[think33]

In his defense, it was Krugman who identified in 2003, that we really needed to have a housing bubble, and advocated that we create one, because it would stimulate the economy.

And he was right- it did! Until it popped.

At the end of the day, Krugman is more a spokesperson for liberal politics than an economist. The liberals want to believe that unlimited spending is not bad, and so they put forth this narrative that it is actually good. They look to Keynes for support, but have to be very selective when they do.

Bitcoin is a currency that is not inflationary. Since unlimited spending is enabled with inflation, they see it as a threat.

What's kinda surprising, and amusing, is just how vocal and vociferous the objections to bitcoin have become in the last couple weeks.

This is not because economists recognize it will be a failure- after all, if it were to fail, they could just let it fail, no need to comment on it.

All of these stories, including this one, are indicators that the establishment economists feel threatened by bitcoin.

The reason is one they will never mention publicly - they can't control bitcoin, and they can't stop its adoption, short of draconian measures, and so it threatens their monetary regime.

Ironically if it wasn't for the mismanagement of the dollar, there wouldn't be much need for bitcoin anyway.

PS - Whenever you see someone pointing out that bitcoin dropped %XX in one day, remember the dollar has already failed twice in US history (eg: gone to zero!) and even the latest incarnation is down %98!

[fennecfoxen]

So you've gone and pointed out that the dollar is worth about 2% of what it used to be.

Sure. A currency's real value is always moving relative to the underlying goods and services produced and exchanged in the economy - if it's not inflating, it's deflating, and it's never really standing still.

The key is a low volatility in that interest rate itself. The dollar's historical average inflation rate, since such records were kept, has been 3.35%-ish, and that rate has gotten much less volatile over time (e.g. 1920 saw monthly rates as high as +23% and 1921 saw rates as low as -15.8%). But since about 1980, it's been pretty level all around.

Bitcoin's value has experienced more volatility during the course of one day as the US dollar had in a whole year DURING THE GREAT CRASH OF 1929 AND LAUNCH OF THE GREAT DEPRESSION.

Maybe some day Bitcoin will come to be the same bastion of stability that the US dollar has been and more. That day is not today.

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Postscript. If Bitcoin is a currency, its rise in value is deflationary. Deflation can be kind of bad sometimes. If you think back to your high school history courses when they were talking about the days that "bimetallism" was a thing during the Panic of 1893, it was because ordinary peoples' gold-backed-dollar-denominated debts and mortgages were becoming more expensive to pay off. "You shall not crucify mankind upon a cross of gold!"

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TLDR: Price stability or STFU