Many articles mention, that the limited Bitcoin money supply is a major advantage of this digital currency. The reasoning usually goes like this. Since Bitcoins can only be created through mining and there is an upper limit of 21 million, Bitcoin is supposed to be inflation proof. This article for instance says, Bitcoin “theoretically eliminates inflation”. If this was true, Bitcoins would not lose purchasing power. The Bitcoins I own today would buy me the same amount of goods and services tomorrow. Or a larger amount in the case of deflation.
In a bailout deal with the Eurozone Cyprus’s bank account holders are being forced to pay the bill…not troubled bank bond holders, depositors. “The illusion that depositors don’t need to yank their money out of threatened banks because they’ll be protected has been shattered.”
Come Tuesday morning Cyprus’s bank account holders could see their balance shrink as much as 10%.
Reuters is reporting that the Bendesbank chief, Jen Weidmann, is concerned that central banks are being pressured to pursue more aggressive monetary policies that could risk a “currency war”.
“I have not faced the prospect of a new year with so much trepidation as when I contemplate what is in store for 2013. Systemic risks abound, which of themselves are not the main story, only milestones on the road to final currency destruction, unless governments somehow regain their senses.”
Bitcoin makes some TV appearances, drama over German gold, talk of European bonds “part-backed by gold”, a report on mobile payments in developing countries, AML enforcement and more.
The Keiser Report on Bitcoin, privacy and the counter-economy, true prices measured in gold, visualizing the world’s gold stock, a GoldMoney interview with Professor Pedro Schwartz and more.
BitPay passes 1,000 merchants, more Romeny/Bitcoin drama, the poor ‘opting out’ of banking, Spanish gold and hyperinflation.
As I have been keeping a close eye on currency news while waiting for the launch of the new blog, I’ve ran across several interesting stories out of Europe.