The topic of whether the Federal Reserve can see bubbles in advance, and what they can do about them, is hotly debated.
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Histories of speculative bubbles are popular these days, in large part because they have driven our economy for the last two decades. First came the tech bubble, whose quasi-utopian promises drew in billions of investment dollars, only to pop its cork in 2000, dragging the United States into a recession. That was followed by our recently retired real estate adventure, which threw us and much of the world into The Great Recession.
We are used to money being created by the state. Or rather, we are used to money being created by banks on behalf of the state. The state has no direct control over the quantity of money created by the private sector on its behalf, though it does influence that quantity through monetary policy and, in these days of near-zero interest rates, fiscal policy. But it does guarantee it. Or rather, it used to.
In recent weeks, some Bitcoin critics have been rethinking their initial Bitcoin skepticism. But others are as convinced as ever that the cryptocurrency is doomed. One of the harshest critics is Mark Williams, who teaches finance at the Boston University School of Management. He predicts that in the first half of 2014, bitcoins will lose almost 99 percent of their value, falling below $10. We spoke by phone on Monday. The transcript has been edited for length and clarity.
Curated by jean lievens
Economist, specialized in political economy and peer-to-peer dynamics; core member of the P2P Foundation
Anders en beter
Met P2P voorbij markt en staat: voor een progressieve coalitie rond de commons. Met nieuws over op p2p gebaseerde praktijken en hoe de overheid, de politiek en de zakenwereld ermee (kunnen) omgaan...
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on money and what it is
From the Great White Way to the West-End and beyond
on peer-to-peer dynamics in politics, the economy and organizations
Not TINA (There Is No Alternative) but TAPAS: THERE ARE PLENTY OF ALTERNATIVES