Perpetual Debt Slavery
Ecuador’s plan to create “bitcoin-like money” is misleading, insofar as bitcoin’s model as money, like gold’s model, is its supposed scarcity in supply, while any money created by government is far more likely to become infinite in both supply and debt to be retired in taxation.
Also consider that Ecuador is not alone in the monetary policy move into digital cashless society… ~Ron
Bitcoin-Like Money Is Ecuador’s Latest Dollar-Saving Plan
By Nathan Gill Bloomberg News Tuesday, August 5, 2014
QUITO, Ecuador — After mortgaging most of Ecuador’s oil and gold to finance spending, President Rafael Correa is planning to create virtual money to pay the nation’s bills.
Congress last month approved legislation to start a digital currency for use alongside the U.S. dollar, the official tender in Ecuador. Once signed into law, the country will begin using the as-yet-unnamed currency as soon as October. A monetary authority will be established to regulate the money, which will be backed by “liquid assets.”
Less than six years after repudiating $3.2 billion of its dollar-denominated debt, Ecuador has dwindling oil reserves, with current-account deficits that are draining dollars from the economy and financing needs at a record. While using virtual money to pay government workers and contractors would help conserve hard cash, the currency may prompt Correa to boost spending even more and undermine the nation’s ability to repay long-term bonds, according to Landesbank Berlin Investments.
“This is usually the start of debasement, inflation, and depreciation,” Lutz Roehmeyer, who helps manage about $1.1 billion of emerging-market assets at Landesbank Berlin, including Ecuadorean debt, said in a telephone interview. […]
Read More: bloomberg.com