True however China's price in USD equivelent is still higher than any USD exchange (4200 CNY is ~$690 USD).  

What is interesting is the spread between exchanges has narrowed.
From the bottom China rose the least and Bitstamp rose the most.  The gap between all three exchanges is now smaller than at the peak.
Not sure what that means (if anything) but I thought it interesting.

A common criticism that economically inclined folks have leveled at Bitcoin is that it is prone to deflation or deflationary spirals. The Keynesian approach to this perceived problem is to increase or decrease money supply until inflation reaches a target rate. Individuals who believe this is necessary for a useful currency have argued that this is only possible with a centralized controller of the money supply.

It occurs to me that it might be possible to create a keynesian decentralized virtual currency somewhat like Bitcoin, where the difficulty adjusts to keep coins generating at a specified rate which is in turn adjusted based on information about coin value over time. The difference with this new currency would be that rather than having the target coin generation rate follow a predetermined schedule, the coin generation rate would be tied to coin purchasing power in some clever way. One way to achieve this would be for the protocol to intelligently scrape information about global exchange rates and try to regulate the average exchange rate between different world currencies to some constant. Alternatively purchasing power information is fed by miners somehow and there is a reward in coins depending on how close the information matches the average information being fed from around the world. This way there is an incentive to not skew the data, and it would be difficult to form a >50% group willing to pump inaccurate purchasing power information into the network.

Both kinds regulatory mechanisms listed above are rather naive and could result in the network being fooled by attackers into generating coins at strange rates.

[disclaimer: I realize I am referring to a "distributed network" as being capable of various things, this is hypothetical for the sake of starting with conceptualization.]

A better mechanism starts with the concept of implied volatility. If the network could "sell" derivatives on coins for coins to network participants, self-interested network participants will buy these derivatives or options contracts at different prices depending on their beliefs about the future vs current purchasing power of a coin.

A simple example(network issuing "bonds"): consider a contract where the network sell a fixed number of bonds for 1 coin with a 0.1 coin per year return, and some of bonds for 1 coin with a 0.09 coin per year return and so on down to arbitrarily small returns. If the coins are inflationary, say purchasing power is decreasing by 5% a year, participants will be willing to put many coins into the 0.1 coin return per year but much fewer coins in the 0.05 or lower return bonds(as they would rather spend the coins than buy a bond that loses value). If the coins are deflationary, users will be willing to put more coins in a lower return bonds. The network monitors the distribution of bond purchases at different prices and determines something about the expected future value of coins compared to their current value. If participants are buying up the bonds available at all return levels a deflationary state is implied, and the network decreases difficulty until the purchase rate of lower interest bonds starts to decrease, the network difficulty is basically adjusted with some kind of negative feedback control with respect to the deviation from a certain reference bond buying distribution that corresponds to the desired inflation rate.

A similar and perhaps simpler mechanism is for the network to allow participants to borrow coins in exchange for slightly decreased mining difficulty for a certain address. This creates similar incentives to the bond scenario, letting the network hold onto your coins in exchange for small returns in the form of more coins mined tells the network something about how the value of coins is changing over time depending on the equilibrium purchase rates of different lowered mining difficulties, and again the network can apply negative feedback to drive the equilibrium on "mining difficulty reduction purchases" to a price which implies the desired inflation rate.

I believe that better solutions exists involving a more sophisticated set of derivative trades between participants and network, which would give the network much more reliable information about value projections of participants, allowing cleaner feedback on coin generation rate, along with providing mechanisms for eliminating coins.

What does everyone think? Is there economic sense to these ideas,(assuming the reader is a keynesian, for the sake of argument) and if so would it be possible to implement them in a distributed protocol?

The single largest threat to the survival of Bitcoin today is the overt and covert attacks on the fungibility of Bitcoin.  If Bitcoin is not fungible then it is not a form of money.  It becomes a collectible with all the problems inherent in a collectibles market:

The need for an authority or authorities to tell you the value of each Bitcoin based on criteria set by outside influences with their own political, economic and social engineering agendas.

The need for and infrastructure to check with this central authority, or worse yet multiple authorities, every single time you do a transaction - so you don't get stuck with less than desirable coins.  Or even worse, the need to check in with a very complex market to value the coins on a “sliding scale”, if presented with less than desirable coins, so you can accept them at a discounted value.

Fragmentation of the market for Bitcoins:  a white market for the coins deemed clean by the authority or authorities and a black market for the less desirable, listed coins.

The core developers could consciously or inadvertently either maintain or destroy the fungible property of Bitcoin.

Help:  implement BIP32 as soon as possible in all clients in order to allow all periodic payments to be done in a fungibility supportive way.

Hinder: anything in the clients that helps in the formation, propagation or checking of any kind, color or flavor of lists of Bitcoins.

People who were interested ... in operating off the grid.

What are some possible scenarios of how the core dev team could intentionally or unintentionally compromise Bitcoin?

Just curious to know possible scenarios where the core dev team would be able to compromise the integrity of Bitcoin.

It's not that I don't trust the team, I do.  I just want to learn more about Bitcoin's potential vulnerabilities.

to most newbies this is what you call and ASSHOLE.. probably not true and all a figment of some stupid attention seeking asshole..

also filed the post for deletion your welcome

Update

Now it's showing 2 transactions in my wallet, both with one confirmation

What are the chances those are legit bitcoins now?

I think it's now safe to say that we have arrived.

The world is now ours.

This is a bet I'd take. I think it could hit 10k eventually.

I don't see it happening this year.

Then again Bitcoin always bitch slaps me when I think I have it pegged.

The guy cop just said:
we all know digital currencies are not illegal.


haha nice.

30 minutes? What's going on?

They tried that (sort of) in Indiana in 1897.

http://en.wikipedia.org/wiki/Indiana_Pi_Bill

Funny, they speak about "their national security"

Since i'm european, this is NOT for my national security  

Bitcoin is international, it is about their world, not about their small nation

"That said, NYDFS also believes that it is in the long-term interest of the virtual currency industry to put in place appropriate guardrails that protect consumers, root out illegal activity, and safeguard our national security."
So, shouldn't he be looking at the dollar instead?

I was ironic but that's not the point.
The thing is that they CAN'T force you to enroll.

You go and buy from people not in the program spend your bitcoin on dice or porn or drugs and they can't do anything.
And nobody said that you can't have a trusted address and an untrusted one at the same time.

Also , i live in a country in which trusting my government means you're mentally ill.

Thanks for the vote of confidence.  Unfortunately, this sort of wallet damage really isn't something I've got the proper skills to help with. I've been meaning to dig more into the actual structure of the wallet.dat file and learn how to parse it, but I just haven't had time for that yet. You could try asking jackjack.  He's the guy who created and maintains pywallet.

I wouldn't give up hope yet.  It might still be possible to extract private keys from a significantly damaged wallet.dat file.

It might also be possible to extract a partial/damaged private key.  If there are only a handful of bits damaged or missing, a brute-force approach to repair/replace the damaged/missing parts might also be possible.

you mean this?

"The European Central Bank could adopt negative interest rates or purchase assets from banks if needed to lift inflation closer to its target, a top ECB official said, rebutting concerns that the central bank is running out of tools or is unwilling to use them."

http://online.wsj.com/news/articles/SB10001424052702304243904579195631017906684