Economics study group
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The Death of Bonds, or the Death of the Money Multiplier?
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The Death of Bonds, or the Death of the Money Multiplier?
I just listened to the podcast, “Will Bitcoin Kill Bonds”, and am puzzled about something. In the podcast, I understood Saifedean to say that if bitcoin were the only currency there wouldn’t be any bonds. It strikes me that in a bitcoin world one still could have borrowers and lenders; in the case of a bond, the purchaser could still pay the issuer for the bond, and the issuer could still get the bitcoin and assume the contractual obligation to pay interest and to repay the principal.
Is the missing piece that theoretically you could still have bonds, but the real point is that you couldn’t have a money multiplier because banks couldn’t make multiple loans with the same money?
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2 Replies
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I think the difference between bonds and lending (What you propose could happen with bitcoin) is the creation of new money (bonds) but I am open to being corrected
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That seems right to me too.
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