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Author Topic: [CHART] Bitcoin Inflation vs. Time  (Read 505173 times)
MarioSPGroup
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September 16, 2014, 05:34:54 AM
 #321

We already have Bitcoin as a generic payment system, why adopt another?
If Mastercoin or Bishares or others will build decentralized systems for financial derivates, futures, etc. what will be the user base of these? Who will start adopting them? What will be the advantage to move from Bitcoin and similar systems using bitcoins.

Thanks, I agree with you. My first and fresh observation about derivatives, futures and Mastercoin let me know that there is no impact on value of Bitcoin, too. In the fact they are only peripherals in a bit way of main stream.
 

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September 16, 2014, 12:12:17 PM
 #322

Bitcoin To-the-Moon   $ 8000      https://www.youtube.com/watch?v=cZQCkjVKy_I
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September 18, 2014, 09:39:41 PM
 #323

If bitcoin was a fiat, then it would be outlawed, period. But it's not, and so it will not be outlawed or treated as such, unless the some company itself engages in currency trading of some kind. But on the other hand given that recently (in the past years) dollar has had an inflation rate of around 2 percent, more and more influential persons try to persuade government to use/approve Bitcoin as an alternative to inflationary fiat currency. So that bitcoin (or candidates that would replace it on the technological basis in near future) is a deflationary currency because demand for bitcoin is rising as evidenced by the skyrocketing velocity. So even though the supply is growing, it is not excessive because velocity is growing so much faster. Actually, the supply of bitcoin should've grown faster during this period, but it is not programmed to do that.

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September 19, 2014, 12:44:11 PM
 #324

But on the other hand given that recently (in the past years) dollar has had an inflation rate of around 2 percent

You are talking about CPI (Consumer Price Index) or something as manipulated.
The actual USD inflation the the last few years were a lot higher than 2%.

The pictures I posted before show the real M1 and Mb inflation after 2011.

https://docs.google.com/spreadsheets/d/17Jjhd_nnfRJ9EyYuOM1ACPMwRod3hhPqRk4YQp7FIZE/pubhtml# (look at the 2011 tab)

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September 19, 2014, 03:54:28 PM
 #325

declining prices until the end of this year

hopefully at the beginning of the year will rise sped up
 Cheesy Grin Kiss
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September 19, 2014, 08:07:46 PM
 #326

But on the other hand given that recently (in the past years) dollar has had an inflation rate of around 2 percent

You are talking about CPI (Consumer Price Index) or something as manipulated.
The actual USD inflation the the last few years were a lot higher than 2%.

The pictures I posted before show the real M1 and Mb inflation after 2011.

https://docs.google.com/spreadsheets/d/17Jjhd_nnfRJ9EyYuOM1ACPMwRod3hhPqRk4YQp7FIZE/pubhtml# (look at the 2011 tab)



Have you extrapolated out to the date that the "diff with USD M1 Inflation (blue)" trendline crosses zero?
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September 20, 2014, 03:17:47 PM
 #327

But on the other hand given that recently (in the past years) dollar has had an inflation rate of around 2 percent

You are talking about CPI (Consumer Price Index) or something as manipulated.
The actual USD inflation the the last few years were a lot higher than 2%.

The pictures I posted before show the real M1 and Mb inflation after 2011.

https://docs.google.com/spreadsheets/d/17Jjhd_nnfRJ9EyYuOM1ACPMwRod3hhPqRk4YQp7FIZE/pubhtml# (look at the 2011 tab)



Have you extrapolated out to the date that the "diff with USD M1 Inflation (blue)" trendline crosses zero?

Any time from now to the end of the year, probably in November.
The USD M1 inflation dropped from 12.94% to 8.87% in a month (august), so the cross is heavily dependant on how much money the Fed print and put in circulation.
These types of drops are, if you look at the chart, pretty common; Eg. in February it dropped 4% in just a month, then jumped back.

We know the Fed can not allow interest rates to grow in any way without collapsing the Federal, State and local budgets, forcing a lot of banks to fail in a verily not gracious way and obliterating the stock market.
So it is really improbable they can afford to keep (monetary) inflation low; they must print to suppress interest rates and manipulate the Prices Indexes to show low "inflation". In fact, government economists and journalists are starting to talk about the risks of "lowflation" instead of the risk of deflation.

They can run print, but they can't hide the money they print.

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September 20, 2014, 08:18:08 PM
 #328

But on the other hand given that recently (in the past years) dollar has had an inflation rate of around 2 percent

You are talking about CPI (Consumer Price Index) or something as manipulated.
The actual USD inflation the the last few years were a lot higher than 2%.

The pictures I posted before show the real M1 and Mb inflation after 2011.

https://docs.google.com/spreadsheets/d/17Jjhd_nnfRJ9EyYuOM1ACPMwRod3hhPqRk4YQp7FIZE/pubhtml# (look at the 2011 tab)



Have you extrapolated out to the date that the "diff with USD M1 Inflation (blue)" trendline crosses zero?

Any time from now to the end of the year, probably in November.
The USD M1 inflation dropped from 12.94% to 8.87% in a month (august), so the cross is heavily dependant on how much money the Fed print and put in circulation.
These types of drops are, if you look at the chart, pretty common; Eg. in February it dropped 4% in just a month, then jumped back.

We know the Fed can not allow interest rates to grow in any way without collapsing the Federal, State and local budgets, forcing a lot of banks to fail in a verily not gracious way and obliterating the stock market.
So it is really improbable they can afford to keep (monetary) inflation low; they must print to suppress interest rates and manipulate the Prices Indexes to show low "inflation". In fact, government economists and journalists are starting to talk about the risks of "lowflation" instead of the risk of deflation.

They can run print, but they can't hide the money they print.



I'm looking for when we might see a spike in bank loans: http://research.stlouisfed.org/fred2/series/BUSLOANS/ (You have to change the Units to one of the rate of change options)
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September 21, 2014, 12:45:11 AM
 #329

Have you extrapolated out to the date that the "diff with USD M1 Inflation (blue)" trendline crosses zero?
Any time from now to the end of the year, probably in November.
I'm looking for when we might see a spike in bank loans: http://research.stlouisfed.org/fred2/series/BUSLOANS/ (You have to change the Units to one of the rate of change options)

Looking at the last 20 years, there had two spikes before large crisis.
One smaller first (and we can see it at february 2014) and one larger one year later, then the hell get loose.
It appear we are 6 months from the largest spike.



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September 22, 2014, 07:17:19 AM
 #330

Have you extrapolated out to the date that the "diff with USD M1 Inflation (blue)" trendline crosses zero?
Any time from now to the end of the year, probably in November.
I'm looking for when we might see a spike in bank loans: http://research.stlouisfed.org/fred2/series/BUSLOANS/ (You have to change the Units to one of the rate of change options)

Looking at the last 20 years, there had two spikes before large crisis.
One smaller first (and we can see it at february 2014) and one larger one year later, then the hell get loose.
It appear we are 6 months from the largest spike.





Very good observation..next crisis will bring BTC walue to new ATH for sure, but the problem is that we still cannot live without the FIAT system, and until then - there will be crisis after a rally all around.
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September 27, 2014, 01:32:28 AM
 #331

But on the other hand given that recently (in the past years) dollar has had an inflation rate of around 2 percent

You are talking about CPI (Consumer Price Index) or something as manipulated.
The actual USD inflation the the last few years were a lot higher than 2%.

The pictures I posted before show the real M1 and Mb inflation after 2011.

https://docs.google.com/spreadsheets/d/17Jjhd_nnfRJ9EyYuOM1ACPMwRod3hhPqRk4YQp7FIZE/pubhtml# (look at the 2011 tab)



I just saw that they updated the "Velocity of M1 Money Stock" today for Q2, now at 6.2, which is the lowest quarterly figure since Q4 1975. It was nearly this low at the end of 1993. I don't know how predictive it is, but I did notice that recessions have more often started when the velocity is at a local maxima, of which this is most definitely not.

I'm not sure when they update for Q3.

http://research.stlouisfed.org/fred2/series/M1V
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September 27, 2014, 04:25:12 PM
 #332


I just saw that they updated the "Velocity of M1 Money Stock" today for Q2, now at 6.2, which is the lowest quarterly figure since Q4 1975. It was nearly this low at the end of 1993. I don't know how predictive it is, but I did notice that recessions have more often started when the velocity is at a local maxima, of which this is most definitely not.

I'm not sure when they update for Q3.

http://research.stlouisfed.org/fred2/series/M1V

Velocity of money is a very different and tricky concept.
In essence, velocity of money is a measure of how fast money circulate in the economy. But, as money go left, goods and services go right.

In the past I would suggest people had the ability to spend more if the interest rate come down.
What happen now is the interest rate can not come down further because it is not going to negative and people, differently than in the past, is saddled with so much debt they can not and want not  take more debts.
So they are spending (consuming/investing) as little as they are able.
Or they just buy gold/silver/BTC/durable goods with their spare money or they stash their spare money in their bank account or their mattress or they try to pay back their debts as much as they can.

Any QE or whatever can inflate but can not force people to take up debts they don't want take. Mainly because the only effect of inflation is to raise prices and people is left with even less money to spend.

The possibility are two:

1) People keep faith in the USD and continue to pay back debts and save and the velocity go down further to the level of the 1960 (but the Fed should start to behave like they were in the 1960)

2) People lose faith in the USD, see inflation as a political tool the Fed will never stop to use and Washington politicians never stop to abuse, and start using their USD to buy anything and everything durable and able to keep its value longer than the USD. With the current level of debt (personal, state, federal, business) if the velocity start to raise, it would be the start of hyperinflation.
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September 28, 2014, 09:58:23 PM
 #333

Current BTC inflation could be closer to 15%, rather than the 10% suggested by the chart in the OP.  I made a similar chart, and gave it a separate thread https://bitcointalk.org/index.php?topic=800890.0  It factors in an assumed 3,000,000 lost bitcoins, as well as actual block time being under 10 minutes.  The 3,000,000 lost coins comes from the Zombie Bitcoin analysis.


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September 29, 2014, 07:08:40 PM
 #334

Current BTC inflation could be closer to 15%, rather than the 10% suggested by the chart in the OP.  I made a similar chart, and gave it a separate thread https://bitcointalk.org/index.php?topic=800890.0  It factors in an assumed 3,000,000 lost bitcoins, as well as actual block time being under 10 minutes.  The 3,000,000 lost coins comes from the Zombie Bitcoin analysis.



Under your assumptions current inflation is, baseline, 12.75% per year (at this moment), falling to ~10.2% before the next halving at the double of speed.
I did the math in a copy of my spreadsheet subtracting 3.000.000 BTC from the total.
After the first halving our assumptions are the same.
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September 29, 2014, 09:04:53 PM
 #335

Under your assumptions current inflation is, baseline, 12.75% per year (at this moment), falling to ~10.2% before the next halving at the double of speed.
I did the math in a copy of my spreadsheet subtracting 3.000.000 BTC from the total.
After the first halving our assumptions are the same.

So you also compensated for the faster rate of block issuance?  Glad someone double checked my work.  I came up the 15% figure just by eyeballing the chart, and I forgot that "halfway" in distance between two ticks on a log scale is not halfway in numbers.  So I can see the 12.75% being the correct value.  If anyone wants my R code, to review or modify, just PM me.

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September 30, 2014, 10:21:04 AM
 #336

To make data easier to understand i will punt it in a grid:

All coins      Live coins
Inflation last 52 weeks    13.39%      18.00%
Weekly trend 2014/9/17   11.54%      14.92%
Projected next 52 weeks   09.89%      12.79%

The "Projected Next 52 weeks" value is computed using 3600 BTC/day issuance. So actual inflation will probably be higher
The Weekly trend is "=(D300-D299)*52/D299" current value less last week value multiplied 52 and divided by last week value.
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October 06, 2014, 06:57:46 PM
 #337

this is a harsh reality to me..  Cheesy
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October 06, 2014, 08:24:01 PM
 #338

To make data easier to understand i will punt it in a grid:

All coins      Live coins
Inflation last 52 weeks    13.39%      18.00%
Weekly trend 2014/9/17   11.54%      14.92%
Projected next 52 weeks   09.89%      12.79%

The "Projected Next 52 weeks" value is computed using 3600 BTC/day issuance. So actual inflation will probably be higher
The Weekly trend is "=(D300-D299)*52/D299" current value less last week value multiplied 52 and divided by last week value.

----fantastic, thank you Sir! Smiley
Though to make it even more easy to understand: - Does one buy and hold BTC, right about now'ish, or - Does one simply awaits while surfing these forums for a little while longer?  Roll Eyes

-trading/investing n0ob I am, but loving the process!
braum
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October 06, 2014, 08:38:45 PM
 #339

what if we dont live that long to see 2027?
reQu
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October 06, 2014, 10:12:06 PM
 #340

what if we dont live that long to see 2027?

 Smiley trolling my n00b or just trolling? Could you answer my question perhaps since you know so much  Roll Eyes
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