What if someone (governments together with banks) would decide to shut down the Internet?
The governments would not survive. The whole globalized society would not survive. It would implode and disappear within days and weeks. All nuclear plants would spread its nuclear inventory into the atmosphere as soon as the power grids collapse. Do you even know how nuclear reactors work? They have back-up generators, which keep them going for a few days to prevent an accident, and they can be dis-armed/rendered harmless within a day at most. The power grids would collapse, that's a given. But there is nothing to say nuclear plants will just explode once it goes down. Things like that don't explode for the sake of exploding. They have massive safety measures in place to help stop meltdowns. What about Fukushima? |
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More goods and services mean more wealth, because that is the definition of wealth. More goods and services compared to last year, means that the productivity has gone up. If this happens and nothing else changes, prices measured in money go down and the value of the money goes up, because that is the definition of value of money. So you don't need more money. You never need more money, a fixed supply is always enough.
If fixed supply is always enough then why inflate btc to 21M? Why not premine 21M and give everyone an equal amount? Let the people decide which money they prefer to use? |
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We are a part of the Crypto bubble the internet bubble 2.0
Crypto is following the same trajectory of the internet. The internet was created and then a couple years later start ups started to pop up.
Bitcoin was created then a couple years later start ups are starting to pop up.
How big do you think this bubble will get?
I think we are in the early adaptors phase. I mean, still today, many people have no clue about wallets, bitcoin transactions etc.. New technology is generally adapted slowly.. it took a while until there were lightbulbs in every house hold, it took a while until there was a train network in the US, I think the same applies to cryptocurrency. Such things never happen in an eye blink, in a few years I think bitcoin market will be 4 to 10 times the current size. You'd be surprised how many people know about about but just don't care. I think the people interested in bitcoin heard that someone made a ton of money. Its similar to 2000's tech bubble. Only a few companies of that era kept going til today. Most of them went bust |
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It could survive, just send a usb with your transaction to every node through the mail. Simple.
It would be very easy to double spend your coins doing this. The various nodes would also not have a way to communicate with each other. Yeah how does the block chain update without a network? |
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Finally, there is also an opportunity to profit by giving out loans. This includes mortgage loans. A business could be set up that allows investors to pool their money together and give out loans. The profits would come from the interest that is paid once the loan is repaid.
zopa.com? lendingclub.com ? peer2peer lending is a thing already. As someone who used to lend on Prosper, I'd advise to stay away. There's a reason a lot of these people can't get loans from banks. Do banks even loan money out to regular people anymore? Besides home mortgages of course. My bank gave me a business line of credit without me asking for it. Like $50K |
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Nobody is accepting BTC, stop saying that shit. They're all using Coinbase to convert it to FIAT immediately. They don't give a fuck about Bitcoin or they'd hold it in BTC.
Its literally them going "well yea we'll take your money but only if we have a way to convert it to USD". There was no meeting where they went "oh man this shit is the future we need to get in on it!". If there wasn't a conversion service like Coinbase to do this there's no way Dell would be letting people pay with BTC.
Also where is my end of July ATH?
Exactly! Everything is still priced in fiat. When its priced in BTC then you can say the merchants accept bitcoin Even my airline price their catalog w miles instead of fiat. However that doesn't mean I should speculate on my miles going to the MOOON!!! |
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You can't be a consumer if you are unemployed. Would you rather have a job and pay higher prices or have your job off-shored and pay lower prices?
1) So long as you're eating / consuming electricity / using gas / drinking water / etc... you ARE a consumer and will benefit from lower prices. Its literally that simple. So stop BSing about terminology here. 2) Yes, except the guy overseas who took your job (A) is willing to accept lower wages thus is a more worthy candidate than that job than you and (B) he lives among more poor people and therefore is in a much worse situation than you are when unemployed. And (C) hiring the other worker results in everyone else benefiting from lower prices. Of course from YOUR perspective you want the job over your competition. But in what economic/moral/logical way does that make ANY SENSE whatsoever? The answer is it doesn't. A person is a consumer AND a worker. What I said is lower prices help consumers but not workers. This is the reality. Offshoring jobs to lower cost labor markets lower price of consumer goods but along w this you lose jobs. When you lose jobs you lose consumers. Then you have viscous downward spiral when instead you want a virtuous upward spiral Why is that hard to understand? If I'm a garment worker what do I care that I can buy a shirt for $5 instead of $20 if I only buy few shirts a year? I'd rather pay $20 and still have a job. Even though everyone consumes without jobs they consume LESS! That is the point. When given a choice or jobs or prices, policy makers should prioritize jobs because thats what drives the economy The problem w your way of thinking is that its isolated. The reality is that corporations off shore jobs so that they can get higher profit margin. I know this because I did it in my own business. The off shore labor receive some benefit and consumers receive some benefit. Owners also get more profit. Taken as isolated cases sounds like win-win-win. However, looking at it from a macro perspective everyone loses in the long term. If the middle class erodes we lose the consumer base which drives the economy. Its not a moral issue its an economics issue. Here is the paradox. Corporations are forced to lower prices to meet consumer demand. The easiest way to lower COGS is to cut labor costs. The Chinese workers work for cheap but they still can't consume US products until their wages become almost equal to ours. But once their wages get close to ours the labor market would shift again to a cheaper place like Vietnam or Bangladesh. Pretty soon instead of inequality being a local issue it will be a global issue. Once it becomes a global issue economies will destabilize and in turn society will destabilize I'm not even saying globalism is bad and maybe it is a necessary step in capitalism's evolution. Just saying you can't ignore issues of inequality. The last time we had this much inequality gap was right before Great Depression. Inequality AND Globalism is a hot topic in economics right now. Its not clear cut as what you make it out to be. Part of what you say is true. Globalism has helped industrialized certain economies but its also destabilized others |
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But because real estate stores value, there's plenty of demand for it most of the time. Yes, when bubbles pop, real estate prices can drop below their direct use value, as you put it. But they usually don't stay there for long. What's the issue that you see with this? If real estate bubbles didn't cause the economy to crash now and then, then some other important asset would. That's the nature of capitalism--boom and bust cycles.
I'm curious: how do you think bitcoin would help solve this?
Well houses are used as a store of value, and thus acquires a higher value than its use value. If good money is available, that money will be used as a store of value. Then you don't have to realize half your house to pay for your kids college, that involves moving to a house of half the size, which is costly and maybe not what you want. So at any time you will have a right-sized house, and your savings in good money. A house is not an investment, it is more like a durable consumer good that takes many years to consume. The idea that a house is an investment, comes from the fact that it rises in the bubble build-up phase, combined with low interest loans which are the effect of government credit creation. So it will be solved (if all goes well) in the way that the money value of houses will be sucked into bitcoins instead, leaving the houses with only the use value. I don't have a timeframe, other calamities may happen first. Plague? See my theory of money as bubbles. Since bitcoin has no use value, it is perfect for this. In fact adam smith considered that if something different from gold was money, that would be a problem, because it would distort the use value of the stuff being money. For instance, he said, if rice was money, the saving of rice would necessarily lead to hunger for some. What we have, is houses are money, and we have exactly the problems that adam smith envisioned: houses (in london and new york) are hoarded, and noone lives in them, to the detriment of people needing houses. That is the problem. Money like bitcoin (and fiat) with no value for direct use, is perfect exactly because they have no use value. Fiat is good for every money function, except the store of value, therefore bitcoin will solve the problem with houses as money, and release the resources now unneccesarily bound in houses.
I'm a little confused here. You say that bitcoin and fiat have no value for direct use, with which I agree. You then say that fiat does not work as a store of value. But then you imply that bitcoin can be a store of value that will suck in all of the extra stored value of the housing market. Why wouldn't bitcoin and fiat be the same in this regard? Yes, bitcoin has limited supply, but why does that mean that it should be considered a safe store of value (it would have to be considered even safer than real estate to suck in its stored value)? Or are you thinking of a future in which bitcoin basically becomes the reserve currency of the world, or at least the dominant currency of a particular country or region? The problem here is he isn't using financial/ accounting language. It simple, if you buy a house w a mortgage the asset - liability = equity or asset = liability + equity. If you buy bitcoin w cash its just an asset. The asset price is the market price. There's no reason to say houses are money (good or bad). It makes everything confusing. The money part is the mortgage not the house. Sorry my prior explanation was incorrect. I should have said: When you have the mortgage, what you owe is considered a liability. Depending on the asset price you can have negative or positive equity. I don't see why bitcoin should affect housing price. Its not related at all |
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You can't be a consumer if you are unemployed. Would you rather have a job and pay higher prices or have your job off-shored and pay lower prices?
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The real estate bubble has been created by the low interests rates from the FED in 2000s and they blew more air into the bubble in recent years with 0% interest rates which means the crash will be bigger and more painful that it would have been if only they allow it to happen to destroy the bad debt
No it wasn't. It was mainly because of 90s deregulation that led to subprime lending. What you should blame the Fed for his not allowing interest rates to rise when they saw a bubble forming. The low interest helped accelerate the housing bubble, but it didnt cause it. Also, in case you didn't notice; housing bubbles were a worldwide phenomenon not only USA Housing bubbles exist because of the one bad property of current money: storage of value. Since current money is not good for that, houses are used. And since they are bought partly for the storage of value function, they acquire exchange value. But since the supply is not fixed, and the demand to hold can change as people move, the exchange value can be lost, and in case of over-supply in an area, their value can go below value for direct use. So houses are money, but bad money. Bitcoin could solve that problem, making houses generally go down to their value for direct use. But because real estate stores value, there's plenty of demand for it most of the time. Yes, when bubbles pop, real estate prices can drop below their direct use value, as you put it. But they usually don't stay there for long. What's the issue that you see with this? If real estate bubbles didn't cause the economy to crash now and then, then some other important asset would. That's the nature of capitalism--boom and bust cycles. I'm curious: how do you think bitcoin would help solve this? Well houses are used as a store of value, and thus acquires a higher value than its use value. If good money is available, that money will be used as a store of value. Then you don't have to realize half your house to pay for your kids college, that involves moving to a house of half the size, which is costly and maybe not what you want. So at any time you will have a right-sized house, and your savings in good money. A house is not an investment, it is more like a durable consumer good that takes many years to consume. The idea that a house is an investment, comes from the fact that it rises in the bubble build-up phase, combined with low interest loans which are the effect of government credit creation. So it will be solved (if all goes well) in the way that the money value of houses will be sucked into bitcoins instead, leaving the houses with only the use value. I don't have a timeframe, other calamities may happen first. Real estate is an investment if you collect rent on it. However, the mortgage is a liability but equity is an asset |
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Why house prices are so high: http://youtu.be/Y4WmDoYJhnkIt is purely caused by the kind of financial system that we have. Asset holders are not any smarter, they were simply born at the right time and into the right family. How did you watch that video and conclude a correlation between rich and lucky. Video said nothing about that. You seem to have a comprehension problem |
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Look at it logically. The primary cause of poverty, other than the variety caused by mental conditions, is generally lack of investment in labor efficiency, in economics terms "capital." The average worker in America, for example, benefits from quite a bit of capital. Worst case scenario you go to work in say Walmart. That's even if you come to the table with extremely low amounts of human capital (i.e, education). In walmart you benefit from easy access to food (during a lunch break you can get food served to you in a number of minutes), there are machines that aid you in your work letting you get more done faster, work that would otherwise need to be occurring in many different locations is now centralized into one hub. Result? You get a lot more done faster. Obviously, the owners of Walmart are also taking a huge amount of profit from the improved efficiency, but the worker also benefits. The reason is that with a greater profit margin, there is a greater room for companies to lower prices. With the lowered prices, comes greater quantity demanded. With greater quantity demanded, comes more demand for labor. That ups the price of labor, otherwise known as wages.
So, what will help solve poverty (it won't solve inequality, but actual poverty) is a greater and more even spread of the capital available to workers. What can help this? Globalization. Not necessarily capitalism or socialism, although people must be motivated by capitalism in order for it to work. The more efficiently "stuff" can be moved around the planet, the more it makes sense for companies to take advantage of low labor costs overseas. In order to take advantage of that cheap labor, they have to send capital there, thereby improving those people's productivity, so they in turn can demand more. The vast majority of poverty in the world is caused merely by special gaps meaning that some people are valued more as workers merely because of where they happen to have been born. This will naturally go away as the costs associated with remote labor are reduced due to things like the internet, more efficient transportation, etc.
There's local poverty too, poverty of people living right alongside loads of capital, but all things said this accounts for a very small portion of poverty on the planet. This type of poverty may be a growing pain associated with globalization as capital flows to overseas locations, there is reduced demand for labor in the industrialized nations. However, as the people overseas lower their saturation of poverty to that in developed nations, then this element goes away.
If governments want to lower poverty, there are two steps:
1) Encourage firms to invest in capital.
2) Allow workers EVERYWHERE to make use of that capital.
There's also a third thing, that should be obvious but I won't get into right now:
3) Encourage/allow individuals to invest in education, i.e, human capital.
Once you have this baseline understood by everyone involved, then you can actually discuss whether socialism or capitalism more adequately meets these goals.
EDIT: note, this post is specifically addressing "how to reduce poverty" not "how to increase the average wealth per capita.
You are correct but this increases inequality gap. Which can be destabilizing to economies Its a tough issue and we in uncharted territory Also I don't agree that lower prices help the worker. It helps consumers. But I'd rather have job stabilitity than lower prices |
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What if someone (governments together with banks) would decide to shut down the Internet? Would bitcoin survive? Is it possible to transfer directly p2p somehow? Any thoughts? How strong this whole industry is really?
I have my doubts about any products' survival without the internet. It might be inconvenient but the world existed for a long time before internet |
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What did you do in 2008? Did it work out? If it did then do the same thing. If it didn't then do the opposite.
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Notable quotes from Keen: Banks, private debt, asset markets and money played essential roles in Minsky’s vision of capitalism, but they were completely ignored in mainstream economic models before the crisis. This is where Abbott was and is wrong: just because left-wing economists are ideological, it doesn’t follow that mainstream economics was logical. Crucially, its illogical decision to model capitalism as if banks, private debt and money didn’t exist led it massively astray when it came to perceive grave risks to the real economy. Yeah exactly. So why you keep thinking Central Banks and fractional reserve create money? Central Banks create base money but half the money exists in shadow banking. This is all uncharted territory and where the post-Keynesians & MMT'rs put their focus. The issue is how to regulate shadow banking. We already know how to deal w commercial banks |
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Mainstream economics has lost all credibility. Time for a new and better understanding of what goes on in our economies. Hopefully, we can all stand back and frankly assess where money actually comes from. And what effects that debt-money has on our economic systems. Personally, I'm sick of the blind bandaid solutions that conventional economists have recommended. We can see the US will not achieve economic recovery, not even close. Something is wrong with the Greenspan/Bernanke/Yellen/Krugman view of economics. They have clearly been misled and are not wise enough to realise that their policies are hurting poor/middle classes whilst enriching the rich. There is no doubt in my mind they have caused great harm on ordinary people, whether intentionally or otherwise. Enough is enough. Let these blind people practice their crafts of self delusion on themselves. Get rid of them. Let them be recognised for what they are in history books. Let people write about what Tim and Hank did during the GFC. There will be a new school of economics that will debunk the myths of mainstream economics, pointing out the very obvious flaws: http://www.businessspectator.com.au/article/2014/7/21/global-news/are-students-revolting-or-it-economicsSo business-as-usual has returned. But it won’t be business-as-usual at Kingston. I’ve been hired with the express mandate to take a University that is open to non-orthodox thought in economics and make it even stronger. We will teach neoclassical economics as well, warts and all. And we will teach the many non-orthodox streams of thought (post Keynesian, evolutionary economics, econophysics) too.
In doing so, we’ll be responding to the successors of those students who, 41 years ago, fought for a different approach to economics at Sydney University. There are now at least 65 student organizations around the world calling for a new approach to economics in what they have titled ISIPE: the "International Student Initiative for Pluralism in Economics”. OMG you posted an article written by Steve Keen who is a self described post-Keynesian and MMT'r. You obviously don't know what you are talking about when it comes to monetary theory because Steve Keen would not subscribe to bitcoin or any type of crypto. A central tent of MMT is that money is endogenous, which means money is not created by Central Banks but from credit (loans). MMT wouldn't even classify bitcoin as money in the first place. This is why I can't stand this thread. You keep posting misinformation based on your ignorance of economics. C'mon man educate yourself |
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Good article, I'll be spreading that one around. Seems to be supported by this graph:  As soon as monetary supply was warped into something that could be manipulated, the average person's wages began to stagnate in real terms. Productivity increases, but wages stay the same unless you're the company CEO. It's not some bizarre coincidence, it works that way by design. Saying the system is 'rigged' doesn't even begin to describe it. It's all an elaborate theft and transference of wealth. Its likely because CEOs are paid w capital (stocks) and workers are paid for labor. Cannot make conclusion w gold standard just by looking at that chart |
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Too much misinformation in this thread. 1. Lehman is not a commercial bank so its not part of the Federal Reserve System 2. Lehman was doing the borrowing not lending. It borrowed money to buy MBS's at the lower tranches (subprime & risky). When the housing market went bust the MBS lost money and they couldn't deleverage fast enough to avoid bankruptcy http://en.wikipedia.org/wiki/Lehman_Brothers_bankruptcy3. Fannie & Freddie don't guarantee mortgages. They were created in order to expand secondary mortgage market. 4. Guarantor is the person who takes on legal obligation of payment in case of default. I can tell you that if you default the bank will take your house. Govt (in USA) will not pay your mortgage for you. Nor they will even sign as guarantor http://en.wikipedia.org/wiki/Fannie_maehttp://en.wikipedia.org/wiki/Freddie_Mac |
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The real estate bubble has been created by the low interests rates from the FED in 2000s and they blew more air into the bubble in recent years with 0% interest rates which means the crash will be bigger and more painful that it would have been if only they allow it to happen to destroy the bad debt
No it wasn't. It was mainly because of 90s deregulation that led to subprime lending. What you should blame the Fed for his not allowing interest rates to rise when they saw a bubble forming. The low interest helped accelerate the housing bubble, but it didnt cause it. Also, in case you didn't notice; housing bubbles were a worldwide phenomenon not only USA Both lending practice and low interest rate contributed to housing bubble. Yeah thats what I said. But interest is lower now than during bubble. So interest didn't "create" the bubble. And you can't blame the Fed for bubbles in multiple countries And 0% is a bank rate. Not consumer rate. |
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