Bitcoin Forum

This article talks about how people are trying to protect their assets :

http://www.zerohedge.com/news/2015-02-19/meet-bureaucrat-who-had-courage-tell-truth-will-be-jobless-tomorrow

Big financial institutions in Europe can't sell more than a few millions euros worth of bonds to a bank, the market is highly illiquid. Gold and Bitcoin should thrive when the thin lawyer of confidence that the western populations have in their banking systems start to crack. It could be in a year or two years but it feels like it started so it could happen much sooner.

Zerohedge is great but predicts doom all the time! 
There ahave been stress tests recently and even if they weren't really thorough enough, the banks all passed, so they aren't completely illiquid!

Imho the amount of liquidity hasn't change that much.
Just now everybody is scared to invest, from the average Joe to the biggest bank.

Before the crash they were used "high risk bonds = big money". Now they look "there is a risk, ow, no thanks. Doesn't matter how small the risk is."

Also, quite a lot of people / institutions are kinda expecting a new crash. And new crash means HUGE opportunities. Just you have to have the money NOW for those.

Have you look at the stress tests from the ECB? They are here http://en.youscribe.com/catalogue/tous/current-affairs-and-social-debate/current-affairs-events/stress-tests-aggregate-report-2511723

The worst scenario they tested for unemployment is 12.2%, -0.3%/year for inflation but they don't even test an inflation rate of 3%/year; -20% for stocks, about -1% growth a year; 3.8%/year for interest rates.

The ECB will monetise the debt because the politics will not be honest enough to do a haircut; the voters will fall for more government intervention waiting for a providential great group of guys to run the countries but it won't happen because bad people are attracted by the power and power corrupts.

How does bitcoin thrive if the fiat banking system is illiquid?

There's no possibility of bitcoin loans. And the only way someone who needs capital can get it in bitcoin is buy using fiat to acquire it, which as you stated is hard to get your hands on in Europe right now.

Zerohedge has some interesting factoids but its relentless angle of doom destroys a lot of credibility. Every article appears to be fundamentally the same and then there's a cascade of comments that are almost completely interchangeable with any of their other writings in the last few years.

You are right and we are not there yet but the fact that certain "big" markets are highly illequid is very interesting and Bitcoin should have a huge price appreciation when the confidence in the banking system go down significantly.

Yeah the money is being pulled out , but where is it going? Its not going to crypto market thats for sure.

oh lookie here :


i was just waiting for such an honest and selfless act of advice from them..  ::)

cheers

There were doomsayers 2,000 ago! It's one of the world's oldest profession. I guess some people just like doomsayers, but we shall not worry as there miracle makers too. Lead turned to gold! Full employment! Give me one penny, I'll give you 2 pennies back in 3 months!

BS, BS and more BS.

How isn't there possibility for bitcoin loans? Bitcoin loans happen all the time in this forum alone.

the-importance-of-saving-money (http://southpark.cc.com/clips/27im67/the-importance-of-saving-money#source=473fef35-48a7-434c-afc6-207874c7f1a3:7013d7f0-ecfd-11e0-aca6-0026b9414f30&position=1&sort=playlist)

...

Keep in mind that bankers and governments lie.

I have no way of understanding the financial strength of "the banks" now, but I would recommend (and already do, to an extent) HODLing the below:

-- physical gold and/or precious metals (5% is way more than 99% of Americans own) in your own possession
-- Bitcoin (up to 1% for those who do not understand BTC well)
-- CA$H, long green, sufficient for three months expenses if possible.

Very few have all three of the above.

You could add guns & ammo, food & water, etc., but then discussion of all that would best be put in a survival thread...  :)

yes, it is possible. But due to the current economic condition of Europe, no one is willing to lend them any bitcoin!

Umm that is not the case.

Twenty-four European banks fail financial stress tests http://www.theguardian.com/business/2014/oct/26/european-banks-fail-financial-stress-tests

Citigroup Fights to Recover From 'Stress Test' Failure http://www.wsj.com/articles/citigroup-fights-to-recover-from-stress-test-failure-1403291332

Deutsche Bank, Santander U.S. units likely to fail Fed stress test: WSJ http://www.reuters.com/article/2015/02/20/us-deutsche-bank-stress-test-idUSKBN0LO2DN20150220

This list goes on...

Bitcoin can work as currency when legacy system is running out of fiat money. Before, without fiat money merchants can't do trades, that will be a total stop for all commercial activities, but now they can use bitcoin, and forget about fiat money during the process

Actually I don't think there will be any liquidity problem for fiat money system, since central banks can always create as much fiat money as they wish. There is a danger though, once they ran out of purchasable debt, they can not print any more, so if everyone refuse to borrow more money (include government), then central banks will not be able to print any more money(to buy debt)

Of course there can be liquidity crisis in fiat system.  We just witnessed one in 2008.

No the Fed does not print money to "buy debt".  If you are talking about QE that was to inject liquidity into the system by swapping asset for reserves.

Bitcoin can't avoid liquidity crisis.  As a matter of fact it would be more prone to liquidity crisis because of its inelasticity

FED create money out of nothing to buy bonds, in fact, inject liquidity is not a phrase good enough, you can call it holy grace, borrowing from god, or whatever name that looks professional

In case bitcoin is not enough for daily use, the value of bitcoin will rise, just like during 2013, large amount of speculative demand drive up the price of bitcoin, there will never be a liquidity problem if 1 bitcoin worth 1 billion dollars

The reason why same thing does not happen on fiat money is because central banks keep looking at the demand, when demand rises, they don't allow fiat money's value to appreciate, they print more, increase the supply and suppress its value. And they greatly benefit from a liquidity crisis, since all the new money's ownership belongs to them

They buy bonds from primary dealers.  So what? How else is the money going to enter the private sector?

When you say "buy debt"  what are you insinuating?  You are trying to claim that this is buying property.  It is nothing of the sort.

The problem here is you are looking at money as commodity when you should be looking at it as stock and flow

How is the gold enter the economy under a gold standard? Just dig it out and spend it

Similarly, fiat money enter the economy by printing it out and spend it, or simply adding some numbers on bank's account and spend it. Of course central banks will never say that they create money this way, they will use complex terms to make it looks as legit as possible. Real Bills Doctrine is a perfect example of such effort: If all the new money is originally backed by some assets, then normal people will not question the money's credibility

You still thinking about commodity and not stock and flow.

Low liquidity would result in bitcoin's price increasing. Wouldn't this automatically solve the liquidity issue?

What about highly insolvent?

Banks should fail when they have been mismanaged, the market needs to eliminate the losing companies for the greater good.

That would be if we lived in a free market, but it's not the case. Even if it was, when a bank fails families get fucked too for having their money there, its unfair.

...

One of my favorite expressions from my time over at Zero Hedge (I dropped out recently) is:

"Be your own bank, buy gold!"

That can be extended to Bitcoin as well, both are assets outside the banking system.  IMO, it is smart to have soem valuables away from the clutches of the banksters...

Perhaps if you own enough Bitcoin and gold we could say:

"Be your own Central Bank, buy gold and Bitcoin!"

How does Bitcoin participate in the lending market? It seems very difficult given the one way nature of transactions and anonymity of things.