Wrong again. Even central bankers know gold is money...that's why they hoard it.
They also hoard a greater amount of Mortgage Backed Securities and Treasuries. Its called an asset not money They hoard the asset-based money to offset the risk of debt-based money. What are you talking about? All fiat money is credit. FTFY. It's only fiat money that is credit. Precious metals and cryptocurrencies are not credit. They aren't issued in the form of debt, but as an asset. The reasons other Central Banks hold USD because they can use it to settle debts in USD. The reason USD has value because its backed by assets like gold, securities but mistly treasuries. Treasuries are debt of USA (US Treasury)
No, they hold USD to back their currencies. This started when the USD was pegged to gold. At the time, they agreed to back their currencies with gold indirectly because they could redeem USD for gold as needed. Also, central banks don't need fiat to settle debt because they don't accumulate debt, they issue debt loans. None of this has to do with hoarding
The value of money (which is what this thread is about) has EVERYTHING to do with hoarding. When no one is willing to hold a particular form of money, it's worthless. It's simple supply and demand. No demand means no value. Edit: Should have said "...they issue loans." Gold is not money anymore its an asset. Cryptos might become money but currently it isnt. Bitcoins were money inside silk road market. But not outside Foreign currencies arent backed by dollars theyre backed by their own treasuries. Foreign central banks might hold dollars as assets. But its not to back their money. Its because they need to setlle debts in dollars Your idea of money isnt modern. Search modern monetary theory to have a better understanding |
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In order for something to be considered as money it needs to have three qualities:
1 - It needs to be a unit of account
2 - It needs to be a store of value
3 - It needs to be a medium of exchange
Gold would not meet this criteria because people will rarely deal in terms of gold, therefore it is not a medium of exchange. Governments hold gold because of it's large and stable value
Gold used to be a medium of exchange, why couldn't it be now? Part of the reason USD is a medium of exchange is because it's enforced by law. Your thinking of gold coins. Later on it became gold notes. Banks kept gold bricks in the vault and handed out notes. But you are right the only legal tender now is fiat. You can still make your own currency tokens but not for paying taxes |
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Is not about what kind of government, but what kind of people are in charge: till they are selfish, greedy and dishonest, no government can succeed.
This is precisely what kind of government, libertarian does not believe that it is possible to have a governement not selfish, greedy, and dishonest, this is why we believe minimal power into their hands is better. Thats incredibly bleak outlook. Thats why you have checks and balances. Thats why you have good regulations. Thats why you have legal framework The paraadox of your statement is that if these selfish, dishonest people arent in the public sector then theyd just be in the private sector. Libertarianism is not the solution for bad people problem. Rules are the solution The law can't be better than the people that decides them... and they are selfish, greedy, and dishonest. (In france, it is almost comical) Law is built up over generations. You have democracy in France? If you think you have the solution then you can get the people to vote you in to office Even if you want to reduce govt you have to do that The political leaders manipulate the media to present only left and right, "a choice" that only represent Statism. I have no choice to make, I don't approve their stupidity, and my time is better spent creating software than fighting over them. US is funnier, the media (see youtube link I gave some post ago) purposefully ignored Ron Paul even when he got better votes than democrats or republicans. Anyway, it is not in my pocket they are stealing because I am smart enough to evade all of that legally, and I don't want to fight for others pockets. I am in a country where most of the people hate our government, they complain but don't understand they are the one that are feeding the beast. Libertarian ? They have no idea about what it means since they never have seen anything else than statism since they are born. The only thing that I fear is that all the money often does'nt go in the right pocket for a right purpose, and the world might can degenerate quickly when a very bad person comes to the head, as history have already shown us. We don't need a libertarian government to live as a libertarian, just to think more carefully how to flow our wealth. All Im saying is you can be a politician if. You think you can do better. Nobody is stopping you |
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Is not about what kind of government, but what kind of people are in charge: till they are selfish, greedy and dishonest, no government can succeed.
This is precisely what kind of government, libertarian does not believe that it is possible to have a governement not selfish, greedy, and dishonest, this is why we believe minimal power into their hands is better. Thats incredibly bleak outlook. Thats why you have checks and balances. Thats why you have good regulations. Thats why you have legal framework The paraadox of your statement is that if these selfish, dishonest people arent in the public sector then theyd just be in the private sector. Libertarianism is not the solution for bad people problem. Rules are the solution Twiifm is right! What we need is a piece of paper with some ink on it that will stop psychopaths from using the state's monopoly on the initiation of force to inflict their whim upon people because........ magic!  What do you think the Constitution is |
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Is not about what kind of government, but what kind of people are in charge: till they are selfish, greedy and dishonest, no government can succeed.
This is precisely what kind of government, libertarian does not believe that it is possible to have a governement not selfish, greedy, and dishonest, this is why we believe minimal power into their hands is better. Thats incredibly bleak outlook. Thats why you have checks and balances. Thats why you have good regulations. Thats why you have legal framework The paraadox of your statement is that if these selfish, dishonest people arent in the public sector then theyd just be in the private sector. Libertarianism is not the solution for bad people problem. Rules are the solution The law can't be better than the people that decides them... and they are selfish, greedy, and dishonest. (In france, it is almost comical) Law is built up over generations. You have democracy in France? If you think you have the solution then you can get the people to vote you in to office Even if you want to reduce govt you have to do that |
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Is not about what kind of government, but what kind of people are in charge: till they are selfish, greedy and dishonest, no government can succeed.
This is precisely what kind of government, libertarian does not believe that it is possible to have a governement not selfish, greedy, and dishonest, this is why we believe minimal power into their hands is better. Thats incredibly bleak outlook. Thats why you have checks and balances. Thats why you have good regulations. Thats why you have legal framework The paraadox of your statement is that if these selfish, dishonest people arent in the public sector then theyd just be in the private sector. Libertarianism is not the solution for bad people problem. Rules are the solution |
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Nope. If no one is willing to accumulate and hold on to a particular currency then it has no value. Doesn't matter if debt is denominated in it that currency or not. The IOUs become just as worthless as the currency.
Money are essentially IOUs. It has value because someone accepts it as settlement If nobody accepts it then it worthless. Has nothing to do with hoarding Fiat currencies are essentially IOUs, but not money in general--gold and bitcoins being two examples of money that is not debt-based. If the central banks around the world that are hoarding dollars in the form of reserves were to suddenly decide they don't want to hoard them anymore then the dollar would certainly collapse in value. Has everything to do with hoarding. Hyperinflation is the result of no one willing to hoard the currency. (When I use the term "hoard" I consider it to be synonomous with "hold" or "save".) Umm no. Gold isnt money anymore. Bitcoin was only a money inside silkroad market. Wrong again. Even central bankers know gold is money...that's why they hoard it. They also hoard a greater amount of Mortgage Backed Securities and Treasuries. Its called an asset not money They hoard the asset-based money to offset the risk of debt-based money. What are you talking about? All money is credit. The reasons other Central Banks hold USD because they can use it to settle debts in USD. The reason USD has value because its backed by assets like gold, securities but mistly treasuries. Treasuries are debt of USA (US Treasury) None of this has to do with hoarding |
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Nope. If no one is willing to accumulate and hold on to a particular currency then it has no value. Doesn't matter if debt is denominated in it that currency or not. The IOUs become just as worthless as the currency.
Money are essentially IOUs. It has value because someone accepts it as settlement If nobody accepts it then it worthless. Has nothing to do with hoarding Fiat currencies are essentially IOUs, but not money in general--gold and bitcoins being two examples of money that is not debt-based. If the central banks around the world that are hoarding dollars in the form of reserves were to suddenly decide they don't want to hoard them anymore then the dollar would certainly collapse in value. Has everything to do with hoarding. Hyperinflation is the result of no one willing to hoard the currency. (When I use the term "hoard" I consider it to be synonomous with "hold" or "save".) Umm no. Gold isnt money anymore. Bitcoin was only a money inside silkroad market. Wrong again. Even central bankers know gold is money...that's why they hoard it. They also hoard a greater amount of Mortgage Backed Securities and Treasuries. Its called an asset not money |
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Nope. If no one is willing to accumulate and hold on to a particular currency then it has no value. Doesn't matter if debt is denominated in it that currency or not. The IOUs become just as worthless as the currency.
Money are essentially IOUs. It has value because someone accepts it as settlement If nobody accepts it then it worthless. Has nothing to do with hoarding Fiat currencies are essentially IOUs, but not money in general--gold and bitcoins being two examples of money that is not debt-based. If the central banks around the world that are hoarding dollars in the form of reserves were to suddenly decide they don't want to hoard them anymore then the dollar would certainly collapse in value. Has everything to do with hoarding. Hyperinflation is the result of no one willing to hoard the currency. (When I use the term "hoard" I consider it to be synonomous with "hold" or "save".) Umm no. Gold isnt money anymore. Bitcoin was only a money inside silkroad market. |
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2)If they ISSUE DEBT and spent it into the economy, then all they did was dilute everyone else's dollar holdings. Again, it wouldn't matter if it was spent by the unproductive ditch diggers on real goods, because the effect would be the same. As new money circulates through the economy the falsely perceived increase in wealth causes prices to be bid up. This is why the term inflation traditionally referred to an expansion of the money supply and price inflation is an effect of it. If wages keep up with inflation it might not be as bad, but typically they don't. People on fixed incomes and savers are also punished. Ask yourself why it's illegal for the average Joe to counterfeit money? So, why is ok for the gov? Where the hell do you get this "create new currency" thing and constantly put these words in my mouth? I never said that in my post. And inflation is much more complicated than "expansion of the money supply". See correction above in BOLD. I say, "create new currency" and you say, "debt issuance" or "deficit spending". They are the same, except the terms you use make it unnecessarily complex sounding. Those 4 million unproductive people in your example would be much better employed, but not at the expense of everyone else. They need to find productive jobs by creating value as entrepreneurs or being hired by a existing productive company. It's a dilemma that socialists and capitalists can argue about forever. I won't. I will make my final attempt at explaining this: Scenario #1: You build a house. You burn it down. You build another house. Q: How many houses do you have? A: 1 Scenario #2: You build a house. You don't burn it down. You build another house. Q: How many houses do you have? A: 2 A child can understand that the same effort went into both scenarios, but that scenario #2 resulted in additional net wealth. How can you not understand how unproductive this is? You don't need to argue with me, the empirical evidence proves that Socialism is complete bullshit. I'd recommend reading some Murray Rothbard, Mises, Schiff, etc. Who is Schiff? Peter Schiff? Rothbard? LOL You just lost any credibility I think the problem here is Roadtrain understands how Central Banking works and you don't. You don't have to read any economists work. Just go to the Federal Reserve website and start there first |
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The gov't can't issue 'too much' debt, unless it just burns the money it raises. Because it usually issues just enough to satisfy the domestic private sector's and foreign sector's propensity to net save.
When economy deteriorates, the private sector's propensity to save increases, as does the budget deficit. Budget deficit actually adds to private sector's net financial assets.
War is an example of destruction of wealth. They are literally burning those dollars. Now don't get me wrong here, of course those dollars are soldiers wages etc., but most of those thousands of soldiers could be doing something of actual VALUE, like running a business that produces more wealth. Nevermind the bombs, tanks, ships, etc. that are depleting the worlds net wealth by destroying and polluting. How does budget deficit add to private net financial assets? Are you just talking strictly on paper or what? They're borrowing money from the FED who just creates it from nothing. That's currency debasement, that's inflation, which is just another tax on private sectors savings! They're stealing purchasing power from anyone who saves, which is definitely not adding to net financial assets! War is something that actually generally will actually stimulate the economy which will generally increase wealth. The businesses that build bullets, and bombs and other "tools" of war will need to hire more workers, as will their suppliers. No it doesnt. Its just after wars there needs rebuilding and reconstruction |
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No one is saying it is impossible to balance the budget; we are saying it is impossible congress will actually act before it gets so bad that we implode. That is exactly it! The political system is simply a popularity contest. No politician, and I mean NO politician, is going to commit career suicide and make the necessary cuts. Their choices are limited. Cut spending, raise taxes, inflate. There is zero chance of cutting spending and the other two result in catastrophe. Who said cuts are necessary? Cutting is not gonna help the economy, but budget tweaking might be. Budget cuts are necessary. Our spending levels are well above the 40 year average as a percentage of the GDP. Entitlement growth is projected to grow at rates well above even the best case GDP growth scenarios. The only way to prevent the US from spiraling into too much debt we need to make cuts. You're wrong if you think government spending and debt are somehow "yours". In fact, you both are in much different positions, you are financially constrained in your spending and debt. Government is not. That's because government issues dollars, and you don't. There is a limit as to how much debt the government can issue. If they issue too much debt then investors will no longer wish (or be able to) buy additional government debt. The same is true for a person; they can borrow from banks and other various sources of credit, but at a point no one will be willing to lend additional money because of overall debt levels. Any debt incurred by the government is ultimately an obligation of the citizens of the country as debt is repaid via taxes. The debt ceiling is political. Problem is not size of debt. Problem is lack of economic activity. If the citizens were making a lot of money in boom times then they wouldnt care about taxes |
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Merchants pay transaction fees like 2-3% on the transaction.
But credit companies make miney from issuing credit. As high as 20-25% APR.
What nobody here ever have a credit card? Lol
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No one is saying it is impossible to balance the budget; we are saying it is impossible congress will actually act before it gets so bad that we implode. That is exactly it! The political system is simply a popularity contest. No politician, and I mean NO politician, is going to commit career suicide and make the necessary cuts. Their choices are limited. Cut spending, raise taxes, inflate. There is zero chance of cutting spending and the other two result in catastrophe. Who said cuts are necessary? Cutting is not gonna help the economy, but budget tweaking might be. Cutting out wastefulness is what I meant. By "tweaking" you make it sound like shuffling things around is the solution. I would make the distinction though that you can't cut things immediately, but most certainly things need to be scaled back as far as government spending goes. The market will reclaim what is given up (and actually necessary) by government and mange it more effectively, but it will take time no doubt. I think he says tweaking to mean different economic ailments require different medicine. Austerity doesnt work in recession. We've already seen that in the eurozone |
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Go ahead troll dumpers, prove me wrong. Let's see this epic selloff you keep squawking about. Otherwise, this is the bottom. falllling, I'm waiting.  Last I checked, the trend is still down and price is still falling. Fundamentally wise, all the good news are out and infrastructures are in place to support bitcoin and global payment system. The price got ahead of itself and any step back will cause huge drop while any good news are already factored in the price. The wise thing to do is have no position. You guys should be in cas now and wait for breakout before taking position It could break up or down. But my bet is down |
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If you study the theory behind money velocity, you will see that they try to capture the production, distribution and consumption, not financial transactions. In fact, nobody measures money velocity directly, they derive it from gross domestic product and money volume. It is just another way to express gross domestic product. It is totally irrelevant for bitcoin. You could possibly get something meaningful if you aggregated bitcoin and fiat, and excluded financial transactions. Sending bitcoin to an exchange and convert bitcoin to and from fiat, would not be transactions included in the calculation of money velocity.
That is why I made the original post. The value comes only from the willingness to hold the money, from the peoples minds. When that willingness disappears, the money dies. This can also be seen in the multiple hyperinflation episodes in the past.
Yes, this "willingness to hold the money" is also referred to as "demand". With no demand the price will drop to zero and that is what causes hyperinflation—a collapse in demand for a currency. If no one hoards a currency it is worthless. It is the fact that someone is willing to hoard it that gives currency value. What? This is wrong. Money has value because someone can settle debts with it. How many people are hoarding Litecoins or Dogecoins? Nope. If no one is willing to accumulate and hold on to a particular currency then it has no value. Doesn't matter if debt is denominated in it that currency or not. The IOUs become just as worthless as the currency. Money are essentially IOUs. It has value because someone accepts it as settlement If nobody accepts it then it worthless. Has nothing to do with hoarding |
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Two top-ranked US universities, New York University and Duke University, are offering courses on cryptocurrencies for the first time. Professor Geoffrey Miller taught the first class of NYU’s new course, The Law and Business of Bitcoin and Other Cryptocurrencies, yesterday. 35 students attended the session – the first in a series of 14 – which covered the fundamentals of money. http://www.coindesk.com/top-us-colleges-begin-offering-bitcoin-courses/As soon bitcoin will get an institutional integration it will be accepted by the society. good to see that the public will be educated on this. it would be nice in there courses if they also had a requirement of buying a small amount of bitcoin and then created a kind of economy for their own purposes. when i was little we had a type of vendor fair in 7th and 8th grade, you were allowed to bring in any type of food adn sell it as long as it wasn't spoiled or bad or anything. so everyone setup a table and used a type of fake currency, people voted on what to call the currency and everyone was given the same amount. the people who had the most after it was all over would win a prize for selling the most, and for making th emost profit. ppl brought in ice cream makers, cotton candy machines, sold popcorn that was freshly made, pizza all that stuff. was very valuable and fun. they should do something like that, Do this in college? LOL |
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If you study the theory behind money velocity, you will see that they try to capture the production, distribution and consumption, not financial transactions. In fact, nobody measures money velocity directly, they derive it from gross domestic product and money volume. It is just another way to express gross domestic product. It is totally irrelevant for bitcoin. You could possibly get something meaningful if you aggregated bitcoin and fiat, and excluded financial transactions. Sending bitcoin to an exchange and convert bitcoin to and from fiat, would not be transactions included in the calculation of money velocity.
That is why I made the original post. The value comes only from the willingness to hold the money, from the peoples minds. When that willingness disappears, the money dies. This can also be seen in the multiple hyperinflation episodes in the past.
Yes, this "willingness to hold the money" is also referred to as "demand". With no demand the price will drop to zero and that is what causes hyperinflation—a collapse in demand for a currency. If no one hoards a currency it is worthless. It is the fact that someone is willing to hoard it that gives currency value. What? This is wrong. Money has value because someone can settle debts with it. How many people are hoarding Litecoins or Dogecoins? |
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How do bankers determine if a particular loan is a good risk to take? They need to evaluate the borrower's income and repayment history and assets to see if the borrower is an appropriate risk. If they are then a loan will be given, if they are not a good risk then it will not. This is not an easy job to measure this kind of risk and it takes a lot of legwork.
Yep nobody understands how risky this is and thinks banks make free money on interest. They make money by taking risk on lending. If there is a default then they also lose their money. Banks go insolvent all the time It is actually pretty uncommon for banks to go insolvent because they are generally good at measuring risks. I would say that they do no make money by taking risks on lending, they make money by taking good risks on lending. It's really not that uncommon.    |
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