One more working paper form the NBER database that’s worth your time.
It’s by Farley Grubb, from the University of Delaware, and considers the bearer bond characteristics of the continental dollar, hitherto believed to be a form of fiat currency. Read more
A quick update to our latest Bitcoin post, since it seems that some have an issue with the virtual unit being described as a fiat currency.
So here’s our rationale for calling it that.
The term fiat is foremost used in the post to differentiate a faith-based non-collateral-backed currency system from a collateral-backed currency system. Bitcoin, however, is described as the “fiat of all fiats” due to its decentralised fiat nature and because its value lies in the mutual interests of its users rather than a collateral pool. It is, in that sense, a fiat that supersedes all other fiats, because it depends on an algorithmic self-dictated “law” for authority. Read more
A major exchange for Bitcoin — Mt.Gox — was hacked last week.
The cyber-attack sent the virtual currency’s exchange rate temporarily reeling from about $17.50 to pennies. More importantly it sparked some fresh concern about Bitcoin’s reliability and security. Read more
What happens when you cross computer geeks with populist outrage at central banks?
Bitcoins happen. Read more
It’s also central bank run, of sorts.
Belarus news specialist The Telegraf reports that the nation’s central bank has stopped exchanging gold for Belarusian rubles. That’s after the National Bank of Belarus said the volume of gold and foreign exchange reserves dropped by $68m to $5,512m last month ahead of a widely-expected devaluation. Read more
Gold zoomed through fresh record highs on Wednesday. See this chart: