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Author Topic: Inflation and Deflation of Price and Money Supply  (Read 508219 times)
kjj
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April 25, 2013, 03:31:19 AM
 #41

stuff

I was about halfway through your post when I realized that you weren't actually saying anything.  Safe to say that "philosopher" under your name is an actual academic thing, and not just a self assessment?

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April 25, 2013, 05:47:47 AM
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Now that we've gone over PRICE Inflation and Deflation (which honestly, to me, is a term made popular by Keynesian's to hide the real facts, as price inflation/deflation is simply the market exchange rate, reflective of the money supply into a currency from itself and other currencies), let's go over the REAL inflation/deflation of a currency (otherwise known by many as Monetary Inflation).

MoneySupply-Inflation is when the value of Bitcoin decreases when the total supply of Bitcoin increases. In our current state, this is at a generation rate of 25 BTC every 10 minutes.

MoneySupply-Deflation will essentially never occur. It is when the value of Bitcoin increases when the total supply of Bitcoin decreases. This may happen, say, when someone loses their private key and all the BTC associated with it are lost. This effectively "makes the rest of us richer". That being said, there is a SET DECREASE in the generation rate of BTC, so you have sort of a "deflationary effect" in the value, as long as more exchange occurs for BTC at a rate which is faster than that set generation rate.

When all 21 million coins are produced, the MoneySupply will be neutral, and the value will continue to increase (prices will decrease, consequently), as long as people continue to exchange in BTC.





The Monetary Inflation of Fiat Bitcoins won't have anything to do with the supply of them for another 30-40 years at least. The supply of them is totally irrelevant to their "current" massive, hourly, fiat exchange-value inflations and deflations, or the "bank holiday" Mt Gox forced itself to call the other day..

You began by referring to the well known economic cancers of "Monetary Inflation" which are caused by:

- adding inflationary pressures by increasing rates of usury on the money supply and thus causing price rises upon everything to pay for it.

- by properly expanding the money supply to serve more workforce members who could no longer be competitive nor productive enough (due to exporting manufacturing and the means of production to slave labour gulags and erasing import tariffs against them) to return the balance of trade wealth (that the fruits of their labours should have represented) back to the economy.

- debasing or devaluing the values of a given Labour Exchange Currency by quantitative counterfeiting in a vain effort to pay off old debts,

- by expanding the money supply to bail out reserve banksterers who purchased the corrupt political policies of free trade, but wouldn't cover their own losses that were actually the direct result of them.

Then, for some reason you dropped the topic and began to talk about "Moneysupply-stuff" to do with Bitcoins

The fiat "exchange value" of a "fiat Bitcoin futures derivative contract token", is totally detached from and completely unrelated to the supply or production of them. It is an assumed, stale, past-value, randomly decreed by a fiat penny-stock market. In fact the futures derivative token has no exchange value until after it has been sold to the next owner, whomever and where ever and for whatever that future value might eventually turn out to be decided to be, later on. The only marginal values a bitcoin itself retains is it's intrinsic security and utilitarian transportability, invisibility and anonymity ones.

It's "exchange value" is totally "fiat", it is in no way "hard".
 

Once again we return to Locke and Smith's three distinctly separated concepts of the loose-term "value". These are differentiated as utility-value, exchange-value and intrinsic-value. If we consider the Medium of Investment commodities of water and emeralds as examples, you can see where each can end up isolated into a single category depending entirely upon conditions of chance. In a long drought or in a desert water has all three wealths, emeralds only one. At a feast next to the fountains of a palace garden emeralds have all three wealths and water only maybe one.

In both cases above the "Prime Resource of Labour" alone ALWAYS stably retains at least two if not all three of the natures of value, as it usually does in most all scenarios. It is the prime function of a "money" that it be a suitably stable "Medium of Labour Exchange" value first and foremost!

Difficult to counterfeit paper money is proof that the intrinsic (Saudi Oil backed) value and utility (Global Reserve-Currency Status) value are also necessary. Since the demise of Bretton Woods, and the inevitable deflationary demise of far too rare gold, a private Federal Reserve Printing Company "They-Owe-Us Note" is backed by the exchange-value of the global oil that can only be priced and exchanged in terms of it. (for now LOL)

Bitcoin's silly "Money-Supply attributes" are totally irrelevant to it's wildly gyrating, horrifically volatile and disgustingly unreliable "fiat quarter-hourly" massively inflationary and deflationary exchange values. (plural because there has been no such thing as a single one)

Adding more or losing many Bitcoin futures derivative contract tokens does absolutely squat to the exchange-value of them. They each only represent, solely in the mind of their owner, the memory of what the dude whom they bought them from, took from them and made off with! A few fresh new, or old lost Bitcoins makes nobody else any richer or poorer than the guy who discovered or lost them, and never ever will.

The sole purpose of the so-called "mining strategy" is to continue to autonomously fund the "bitchain" security-confirmation exchange logging network. It will have zero impact on Bitcoin inflation or deflation.

The entire notion of the speculative market-trading of the value of the Bitcoin derivative itself is almost nonsense, if you ever honestly intended it to be a “currency”.

If the BitCoin asset pool were merely valued by simple Debit-Balance and Credit-Balance Bookkeeping all varied-currency-converted values coming into it would always exceed all varied-currency-converted values flowing out of it. It’s mere “funding” would generate a constant surplus that would assure each token’s constant value. But that would require an accountable “Central Exchange Authority” (bank) to take in the values and dispense the tokens for them.

But, the BitCoin “asset pool” is a Derivative Market where the coins themselves are ALSO THE DERIVATIVE, and are only worth their FUTURE (not current), highly volatile gambling-derivative market value, an hour from now. This derivative market also suffers from the underlying "pyramid pressures" where a few Bitcoin-flush “somebodies” got (or feel they deserve) a lot of something for little and are unafraid to go in hard after that something whenever the grass starts looking a bit greener.

Meanwhile the Bitcoin buyers are merely holding a derivative of it’s former owner’s withdrawal from the asset-exchange system. The only thing that keeps it's value-growth expanding are the "buy and holders" who don’t (and can’t really) spend their derivatives anywhere save by cashing them in, or by patiently selling them (at some break even or gain) to newbies or other speculators, so as not to tip the applecart.

The corollary is that despite there being no central boardroom-socialist banksters, the more aggressive BitCoin Pharaohs can (must and do) still take every opportunity to devalue “our” currency, and they are not alone, as other enemies can come in with worthless cash that costs them nothing to feed speculative bubbles and then dump too, to devalue the currency and discredit us..

Bitcoin will never work, regardless of it’s value-transfer utility, if they cannot stabilize the price of it. If nobody can guarantee what it will be worth in the next ten minutes nobody can afford to lend, contract, price, nor comfortably and safely wait the hour it takes to transfer, be paid in or even to spend it.

For eons Gold Pharaohs enslaved us and our nations through their monopoly. Free us all from them forevermore with:
Bitcoin, the Goldslayer! - Welcome to the digitally portable, untraceable, perfectly lawful "BTC securitized OTC Credit Swap derivative" money that is OURS, ALONE! So you got your TARP, eh? Guess what?
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April 25, 2013, 06:30:02 AM
 #43

An area dedicated to discussing the differences of these two terms and the theories supporting them.

I'm looking forward to an in-depth discussion on the subject! I've noticed that confusion between the two seems to come up quite a bit on the forum, and thought it may be reasonable to dedicate a thread on the matter.

<<<<clips>>>>

What determines the PRICE of Bitcoin? The VALUE of Bitcoin at a particular moment.


Market speculators and their antics capriciously determine the latest fiat exchange-value the last fiat Bitcoin that came their way.

The actual "price" of any given Bitcoin remains forever unknown and unknowable until after it has been sold (re-exchange valued) to the next guy, in the future.

The intrinsic and utility values of the "futures derivative contract token" no matter how attractive, are materially too small to be a major factor in it's exchange-value (aka price)

Buying a Bitcoin futures derivative contract token is gambling on the current exchange-value of it's future exchange-value.


What determines the VALUE of Bitcoin? The SUPPLY and DEMAND of Bitcoin in the economy.


The supply of Bitcoins is totally irrelevant and unrelated to their values, and likely to remain so for a long, long time. Small (or even large) quantitative changes in the small intrinsic and utilitarian characteristics of it's values should have practically no impact on it's exchange value, which is solely a "fiat election" of it's futures-market traders alone.

The (largely utilitarian) demand for Bitcoins is thus far for the most part entirely a function of their intrinsic curiosity, utilitarian novelty and speculative exchange values. Their original purpose was as a gambling casino utility, and they also apparently work pretty well to deal with certain other nastinesses at SR and sports gambling sites.

The best way to think of the exchange-value of Bitcoins is as a kind of a "virtual toilet" which regardless of what has been dumped through it only bears the memory-value of the position that it's last user left the seat in. (to it's own current owner, alone)


What determines the SUPPLY of Bitcoin? Currently, the MoneySupply-Inflation rate of 25 BTC every 10 minutes, and traders willing to SELL Bitcoin to BUYERS in exchange for other supplies of money (currencies).



The supply of Bitcoins has, does and will always have zero to do with the inflation and deflation of their exchange values.

The supply of Bitcoins has everything to do with the fiat exchange value that upper-level "cheap-cheap Bitcoin Pharaohs" are willing to be bothered to settle for, and about nothing to do with the demand for or surplus value of them. Bitcoin millionaires would just as soon be Bitcoin billionaires than  part with them for $80 or something lousy bucks. (unless or until they get a hankering for some more cash)


What determines the DEMAND of Bitcoin? Traders willing to BUY Bitcoin from SELLERS in exchange for other currencies.


So far, the needs of speculators to take advantage of or engineer volatile price bubbles and crashes.

Happy Trading! (and remember to leave those seats up guys!)  Embarrassed

For eons Gold Pharaohs enslaved us and our nations through their monopoly. Free us all from them forevermore with:
Bitcoin, the Goldslayer! - Welcome to the digitally portable, untraceable, perfectly lawful "BTC securitized OTC Credit Swap derivative" money that is OURS, ALONE! So you got your TARP, eh? Guess what?
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May 02, 2013, 04:21:45 AM
 #44


the well known economic cancers of "Monetary Inflation" which are caused by:

- adding inflationary pressures by increasing rates of usury on the money supply and thus causing price rises upon everything to pay for it.

- by properly expanding the money supply to serve more workforce members who could no longer be competitive nor productive enough (due to exporting manufacturing and the means of production to slave labour gulags and erasing import tariffs against them) to return the balance of trade wealth (that the fruits of their labours should have represented) back to the economy.

- debasing or devaluing the values of a given Labour Exchange Currency by quantitative counterfeiting in a vain effort to pay off old debts,

- by expanding the money supply to bail out reserve banksterers who purchased the corrupt political policies of free trade, but wouldn't cover their own losses that were actually the direct result of them.


Please explain how is that "expanding the money supply" done in practical

For example, you are Ben Bernanke, and now is 1st of May, you are going to purchase 85 billion dollars worth of government bonds and Agent MBS, where is that money come from?



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May 02, 2013, 01:39:00 PM
 #45


the well known economic cancers of "Monetary Inflation" which are caused by:

- adding inflationary pressures by increasing rates of usury on the money supply and thus causing price rises upon everything to pay for it.

- by properly expanding the money supply to serve more workforce members who could no longer be competitive nor productive enough (due to exporting manufacturing and the means of production to slave labour gulags and erasing import tariffs against them) to return the balance of trade wealth (that the fruits of their labours should have represented) back to the economy.

- debasing or devaluing the values of a given Labour Exchange Currency by quantitative counterfeiting in a vain effort to pay off old debts,

- by expanding the money supply to bail out reserve banksterers who purchased the corrupt political policies of free trade, but wouldn't cover their own losses that were actually the direct result of them.


Please explain how is that "expanding the money supply" done in practical

For example, you are Ben Bernanke, and now is 1st of May, you are going to purchase 85 billion dollars worth of government bonds and Agent MBS, where is that money come from?




It's created out of nothing by the FED, loaned to the government, who gives it back to the FED, where it is then used as "reserves" by commercial banks. Commercial banks then attempt to create, out of nothing, 10 times this amount in the form of interest bearing debt to regular people and businesses. Somebody tell me if i didn't get this exactly right. It is a rotted zombie of a monetary system.
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May 02, 2013, 03:00:14 PM
 #46

It's created out of nothing by the FED, loaned to the government, who gives it back to the FED, where it is then used as "reserves" by commercial banks. Commercial banks then attempt to create, out of nothing, 10 times this amount in the form of interest bearing debt to regular people and businesses. Somebody tell me if i didn't get this exactly right. It is a rotted zombie of a monetary system.

Actually, lots of people get the order of events wrong with private lending.

Banks loan whenever they find a creditworthy borrower, and the money comes out of thin air at that point.  After the loan is made, if the bank's reserves are insufficient, they borrow from the fed.  This is a pull process initiated by the bank, not a push process initiated by the fed.

Congressional spending is a different story.  When congress spends, the fed creates money out of thin air and loans it to the fed.

The actual mechanisms involved are a bit more complicated.  You have a checking account with your local bank, your local bank has a checking account with the regional fed branch.  If congress writes a check to you, you present it to your bank, and the bank increases your account balance.  Your bank then presents it to the fed, which then increases your bank's account balance.  (In ordinary check clearing, the regional fed would decrement some other bank's account balance, making a zero sum.)

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May 02, 2013, 03:22:32 PM
 #47

It's created out of nothing by the FED, loaned to the government, who gives it back to the FED, where it is then used as "reserves" by commercial banks. Commercial banks then attempt to create, out of nothing, 10 times this amount in the form of interest bearing debt to regular people and businesses. Somebody tell me if i didn't get this exactly right. It is a rotted zombie of a monetary system.

Actually, lots of people get the order of events wrong with private lending.

Banks loan whenever they find a creditworthy borrower, and the money comes out of thin air at that point.  After the loan is made, if the bank's reserves are insufficient, they borrow from the fed.  This is a pull process initiated by the bank, not a push process initiated by the fed.

Congressional spending is a different story.  When congress spends, the fed creates money out of thin air and loans it to the fed.

The actual mechanisms involved are a bit more complicated.  You have a checking account with your local bank, your local bank has a checking account with the regional fed branch.  If congress writes a check to you, you present it to your bank, and the bank increases your account balance.  Your bank then presents it to the fed, which then increases your bank's account balance.  (In ordinary check clearing, the regional fed would decrement some other bank's account balance, making a zero sum.)

ONLY central bank have the right to create money, commercial banks can not create money, they can only loan out part of their existing money

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May 02, 2013, 05:49:23 PM
 #48

ONLY central bank have the right to create money, commercial banks can not create money, they can only loan out part of their existing money

That's what you hear, but the truth is different.

When a bank makes you a loan, they just add a number to your checking account balance.  They also make a new account (your loan) and subtract a bigger number from that, so according to their books, they are even better off than before.  They don't have to run out and get more bits from someone.

When you spend part of that loan, you write checks against that new balance.  To the extent that your checks go to other banks, their account with the regional fed is decreased, which may put them in a tricky situation with the auditors, causing them to borrow to keep their reserves up.  This loan is, of course, backed by the asset they are holding, namely your promise to pay them.

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May 02, 2013, 09:43:41 PM
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It's created out of nothing by the FED, loaned to the government, who gives it back to the FED, where it is then used as "reserves" by commercial banks. Commercial banks then attempt to create, out of nothing, 10 times this amount in the form of interest bearing debt to regular people and businesses. Somebody tell me if i didn't get this exactly right. It is a rotted zombie of a monetary system.

Actually, lots of people get the order of events wrong with private lending.

Banks loan whenever they find a creditworthy borrower, and the money comes out of thin air at that point.  After the loan is made, if the bank's reserves are insufficient, they borrow from the fed.  This is a pull process initiated by the bank, not a push process initiated by the fed.

Congressional spending is a different story.  When congress spends, the fed creates money out of thin air and loans it to the fed.

The actual mechanisms involved are a bit more complicated.  You have a checking account with your local bank, your local bank has a checking account with the regional fed branch.  If congress writes a check to you, you present it to your bank, and the bank increases your account balance.  Your bank then presents it to the fed, which then increases your bank's account balance.  (In ordinary check clearing, the regional fed would decrement some other bank's account balance, making a zero sum.)

Ok thanks for clarifying, but the fact remains that this monetary system is a totally rotted fleecing operation. It is the result of the banking sector abusing a true reserve specie, gold, over and over again, and then getting bailed out repeatedly until the reserve currency turns into "monetized government debt". What kind of a dirty joke of a monetary base is that? It is completely insane. The people who have profited from this have acquired so much power that they've been able to dumb down the entire population of the world to where we have no idea what is going on nor think that we have any reason to care. I'd venture to say that if a single semester in highschool was devoted to this very subject, the whole system would change in a generation.
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May 02, 2013, 10:14:24 PM
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Ok thanks for clarifying, but the fact remains that this monetary system is a totally rotted fleecing operation. It is the result of the banking sector abusing a true reserve specie, gold, over and over again, and then getting bailed out repeatedly until the reserve currency turns into "monetized government debt". What kind of a dirty joke of a monetary base is that? It is completely insane.

I dislike the way the system works as much as the next guy around here, but it isn't the monetary system itself that is so completely batshit, it is the politicians and crony capitalism that have made it the astounding pile of shit that it is today. If banks actually had to have the reserves, if banks had to actually secure long-term assets to back long-term liabilities, if banks this if banks that it all comes down to big government letting it slide because they get a fat f'ing paycheck for doing so. It doesn't help that the same government spends $600 some odd billion dollars a year to make sure that nobody tries to cause trouble with this system.

It's a shame bitcoin won't do fuck all to fix it.

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May 02, 2013, 11:10:23 PM
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I'm going to go ahead and predict that if the community doesn't come up pretty quick with a decentralized p2p system to issue notes and accounting entries on cryptocoin reserves, then bankers will do it, either new bankers or existing bankers.
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May 03, 2013, 05:56:31 AM
 #52

ONLY central bank have the right to create money, commercial banks can not create money, they can only loan out part of their existing money

That's what you hear, but the truth is different.

When a bank makes you a loan, they just add a number to your checking account balance.  They also make a new account (your loan) and subtract a bigger number from that, so according to their books, they are even better off than before.  They don't have to run out and get more bits from someone.

When you spend part of that loan, you write checks against that new balance.  To the extent that your checks go to other banks, their account with the regional fed is decreased, which may put them in a tricky situation with the auditors, causing them to borrow to keep their reserves up.  This loan is, of course, backed by the asset they are holding, namely your promise to pay them.

I don't think that is the case. If commercial banks can create loans as wish, then central bank's open market operation will have no effect at all. The OMO's purpose is to increase or reduce the amount of money that commercial banks can loan out, in such a way to adjust the credit money available for business. If commercial banks can create money by themselves as wish, this whole operation will have no effect

When a commercial bank give me a loan of $900, he must have that money at his account at the first place, and the reason that he can lend me that $900 is because he already have $100 deposited at central bank (10% reserve requirement)

Don't be fooled by bank's accounting tricks


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May 03, 2013, 01:50:37 PM
 #53

When a commercial bank give me a loan of $900, he must have that money at his account at the first place, and the reason that he can lend me that $900 is because he already have $100 deposited at central bank (10% reserve requirement)

Actually, the bank just needs to meet its average reserve requirement over time. It only needs to have the $900 when someone else cashes the check, presuming it is not at the same bank.

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May 03, 2013, 02:26:51 PM
 #54

When a commercial bank give me a loan of $900, he must have that money at his account at the first place, and the reason that he can lend me that $900 is because he already have $100 deposited at central bank (10% reserve requirement)

Actually, the bank just needs to meet its average reserve requirement over time. It only needs to have the $900 when someone else cashes the check, presuming it is not at the same bank.

To simplify the matter, suppose that there is only one commercial bank in the country. That $900 I spent will become someone else's deposite at this bank, and his deposite will again be loaned out, but then the commercial bank need to have another $90 reserve at central bank and can only loan out $810, this is typical FRB

So, this bank only has $1000 to start with, but over time, it will create lots of accounting activities through loan and deposite. In the end there could be lots of people having a total desposites of $10000 at bank, but if more than 10% of them go to bank ask for withdraw, the bank went broke, since the total money in the system at any moment will never exceed $1000

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May 03, 2013, 04:16:13 PM
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I don't think that is the case. If commercial banks can create loans as wish, then central bank's open market operation will have no effect at all. The OMO's purpose is to increase or reduce the amount of money that commercial banks can loan out, in such a way to adjust the credit money available for business. If commercial banks can create money by themselves as wish, this whole operation will have no effect

When a commercial bank give me a loan of $900, he must have that money at his account at the first place, and the reason that he can lend me that $900 is because he already have $100 deposited at central bank (10% reserve requirement)

Don't be fooled by bank's accounting tricks

The local bank's interaction with the fed creates a soft limit, not a hard one.  Small and simple examples don't show the real picture, because it isn't just you, the bank and the fed.  There are thousands of other banks, and millions of other people.

What makes you think that the bank has to "have" $900 somewhere in your example?  Where is that $900 stored?  Physical tokens in the vault?  In their computer?  No.  And also clearly not in the central bank's computer.*

Banks have two kinds of "real" money.  They have physical tokens of money (dollar bills) and central bank deposits (reserve accounts at the fed).  They usually have a truck show up daily to either pick up excess tokens, or to bring more tokens, and all they really need are enough to service local demand, which is usually a tiny little fraction of the non-physical business at the bank.  As to reserve accounts, they can borrow from other banks or directly from the fed.

What really limits the local bank is that the auditors verify that they have enough on reserve on a regular basis.  And since reserves are so easy to get, they are effectively never out of compliance with their reserveholding requirements.  Banks fail when their books get out of whack, not when their vaults run empty.

Well, at least I hope it is clear.  Clearing and settlement is done on a net basis.  It would be silly for the bank to need $1000 in their reserve account, and then withdraw $900 to make the loan, leaving a 10% reserve.  First, how would the withdrawal work?  Second, what would stop the bank from redepositing whatever fraction of the loan doesn't leave that day and loaning out 90% again?

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May 05, 2013, 05:08:10 PM
 #56


Pulled from a discussion in Wall Observer



Price-Deflation is what you are used to hearing about in Bitcoin. That term is used to describe the prices of goods/services as they decrease, because the value of Bitcoin goes up.

Price-Inflation is the opposite. When prices of goods/services increase because the value of Bitcoin goes down.



You should not attempt to describe the workings of bitcoin economy with a standard economic theory, because your interpretations will always be wrong.

BTC is a completely new form of money and thus requires the application of its own economic theory when describing what drives its value up or down.

And it's definitely not the currency exchange rates that create deflation and inflation in a BTC-based economy. It's the BTC spending that does it.

It's also worth noting that when we talk about exchange rate fluctuations, we imply appreciation/depreciation, not inflation/deflation.


Bitcoins are earned, not traded! If you plan on hoarding BTC, you're on my target list. (And yes, it is possible to swim in BTC.)

Don't give me that Bull... I'm one of those honey eating Bears that the bees hope to never meet again... Viva la BTC!!!
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May 06, 2013, 07:12:00 PM
 #57

I'm going to go ahead and predict that if the community doesn't come up pretty quick with a decentralized p2p system to issue notes and accounting entries on cryptocoin reserves, then bankers will do it, either new bankers or existing bankers.

Indeed a Bitcoin is nothing more than an exchange-traded  Over the Counter "Funded Credit Swap Derivative" that may work as a delayed-settlement funding mechanism of great utilitarian value and security but it can never ever be qualified as a liquid "money" that can be confidently exchanged at any guessable rate, without it being exchanged (cashed in for a national economic Medium of Labour Exchange with established stable liquidity) first.

Conducting business in Bitcoins is little more sane than spending and accepting Facebook shares would be.

For eons Gold Pharaohs enslaved us and our nations through their monopoly. Free us all from them forevermore with:
Bitcoin, the Goldslayer! - Welcome to the digitally portable, untraceable, perfectly lawful "BTC securitized OTC Credit Swap derivative" money that is OURS, ALONE! So you got your TARP, eh? Guess what?
agentbluescreen
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May 07, 2013, 03:34:31 PM
 #58


You should not attempt to describe the workings of bitcoin economy with a standard economic theory, because your interpretations will always be wrong.

BTC is a completely new form of money and thus requires the application of its own economic theory when describing what drives its value up or down.

And it's definitely not the currency exchange rates that create deflation and inflation in a BTC-based economy. It's the BTC spending that does it.

It's also worth noting that when we talk about exchange rate fluctuations, we imply appreciation/depreciation, not inflation/deflation.


Only nations, communities or groups with exclusive territories, assets, labourers, exports and imports can have an "economy" and a national (or local socially accepted) Medium of Labour Exchange "currency" for which there exists a "current foreign exchange value". Globes cannot have economies since they lack all of those things and (thus far at least) trade with no other globes. The planet is merely a Global Marketplace there is, and so far, can be no such thing as a "global economy". (unless you want to consider Liechtenstein, Bermuda, Belize, Switzerland and the Cayman Islands as "another planet" populated by racially superior "alien" boardroom-gold-pharaoh-socialist slave-owners)

For instance your "American" home (BTConomist's Kingdom) could have it's own Medium of Labour Exchange "BTCono-Dollar" currency based upon the assets, labour values, imports and exports of BTConomist's "subjects", that might be accepted by your neighbours as a local "foreign currency". Your little tribe and it's tribal economy might consist of you importing lawn equipment and exporting lawn maintenance and your wife might import beauty supplies and run a salon and your kids might paint houses, deliver papers and do lawns too, your nephews, aunts and uncles and in-laws may also become part of the families' "BTCono-Dollar" economy. Your families' little "economic kingdom" can do as it pleases as long as it pays it's communist rent-taxes to the private Federal Tory-Bilderberg Gold-Pharaoh Reserve Printing Companies' Pentagon war-communist Union of ZioNazi Socialist Republics within which it is imprisoned.

You could "back" your "BTCono-Dollars" with grass seed, house painting or lawn cutting jobs for instance, then everybody would know when your kids showed up with them just about how many popsicles to give them for one. If the BTConomist's Kingdom imports too many slave goods from the kingdom of Walmart, such that it must go into debt to a private plastic-counterfeit renting Vultures International Slavery Association outfit to whom you must pay 30% interest then you cannot afford to be "backing" too much exported currency for the neighbors around your 'hood, and your economy must increase it's exports. Now you might also Friedmanize ("monetize") your Walmart debts by printing up more BTCono-Dollars to pay off your wife and kids with, but sooner or later they are going to be all like "Where's the popsicles Tory Trotskyite Papa Friedman?" on your butt.

Unlike a "money" a "penny stock exchange-traded" Bitcoin is only an Over the Counter Funded Credit Swap Derivative that is only worth what the next guy wants to pay you for it, the next time it's cashed in, and that is all it ever can or will be worth. It certainly had a "funded cost" to you but what it's worth is, (exchange value) is unknowable until you are rid of it.

Appreciation and depreciation only apply to Mediums of Savings, which consist of rare fine arts, commodities or antiquities always absolutely certain to appreciate in exchange value, or, "bad" Mediums of Investment (like coal, whole used cars, or Tory-Trotskyite Red Chinese slave labour) doomed to be worth less than it was before. (monopolized-gold is only bulky, common-nuisance 3rd rate medium of savings) Labour is the PRIME RESOURCE which is expressed in and represented by an economies' Medium of Labour Exchange "currency". The gracefully inflating (depreciating minutely in concert with growth) exchange value "price" of a fair "currency" has a certain and direct impact on all prices over time, but it cannot (usually) strive to be a fair or good Medium of Savings or become as abused as a bad Medium of Investment.

It (Medium of Labour Exchange "currency") is (and must be) the central and most stably growing component of all valuations within a healthy, growing economy (where the citizens own and rent their own currency). In an unhealthy, diseased, private ex-gold Pharaoh Federal Reserve Monetary Labour Enslavement tyranny, all of the profits from reserve lending and counterfeiting are stolen by criminal Tory-Bilderberg Trotskyite oligarchs, and thus, armed-communist taxation robbery must be imposed (by the politicians they buy and own for nothing) to pay them their Trotskyite pounds of flesh. In that case the corruptly rented-private Medium of Labour Exchange currency must always (depreciate like a bad investment) inflate and all prices must also inflate, along with it, to ALWAYS PROFIT ONLY THEM, ALONE!

This phenomenon today is known as Neo-Keynesian Fascist-Friedmanism (aka Tory-Bilderberg Gold-Misesism) or "austere" urinate-down "voodoo economics".  It's simply a throw-back to Tory-Malthusian Gold-Mercantilism.

Try to avoid the silly temptation of confusing a "wealth" with a "money". In 1913 the results of the American Revolution and the Civil War were reversed and all became bonded slaves to the Transnational Trotskyite Tory-Bilderberg gold-pharaohs of London once again.

If exchange-traded Bitcoin Credit Swaps can somehow be made to work as well as a stable, liquid currency it means Global Human-Monetary Freedom from the private national-socialist bankstering tyrannies of the wealthy Pharaohs, once and for all, finally..

PS:

One “winning” wealthy Gold (or Bitcoin) Pharaoh, no matter how audacious his lifestyle, cannot “urinate down” a “Free Market” economy renovating his palaces. The power to counterfeit, loan and issue (from nothing) a fiat Labor Exchange Currency token is the power to corrupt. The Wealth of Nations (national economies) is their public property expressed and represented by the foreign-export fruits of all labors value of their publicly owned and issued “Medium of Labor Exchange Currency”. Maintaining and growing the ongoing exchange-value of its own economic “currency” is the public work of a nation, it is not ever to be regarded as the private toy-hobby of some “beneficent” private gang of boardroom-socialist Pharaohs.

For eons Gold Pharaohs enslaved us and our nations through their monopoly. Free us all from them forevermore with:
Bitcoin, the Goldslayer! - Welcome to the digitally portable, untraceable, perfectly lawful "BTC securitized OTC Credit Swap derivative" money that is OURS, ALONE! So you got your TARP, eh? Guess what?
MikeMark
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May 09, 2013, 03:15:32 AM
 #59

I think people here need to lighten up a bit.

We are all treading the grounds of definitions, philosophy and high-level concepts. There will always be a misunderstanding among us, simply because the language used may not be strict enough or possibly the concept not presented clearly enough to get the ideas completely across to one another. We don't have the ability to read one another's thoughts.  Grin

Thank goodness.


However, we can think of those using BTCitcoin as an "economy". There is exchange within and foreign. It is currently a tiny economy, subject to great fluctuation and disruption. However it is growing.

We can consider the price of BTCitcoin in terms of something else. USD, Euros, mg of Gold, ozs of Silver, seashells, or Litecoin.

We can choose definitions we want to use. Is inflation an increase in supply of money, or an increase in money needed to purchase a particular item (or basket of items)?

Once we choose definitions we like, we can then track some things about our little "economy".

From that we may be able to help ourselves and others choose what best to do, whether it be to ignore or embrace the use of BTCitcoin.

However, we'll get the most done if we combine our strengths and forget about our individual desire to be the one who is "right".   Cheesy


The Path of the Just is as the Shining Light...
[WTS] 1 Oz 9999 Silver Maple Leafs
agentbluescreen
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May 12, 2013, 12:54:50 AM
 #60

I think people here need to lighten up a bit.

We are all treading the grounds of definitions, philosophy and high-level concepts. There will always be a misunderstanding among us, simply because the language used may not be strict enough or possibly the concept not presented clearly enough to get the ideas completely across to one another. We don't have the ability to read one another's thoughts.  Grin

Thank goodness.


We can choose definitions we want to use. Is inflation an increase in supply of money, or an increase in money needed to purchase a particular item (or basket of items)?


However, we'll get the most done if we combine our strengths and forget about our individual desire to be the one who is "right".   Cheesy



I agree with you but in the field of "economics" we have to be terribly specific and strict in our assumptions, and positively saintly in our choices and conclusions because by definition we are talking about an awful lot of other peoples business, behind their backs, almost all of the time.

Grin


For eons Gold Pharaohs enslaved us and our nations through their monopoly. Free us all from them forevermore with:
Bitcoin, the Goldslayer! - Welcome to the digitally portable, untraceable, perfectly lawful "BTC securitized OTC Credit Swap derivative" money that is OURS, ALONE! So you got your TARP, eh? Guess what?
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