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1  Economy / Speculation / Operation twist on: September 22, 2013, 03:22:18 PM
Difference between gox and stamp is down to USD 9. Will stamp soon take the price lead?
2  Economy / Economics / Discounting the future on: September 19, 2013, 07:35:08 AM
How can you loan from the future? A taxi owner can do that. By not setting aside money equivalent to the wear of his car, he can spend more than he earns. When the car is worn out, of course, he will have a surprise.

What about the world at large? I allege that it is not possible for the world to loan from the future. Consider this: First, remove the money from equation. You can do that, because money does not have direct use value, their function is only to facilitate trade. So whatever the world produces in one period of time, must either be consumed directly, or be saved as real capital. If the world in a period uses more than what is procuded, the excess must come from previously invested capital.

The effect of consuming more than is produced, is capital consumption and consequently reduced productivity in the future. That is why fucking with the money, fucking with the prices and fucking the interest rate is always the wrong thing to do.
3  Economy / Economics / The need for bubbles on: September 15, 2013, 07:10:33 PM
Somone hinted on this (old) article from The Onion,2486/?ref=auto

"WASHINGTON—A panel of top business leaders testified before Congress about the worsening recession Monday, demanding the government provide Americans with a new irresponsible and largely illusory economic bubble in which to invest."

It seems that the satirical The Onion hit the nail with this one. I think this is the policy the central bank is following.

According to this article by Krugman in New York Times, they should blow up a new bubble:

4  Economy / Economics / US 10 year bond yield on: September 10, 2013, 07:45:02 PM
Its creeping up just below 3.00 again. There is a big whale in the room, may be it has a slush fund to force it down again, or maybe the whale just writes off this indicator and focus on the 2 year. No, I am not crying end of world. I just find it interesting.
5  Economy / Speculation / The church of the invincible financial advisor gods on: September 02, 2013, 07:49:06 PM
Are you a member? Me not.

I saw one who allegedly had a totally legal and profitable tax scheme. It was not totally legal, or even effective, and it was mixed with risky foreign exchange, loan, insurance, fees and whatnot into a hairy, greasy ball. When I turned him down, he literally (well almost) followed me out on the street, hands waving.
6  Economy / Speculation / Slowly moving orders on: September 02, 2013, 07:37:09 PM
Sometimes you see that an order is moved just a millibitcoin up or down, for no appearant reason. That is, it does not move past another order. I think this is an order placed in a non-USD currency, and the changes are changes in the fiat exchange price. I speak about Gox, obviously.
7  Economy / Speculation / Money flowing into Gox irrelevant on: September 02, 2013, 09:31:17 AM
You can possibly find some statistical correlation between volume and price on gox, but the idea that billions of USD has to flow into gox to raise the price to a certain level, is irrational.

Here is the formula for USD flow: Inflow - outflow = increase in USD on gox. Basically, inflow is always the same as outflow, modified for change of balance.

What really moves the price, is a change of heart on part of the actors, the gox customers and potential customers. The order book reflects the value scales of the actors somewhat, but remember there are always opinions like "I will sell some at 1000" that is not in the order book.

So, when we have a really slow day (or any time interval), it means that the actors are content with their holdings. When the value scales of some of the actors change, we have trades. For instance, if someone with an order for 100 BTC at 120, waiting for a dip, changes his mind and now values BTC at 300, he will change his order and buy at the current price, driving last price up. But, equally, when someone selling for just above the current price changes his mind likewise, he will withdraw his sell order, indirectly moving the price up for the next buyer. If all actors revalue bitcoin up 10 dollars, the price will move that amount without much trade going on.

Anyway, this is not bitcoin magic, it is the same for all markets.
8  Economy / Speculation / fundamentals: buttercoin on: August 26, 2013, 12:46:06 PM
The advent of buttercoin is in my opinion one of the best fundamental movers now.

Buttercoin was on Bloomberg TV the other day, but it was better explained on Let's Talk Bitcoin (or was it Plan B). They supply a mostly complete exchange, all you need is basically a bank account and your own exchange name. They even supply seed liquidity, and all buttercoin exchanges in a country trade on the same order book.
9  Economy / Service Discussion / Gox innovation on: August 23, 2013, 10:41:37 PM
I have a list of wishes for Gox like anybody here, but lets get real - here is what they brought to the table:

1) Big and small orders treated the same - lots of orders are around a dollar forchrissakes.

2) Around the clock trading.

On equity bourses, they have this random share price and random share numbers. An idea for those guys: Redefine a whole share to be the complete company, trade arbitrarily low fractions of that.

And why stop at 4pm (ah - do they mean 16:00 eastern something with DST in some random country?). I know, the NY brokers need to eat, but what has that got to do with some palm wine drinker in Malaysia?

I say to NYSE and NASDAQ: Learn from MtGox.

10  Economy / Speculation / General speculation rant on: August 21, 2013, 09:18:51 AM
The Fed minutes not released yet.

My guess is that bond yields will continue to rise, not because of tapering (which I guess will not happen) but because the risk is perceived to climb.

General appreciation of USD due to lower confidence in diverse local fiats around the world.

Metals except gold inching lower.

With gold, anything can happen.
11  Economy / Speculation / continued QE on: August 19, 2013, 02:21:32 PM
I suppose there will be no tapering revealed on Wednesday, at best a change from the current treasury and mortgage bond buying to something else. He likes to surprise the market.

If I were interested in shares these days, I would buy on any downturn on tuesday, sell on wednesday, but I am currently not, too risky.
12  Economy / Economics / Meanwhile in the fiat world... on: August 19, 2013, 09:38:40 AM
...the 10 year treasury bond yield touched 2.873 this morning.
13  Economy / Economics / Gold as money on: June 23, 2013, 09:32:58 AM
Gold could become money, with fully backed notes and demand deposit banking.

But for each gram note, there should be one gram in the bank. The notes would have a higher value than the gold, because it is more practical than gold for trade (but have a slightly higher risk)

Demand deposits must be fully backed by gold or gold notes. The gold in the bank would be more valueable than the gold note, because it can be sent worldwide instantaniously (and have a slightly higher risk than a gold note).

Accounts with interest is possible by lending trough a lending consortium, but the amount can not be paid out on demand, only after some period of time after request, corresponding to the duration of the loans extended by the consortium. Still higher risk.

Everything would have to be private, no government guarantees. Businesses including banks will have to go bust from time to time, keeping the public aware of the risk. If central banks start to mess with the system, we would go into the same slippery slope as we have done the last hundred years. Changing the name of the notes from gram notes to something that is not a measure of mass, would be the first step on the slippery slope.

Conceivable? Yes. Competition to bitcoin? Yes.
14  Economy / Economics / Can USD be transformed to soundness? on: June 23, 2013, 09:13:41 AM

1. Stop the printing
2. Stop FDIC, saving of banks and all other firms.
3. Make it divisible by producing smaller notes and coins (larger notes will have to be destroyd in hte same dollar number).
4. Stop the competition for maximal incompetence and nonproduction that is government welfare.
5. Let all other fiat die.

This must be done, plus everybody must believe that it in fact is going to be done.

Personally, I would have some bitcoins, just in case.

15  Economy / Economics / Unification of bubble and monetization on: June 07, 2013, 07:47:23 PM
What is cheap price? It is that a good or service has a lower price that it was, lower than it is expected to become, or it can replace another good or service, that has a higher price.

In reality, all prices that are based on voluntary exchange are exactly right, at the time and place of exchange. (Or more precisely said: the price is bounded between the seller's and the buyer's valuation).

A asset bubble, for instance in housing, can be regarded as a monetization of the houses. They are priced, not only on the utility for the owner, but for the expected exchange value of the house in the future. The monetizing effect is self-reinforced, as the rising prices attracts investors prospecting an even higher price. The house has partly a utility value, and partly an exchange value. Eventually, the bubble will burst, because a house is not a very good money: It is not fungible, divisible or movable.

Bitcoin is a bubble in the same sense as the house asset, even more, since it started at zero, has only exchange value, and will likely go to zero in the future, if it can be replaced with something better. (Hopefully far beyond my time). The difference is that the exchange value of bitcoins is real, because, it is in fact fungible, divisible and (extremely) mobile. It can stay on the top of the bubble curve for a long time, the exchange value will hold, because of the usefulness of the system in indirect exchange. Or in stead of real, you could say that bitcoins are extremely liquid, while houses: not so much.

In sum, the same thing: a bubble is the monetization of some stuff, if it is not good money, it will burst.

What do you think?

16  Economy / Speculation / Bitcoin incredibly stable on: February 19, 2013, 06:43:38 PM
It hasn't changed much since June 2011.
17  Bitcoin / Bitcoin Discussion / Store of value vs medium of exchange on: February 19, 2013, 01:18:00 PM
These can not be disconnected.

A fine day in the jungle:
-- Dude, I have codez. They are valueable. Interested?
-- Sure, how many for this piece of ganja?
-- Oh, sorry, they are not transferrable.
-- Huh?

5 minutes later:
-- Dude, I have codez. They are transferrable. Interested?
-- Sure, how many for this piece of ganja?
-- Keep it, you can have some anyway.
-- Ehh, okayee, what can I use them for?
-- You can keep them forever or donate them to who you like.
-- Huh?

18  Alternate cryptocurrencies / Altcoin Discussion / Statecoin on: February 19, 2013, 08:31:27 AM
If or when bitcoin becomes well known, in addition to working to destroy it, the state (any state) could try to make its own coin to compete.

This would of course have to be different from bitcoin in some way, otherwise there will be no point in it, and it would not have a hope of being a success anyway.

The statecoin would of course have some benefit for the state. For instance half the block reward goes to the state, or half the fees, or a percentage of each transaction. Even better, centralized, so the rules could change.

I have not seen any hint of this yet, but it is possible that at least the idea would be thrown in by some politician.

So if you see something like this, please bump the thread. (Comments also welcome of course).
19  Economy / Speculation / Volatility on: February 17, 2013, 04:24:44 PM
It seems the concept of volatility is not well defined metrically.

It could be over some timespan, percentage of in or out value or some volume weighed indicator. It could be moving window, and it could be defined as a quadratic filter.

We need some formula that will not be distorted if value rises significantly.

20  Economy / Economics / International Monetary Fund Special Drawing Rights on: February 15, 2013, 02:15:23 AM
Heard about it?

Money issued by IMF.

Pegged to a basket of national currencies:

"The currency value of the SDR is determined by summing the values in U.S. dollars, based on market exchange rates, of a basket of major currencies (the U.S. dollar, Euro, Japanese yen, and pound sterling). The SDR currency value is calculated daily (except on IMF holidays or whenever the IMF is closed for business) and the valuation basket is reviewed and adjusted every five years."

That is, it is pegged this way until it is pegged otherwise.

What is the money base?

"• SDR 9.3 billion was allocated in yearly installments in 1970–72.
• SDR 12.1 billion was allocated in yearly installments in 1979–81.
• SDR 161.2 billion was allocated on August 28, 2009.
• A special one-time allocation of SDR 21.5 billion took effect on September 9, 2009, bringing total cumulative allocations to about SDR 204 billion (equivalent to about US$318 billion)."

"Q. Will the SDR allocation be inflationary?
A. Not likely."

This must surely end world poverty. (sarcasm).

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