Makes sense...draw in the investors looking for a quick buck, then they'll draw in more in hopes of increasing the demand and price of the crypto, leading to wider adoption, until the choice comes down to the majority or rest of the population to accept it as a currency or not, even though it already functions and is used as a currency.
That's called a pyramid scheme and that's why Bitcoin's not working. You can't have a currency with the mantra of "buy and hold", when they need to "buy and spend". Otherwise, Bitcoin is not useful and it remains poorly distributed. Doesn't matter how many business jump on the free advertisement hype, people can't spend what they don't have. I'm not sure what Bitcoin's purpose is other than "to the moon". Good for speculators (maybe) useless to the general public. This is because bit coin is designed deflationary. If it had a demurrage design or if bitcoin can be created ex nihilo . Then it would take away the speculative nature and people would use it as currency. |
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Futures, options, forward contracts. There are lots of derivatives that allow you to hedge. Some people consider gold or silver as a hedge here but it really isnt. Stock market is booming, think its still got some legs to it, earnings season starting soon so we shall see.
housing can be a hedge depending on location |
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So fake!
And so stupid. Max Keiser is annoying |
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I don't think any of the answers given so far are the reason there's not rampant inflation. The reason is that the fed offers a competitive interest rate on excess reserves to serve as a magnet to "suck" all the new money back onto its own balance sheets as soon as the bond purchases are made, so that it doesn't get out into the economy. Look - all the money (mainly in the form of US T-Bonds), is sitting backed up on the feds balance sheet... http://qz.com/157198/the-federal-reserves-balance-sheet-will-hit-a-mind-boggling-4-trillion-any-day-now/Read this wiki article which states how the law was changed in 2008 to allow the fed to do this. The express purpose was so that they could start doing QE without it causing rampant inflation. http://en.wikipedia.org/wiki/Excess_reserves#In_the_United_States_.282008-.29(Actually, this poster is saying the same thing) When we say the govt is printing money, we are not really talking about the paper notes in circulation, rather electronic money (digits in a computer screen) that exists in bank accounts.
Yes, of course. They are not doing that either though. an excerpt from some quick google search result: When the Fed creates $85 billion, it uses this money to buy bonds - typically split 50/50 between US Treasuries and Mortgage Backed Securities (MBS). Here is what's important: When the Fed creates and gives $85 billion in reserves to its member banks, it removes $85 billion worth of assets (bonds) from the balance sheets of those same member banks. The result is that no new net financial assets enter the economy. I agree. Some of us here is looking at the issues at the macro level. While most bitbugs are looking at it from a micro level. The purpose for QE is for liquidity. Inflation doesn't matter as much as long as production levels increase and that debt can be paid off (money destroyed). The bigger problem is liquidity trap. When businesses don't have access to credit they have to downsize. Then unemployed workers can't consume and the business have to do more downsizing. When the population saves too much there is no demand for goods & services. Deflation is bad for economy unless we are trying to counter balance a period of too much inflation. Most economists recognize this, however, it's not easy to influence the economy merely from monetary policy. "Pushing on a string" is the term they use |
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Ask Japan, they've been trying to inject some inflation for over a decade. The reason is that many following pop-economics dont accept/understand that inflation is a measure of price increases, not increase of the monetary base. This may lead to inflation due to excess money supply, but its not a certainty. cf Japan... The Fed is not printing money, from what I understand. And that's the other point ignored. Quantitative Easing isn't printing money - the clue is in the use of different words. People think it's just a fancy way of saying the same thing, and it is very similar in principle. But in detail, its different. The money is going in to bonds to effect bond prices change, and into bank balance sheets. This is key, it answers "where is the money going". Another detail over looked is the bonds are cancelled, the Fed/BoE have a large stash of bonds which they can sell back to the market to remove excess supply in future. If in some future years they don't do this, that when you may begin to see significant inflation problems. There's another factor of exporting the inflation abroad, mostly to emerging markets where they have lots of growth to soak it up and its largely hidden (but that's complicated I don't really get that whole aspect). That said, running such a massive deficit as we in the UK and US are is bonkers, though as far as i can tell half the problem in the US is tax breaks from previous administrations that haven't been reversed. You'd be amazed how quickly the deficits reduce with even a few % increase in tax revenues. But the anti-taxation Austrian school don't want to say anything about that. Good explanation. I would add that the ultimate goal of Quantitative Easing is to create liquidity in the near term. The problem is that when private balance sheets are underwater, you can flood the market w cheap money but the private sector still have no choice but pay down their balance sheets and deleverage debts. QE by itself is not enough to jump start the economy. Richard Koo describes this as a "balance sheet recession" |
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When we say the govt is printing money, we are not really talking about the paper notes in circulation, rather electronic money (digits in a computer screen) that exists in bank accounts.
Yes, of course. They are not doing that either though. an excerpt from some quick google search result: When the Fed creates $85 billion, it uses this money to buy bonds - typically split 50/50 between US Treasuries and Mortgage Backed Securities (MBS). Here is what's important: When the Fed creates and gives $85 billion in reserves to its member banks, it removes $85 billion worth of assets (bonds) from the balance sheets of those same member banks. The result is that no new net financial assets enter the economy. That's true, as far as it goes. But the Fed also buys Bonds directly from the Federal Government, and that creates new money. and Debt Is is safe to assume that the US Gov sucks up overflowing debt this way? I wonder if US Gov can go bankrupt, or is it like a debt black hole and can go infinitly indebted? The only way the US goes bankrupt is when bond holders of US Treasuries has to be paid and they refuse USD as payment. Unlikely to happen. If this happens probably war breaks out. |
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They do this w penny stocks all the time. It wouldn't surprise me if MtGox did this to lure in bagholders. Since BTC exchanges aren't regulated by SEC and you can be somewhat anonymous. Why not? Good scam
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For those who compare Bitcoin to credit cards. They are not the same. One is treated as cash the other as credit. When you use credit you are using borrowed money. Its an unsecured loan and thats why the interest is so high.
You have to compare bitcoin to debit cards.
Banks provide financial services. You need banks for loans and credit and other things. Money transfer is just one thing. But you don't need BTC to do a blockchain transfer. That can be done w any crypto. Crypto doesn't replace need for banks. It just gives user a choice to hold their own money in their own wallet
If you need a mortgage. You still need a lender
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In my opinion the Winkelvoss ETP will be very unlikely to become the pricing mechanism for BTC, but since the issue was raised
Whats the ticker? I want to short this sucker Its not out yet. There is probably a long term play in shorting the ETF against a long bitcoin position just because you aren't paying anything to hold your own coins, but I wouldn't naked short this IIWY. Consider how many billions are locked into US 401K plans that could suddenly flood into bitcoin holdings. We should expect this to unlock new investment in bitcoin. I sell near term strangles to buy long term OTM verticals. Little risk but little probability. But works good for shorting |
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You're right I copy & pasted from that blog cause I happen to follow MMT. I never claimed it was my writing and this is forum not a paper. Next time I'll credit so I apologize to you & the author for that. But the formula is a standard one in finance so the point remains the same.
I don't know why you keep asking about "proof of value". I'm trying to define money for you. BTC is fiat & USD is fiat - they are both fiat. The value is 1USD is convertible to 1USD. The value of 1BTC is convertible to 1BTC. One of them is money the other is not. The difference is USD is issued by the govt, BTC is not issued by anyone. Sounds like you want to know future buying power which akin to time value of money so use this formula if you want to calculate that.
In order for bitcoin to be money it needs to be issued. If it is not issued who ever holds that bitcoin in the future cannot return to the issuer and claim value (of 1BTC). If I found a bitcoin on a hard drive I can't go to an issuer to claim the value because there is no issuer. Nothing is backing the currency except pure faith so in theory it has no "moneyness". For me to use that bitcoin in a transaction the receiver need to have pure faith that it is money. He has to take my word that it is worth something. IOW BTC is built on a house of cards. If you found a USD you can transact w it because you and the merchant knows the Fed issued it. USD has no intrinsic value but it has market value because we have legal obligations to pay taxes. The demand for USD is always guaranteed so there is always a market for USD. If anyone wants to do business w the US gov they need dollars. Simple as that. This is not a theory I am merely describing reality.
Right now the market price of BTC is based solely on trading. So BTC behaves like a commodity not money. Trading a BTC for goods or services is bartering not using money. Its no different than trading apples for oranges. For example: Gold is not money, but gold coins are money. The money part has nothing to do with intrinsic value of gold. A $100 gold coin might only have $10 of melt value. But its "value" is $100 because a King or some issued it and backs that value. Money is a concept. It only exist as a score keeping in a system of debt & credit. This is why I don't understand your question about value. Are you talking the price? Or intrinsic value or utility value? All I'm saying is that money requires issuance because all moneys are claims on "something". They are essentially IOUs. That is not BTC. BTC is a ledger, BTC a protocol but it is NOT MONEY. Anyone who understands economics and money systems understand this
I don't how many times I gotta write up the same thing. I'm done on this topic. You are a rude prick
Why do I have to prove to you that fiat is money or has value? It is money because thats the definition of money. What's there to prove? I don't think you even understand what money is. Why don't you prove BTC is money. I bet you can't. Bitcoin is just computer code written by some unknown guy(s) and sold to some paranoid "crypto -anarchists" a story of corrupt bankers & govts stealing their money. And because of that you think its money? You think people prefer to store their wealth in magic beans even though they don't know where it comes from and no way to claim? ROFL. Yeah good luck w that. Most people aren't as stupid as you are.
I hope you put your entire net worth in BTC. Please please prove me wrong and buy all the bitcoin you can afford. Sell your house, sell your wife, sell your kids and buy bit coins. Its the greatest thing ever. hahhaha
Good night
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Capital gains are long term. Its a preferential rate. Short term gains are treated as ordinary income
If you mine as a business. It depends on how you set up your business. Sole proprietor, Corp, S Corp, LLC. They all have different tax rules.
Ask your accountant for tax advice. Theyll be more equipped to answer your question than a message board
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Off w their heads! Hey I don't have any political opinions only economics. Just stating what happened. Why shoot the messenger?
Why would anyone give back their bonus when those were contractual obligations? Bailouts were repaid. Treasury received Citi stock or warrants (I forgot) and they made 2B in profit.
There were no criminal proceedings cause no crime was committed. You want argue ethics then I won't disagree w you. But cite me the law that was broken
To repeat I AM FOR MORE REGULATIONS in matters of banking. I AM FOR RULE OF LAW. I am NOT for circumventing law, mob rule, anarchy, unregulated currency, lassiez faire capitalism.
The koolaid I drink is empiricism. I am interested in academics and how things work. Not soapbox rhetoric
Im finished w this topic cause I don't want hijack this thread anymore
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What about economic growth after Nixon shock? After the Nixon shock in 1970, the U.S. Economy was stagnant until the early 1980's. A common phrase in the mid 1970's was "stagflation". I remember that. But elasticity from removing gold standard allowed Friedman to use monetary policies to address stagflation. |
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In 1944, at the Bretton Woods conference, 44 countries met and agreed that they would all peg their currencies to the U.S. Dollar, and that the U.S. Dollar would be pegged to gold. In 1991, President Richard Nixon unilaterally removed gold backing to U.S. Currency.Look what happened to the price per ounce of candy and the price of a First Class Postage stamp up to 1970 and after 1970 on this chart. Inflation, inflation and more inflation! What about economic growth after Nixon shock? |
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no more centralized exchanges please
we really need the next generation p2p exchanges
this myth again... so how does fiat move between the traders? direct ACH transactions between traders bank accounts over and over?? please elaborate You talking about FOREX? retail forex brokers central banks commercial businesses banks |
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Hey man I explained everything in the clearest language I can. If you still don't understand it I recommend you read some economics books. You keep getting stuck on the word "value" which you confuse with price. I'm using "value" correctly as an economic term This is the formula of value as it relates to monetary instruments;  Where the subscript t indicates the present time, Pt is the current fair value, Yn is the income at a future time n, FVN is the face value that will prevail at maturity, Et indicates current expectations about income and face value, dt is the current discount rate imposed by bearers, N is the time lapse until maturity (n = 0 is the issuance time). There is a wide variety of financial instruments using that formula. On one extreme are modern monetary instruments that, provide no income (Y = 0), have an instantaneous maturity (N = 0), and are widely expected to be taken back by their issuers at their initial face value at any time, Pt = FV0. On the other extreme are stocks and consols that have a positive expected income and an infinite maturity, Pt = Et(Y)/dt. Given the nature of monetary instruments, they have also other characteristics common to all financial instruments. First, all financial instruments are accounting creatures. They are the asset of the bearer and the liability of the issuer. Gold coins were the liability of, e.g., the King, Federal Reserve notes are liability of the Federal Reserve, and coins are the liability of the Treasury. Currency is their liability because they (at least) promise to take their currency from bearers in payments at any time; issuers owe that to the bearers. That is partly how their scarcity is controlled. Second, all financial instruments have a fair value that is defined as the discount value of future streams of monetary payments. If you aren't equipped to understand economics stop embarrassing yourself when someone with that background is trying to help you learn |
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gold backed currency would not solve anything... most people who promote gold own gold, just like bitcoin, and they'd love to see a gold standard because they'd stand to 'gain' from it... they are profit mongers.
Gold would be fractional reserved like any other currency and would not meet the needs of 21st century commerce. Gold is a commodity.
It remains to be seen if credit based currency issued by the government treasury would really work that much better than debt based currency issued by a central bank. The main problem we have to day are exchange rate differences and automation which has eliminated a lot of jobs and lowered their salaries. Just in the last 10 years where I work machines are able to pump out twice the product or more in just 10 years... what can't be made faster with automation is shipped to china to get done.
Just curious. Have you read Lights in the Tunnel? http://www.amazon.com/Lights-Tunnel-Automation-Accelerating-Technology/dp/1448659817/ref=sr_1_1?s=books&ie=UTF8&qid=1396045622&sr=1-1&keywords=lights+in+the+tunnelIts similar to what you are concerned about? Great book |
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If people would stop calling bitcoin a currency and market it as a protocol, a technology, we wouldn't have had all these bans. Governments freak out when they hear the word currency.
I agree. Crypto has a great potential as a technology. But bitcoin community has too much of an anarchist angst image. All the anti-bank & anti-govt talk makes it look childish. The anarchists/ libertarians think bankers or govt fear them cause they represent something revolutionary. What a joke. They laugh at them like I laugh at crazy proselytizing nut jobs on the street. These vocals proponents give bitcoin & crypto a bad image and that is a real barrier to mass acceptance and adoption. Personally I think bitcoin makes a terrible currency because of the deflationary design & decentralized nature of its issuance. I don't even consider it money in an economistic sense. However, I think the block chain concept is extremely innovative and has many potential for verifying transmission. To transmit what I don't know. |
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The block chain is a ledger but there is no issuer to guarantee the value.
Did you fcking read "zimbawee dollars has as much value as my dog's poop" Retard, value cant be backed by anyone. Something has value because someone willing to give its value. Please child, calm down. No one said price is guaranteed. What I said is money comes from an issuer who backs that money as a promissory. Whether its convertible to grain, gold or legal tender. Doesn't matter if its currency form is rocks, shells, coins or sticks w notches in them. All money have the same quality. They are financial instruments. Essentially an IOU. Because it is issued and backed you can go around and exchange with other people as money. Of course if the issuer goes insolvent the money cease to exist because the issuer cease to exist Bitcoin has no issuer. Its entirely faith based. Its fiat like USD because it is not convertible to anything except bitcoin. Except USD are legal tender meaning I can pay my debts to the US govt with it i.e. taxes which I am required to do by law. Get it? |
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