Originally Posted by smex
I think that too but the problem is that the banks offer safety, especially the fed bank
paying for the safety by generating inflation that is more or less calculable.
Of course from time to time some bank or company of any kind dies, but they are in
a line of other banks and companies and get either saved or eaten by them.. again
held by the biggest that creates value at will because it isnt bound on anything material
since long time ago.
The big problem with cryptos is that it is not centralised and by that not controllable and
predictable compared to the system to create value at will which offers a great danger.
A much greater danger than such a centralised system securing it self thru small but predictable
While I agree with much of your previous assessment and statement, I have significant issues with the accuracy of this one. While it is true that banks (especially central banks) have offered relative safety against total
destruction of wealth - it is also true that the price for that is much more than many people realize. I'm not sure how it is where you live, but in most countries there are some basic principles at work which nullify much of the advantages of banking in general (which is why many countries/states/towns/companies have created their own currencies
for nearly as long as currency has existed).
I'm not suggesting that most people (a significant majority in fact) don't agree with your assertion - they most certainly do - however, I'm not one of those people. The problem is that most people don't actually think about their 'wealth' at all - I'm not referring to those considered 'wealthy' by saying that... even a college student with nothing but a used car to their name is affected by this. This is the first way in which the central banking model is destructive to wealth - devaluation. Much credibility is given to inflation metrics - which in general only consider things that don't hold value - as a determination of whether a central bank or fiat issuing government is 'doing it's job' economically speaking. However, the bottom line is that the things which are truly a store of value are constantly becoming more and more expensive relative to those currencies.
When my grandfather started working (around the time the Federal Reserve was created), he was making $40/week... on that income he managed to buy a plot of land, build a house on it, buy a truck to go to work, and feed and clothe his family. They definitely weren't rich... but they had enough to survive. By the time he retired he was making around $20K/year working part time - largely because he continued to buy real estate in numerous locations, and invested in different funds/companies which (for the most part) paid dividends and appreciated. What did not was the fiat currency he kept in a shoebox "for a rainy day"... other than a slight increase in value for the notes/coins that have numismatic interest... they're worth the same amount today that they were then.
Of course, that all occurred during a time of relative
fiscal responsibility by both the US government and the central banks. Then came free and easy credit - both for the individual and for the governments both here and elsewhere in the world. My parents' lives tell a similar story but not quite as rosy... when my parents started working they made a combined income of around $7500 per year... but they were able to buy a small house and pay it off in 3 years! They then saved enough to buy and build a large custom home with savings accumulated over another 3 years - that house is now worth about $600K... which is actually more than their income for the past 20 years was! They always maintained a similar amount of money in savings... that savings is worth less than the total of the funds deposited - the number is bigger, but less than 4 times bigger... and the cost of almost everything is 6-10 times greater than when they saved it (with healthcare being closer to 20 times).
Banks don't just destroy peoples wealth through forced inflation like is occurring with QEx or whatever they're calling monetizing US debt loads these days. Banks get free money to invest - and are given authority to restrict people's ability to disrupt this. Although it might be reported due to money laundering laws now... no bank in the world will prevent you from making a $1M deposit. On the other hand, no regulated
bank in the world will allow
you to simply withdraw that same amount should you be lucky enough to have a balance that allows this. Of course, if you do
actually have a bank balance of that nature - then you actually can avoid the final way... fees. Twenty years ago no one paid fees for having a bank account... you got paid
to keep money in one (I even remember the 80's where I was making 10% interest in a 5 year CD). Now, depending on how poor you are, they literally rape you (financially speaking at least). Under $10K balance? Fee. Auto-transfer from savings to checking to cover a debit? Fee. Withdraw from an ATM? Fee. Another bank's ATM? Two separate fees. Wrote a check? Fee. Need checks? Charges and
fee. Online transfer between money market account and directly associated savings account? Fee.
I could keep going on but you get the idea. For the average person, yes - the fact that they don't have to think about protecting a stack of paper from thieves, and can swipe their debit card and buy their groceries is equal to security. But those people are still trying to figure out why they are having problems finding a job after they posted pictures of themselves in compromising positions on their Facebook page. These are the same people that believe the government that bailed out the first group of people that lost them their retirement accounts - banks - is going to take care of them in their old age...
In summary: crypto currencies are risky as hell, stand a good chance of enabling (or at least failing to prevent) a ton of scams, fraud, and accidental loss... and I'd still rather own some than have nothing but a bank balance. Of course, since I can simply 'invest' a nominal amount of money in my electrical bill, and buy a few extra GPUs which will be used for gaming if nothing else... it's win-win in my book. That way I can take the other
"silly money" and trade it to people for gold, real estate, firearms, ammunition, food stores, solar panels, etc... all of which I expect to be nearly useless... but a hell of a lot less
useless than the FDIC seal on the banks door should there be systemic failure in the banking system... which considering the fact that it's already happened to a small degree twice in my lifetime... is virtually guaranteed.
And back on topic... DOGE = much scared, many losses, sky falling! (Just bought a bunch more @ 165 & 167).