments - at least until we can get thw good governance problem solved

Yeah, it’s not great, but I don’t think using Bitcoin solves any of those problems...

The gov can still pay its employees with its own currency. There are plenty of bimonetary economies.