Bitcoin Forum

The economy is going to have to restart. If the internet survives, Bitcoin will be the new currency going forward. For those who don't react in time, my condolences.

http://www.youtube.com/watch?feature=player_embedded&v=bYkl3XlEneA

48% of Americans believe another great depression is likely to happen in the next 12 months.

I'm not ready, more time please...

48% of the Americans are ignorant enough not to know tha the crysis as of now is already bigger than the so called Great Depression ('29).

Which in that case, things are about be worse than a dotcom bubble on steroids.

You mean an accasion of TSHTF is coming soon?  ::)

but but the stock market is on a bull run!

Possibly more of as much significance for Bitcoin right now is not so much whether and when such a crash will happen but that "64% of all Americans believe the Government is the problem."

What that tells me is there's a massive untapped US Bitcoin userbase ready for it now (or as soon as they understand how Bitcoin fits into this picture).

Ya bitcoin is definitely weak in the sense it needs the internet, but I guess if the internet crashes we are all hooped anyways. I got a few oz of silver. If bitcoin moonshots I will definitely move some into PMs.

I highly doubt this "48% American's judgement.", but the economics is definitely weak

>:(

50% of Americans also believe that the sun revolves around the earth. your point?

Hold me!  :'(

+1

As a plus the show accepts bitcoin donations (http://freedomainradio.com/Donate.aspx)!

But really, all of this just makes me feel even more secure about my btc and silver. Now if I could only afford gold and guns...

When the crash comes it will be a deflationary collapse. Gold and silver are not good investments during a deflation event. They are a good hedge for any economic event, but those who think that gold will go to 10,000 and ounce are wrong and even if it did it would be because the dollar lost its value. So if you had one ounce today at 1,600 and it could buy a barrel of oil then after the devaluation you would have gold valued at 10,000 an ounce and you would be able to buy that same barrel of oil. Same thing in reverse for deflation. The best thing is to be diversified to hedge against either inflation of deflation, but ultimately we will have the biggest deflation the world has ever seen. The best investment during deflation is the dollar. I know I know I hate the dollar too, but during deflationary collapse money is destroyed and as more money is destroyed more people default and more money is destroyed creating a debt deflationary death spiral. Where there is simply not enough money to go around. Then you have a game of musical chairs with less and less seats. So who ever is left holding usd at the end has great buying power. The dollars become scarce and the value rises. That is what happens with money is debt.

So in response to the OP. When the worlds financial system does finally implode the price of btc will fall. No one will have money for weed off the SR. People will be to busy trying to feed their families to worry what nerds on the internet are doing.  :)       

Source?

Helicopter Ben and his pals probably won't allow deflation. They seem to have a pathological fear of the 1930s.

With most of their balance sheet being bonds and the interest rates continuing to creep up, I'm not sure they can stop it.

I don't know if there's a source for that, but apparently 4/5ths of Americans believe angels exist  :o

http://www.cbsnews.com/8301-201_162-57347634/poll-nearly-8-in-10-americans-believe-in-angels/

Kinda old, so maybe that stat has changed :P

Possibly not, but then again, they can print as many $$$ as they want. Ask Gideon Gono, he knows a thing or two about that. :)

I agree that is what they have been trying to do is keep us from falling into a new great depression, but it can not be stopped. Our monetary system requires an ever expanding debt. People get mad about the trillion dollar deficits but if they stopped spending the money we would collapse into a new great depression.
gdp last year was about 16 T if we balanced the budget  we would have a 14.8 T gdp which would which would kick start the deflation. The only way that we could have an inflationary collapse (hyper-inflation) is if the banks can loan, but the world has to much debt already. There are excess claims on the underlying wealth. So the money sits in the banks as excess reserves. This will all end badly, but the fed doesnt have the ability to force people to lend or take out loans and therefor doesn't have the power to create a inflationary default. This will end like the great depression only worse and on a worldwide scale. There are only two way for governments to default. It will not inflate the debt away it will write it off and when they do the money supply will contract.   

27% of all statistics are boner-fied bulldada.

Who will help them support the bond market if they devalue the dollar?  Certainly not me.

Up to 73% of all fake statistics could be fabrications.   ;D

sublime17, are you here to spread FUD or do you genuinely believe that the dollar will deflate? The Fed will not let that happen in any circumstance, they'd hyperinflate if they had to.

The Federal reserve can easily inject trillions into the economy at the first sign of widespread deflation. Banks were forced to take the bailout durning the GFC, btw.

100% serious read Richard duncan "the new great depression" read james richards "currency wars" The fed can print all it likes if people dont take out loans it will not enter the money supply. The fed can print but there are limits on the printing too. I would say that i am a free market, Austrian, but peter schiff is wrong about hyper inflation and the gold price, steve keen, nicole foss, richard duncan are right. We will have a deflationary collapse. Tradefortress you so understand what i mean when i say money is debt right? You do get that total debt must always grow right? You do understand that the only way the public sector could cut its debt is for the private sector to raise it debt right? You do understand that understand that all money is lent into existence right? and you do understand that if all debt where to be paid off public and private that money would no longer exist right? 

How about the quantity theory of money or I should say the quantity theory of credit (money is debt) do you know that? Do you know what milton freedman had to say about the causes of the great depression? That he correctly identified the cause of the great depression?

The labor force will only tolerate this strategy for so long.  In the framework of Adam Smith there are three types of stakeholders in any venture: labor, capital, and land.  Labor earns wages, capital earns interest, and land earns rent.  All these roles may be filled by one person, or by several separate entities.  Many Americans fall into the category of labor only.  In the face of technological progress, the demand for labor falls as machines displace workers.  Capitalists see a short term bump in the interest they can earn (the rich get richer).  Landholders are who sees long term gains due to the finite amount of land (similar, but smaller gains happen with other durable assets but land is crucial for survival and you have to pay to use what you don't own).  High unemployment drives down wages and meanwhile businesses are figuring out how to do more with less.  $22k robots that can be shown what to do by unskilled workers will soon make us competitive with China in manufacturing, but unemployment will only go up until labor can be trained for the new jobs that didn't exist previously.  Many will be too old to recoup an investment in training and some will be unwilling or unable.  Things will get nasty as these laborers choose between low wage positions doing delicate things like clearing tables that will only exist temporarily and seeking alternative means of survival like crime.  Consumer demand will decline and prices will fall.  If this segment realizes the politicians are keeping prices artificially high heads will roll.  Hopefully only metaphorically.

See Chapter 11 of book one of Wealth of Nations for more.  There is a tl;dr conclusion section at the end.

Here this is the correct assessment of the global economy. You can thank me later :)

http://www.youtube.com/watch?v=iquemUNNYY8

Wow, that is very good description of today's debt driven system

Since FED is the lender of the last resort, there is a final solution: FED just burn those securites they bought from government and banks

After this, government and banks will be happy, all of their debts at FED are gone, no one lose anything. Of course FED took the loss, but since all their loss is just some digits, that affect nothing

Then next step, government and banks will have so much cash at hand and they will start to spend BIG, and there will be hyperinflation

So, FED still have lots of weapons in the reserve, they have not fired them yet. Recently they are buying MBS with a premium, that is a start of unloading the debt for banks, it is not the same as buying government bonds, but few has noticed that

http://www.youtube.com/watch?v=THelXGcKQd0 well worth watching. Steve keen is the man. Read "debunking economics".

I have some disagreement with the above post, but will post a reply later.

In the UK I'm seeing both inflation and deflation. Double digit inflation in the things that I can't do without such as food/utilities and strong deflation in the things I don't give a damn about.

We're already in a great depression here. The government is running a 6% deficit to get 0% GDP growth.

The decent into hyperinflation is in the hands of the public. With the best savings rates at around 1.5% gross it's only a matter of time before people empty their accounts to chase a decent yield.

My parents half jokingly said that they might convert their savings into tins of tomato soup. They would have got a 12% ROI if they had done it a year ago  ;D

as much as i've cringed reading your ranting posts about Bitcoin's inevitable demise, i must say that when it comes to real economics, we think alot alike.

and we listen to the same guys.

it was good watching that video for a second time.

so we agree on alot of the causes and the primacy of debt deflation.  Duncan himself says that going back to a gold std is a non starter.  but his solution involves contined trillion dollar deficits directed at high tech, such as solar. 

b/c this is essentially an inflationary strategy at all costs to prop up the ailing system, why is it that you can't understand that Bitcoin may be a solution?

48% of American adults drink one soft drink a day
48% of American citizens pay no taxes
48% of Americans are terrible at Financial planning
48% of Americans watch online videos
48% of Americans don't use all their vacation time
48% of Americans reject evolution
48% of American Democrats support gay marriage
48% of Americans think most members of Congress are corrupt
Only 48% of Americans know Presidential elections are held in November
48% of Americans say eating is their favorite leisure activity
48% of Americans believe BP knowingly violated oil drilling regulations in the Gulf of Mexico
48% of Americans spend more than an hour a day on the internet
48% of Americans say the most exciting place they have ever had sex was in a car

Why can't America just be 50/50 on anything >:(

Thanks for sharing the video! I like the girl, she asked the core question: Why couldn't we just write off the private sector debts? Duncan said that one people's debt is another people's asset, this is true in micro level, but when it finally reached FED, it is not true anymore. From moral reason FED should not write off the debt (to create unfairness), but from technical point of view, they could write off the debt of the whole society (and create hyperinflation at meantime)

And I think Duncan mix the government with FED. Government and FED still have formal business relationship, government can not create credit as they wish, they have to lift debt limit first and FED has to buy their bond to give them cash

+1

Much much bigger, nothing to compare..

the great deprssion is a joke compared to what the facts actually are.  I'm very surprised they have manage to bluff to whole world for so long.. (since 2009)

This will cause a lot of suffering :(

A lot of american child do not recognize this, and can't name it :

https://i.imgur.com/zpNPTo1.jpg

...Dan Quayle?

I do see digital currency as the answer and i do not agree with richard about the solution to our debt based system. His solution is perpetuation of the existing system. I know that P2P digital currency is the future. I have just been disillusioned with BTC as the savior I once thought it to be. I have also been very frustrated by the inability of the community to verify transactions and prevent fraud. What BTC desperately needs is a feedback system that is clear to see and easy to use and an alternative to stabilize price. I stand by my statement that btc is a manipulated market, that it is in a bubble and that the price swings are not in line with real market demand.

BTC is not a commodity, there is no comparison here. It is not a retirement plan, It is not a store of value (or it is very poor store of value).
BTC is money and should be used like it. At it's essence BTC is a promise (all money is) and is a promise that can be broken.   

So sometimes I know that i sometimes come off as anti BTC, that couldn't be further from the truth. I think it will change the world. I have mentioned this on a couple other post, but I truly believe that it can bring the whole world closer together and dismantle the war machines of the world. (i know, a pipe dream) 

This is why steve keens ideas on a modern debt jubilee are so interesting. In history during a jubilee debt was written off periodically and debt issuers where killed or force to forgive the debt. Steve has an interesting idea to work with in the confines of the current system (as you mentioned one persons debt is anothers asset).  Steve's suggestion is for a modern debt jubilee is to write off the debt of debt holders and send checks to the debt free. This is a way to wipe the slate clean and forgive the debt in a way that doesn't punish the debt issuer. I think this is a 100 year plan. I want to fix the problem not just hit the reset button, but hey if they want to send me a check I wouldn't refuse it.

As far as steve not recognizing the differnce between the fed and treasury, I would say highly unlikely, guy is super smart.     

 
Thank you for answering this questionnaire. Your score was 0 out of 12.

You have to set the parameters of the scale. What you meant to say it thanks for taking this questionnaire your score was 0 out of 12. 0 being the most rational and 12 being the least.  :)

It was just sarcastic. I shouldn't do it. Sorry.

No problem. Dont apologize. Shit I dont care. I am used to being given a hard time. I worked in repair shops most of my working life those guys are ruthless, so dont worry about getting under my skin.   

one of the reasons i spend so much time on this forum: people who fricken GET IT. i often wonder, as i read various international news articles, which will tip global society over the edge first, the economy, or some military action or civil revolution.

either way... bitcoin good.

the reason i don't like Keen's debt jubilee solution is that it's just so plain "ridiculous".  it is a perversion on top of another perversion.

what we need to do is return to the rule of law and allow market forces to reassert themselves.  stop the bailouts.  otherwise, you'll just spawn another generation of game theorists who will just reapply "perversion economics" to everything we do.  not to mention the rest of us who will just crawl into a hole of fear from an investment standpoint.

Oh ya dont get me wrong I do not support the idea. I want individuals to control the money not institutions. Both Richard Duncan and Steve Keens ideas would work and would get economies and debt growing again, but dont fix the root problem.   

you know sublime, its good to know you understand real economics in great depth but i want to point something out to you.

you do realize you're biased against Bitcoin, don't you?  i mean, you are essentially a Bitcoin exchanger and you make money when Bitcoin's price is dead flat.  this continuous price rise must be hell for you.  when the price is dead flat, you can buy Bitcoin at that price and charge a nice safe markup for a tidy profit without worrying about a price dump.  at least that's how i interpret you seeing it.

consider this; ppl wouldn't be rushing to buy/sell Bitcoin if the price wasn't volatile and your business might just dry up to nothing.  perhaps you ought to understand the fundamentals behind Bitcoin a little more and take advantage of the upwards moves.  you could make even more money being an exchanger if you understood better what's going on.

No the rising price is great for me on the way up I get the to get my tiddy"little" profit plus the market move, the problem is when the price moves become irrational. I bought close to 19 and then it corrected down to 17. I turn my coins over every 24-48 hours that math doesn't work out then when you factor in risk of a major correction I takes me out of it all together. I can park my money in to my business and get a 300-400 % return (over time) with zero risk. One of the main reasons that I am not selling coins right now is that I cant get them. Over the last 6 months I have gotten 3 sellers and one miner that sell to me for PP. Once the market exploded upwards, two sellers are out and one has tons of coins that he bought a .50 cents, but will not sell for a decent prices because he doesnt want to sell and miss the next move up. He quoted me at 26.68 when the spot was 24.9. I invest I do not gamble and right now I see a lot of gambling. I have a verified Mt gox and dwolla and a okpay but it takes forever to get them funded. I have to transfer from PP to bank to dwolla to mt.gox or PP to okpay to btc-e. Then I sell for PP and have to do it all over again. It is not possible for me to serve my customers without a steady supply or BTC for pp without holding onto large amount of coins, and I can take that kind of risk, right now. 

Sublime,

Could your supply/price problem be solved by simply stocking up on coins at current prices and selling those in the following month? Woudn't it be easier on the books if the coins you're selling are from last month's purchase, and the coins you're buying are for next month's sales? You would be building a reserve in profit margins to protect against a price drop, allowing you to operate profitably on a long-term scale and not focus so much on the day to day aspect of it.

I realize it's still risky, but depending on your volume, I think it would be much harder to lose money this way over a significant time period unless bitcoin enters a very long downtrend.

i've always been curious as to how BitPay handles this risk.  i'll bet they have a huge reserve by now to cushion any big downdrafts in price.

you can't fault Bitcoin for your woes.  you can blame speculators for causing volatility but that's just the market and that's not Bitcoin.  unfortunately, i don't think there are many markets you can be an exchanger in and not have this sort of risk.

As long as the price keeps going up. I sell to the public so I have a decent idea of the number of new users coming on board. Obviously I dont know all of the market forces at play (no one does) but IMO their is not the market demand to justify the price. I have only been involved with btc or 6 months. When I got in it was moving every evenly upward. Once the price spiked my sellers ran out or started to try and F!@# me on the price. under that scenario I bear all of the down side risk. So I told my number 1 seller "why so I need you?" If I can just deal with the exchange. I told him that I can play the same game. (i can buy large quantities on a dip), but that is not really what I am trying to build. I dont care about getting the market moves (i know it can be a lot of money) I want to get paid for giving the people what they want. I want to get payed for serving my customers. I believe that the market rewards the people that do the most good. You shouldn't get paid for for hoarding like a troll you should get payed for sharing it to the world. I sell to people no one else would touch, new users, for PP. It is a lot of work to verify accounts and I still have charge back risk. I bought 6,600 in btc this year and have 0 coins right now I made about a 1000 selling the coins, not very good I know. In my other business I have 20,000 dollar months with 0 risk. I look at what I am doing as building a real market.

Okay, I think I understand what you're trying to do now, and why buying and selling might not be an ideal business model for you. Reading your reply here though makes me think that you should be mining and selling though. You would be getting payed for doing good, something that you've made clear is important to you, and able to serve customers on your own terms, not dictated by what the market is doing.  Have you considered investing in high end mining equipment?

Paypal has that kind of market with the dollar. I agree bitcoin is not the problem the problem is the market, but the market will change or die. LTC will help. I will be watching LTC to see how it behaves. Right now I am planning of dealing LTC and telling my customers to they can exchange for BTC, but i still have to wait for bank transfers. I really need PP sellers of LTC (which I am hoping will be easier to find) to keep me liquid and a constant supply of coins.

Ignorance does not necessarily equal stupidity.

There was a time when that was the prevailing theory. Even in the scientific community.

 

I have. My dad owns a software company that writes software to manage data centers and is partnered in another company DCN cables that makes custom length power strip whips with custom outlets and other data center hardware. So I have access to a mini data center that acts as their test bed, but it didnt look financially viable to mine btc when I looked into it. I just started looking into LTC which would be better for me because the data has lots of cpu's not a lot of gpu's. To be honest i consider that to all be tech guy nerd stuff. That is not my style is what i am trying to say, but i can get one of my dads's guys to start mining for me.   

b/c you understand real economics well, you must see that what you're doing here is trying to impose your own value/moral set onto the Bitcoin market?  that does not work.

The market wants some people to build up substantial piles of capital.  That enables them to serve the rest of us.

I do understand that. I am powerless to change anything, but ideas are more powerful than armies,governments and markets. Good ideas dont require force,people will adjust their behavior all on their own. The mindset of the market will change it will have to to survive. IMO. It will be interesting to watch. All of it is fascinating, we are living through an amazing time. 

You want the market to change to not want people to build up huge piles of capital?

Then we will never get the services that we need.

The huge piles of capital serve us.  Look at the successful bitcoin businesses.  They had to have big piles of capital.  As examples, check out Tangible Cryptography and bitinstant.  Nobody could do what they do without accumulating big reserves first.

i think what you really want, while not knowing it as a small individual exchanger, is for the Bitcoin market to find its fair value price as fast as possible.  once it achieves that, volatility will damp down markedly and your profit margins can be more assured and less risky.

you can't fault hoarders at this point in time b/c they are part of the market and what they are telling you is that we are not there yet.  and the even bigger problem for you and your business is that it could be years and at a much higher price point for that to happen.

what i would suggest is instead of trying to fight the market and its movements, try to understand Bitcoin a bit better.  i know i learn something everyday and i've been at this awhile.  once you get a better understanding of why the price keeps rising, you will be better equipped to structure your business around those principles.

I think we are in perfect agreement here.  :). I would like to see a network of regionally distributed verified exchanges run by individuals. The exchanges are a weak spot for btc. If gox gets shut down btc goes back to 2 bucks maybe less. I want it decentralized as much as is possible. As far as the previous comment by walter block I would say that those services do little to increase mass adoption of BTC. I see them as financial institutions that weaken BTC. People simply are not going to go and WU,MG,MP,BT, funds in mass. To me all road to BTC mass adoption run through PP. I dont like it but that is the way I see it. People have to be able to get coins without leaving the house or paying a bunch of fees. It has to be easy. If we had a network of sellers then we could monitor fraud, sell for multiple payment methods (PP, cash in person,bank transfers, barter), increase customer reputation reports and seller reputation reports, and hedge against market moves. A great business would be a reputaion/verification service, that would verify your identity and that you are the account holder and a history of trades. That is what is so powerful about the way that I handle scammers. I only allow people to buy from me who have liked me on facebook. So I know that one of two things are true. Either your are the account holder or someone has hacked your whole life. My selling procedure goes as follows. You like our page, you send and email form the email address associated with the account, sometimes I check the phone too then I check everything, The name on the PP matches the Fb the email matches the PP the location matches the address the Ip matches the address or region the phone matches. So either someone has assess your email, FB, Phone,and PP or you are the account holder. The other thing that I do is start with 1 coin then after 24 hours you can buy up to 5 then after another 48 you can buy up to 10 the limit is set at ten till 90 days has past after that 20 then after another 90 days we can raise limits again. So if someone scams me i know who they are and where the live and their family members. I had one person scam me under that situation. He is user name bogbrush on otc. But I know that his real name is scott harding and that he lives in durham,durham in the UK he has been put on my scammer wall (my personal list of confirmed scammers).. BTW if you want to add confirmed scammers let me know. Would prefer if you knew FB page but will post email or IP address. They must be confirmed scammers 

Another great business idea it to start an insurance pool to insure btc transactions, I would like to see the indvidual sellers contribute to the fund and then create a claims process. I have no idea how to make that run in a decentralized way, but in my view if the problem with individuals selling to one another is the risk then the way to fix it is to insure the transactions.

I'm not sure I would describe the collapse of the world's financial markets in this manner.

why don't you set up a competitor to localbitcoins?  i don't know anything about them but they seem to be one of a kind.  i would think there'd be room in the market.

Yeah, similar network idea, but via PayPal, not cash... As a web-developer and entrepreneur, that's something I could be interested in being involved with. Fully vet the individual exchangers, and maybe set up an insurance system whereby they pay you a small fee in exchange for insurance as well as the exposure through your network. No idea how to price that; would obviously require an understanding of fraud rates and so forth to price properly...

But I really like the idea of a network of *verified* exchangers using PayPal. As noted, they'd need to be vetted *well*, and would have to agree to the business model you set forth (which minimizes fraud-risk via various checks, etc). If it can be structured in such that they get some insurance out of it, and you get the stability of premiums (and can use the float to offset some currency risk), it could be pretty nice.

Thanks.
I would really just like to get paid for verifying and insuring transactions with in the network. Maybe a one time fee for verification and and a ongoing fee for insurance. All sellers in the network refer new potential customers to me for verification. They would pay a subscription fee up front, then a fee every time I verify a new customer then a monthly issuance fee. The way to set up sellers is regionally as we added new sellers it would get more and more decentralized. Maybe getting to the point that the sellers are selling in their own city. Of course they could sell to people they know with out the verification process, obviously we wouldnt insure those transactions (unless the want us to)   

What about skipping Paypal and just using a credit card processor?

While I am proud to be mistaken for Walter Block, I am not he. ;)

Cant skip paypal I sell btc on ebay for pp. I dont want to stop because I get good margins although much higher risk to sell though ebay, I do also take a debit and credit through google checkout for my verified customers. They have to upload a copy of their drivers licence and fill out a form saying they wont charge back and then sign it with docusign. It is a little more work for me to take debit card. I also heard they where going to start charging higher prices for cc fees.

I know you aren't Murry rothbard? reincarnated?

Lol, I wish.  No relation.

It would be nice if somebody could create an exchange where people can get money in through a credit card processor, using models similar to those discussed here to minimize the risk of chargeback.  Somebody was floating the idea of doing this with paypal, but I think the idea is even better if paypal can be skipped altogether.