Bitcoin, Cryptos, and The Adjusted Monetary Base '94-'18

If you think cryptos are worthless the scary reality is that your dollar is also worthless. You should become a gold bug. The reason for your dollar being worthless is because it isn’t backed by anything aside from a government that is set on devaluing your dollar by setting an inflation target of two percent.

Does anyone remember when you could pick up a candy bar for ~$0.50? Better days, right? Now a candy bar is ~$0.89. Prices are increasing while quality is flatlining. Shouldn't the cost of a candy bar decrease over time as innovation/competition enters the market?

@chriscanno

The answer is: yes. Innovation and competition should lower prices, but the central bank is set the hold the cost of goods at a certain price with their inflation target. What is happening is that The Federal Reserve is digitally pumping money into the system to keep prices lower. What gives precious metals value is scarcity. If we all have ten ounces of gold because someone can just 3D print it, then gold becomes less scarce, as gold floods the market. You can't 3D print real gold. So gold has value. The Federal Reserve can digitally print US Dollars to flood the market with, and they sort of have.

This shows the circulating US Dollars and the percent increase/decrease from the start of the year to the end of the year:

1994: 01/05 - 12/21   407,279,000,000 ->  435,286,000,000  6.877%

1995: 01/04 - 12/20   435,179,000,000 ->  455,013,000,000 4.558%

1996: 01/03 - 12/18   456,408,000,000 ->  479,173,000,000 4.988%

1997: 01/01 - 12/31   479,726,000,000 ->  510,788,000,000 6.475%

1998: 01/14 - 12/30   510,869,000,000 ->  541,525,000,000 6.001

1999: 01/13 - 12/29   542,000,000,000 ->  636,677,000,000 17.468

2000: 01/12 - 12/27   630,520,000,000 ->  613,869,000,000 -2.641

2001: 01/10 - 12/26   613,643,000,000 ->  668,020,000,000 8.861

2002: 01/09 - 12/25   668,972,000,000 ->  716,732,000,000 7.139

2003: 01/08 - 12/23   713,933,000,000 ->  754,879,000,000 5.735

2004: 01/07 - 12/22   752,564,000,000 ->  789,182,000,000 4.866

2005: 01/05 - 12/21   785,107,000,000 ->  814,839,000,000 3.787

2006: 01/04 - 12/20   818,335,000,000 ->  836,208,000,000 2.184

2007: 01/03 - 12/19   839,798,000,000 ->  846,240,000,000 0.767

2008: 01/02 - 12/31   847,977,000,000 -> 1,690,820,000,000 99.395

2009: 01/14 - 12/30 1,772,026,000,000 -> 1,994,433,000,000 12.551

2010: 01/13 - 12/29 1,971,416,000,000 -> 1,982,754,000,000 .575

2011: 01/12 - 12/28 2,034,863,000,000 -> 2,559,185,000,000 25.767

2012: 01/11 - 12/26 2,659,915,000,000 -> 2,633,397,000,000 -0.997

2013: 01/09 - 12/25 2,705,672,000,000 -> 3,670,271,000,000 35.651

2014: 01/08 - 12/24 3,665,760,000,000 -> 3,994,584,000,000 8.97

2015: 01/07 - 12/23 3,941,184,000,000 -> 3,822,094,000,000 -3.022

2016: 01/06 - 12/21 3,649,892,000,000 -> 3,520,560,000,000 -3.543

2017: 01/04 - 12/20 3,418,434,000,000 -> 3,847,715,000,000 12.558

2018: 01/03          3,748,927,000,000

Here is all that data in a Graph:

In 2017 the Federal Reserve pumped ~13,612.41 US Dollars into the economy per second.

Our current population has a net gain of 1 person every 18 seconds.

For every additional person that is born/enters the US, the Fed puts ~245,023.38 US Dollars into circulation.

1994 ~$1,597 US per person

In 1995 there was ~$1,671 per person.

2006 it increased to ~$2,764 per person

In 2018 there is ~$11,465 per person

  What does this have to do with cryptocurrencies? Bitcoin and a lot of other cryptos have a finite supply. Meaning that over time, less and less coins come into circulation, until no more coins enter into circulation. With (useful) cryptocurrencies, miners get rewarded for adding transactions into the ledger. Over time those rewards get smaller until the max amount has entered the market. Then miners only get rewarded with transaction fees. Over time the global population increases. What this means is that over time cryptos become more scarce. Scarcity leads to a higher value.

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