The idea seems paradoxical, but by speaking of “inflation targeting” these responsible official are effectively CONFESSING…that it is indeed after all possible to control inflation by controlling the supply of money (as if by limiting the amount of individual “prints” that could be made of a work of art being produced as “prints).~Ideal Money
Nash define’s ideal money as:
…intrinsically free of “inflationary decadence”..a true “gold standard”, but the proposed basis for that was not the proposal of a linkage to gold
However he also remarks the difficulties of bringing about such a money:
…for the government of a state…to rationally contemplate the evolution of the inflation rate for its currency towards zero there are clearly some very relevant considerations relating to tax revenue expectations.
…money systems that could qualify as “ideal” are dependent on the political circumstances of the world.
He then goes on to suggest an alternative strategy for obtaining that which is to be “ideal”:
…its was the observation of a new “line”…for “central banking” functions relating to national currencies that gave us the idea for the study of “asymptotically ideal” money.
Wiki defines asymptote as:
…a line such that the distance between the curve and the line approaches zero as they tend to infinity.
We can find relevance with bitcoin’s monetary supply in terms of its inflation rate over time:
Another interesting reference from Ideal Money in relation to bitcoin’s money supply:
…the possible area for evolution is that if, say, an inflation rate of between 1% and 3% is now considered desirable and appropriate in Sweden, then, if it is really controllable, why shouldn’t a rate between 1/2 % and 3/2 % be even more desirable?
Computationally we might not recognize the perfect similarity, since bitcoin hits zero coins printed after 140 years, however PHILOSOPHICALLY bitcoin’s schedule of halving every four years IS asymptotic in the sense that it is a Zeno’s paradox that only truly hits zero at infinite.
Why might Satoshi release bitcoin as “asymptotically ideal money”? Nash points out one possible pitfall and thus outlines a possible solution for the issuer of a currency:
There is a problem for the issuer of a currency, whether in coinage, paper, or electronic form, that if this currency (or money) is too good, then it could be exploited by all sorts of parties…
If the value trend of a currency is such that a natural interest rate is not negative, then it is not an unattractive task for a central currency authority to mint or print the physical currency that would circulate.
Hence, the problem of a money that would be too good is avoidable.
We can see then, “asymptotically ideal money” in another context is the plan to get from A to B, where B is some future conceptual ideal:
So here is the possibility of “asymptotically ideal money”. Starting with the idea of value stabilization in relation to a domestic price index associated with the territory of one state, beyond that there is the natural and logical concept of internationally based value comparisons.
The currencies being compared, like now the euro, the dollar, the yen, the pound, the swiss franc, the swedish kronor, etc. can be viewed with critical eyes by their users and by those who maybe have the option of whether or not or how to use one of them. This can lead to pressure for good quality and consequently for a lessened rate of inflationary deprecation in value.
Do we not observe the phenomenon described above in today’s global economy?