Nobody gets rich without lifting a finger except lottery winners.
Banks take on a lot of risk to give loans. If the lender doesn't pay the banks can go insolvent
I can name at least three groups that get rich without lifting a finger: 1. The aristocracy/landlords 2. The resource owners - oil, water, various monopolies and oligopolies (who are also often owned by the aristocracy) 3. Bankers who basically shuffle paper to create loans and money out of thin air Seriously, it does not take a genius to calculate credit scores and lend out money. All that infrastructure was built decades ago. Ha! You think it's easy to be any of these things? Keep dreaming. I own 3 apt buildings and it's a lot of work. I have to maintain my property, chase down late rent, taxes, stressing about about my mortgages and falling real estate prices. I deal w all kinds of unexpected sh*t. If you think its so easy nobody is stopping you from going out and doing the same Satoshi created BTC out of thin air and convince you all its worth $400. I don't see anyone here bitching about that. One thing you don't understand about banking is that loans are risk. The bank is making money off the interest but they take the risk of credit. If I default my loan the banks would be stuck w my 3 buildings that I haven't yet paid off the mortgage. Thats a lot of risk |
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Just because my website isn't accurate all the time doesn't mean that predicting prices is impossible. This isn't even really an argument, it's objectively true that it is possible. Whether it can be done practically is another question, and it is still pretty clear that the answer is yes. In fact, it has been done on stock prices already on many occasions.
mikerbiker6 - You say that it is human nature to see patterns where there aren't any. First of all, can you prove that this is true? What are you basing this statement off of? Second of all, how is this relevant to being able to use software (which is not human) to predict bitcoin prices? Also what you are saying about people overlooking the false predictions not the case at all. In fact, people have MUCH more often done the opposite - they see one or two bad predictions, ignore the good ones, and make the generalization that the system performs poorly.
People here are claiming it is impossible to predict bitcoin prices because they themselves don't know how to do it and can't think of how/why any method would work (which is reasonable because most people have not learned about the types of algorithms and models that would be useful for doing something like this). However, it is not reasonable to make assumptions that it can't be done just because you dont' know how. It 100% is possible to accurately predict bitcoin prices, and you guys will see that this is the case eventually. I am working on improving my predictions, and I'm sure there are other people out there working on their own methods of prediction as well.
Lastly, as I've explained in other threads, to believe that bitcoin prices are unpredictable is to believe that they are random. Anything that is not random is predictable and has a cause. Anything that is random does not have a cause by definition. Something that happens for no reason is the definition of magic, so to say that bitcoin prices are unpredictable is literally the same as saying that price fluctuations are caused by magic. It's just nonsense.
You can use logic to determine markets are random walk/ unpredictable. Markets can be broken down to individual players. Each player only has 3 possible moves sell-buy-hold. All players play to make profit. The players only choice is follow trend, be contrarian or neutral. Any given day more players join or leave. The only time anything is predictable is when you get a volatility spike or dip and volatility always revert to mean. This usually happens on significant news. Most experienced traders know this from trading everyday. Or you can also just use Occam's Razor. If markets were predictable then everyone would be doing it. If everyone did it there would not be a market. Since I first commented in your thread a month ago I tried to Google "neural networks" and market prediction. Seems like this was tried for a while in late 80's wary 90s but no big firms believe in this method. The big trading firms have all the money to hire the best scientists & mathematicians in the world. If they don't believe in it then it probably doesn't work. Most of the "quants" in Wall Street are hired to calculate statistical probabilities. They make trading decisions based on long term statistical strategies like "statistical arbitrage" or they try to determine if the derivatives are correctly priced or not using concepts from Game theory, Kelly criterion gambling, etc.. This is not the same as price prediction! I only see some fly-by-night amateur website or youtube channel claiming to be able to predict price using "neural networks". And from what I've seen it's just some lame technical indicator. What I learned about "neural networks" is that its mainly used to teach computers to recognize patterns. Things that humans have no problem doing like speech recognition. Seems to me like you are misapplying "neural networks" here. First you claim that computers are better at recognizing patterns than humans. This first point is already debatable. Second you argue that there are patterns in market prices. This is the Technical Analysis argument. There might be some patterns occurring some of the time but its not consistent enough to create a complete trading system. And since most trading firms are moving away from technical analysis and towards quantitative analysts, it should tell you that quantitative trading is far more profitable than technical trading. Fundamental analysis is still dominant for the "investing" world though. |
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Oh lord. Do people actually take this guy seriously? Just another shock jock like Alex Jones et al
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Nobody gets rich without lifting a finger except lottery winners.
Banks take on a lot of risk to give loans. If the lender doesn't pay the banks can go insolvent
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This concept only works if the merchant is a speculator himself. What if the price doesn't make a recovery?
Being a merchant is being a speculator. When you buy (or produce) stock, you have to believe to be able to sell it with a profit, but that's not guaranteed -- hence speculation. When you accept any currency for payment, you have to believe it keeps its value well enough to be able to restock and pay your other expenses, and to actually be allowed to keep it. This is not guaranteed either, and ranges from inflation and unexpected new taxes to outright disownment (see Cyprus). There's no principal difference in which currency a merchant accepts. This analysis tries to compare the quantitative difference of being exposed to $ or BTC in the recent past, which of course is a poor indicator for the future. There are worse flaws than assuming merchants are open to assume risk for a profit here. I think assuming a constant sales value in $ per day, payed in BTC, is a bad assumption. I'd expect BTC holders to prefer to spend on peaks, and pay in $ in valleys, which may undo the cost-averaging effect. Also I'd expect rising BTC sales over time, which will shift more sales to the time in 2014 which has a lesser performance. So wrong. Merchants are not speculators, they are manufacturers or distributors or both. Prices are stable in short term. If you are a retailer (distributor) you buy something wholesale and sell it retail. Your inventory liability is fixed. The cost doesn't go up and down every day. Nobody reprice on a day to day basis If you are manufactor, you buy raw materials (COGS) and produce goods. You also expect stable prices. |
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This sounds great in theory, but it only works for businesses with enough cash on hand that they can pick and choose when to cash out their bitcoins. There a lot of businesses that this approach wouldn't work for: coffee shops, for example, probably operate on fairly thin margins. Maybe corporate chains aren't as bad if they're partially supported by the parent company, but that's not guaranteed to be how it works.
If you're in a business with a fairly tight profit margin and you need to make payroll in a few days or a week, you may be forced to sell off bitcoins at a loss. A prime example of this would be the last few weeks of December last year: the price of bitcoins dropped from the high in the thousands down several hundred dollars in a matter of weeks. No business that really wants to stay in business wants to take the chance that they will suddenly have half as much money as they previously had.
Even now in 2014, your post is invalidated by the fact that the price of bitcoins continues to drop. It was around $600 a couple months ago, maybe more. Now it's $438.20, according to Bitstamp. The volatility of bitcoins is good for only two groups of bitcoin users: investors willing to buy and hold for a long period of time, and day traders. Day traders can profit off volatility regardless of which direction the price goes, so the volatility is great for them. As for the investors - well, if you bought bitcoins say, in January of last year, you're still way better off despite the lower price since the beginning of the year since it was around $13 back then.
if they have good credit then can get advance cash through a merchant program, I heard they give you cash in trade for your transactions but who knows by doing that it can really cut into the profits. That's called factoring where you get advanced on POs. But the buyer (PO issuer) needs good credit ratings where can you get this factoring service? From a factor. Google factor financing I made a mistake by saying they advanced you on POs. Its advanced on your Invoices. Had it backwards |
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...
Money typically has three major and well-accepted attributes (and examples):
1) Unit of Account (how much a business is worth, and "keeping score")
2) Medium of Exchange (that loaf of bread costs you $3.00, the movie ticket $10.00)
3) Store of Value (gold is store of value, and will that dollar still be worth a (real) dollar -- or close -- in 5 years?)
Bitcoin at this point works only well for number 2. The price volatility excludes numbers 1 and 3. There is a real case to be made to buy Bitcoin as an investment/speculation (as I have), but I would classify Bitcoin as a special case of a commodity.
So, I would not call it money.
***
You could even make an argument that our US $ is not "money", perhaps better thought of as a "currency" as the US dollar is not a good store of value over the longer term (inflation). That is another topic...
...
Even for 2 it is limited because its not legal tender. Its more like a barter than money |
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US Dollar is not backed by gold, but by policy. Bitcoin is at least backed by mathematics  This makes no sense. USD is not convertible to gold anymore. Its legal tender. The only tender accepted for taxes BTC is not convertible to anything. It is currently barter. |
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This sounds great in theory, but it only works for businesses with enough cash on hand that they can pick and choose when to cash out their bitcoins. There a lot of businesses that this approach wouldn't work for: coffee shops, for example, probably operate on fairly thin margins. Maybe corporate chains aren't as bad if they're partially supported by the parent company, but that's not guaranteed to be how it works.
If you're in a business with a fairly tight profit margin and you need to make payroll in a few days or a week, you may be forced to sell off bitcoins at a loss. A prime example of this would be the last few weeks of December last year: the price of bitcoins dropped from the high in the thousands down several hundred dollars in a matter of weeks. No business that really wants to stay in business wants to take the chance that they will suddenly have half as much money as they previously had.
Even now in 2014, your post is invalidated by the fact that the price of bitcoins continues to drop. It was around $600 a couple months ago, maybe more. Now it's $438.20, according to Bitstamp. The volatility of bitcoins is good for only two groups of bitcoin users: investors willing to buy and hold for a long period of time, and day traders. Day traders can profit off volatility regardless of which direction the price goes, so the volatility is great for them. As for the investors - well, if you bought bitcoins say, in January of last year, you're still way better off despite the lower price since the beginning of the year since it was around $13 back then.
if they have good credit then can get advance cash through a merchant program, I heard they give you cash in trade for your transactions but who knows by doing that it can really cut into the profits. That's called factoring where you get advanced on POs. But the buyer (PO issuer) needs good credit ratings |
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Bush really isn't to blame for the downturn since it was third-party forces outside of his control. His biggest blunder with the economy was the appearance of his mishandling, but he's not really to blame. The big crash of 2008 could have been avoided at the cost of a smaller crash about two years earlier. Without some of the Bush-era stimulus policies, there would have been a crash in housing several years earlier, but it would have been about the size of the savings and loan debacle of the 1980s. There was a mindset, fully endorsed by Alan Greenspan at the Fed, that rising house prices were a good thing and a source of wealth. Greenspan really didn't believe that someday there had to be a crash in housing. ("Houses can only go up!". Wrong.) A big problem was the earlier elimination of Glass-Stegall, the law which kept commercial banks from getting into the stock market. While brokerages were separate from banking, a Wall Street crash didn't take down the banking system. That separation was put into place in 1933 because of the 1929 crash. It was repealed in 1999. Trouble soon followed. Deregulation happened during Clinton administration |
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I think Japan will never collapse knowing their culture. Japanese culture is collective. If it ever gets that bad the individual sacrifice himself for the good of the collective
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Sounds like OP never ran a business and has no concept of cashflow
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Thanks, I've previously read the Wikipedia link but not that article, interesting. I think I'm getting the idea of capital requirement, been reading about the Basel Rules in detail. So it's basically similar to reserve requirement, but weighted differently for different types of loans and assets, right? I believe there aren't any technical limits. The limit is the credit worthy borrowers avail. Banks don't just give out because they can. They just learned their lesson from sub prime mortgage fiasco |
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I suggest buying KNDI. It could go down to 8-9. If it does then buy more to double down Kandi Technolgies? The problem is that the stock is slightly over-priced right now. A year ago, it was trading at $3.80-4.00 levels. Now it is going at $12.50-13.00. That is almost 300% increase in valuation in just 12 months. There is risk. But its a new company w a lot of growth potential. 8 or 9 would be a good price. Not sure itll dip that low |
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It might be able to be done FSBO real estate deal. I doubt any escrow agency would accept a highly volatile payment like bit coin. Wouldn't that be similar to exchanging real estate for stocks? It would be risky for both parties involved...
They'll just tell you to sell the BTCs and give them cash |
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I suggest buying KNDI. It could go down to 8-9. If it does then buy more to double down
Otherwise as others say. Now is time to short rather than buy
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If you are talking about mortgages, the house is the collateral
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@coincube
Seems like you understand money creation but I don't get how you can go from that to Rothbard.
IMO Minsky has a more "real world" understanding of banking like the pdf you link, rather than the anti-Central Bank theme of your articles
To put it another way. If money had to be backed by gold reserves & there was no Central Bank. Banks would still create money (M1,M2, etc) from creating loans then they would look for the reserves later to balance their books. If there was not enough gold then they would be at greater risk of insolvency.
I think Rothbard didn't understand banking the way Minksy did. Rothbard thinks money is created from fractional reserves & that's why it leads him to the conclusion that Fractional Reserve Banking is harmful
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I actually agree with most of Minsky analysis which is essentially correct. However, both Keen and Minsky make a major error. They assume fractional reserve banking is part of a natural economy. Calling fractional reserve banking part of a natural economy is morally equivalent to arguing slavery is a natural state of mankind.
Fractional reserve banking is simple theft. It is an ancient and institutionalized form of theft who's perpetrators have managed to convince the masses it is a "natural part of the economy". I don't think that's what Minsky or Keen says. Rather they point out how money is actually created in regular banking operations -- as double entry balance sheet operations. Banks create deposits from loans. They don't loan out a multiplier of their reserves as the fractional reserve myth alludes to. After they create the loan they look for the reserves. If they don't have the reserves available they borrow it. If no one lends it to them the Central Bank as as lender of last resort. Both Minsky & Keen have an endogenous view of money. They would hate BTC because it's inelastic. Most of Post Keynesians would hate BTC because they all have a liquidity preference for money. BTC is designed to be inelastic and non liquid |
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It depends if they are branches of the same bank or different banks.
Each country have their own clearing and settlement systems like CHIPS and Fedwire in US
SWIFT isnt a clearing house. Its a network so the wire goes to the correct recipient
If Putin has an account in US bank and he commits some kind of fraud then theoretically his account could be frozen.
Kim Dotcom had his account frozen in New Zealand from FBI raid. But Putin is president of Russia so I doubt the US could get anywhere close without a war breaking out
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