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Author Topic: America's new debt ceiling - $19,600,000,000,000  (Read 16074 times)
jubalix
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November 11, 2015, 05:26:41 AM
 #141

sure the official interest rate looks low, but govs politically cannot move that up so much. They however are into QE and similar in a massive way which is hyper inflation.

Look at the house price increase in alot of countries, it has gone 100% in the last year or two. Where that's extra money coming from, well wages did not go up, so it through money printing via debt instruments such as loans. 99% of people simply do not understand the money printing part of the inflation equation.

Look at the costs of goods and services going up much much more than inflation of 2% or whatever it is.

The price of housing has risen a lot in many countries. But the inflation figure reported is very low. That is because house price is not included in the price index, only the maintenance cost is included. So the inflation figure is lower than we feel.

House price can only go up where more money is printed by issue of debt instruments.(where velocity remains the same)

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November 11, 2015, 05:30:10 AM
 #142

I dont quite grok the politcs of it,

however, debt is sort of immaterial in a fiat system as 0's are free to add.

eg 100

1000
10000000

10000000000000000000000000

etc.

The US can print its way out of anything. (by print I also me issue debt instruments etc)



Yea but the fiat money is representative of the economy (although not 100% correlation), but it still affects it very much.

The derivative bubble and other ponzi instruments, if the fail, no big deal. But if they start taking the collaterals: confiscate houses, cars, land, etc..

That will mess up the economy + a treasury bond default = no pensions  & no welfare.

You underestimate the enormous damage it can cause when it gets defaulted.




There is no way Fiat represents he economy as to value.

Eg x trillion added in houseprice, negligible renovations or house building.

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November 11, 2015, 11:48:42 AM
 #143


There is no way Fiat represents he economy as to value.

Eg x trillion added in houseprice, negligible renovations or house building.

In theory it outght to be, in practice is not.

Stupid keynesians argue that the money supply must grow with the economy size, to avoid clogs in the financial sector.

Because they think that if you dont spend every single penny of your savings and don't rely on slavery debt for sudden urgencies, the economy will just not function.

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November 12, 2015, 06:27:13 AM
 #144

That is a lot of debt, basically the one year income of a High-End Middle class member of society
Watching some of the Republican and Democratic Debates the only one that seems to be targeting the Debt Ceiling and lowering all forms of spending including the military machine is Rand Paul.
Either way it will be interesting to see if someone will try to push that debt down.

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November 12, 2015, 09:43:28 AM
 #145

That is a lot of debt, basically the one year income of a High-End Middle class member of society
Watching some of the Republican and Democratic Debates the only one that seems to be targeting the Debt Ceiling and lowering all forms of spending including the military machine is Rand Paul.
Either way it will be interesting to see if someone will try to push that debt down.

The debt will not be pushed down in any meaningful way. This happened in most countries in the world. Most governments have budget  deficit year after year. There is no way they will pay  it back. They borrow money from central banks. There is unlimited supply of money from central banks. Governments use inflation to reduce the debt burden.

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November 13, 2015, 02:11:47 AM
 #146

That is a lot of debt, basically the one year income of a High-End Middle class member of society
Watching some of the Republican and Democratic Debates the only one that seems to be targeting the Debt Ceiling and lowering all forms of spending including the military machine is Rand Paul.
Either way it will be interesting to see if someone will try to push that debt down.

The debt will not be pushed down in any meaningful way. This happened in most countries in the world. Most governments have budget  deficit year after year. There is no way they will pay  it back. They borrow money from central banks. There is unlimited supply of money from central banks. Governments use inflation to reduce the debt burden.



So basically it's a game between governments and banks. Where the rich get richer and the poor get poorer. When will this game end? And maybe more important question is there a way to end that game?

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November 13, 2015, 10:25:32 PM
 #147

That is a lot of debt, basically the one year income of a High-End Middle class member of society
Watching some of the Republican and Democratic Debates the only one that seems to be targeting the Debt Ceiling and lowering all forms of spending including the military machine is Rand Paul.
Either way it will be interesting to see if someone will try to push that debt down.

The debt will not be pushed down in any meaningful way. This happened in most countries in the world. Most governments have budget  deficit year after year. There is no way they will pay  it back. They borrow money from central banks. There is unlimited supply of money from central banks. Governments use inflation to reduce the debt burden.


Don't raise the debt limit, start cutting spending. Like eliminating literally dozens of federal agencies that overlap one another. Like cutting all foreign aid. Like making all these other countries we defend for free, pay their own expenses. Like cutting the massive regulations that strangle job creating and cost billions to enact, that are the idea of a minuscule percentage of our population.
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November 13, 2015, 10:28:04 PM
 #148

This is one of the reasons why I hate modern currency.
Every dollar that exists is owed to someone.
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November 14, 2015, 11:55:30 AM
 #149

This is one of the reasons why I hate modern currency.
Every dollar that exists is owed to someone.

Yes, technically the US dollar is a debt, but in reality when it comes to the physical money in circulation the line between money and a debt instrument is quite blurred. It's quite true with most other things, but not all modern currency is debt. Don't get me wrong, it's still a massive flaw with fiat currency and something Bitcoin handles much better, but let's not make a massive generalisation here. If I give you a gold coin worth 5 USD it's still modern currency worth US dollars but I doubt you would hate it.

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November 14, 2015, 03:01:18 PM
 #150

Bitcoin is ultimately deflationary. After 2140 it is 100% deflationary because no new coins will ever be created, and the supply will keep naturally shrinking as people make mistakes and lose them (I doubt anyone will be willing to burn Bitcoins because by then 1 Bitcoin will be worth several billion dollars).
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November 15, 2015, 02:49:42 PM
 #151


Not hard to prove, it's mathematically certain unless you're taking the unreasonable position that no fraction of a bitcoin will ever be lost after the minting phase of bitcoin is complete. It's already happened, and will continue to happen. Once the last bitcoin is minted, that's not "shrinking money velocity" (that term doesn't even mean anything, but I assume you mean decelerating inflation), that's deflation, which is falling prices (often) caused by a shrinking money supply.

I know that a permalock is possible, I`m not denyit it. And I know that eventually, all bitcoins will be locked (if the lock is irreversible, then probability tells us that in infinity all bitcoin will be locked)

However I`m talking about now, and how can it be definitively proven that an address is really locked or not. It can't.


So the only way to measure this is from the money velocity viewpoint, by looking at the transaction volume daily, and you will see that it will shrink eventually.


I think I better understand what you were saying now. As long as bitcoins are being minted at a high rate (as opposed to the later phases where blocks will be fractions of a bitcoin), any losses due to locked addresses will be extremely insignificant compared to inflation. So yes, presently, it's negligible.
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November 16, 2015, 01:15:15 AM
 #152

Bitcoin is ultimately deflationary. After 2140 it is 100% deflationary because no new coins will ever be created, and the supply will keep naturally shrinking as people make mistakes and lose them (I doubt anyone will be willing to burn Bitcoins because by then 1 Bitcoin will be worth several billion dollars).

The price of Bitcoin will increase and goods will get cheaper. Don't forget the fact that you can divide Bitcoin into many decimals.

So problem solved.
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November 16, 2015, 01:59:28 AM
 #153

By 2140, no more Bitcoins will be created so people will probably move on to other crypto currencies.
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November 16, 2015, 11:31:37 AM
 #154


I think I better understand what you were saying now. As long as bitcoins are being minted at a high rate (as opposed to the later phases where blocks will be fractions of a bitcoin), any losses due to locked addresses will be extremely insignificant compared to inflation. So yes, presently, it's negligible.

Yep, there are 3600 bitcoin minted every day, and how many people lose their private key? 1-2? With usually less than 1 btc on each address.

Thats nowhere near that amount. Usually people store their bitcoin on multiple addresses. Unless Bitfinex or Kraken loses their key, I can hardly see your scenario relevant until the next 10-15 years.

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November 16, 2015, 11:45:19 PM
 #155

By 2140, no more Bitcoins will be created so people will probably move on to other crypto currencies.

This sounds consufing.

You mean miners move on to other crypto currencies, since they have too or people (speculators) etc.?
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November 17, 2015, 12:50:11 AM
 #156

By 2140, no more Bitcoins will be created so people will probably move on to other crypto currencies.

This sounds consufing.

You mean miners move on to other crypto currencies, since they have too or people (speculators) etc.?
Fees will most likely be miners incomes, since block reward would be so low.
I think that bitcoin would still be as profitable as it is today. it takes just one big bitcoin farm to 51% attack a sha-256 altcoin. So they will most likely move on to new algorithm. Most likely my bet would be that PoW coins will be superior only to some point in the future. Beyond that point PoS or other methods would be far more superior.


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November 17, 2015, 01:33:52 AM
 #157

By 2140, no more Bitcoins will be created so people will probably move on to other crypto currencies.

This sounds consufing.

You mean miners move on to other crypto currencies, since they have too or people (speculators) etc.?
Fees will most likely be miners incomes, since block reward would be so low.
I think that bitcoin would still be as profitable as it is today. it takes just one big bitcoin farm to 51% attack a sha-256 altcoin. So they will most likely move on to new algorithm. Most likely my bet would be that PoW coins will be superior only to some point in the future. Beyond that point PoS or other methods would be far more superior.

At present, PoW is the most fair and efficient way to distribute the coin for long time. In PoS coin, the coins are distributed in one go (ICO) or very short period. So it is unfair to later comers as the only way they can get the coin is to buy. For the PoW coins, you can buy/rent rigs to mine. You can also buy cloud mining service.
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November 17, 2015, 02:29:17 AM
 #158

By 2140, no more Bitcoins will be created so people will probably move on to other crypto currencies.

This sounds consufing.

You mean miners move on to other crypto currencies, since they have too or people (speculators) etc.?
Fees will most likely be miners incomes, since block reward would be so low.
I think that bitcoin would still be as profitable as it is today. it takes just one big bitcoin farm to 51% attack a sha-256 altcoin. So they will most likely move on to new algorithm. Most likely my bet would be that PoW coins will be superior only to some point in the future. Beyond that point PoS or other methods would be far more superior.

At present, PoW is the most fair and efficient way to distribute the coin for long time. In PoS coin, the coins are distributed in one go (ICO) or very short period. So it is unfair to later comers as the only way they can get the coin is to buy. For the PoW coins, you can buy/rent rigs to mine. You can also buy cloud mining service.
What about clams, they were distributed to every doge lite and bitcoin owner. And as for other PoS coins like nxt for example has better distribution than bitcoin already. PoS coins are poorly distributed at the beginning(except for clam, which had a pretty good distribution early), but they should be pretty evenly distributed in 3-4 years time if there is an active community behind the coin. imo there are currently 2 good well distributed coins out there. One is clam and other one is nxt.


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Xeelee
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November 17, 2015, 01:26:49 PM
 #159

The will lift this to $20,000,000,000,000 or $21,000,000,000,000 very quick as usual.

A lot of noise but there will be no impact. This is now going on since some years and there was no effect at all (despite higher debt levels of course)

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November 17, 2015, 01:31:20 PM
 #160

The will lift this to $20,000,000,000,000 or $21,000,000,000,000 very quick as usual.

A lot of noise but there will be no impact. This is now going on since some years and there was no effect at all (despite higher debt levels of course)

Remember the last crisis almost wiped out all banks, and it was only the FED's quick intervention that saved them.

The next crisis will be the big one. Which could come as early as next spring, or after US elections (as no politician wants crisis on their election day)

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