that is logical, since the US gov basically prints more money at will.
why would anyone wants to hold the USD?
It is like holding fake money, where people can print at will.
Do tell the Chinese government that. It seems addicted to dollars. If only 1% of their dollar holdings were moved to bitcoins....  They have been OFFLOADING the USD currency since 2008. Now nobody wants to touch US treasury bonds. I am not sure where you get your information from. People are practically climbing into the windows of the White House to buy US treasury bonds that carry pretty low (but so far guaranteed) profit. The US could sell more then they are now quite easily and find buyers. Hum... then what do you think of this info ? http://www.fxstreet.com/technical/forex-strategy/daily-commodities-update-technical/2011/06/13/http://www.reuters.com/article/2011/07/07/us-usa-treasuries-auctions-idUSTRE7666K120110707Seems like less and less people are buying US debt Did you read what you posted? Not just the titles, the articles? There is a lot of FUD in both articles. The Reuters article has the title: "Treasury market wilts as Fed waves goodbye" Yet only points to one less then perfect auction. Even with the language it is easy to see through with statements like: "This happened two weeks ago when three separate auctions "tailed" in the worst week for government debt sales since March 2010." The worst since 15 months ago? It's not like the worst in 10 years or something like that. What does "tailled" mean? It means the bidders didn't bid as much as expected. They bid and bought. Do I think we can sell our debt forever? no. Do I think we need to manage our money better? Of course. Will there be inflation? Of course. The dollar coming to an end? Not unless the congress critters PURPOSEFULLY fuck everything up by voluntarily defaulting on debt. What i was trying to show with these articles is that during the last months, the main buyer of the bonds was the fed. And with the end of QE, it's going to be a lot more difficult to sell more (once the debt ceiling is raised). And in order for the keep the yield low, i think FED will have to buy some by one way or another. So i think your sentence "People are practically climbing into the windows of the White House to buy US treasury bonds that carry pretty low (but so far guaranteed) profit. The US could sell more then they are now quite easily and find buyers." is an exageration on the attractivity of US bonds (at the current yields). |
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The premium on the last buyer is perhaps not a good expression. Let's take oil as an example. What i mean by this premium, is the increase of the price paid by at the pump, by the final consumer of the product, which is due tu speculation. A recent report show that this increase due to speculation could be as high at 20% http://ourfinancialsecurity.org/blogs/wp-content/ourfinancialsecurity.org/uploads/2011/07/FINAL-Wrap-up-Gas-Prices-Speculation-Call-6-30-11.pdfhttp://www.youtube.com/user/TheRealNews#p/u/5/furSTUKwfOwI'm ok with speculators making money, they are providing a service in markets, I just want to put a limit somewhere. And about the tax amount, you're saying it won't be profitable without knowing how big that tax is. 1% is not a fixed number, i have now idea how low this tax should be, i just think there should be one. Then we can make a bigger tax in comodities, a smaller in forex. Depend of the need for speculators within the market. There will still be winner because we need speculators, there'll just be less. In your example you're talking about a 200pip average to break even. How about a 20pip then ? maybe that's already enough to make HFT non profitable |
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I don't have a lot of experience in trading/economy, maybe you can correct my thinking and tell me where i'm wrong.
(1) By doing speculation, you are expecting some winnings. Where does the money come from ? Is it only from wrong speculators, making speculation a zero sum game ? Or does it come by a premium on the last buyer ? (I think the answer is both)
(2) And for the tax, to me it's just a tax on your average pip/trade. If your (average rate - tax) is positive, you're still a winner. Since HFT has a very low expectancy, and play with volume, their winrate become negative.
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that is logical, since the US gov basically prints more money at will.
why would anyone wants to hold the USD?
It is like holding fake money, where people can print at will.
Do tell the Chinese government that. It seems addicted to dollars. If only 1% of their dollar holdings were moved to bitcoins.... They have been OFFLOADING the USD currency since 2008. Now nobody wants to touch US treasury bonds. I am not sure where you get your information from. People are practically climbing into the windows of the White House to buy US treasury bonds that carry pretty low (but so far guaranteed) profit. The US could sell more then they are now quite easily and find buyers. Hum... then what do you think of this info ? http://www.fxstreet.com/technical/forex-strategy/daily-commodities-update-technical/2011/06/13/http://www.reuters.com/article/2011/07/07/us-usa-treasuries-auctions-idUSTRE7666K120110707Seems like less and less people are buying US debt |
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As I understand it, it's a tax on the trade, both ways.
For sure, it'll reduce profits for traders. Basically you'll neep more pips. But you know what ? That the point. It's not complex to understrand that speculation add a premium on the price for the average consumer.
Of course it it important to have some, but we can't have infinite one. We need to put a limit somewhere.
As for the 1%, it's not a fixed one. Different markets could have a differents one, maybe by targetting a max % of speculation transactions within a market.
There as been some work one the value of the %, i think you can find infos on the wiki page
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I'd love for someone to tell my why speculation is bad.
I sense a thread derail coming, but yeah I don't see why speculation is so bad. Apparently that's because both of you aren't aware of how much of it is going on, at least I hope that is the answer. Before I write a 10 page history on this I'll test the waters: do you think that there is any amount of speculation that would be 'too much' or is it fine to have 50 times GDP of a country flowing in and out of that countries capital markets annually? No, I don't think there is the concept of "too much". Maybe you can explain why. Even just a short summary. I don't know if the Tobin tax is a good idea but the problem it addresses is huge. When you try to buy or sell securities, hypertrading is a way that allows the big players to find the maximum price you are willing to pay. They do it by placing and cancelling sales 1000s of times per second when a new buy order appears. The effect is that us peons always pay close to the max we are willing to pay while the Goldman Sachs type institutions pocket the difference between that max and the price the security could be acquired at. Its thought that transaction tax to eliminate those trades would be helpful. If it provided a buffer for the "too big to fail" banks, so much the better. Personally I'd worry that the exchange would simply take place somewhere else. I don't know if the tax would work. So the problem is someone else makes money? Oh noes, how horrible. I pay what I am willing to pay, how horrible. Problem is that someone else is making money off of you without you getting anything out of it. You literally gain nothing in the transaction while they gain everything. The funny thing is you're already paying these inflated prices to private hedge funds and other HFT operations. You get to pay more for hyper-traded funds while getting nothing (except for the privilege of paying a little more, I guess). All the details of the existing system look like a tax (since you can't elect not to pay it) except you get nothing out of it. Like I said before in an exchange where 1 party seeks to gain all the utility of the transaction without providing any benefit/utility to the other party seems like a parasitical operation that should be discouraged. I lose .00005%. Oh no, how horrible. I'll much rather pay a 1% tax instead to keep these bastards from taking my .000005%. Sounds to me that someone is getting utility, otherwise they wouldn't be engaging in trade. Do you have any source for the .00005% figure ?? Obviously the premium due to speculation (and especially HFT) is difficult to know. But i'll be ready to bet that it's far more than that (again, let's say on oil price). Pretty sure we can find lot of estimations. Wanna bet that the average is > 1% ?? |
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If you want an exchange with a Tobin Tax, then create one. Everyone who thinks it's a good idea will trade on it. Others won't unless you force them to. We'll then let people figure out how valuable HFT is.
Thanks for your answer, it's a good one, and it makes me think  Maybe that's the way to go, but for that we would need producers/retailers to agree with that, which need pressure from people, which need people to understand economy. That's why niemivh idea of creating a website is a good one. Call me an utopist, but I still hope that one day people will get it. We just need good (and not corrupted) teachers, and a motivation for people to understand economy. Perhaps the present economical situation could help with that |
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a 1% Tobin tax is extremely high. Most Tobin tax proposals have been a fraction of that amount and would still have significant distortionary effects according to any of the positive studies done.
I also do not see a problem with HFT or speculation on its own.
And why is this posted in Bitcoin Economics?
Most free-marketeers don't see are unable to see the incredible bias of all economists. They believe that free markets are the solution to all our woes and that all economists (at least on their side) have no stake in the fight. Can I see some of those studies? It's likely that I've seen them before and that they are totally wrong, well not 'wrong' just biased in favor of those who produce nothing and suck of the real economy (not referring to speculation in general, just HFT). The resistance to a Tobin tax is not some benign triviality, it is through a lack of this tax that the system is largely gamed at present and there are people making an incredible pile of money in the process. Let the people make a pile of money. Wealth is not limited unless you set it up that way from the start. So it's ok for people to make money off of other people without their knowledge or benefit at all? And that somehow trading money back and forth with algorithms to exploit technicalities in an exchange system is creating "wealth"? People make money "off" people without their knowledge all the time. Why is that wrong? For example, my mortgage was sold to another company. Someone else is making money off of me! Oh noes! The benefit is liquidity. No one is forcing people to sell at these prices, no one is given special access to make bids or asks. Do you favor banning poker since some people might be better than others and "take money" from them? In poker, people agree to play, and understand the risk. With HFT, everyone is paying the price, even if they don't want to play the game. About speculation and price discovery, of course we need speculators, question is how much (how much accurate we want the price to be). And tobin tax is a very efficient way to set the limit. And sorry about OP hopes, but Sarkozy don't really care about this. I guess he just said that during the election campain, or at some point when he needed a nice popularity poll. |
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Hi there
Is it possible to have access to the whole forum ?
Thanks
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Hi, I would be interested by joining Deepbit, however your network share makes me think you shouldn't grow too much  By having a > 50% share of bitcoin network hashpower, you clearly are the target for anyone who wants bitcoin to fail. Do you have a strategy to counter this ? Don't you think splitting deepbit into severals servers to make an global takeover more complex is a solution ? |
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Nice to see always more developpers at work to help bitcoin grow. Don't forget, fancy features are not the priority yet. Priority is to find efficient ways to increase wallet security, that's to biggest factor to increase confidence. Keep up the good work  |
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I didn't do the math, but i have trouble thinking it's profitable to use BCP because of electricity cost
Adding to that fees, and the fact that it makes Mozilla crash, i'm not using it anymore.
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That's a nice idea 12th of Aug is my birthday, hope lady luck will be with me |
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True but what if someone hack deepbit ? By being popular they also become a target
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