Capital Maintenance in Units of Constant Purchasing Power in terms of the Daily CPI: Completely wrong Bitcoin statements

Tuesday 22 April 2014

Completely wrong Bitcoin statements

Completely wrong Bitcoin statements

It is completely wrong for The Economist to state that Chronic deflation may keep Bitcoin from displacing its fiat rivals.

Deflation is impossible in Bitcoin. It is impossible in a non-monetary item. A bitcoin is a variable real value non-monetary item.

Deflation is a sustained decrease in the general price level over time.

Deflation means the real value of a monetary item increases while its nominal value stays the same over time as a result of a fall in the general price level.

A monetary item can only be affected by inflation when its real value decreases as a result of a sustained increase in the general price level over time. The nominal value of the monetary item (US Dollar, Euro, Yuan, Yen, etc.) stays the same over time.

All statements linking Bitcoin to inflation or deflation are completely wrong.

Nicolaas Smith Copyright (c) 2005-2014 Nicolaas J Smith. All rights reserved. No reproduction without permission.

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Daily CPI

1. Argentina Daily CPI - CER (Coeficiente de Estabilización de Referencia)

Click in sequence: "Estadísticas e Indicadores"

"Monetarias y Financieras"
"Descarga de paquetes estandarizados de series estadísticas":

At the bottom of the page you will see: "Coeficiente de estabilización de referencia (CER), serie diaria", then choose a year and open the excel file.

2. Chile - UF: Daily Unidad de Fomento Index. Not a Daily CPI, but a monetized daily indexed unit of account.

3. Colombia - Real Value Unit A Monetized Daily Indexed Unit of Account

4. Denmark Inflation-Linked Bonds

5. Eurozone Daily CPI Click on "Download historical data"

6. France Daily CPI Click on "Download historical data"

7. Germany Daily Reference Index

8. Iceland - Daily CPI

8. Iceland- CPIs - including Daily CPI

9. Ireland Inflation-Linked Bonds

10. Italy Inflation-Linked Bonds

11. Japan - Daily CPI

12. Mexico - Unidad de Inversion Click on UDI and then select Export to HTML