why is it running from "webmail" subdomain?
Because it's a sysadmin  . Bad boy  Yeah, he's making the quants look bad |
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No. Silver is the currency in this example. In hyperinflation the relative value of the currency will fall drastically. That is what happened with sliver in 1980. As to why Pirate is a bear, my conclusion here is based mostly on Pirate's own threads and comments and some of the comments from his supporters. I then compare this with the market data and have reached my conclusions from the relationship between the pro Pirate comments and the market data.
Hyperinflation was averted for the currency (USD) in the period you're referring to. The Hunt brothers were forced to liquidate their holdings, so there was an excess of supply over a short time. It was also a known quantity, not unrestricted production at an exponential pace. Finally, I posed the hypothetical because silver was not an official currency in 1980. Without monetary demand, there wasn't enough industrial or investment demand for the quantity available. I'm not sure how you've determined Bitcoin market data is bearish. There's been every effort at maintaining stability, especially in light of the $9+ spike a few weeks ago which was cut down before it became a bubble. Followed by a stable basing range and resumed gradual ascent offering no easy entry points, it looks exactly the opposite of a bear. What posts led you to believe Pirate is bearish? Everything I've seen indicated that he thinks Bitcoin has great potential, with some risks that could cause it to fail. Why would anyone hold or invest in bitcoins if they expected them to decline, let alone accumulate large quantities and build several services based on the system? I could see the case for a pump & dump, but where's the pump - are we witnessing a slow, multi-year pump that'll dump when everyone is using Bitcoin? |
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QE doesn't address solvency problems.
It doesn't? Please explain. It's basically assets vs. liabilities. If your assets (income) are greater than your liabilities (expenses), you're fine. The other way around, though - not so good. Let's say I run a bank, and my reserve is 10% of total assets. As with any business, I have cyclical expenses including employees, property costs, shareholder dividends, etc. To make things easy, let's say that the annual expenses are equivalent to 10% of total assets. I have 90% of total assets to work with, so I make 9 loans at 10% each. Every one of the loans returns 2% annually for an 18% total return. This means that the bank will be running at break-even if 4 of the loans default and cannot make payments. There may be costs involved with recovering the principal capital which could turn a defaulted loan into a net loss, but let's just assume 5 of the loans have defaulted. In that situation, there is now an annual shortfall of 20% (the 2% out of 10% total asset value necessary to keep the lights on). The reserve now has to be dipped into in order to make up the difference. What liquidity injections attempt to do is recapitalize the banks to a point where the assets are greater than the liabilities again. However, liquidity cannot make defaulted loans profitable again. Instead of helping directly, liquidity can simply flood the banks and allow them to stay afloat until there are worthwhile loan applicants that aren't likely to fail in repayment. The problem is that there's a very large percentage of defaults, like a swimming pool with dozens of big cracks - pouring water in like liquidity injections just winds up flowing out almost as quickly. The really dangerous part for the banks comes from any shift away from them as a primary source of business. If the banks start losing potential customers (to Bitcoin!), the solvency problem gets even worse, requiring bigger liquidity injections than before. Since most governments are highly dependent upon the banks, there's an extreme incentive to keep them alive. Without the ability to create productive clients for the banks and fix the solvency issue, and no money or insufficient cashflow (tax revenue) to pump into the banks, let alone keep the government itself going, the only option is to generate funny money and distribute that until nobody wants it anymore. You can think of buggy whip makers for an easier analogy. If everyone has switched to using horseless carriages and no longer need whips, it doesn't matter how many whips you make - you're going out of business. Economists can be a mind-boggling contradiction with their ability at being intelligently stupid. That went a little further than solvency, but the cascading effect is important too. And this highlights the especially dangerous nature of Bitcoin and gold for the banks in the current situation |
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Hypothetically, what do you think would've happened if silver were instated as a currency at that point?
The Hunt brothers would have become rich, owning 1/3 of the currency's wealth. That would be a retarded move by any government. Exactly. No government would sign on to that, but with Bitcoin they may not have a choice. Even after over 32 years the price of silver has not reached the 1979 - 1980 peak of 49.45 USD an ounce. As a currency initially hyper inflation. The key difference with Pirate is that Pirate is a bear and the Hunts were bulls. So if Pirate were to try the same thing as the Hunts did in 1979 - 1980 but as a bear, the initial impact on Bitcoin would be hyper deflation.
By hyper inflation, do you mean the relative value of silver would rise? How do you know Pirate is a bear? |
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 Snoop's got a brainwallet... Win! |
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9-10 digit size? Like $857,499,185 and $1,320,419,443? :-)
Yes! Exactly those numbers! |
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gold doesn't seem to be doing so well today.  It's very likely that there will be a short spike down in the monetary metals before they confirm the recent breakout and have a rise similar to Bitcoin's during the last two months. Of course, with multiple Pirate-like operations going, Bitcoin should continue to steadily rise in value. If there are any major shocks to the traditional financial markets, a greater than normal flow might enter Bitcoin and cause a spike (or a series of spikes) similar to the $9+ a couple of weeks ago.
We're at a breaking point, like a pressure cooker. If everyone refused to sell their bitcoins, the same explosive situation would be present. Sinclair's perspective is wise as always... Many of you are so lost in the Fed soap opera that you have lost your focus entirely. The longer the Fed waits, the greater the amount of QE they will have to do.
As in the Skier illustration, done for you years ago, the second drop in the US economy is going directly through the floor. Markets will push the Fed to act on a random day, not on a predetermined Fed meeting of the FOMC.
Where did you all get the crazy idea that Fed moves come on schedule? That implies preplanning – something that has never occurred.
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If you were an early oil baron what would you pay to corner the oil market by buying saudi arabia ? 7% seems cheap It almost always costs more to corner the market than you can possibly make after having cornered it. Hypothetically, what do you think would've happened if silver were instated as a currency at that point? |
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Because the only way a HYIP can be successful is if it experiences perpetual exponential growth at a rate higher than the world economy is growing. Otherwise, people are just receiving fraudulent transfers of other people's money as the HYIP as a whole gets deeper and deeper in debt.The longer a HYIP runs, the more it loses.
High yield offers don't necessarily start off in the negative, depending on what they're associated with and how. At a certain point of market saturation, they certain can. Then it becomes a losing proposition, and that transition can be further masked by fractional reserve practices. With Bitcoin, at least the record is in the open. |
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How much is an online reputation in the bitcoin community worth, really?
Because his current liabilities (assets obviously unknown) are at least a few million dollars.
BitcoinMax alone is over a million dollars, that's before you count any of the other schemes, through the forum or on GLBSE, or people's personal accounts...
That depends on how you view Bitcoin. If you're prone to suggest that this Interwebz thing is just a fad and will end 'any day now' because you don't see any use for it, then Pirate is a guaranteed scam for you regardless of logic or proof. I don't think anyone here assumes Bitcoin is a force that will change the world within months, nor do any of us expect Pirate's operation to continue in perpetuity. So there's a fairly small range of views. I'm simply more inclined to think that Pirate is legitimate based on what I know about how financial markets are influenced and that he runs more than one operation, one of which provides an especially valuable service. As BurtW said, a million dollars is a drop in the bucket. To add to that: a million dollars worth of Bitcoins makes you a big fish in a small pond. The former is a small fish in a big pond. With great influence comes the potential to do a lot more than could be done in the 'old world' of fiat currencies. Consider that it's the equivalent of monsoon season for Bitcoin, but drought and famine for traditional currencies. Would you rather be that small fish in a shrinking pond, or a big fish in a growing one? As for the 7% concerns, there's more involved than just BTCS&T. Similar to Wikispeed, multiple sources can combine to provide an higher aggregate return. |
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1. Because Pirate cares just too damn much about his reputation! That didn't seem to stop bitcoinica and mybitcoin from disappearing (or being "hacked"--I'm sure some true believers will insist that Pirate was hacked or suffered a bad trade when this is all over).
A valid point. That's why I said that it makes more sense from a business building perspective than from a scammer point of view. It doesn't exclude the possibility that Pirate could do a 180 and abscond with everything he's accrued. 2. If you're trying to benefit a fledgling revolutionary system and you also happen to spot a lucrative trading opportunity within it, how do you best benefit the system? Do you: (a) share your profits with the lucky faithful people who give their money to you in spite of your investment having all of the warning signs of being a HYIP, or (b) spend your profit on, you know, actual charity and development for the revolutionary system. In the alternate reality where pirate is running an actual investment, it seems like the only reason for pirate to pick (a) is if he has aspirations of being a cult leader.
Charity gets people by for a day. It's the government way of doing things. Business allows others to participate, making an endeavor that much stronger. The former is sunshine and ponies in the short-term, but disastrous in the long-term. The latter is consistent and tends toward longevity. I like how you so nonchalantly threw in 'cult leader', as though that's the only option for anyone to aspire to. 3. To be pedantic, Pirate made it clear that he couldn't accept that much "storage" (such as $100,000) early on. https://bitcointalk.org/index.php?topic=50822.msg615031#msg615031 He had to gradually ramp up a balanced set of "investors." This is inconsistent with a market trading or arbitrage scheme, where more capital could be used instantaneously, but by remarkable coincidence it is completely consistent with a Ponzi scheme (where a large investor early on can imbalance the scheme and cause it to fold prematurely if he pulls out to test the system). Of course not, the market couldn't handle that much then. If you were to dump $10mm into Bitcoin when the total market value were $25mm, he would be working against himself because there wouldn't be enough flow to provide earnings at the margin. It's the same in the commodity futures markets where the banks control a majority interest and have to be careful not to trade against their own positions, trapping themselves in losses. Once again: from what I see, as long as the Bitcoin economy is growing, Pirate will be able to generate a return. I don't know Pirate, nor do I have access to his information. It could still be a Ponzi. At the same time, there are a number of methods which could be aggregated to provide greater return than 7% weekly. If you haven't been able to already from the nearly explicit descriptions of how it works, then it's up to you to figure out what those methods are. There is likely at least a handful of individuals other than Pirate doing the same thing. |
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One thousandth post! Thanks for providing the amusing material with this thread. Another kind of pseudo-insurance would be to simply have your interest auto-paid-out. After just 10 weeks you have your principal insured. In fact, you got it back. From then on it would be pure gain.
Pirate's Ponzi works only because most people don't do that. Instead they attempt to compound their interest, because they want to get rich quick.
You must be truly amazing to be capable of asserting facts like that without offering any analysis or proof. I am in awe of your magical guessing abilities. So my advice for everybody who, against all common sense, believes in pirateat40, but is still looking for a bit more insurance, is to switch your account to interest auto-pay-out and keep your fingers crossed for 10 weeks.
Another variation of this is to reinvest about half of the gains and have the other half auto-paid-out. That would have worked pretty well for the very early adopters and would return the principal within 20 weeks. Of course all such schemes would be a catastrophe for pirateat40, who can continue only if people withdraw less than other people pay in. He is banking on the compounders.
Very sensible. Glad to see you're finally catching on to what's been suggested repeatedly in countless posts. Just to be sure that nobody takes the above advice too seriously, my real advice is, of course, not to trade with pirateat40 at all and, if you have already given him money, withdraw it immediately. I don't think you'd have another 10 weeks.
Your decision, herr Diktator! I am again in awe of your magical guessing abilities. |
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Don't you guys love it when one guy admits he fell for scams and tries to convince everyone he can spot a scam? LOL, just LOL "I can see a scam because I fall for them" <--- Doesn't compute.
Classic! |
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Do you really not understand the simple fact that there has never, in the history of humanity, been anything remotely resembling a low risk investment that can promise to return 3000%? However, the list of things that have claimed to be such and have actually been Ponzi schemes is quite long. Even his supporters admit that the scheme cannot last (this is simple mathematical fact). The only question is whether it ends with Pirate paying people back or with Pirate not paying people back. And Pirate basically has no incentive to pay anyone back.
This isn't rocket science.
That's the only part I disagree with. The assumption that there is no incentive to return funds involved in a highly public operation that has multiple facets, all of which are heavily invested in supporting the Bitcoin system, simply doesn't hold up as strongly as if it were a completely silent effort. Assuming Pirate had invested USD$100,000 at $2.50/BTC around the time BTCS&T began, at 7% returns he would now have about 600,000 bitcoins and by one year almost 1.2mm. Why bother dealing with the hassle of a Ponzi when those kind of gains would be achievable quietly and with no accusations directed at him? If we look at his motive from a more pragmatic perspective, his actions make sense. The most valuable asset for a business is its reputation. Bitcoin has been observed by many as a revolutionary system. Anyone looking to be a mainstay in such a new system might do what Pirate has done in order to solidify himself as a valuable participant, whereas the traditional view steeped in greed is to extract as much as possible, as quickly as possible, and everyone else be damned. Instead, Pirate is now poised to be one of the prime go-to names for anything Bitcoin related. The result of wealth extraction practices is what we're seeing with animosity and civil unrest toward those whom have pursued exactly those destructive behaviors for the past several decades. That is, destructive actions are unsustainable and end violently. They have especially permeated the traditional financial realms. Responsible, long-term views founded on commitment to core principles can result in longevity through stability. Some examples, both old and new, are Costco, W. L. Gore & Associates, Google, IBM, Jim Sinclair's Tanzanian Royalty Exploration Corporation, etc... Bitcoin being new, it has certainly attracted its share of questionable and unscrupulous individuals. At the same time, anyone recognizing its greater potential has the opportunity to create a legacy that could rival the Du Ponts or Rothschilds or Vanderbilts. From everything that I've seen regarding Pirate's community involvement and operations, I see an effort to do something greater than himself that benefits the world, and secure an admirable place in history. I also PMd you an outline of how the various components work together to bolster BTCS&T. |
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Creating the market is different from cornering the market on an existing good.
And the potential market for Bitcoin is as big as that of the major fiat currencies. That's quite a market that can be created, or more accurately - replaced. |
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We pushed over 9 2 weeks ago in an unhealthy situation...
Exactly. If the investment and speculative capital continues to steadily flow into Bitcoin, that wealth won't be easily spooked with the lack of technical bid vacuum areas. Most are only looking at the purely speculative aspect of the Bitcoin markets without taking into account real world business activity. As a market grows toward the 9-10 digit size, it starts attracting 'legitimate' businesses that see a potential client/consumer market that can be tapped. So at some level not too far above the USD$100mm market size, real businesses should start waking up to Bitcoin's presence and seek ways to tap into it. With that happening, the chances of Bitcoin's exchange rate collapsing becomes even more remote. |
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It seems nobody is paying attention to the fact that Pirate has other operations that can supply BTC for BTCS&T, not to mention the select few whom have mentioned the potential for arbitrage across exchanges. There's also no way of knowing how much activity occurs off exchange.
Most seem to think the intention is simply to accumulate as much as possible, at all costs. What if the plan is to maintain stability so the entire Bitcoin economy can grow, appealing to businesses and those who would be frightened off by events like the 2011 bubble?
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he's also the Bear who said he would take down the Bear if we got over $8.
TBH I wouldn't recognize which posts were his if he did... Bitcoin up, up and away! |
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I think we'll see a big drop in PM's and a HUGE epic rise in bitcoin.
if you do not fear inflation with your currency why hold PM's?
its kinda like holding on to your sea shells after gold is discovered.
Yes, but over what timeframe? While Bitcoin does outclass gold in some ways, it won't be able to completely supplant the metal until communications networks are as resilient as distributed networks. That means meshnets must become ubiquitous. Even then, the final vestige of gold probably won't be released until supply is called into question. Inflation is the superficial fear. The deeper, more substantial threat is counterparty risk - the danger of trust being broken in custodians of assets. For at least the next few years, both the monetary precious metals and Bitcoin will offer the best protection of all financial assets. |
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