Wall Observer BTC/USD - Bitcoin price movement tracking & discussion

[billyjoeallen]

Current US dollar strength is due to deleveraging. If net outstanding debt is being payed back, then the fractional reserve money multiplier runs in reverse.  Debts that default also reduce the money supply. 

Why was the Euro EVER worth so much....?

What magic is going on that allows the Reserve to deposit trillions into bank accounts but there is no inflation?

anything is only worth what a buyer is willing to pay for it.  You could say there was relatively higher USD expected inflation. You could argue it was the expected efficiency gains by unifying Europe under a single monetary standard and the efficiency gains of free trade. It's very complex and there's no way to really know exactly.

as for "magic", there is no magic. The Fed is fighting DEFLATION which would be worse (or better depending on your perspective) without ZIRP and quantitative easing.

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[MatTheCat]

John the Dumper is dumping again.

Good traders buy in opportunity.

I amn't going to do it though, cos all that would happen would be my position going $5 against me, and then me freaking out and going short, and getting wiped out on the rise to $370.

[galdur]

Current US dollar strength is due to deleveraging. If net outstanding debt is being payed back, then the fractional reserve money multiplier runs in reverse.  Debts that default also reduce the money supply.  

Why was the Euro EVER worth so much....?

What magic is going on that allows the Reserve to deposit trillions into bank accounts but there is no inflation?

anything is only worth what a buyer is willing to pay for it.  You could say there was relatively higher USD expected inflation. You could argue it was the expected efficiency gains by unifying Europe under a single monetary standard and the efficiency gains of free trade. It's very complex and there's no way to really know exactly.

as for "magic", there is no magic. The Fed is fighting DEFLATION which would be worse (or better depending on your perspective) without ZIRP and quantitative easing.

All right, they´re fighting deflation with talking up the dollar by implying forever that interest rate hikes are just around the corner, thereby importing deflation. Rising dollar = cheaper imports.

[billyjoeallen]

Current US dollar strength is due to deleveraging. If net outstanding debt is being payed back, then the fractional reserve money multiplier runs in reverse.  Debts that default also reduce the money supply.  

Why was the Euro EVER worth so much....?

What magic is going on that allows the Reserve to deposit trillions into bank accounts but there is no inflation?

A rising dollar imports deflation into the U.S. obviously. Unfortunately for the U.S. it also exports inflation (making exports less competitive) but that´s not really a big deal since the most important products are weapons, porn, hollywood crap and of course dollars.

that's correct. A big factor is all the neomercantilist emerging economies are blowing up, doing more or less the same thing Japan did 20 years ago. This puts a downward pressure on commodity prices everywhere and that ripples through the economy. For example, I'm an oilfield trucker getting paid almost nothing but there is no upward pressure on wages because there are more drivers than loads with WTI crude at $42/bbl.

[riils]

John the Dumper is dumping again.

Good traders buy in opportunity.

I amn't going to do it though, cos all that would happen would be my position going $5 against me, and then me freaking out and going short, and getting wiped out on the rise to $370.

I think thats what bots are programmed to do - buy and sell soon on every steep drop no matter what. Probably works.

[galdur]

Current US dollar strength is due to deleveraging. If net outstanding debt is being payed back, then the fractional reserve money multiplier runs in reverse.  Debts that default also reduce the money supply.  

Why was the Euro EVER worth so much....?

What magic is going on that allows the Reserve to deposit trillions into bank accounts but there is no inflation?

A rising dollar imports deflation into the U.S. obviously. Unfortunately for the U.S. it also exports inflation (making exports less competitive) but that´s not really a big deal since the most important products are weapons, porn, hollywood crap and of course dollars.

that's correct. A big factor is all the neomercantilist emerging economies are blowing up, doing more or less the same thing Japan did 20 years ago. This puts a downward pressure on commodity prices everywhere and that ripples through the economy. For example, I'm an oilfield trucker getting paid almost nothing but there is no upward pressure on wages because there are more drivers than loads with WTI crude at $42/bbl.

There´s one pretty major drawback in this dollar rise which the stock market doesn´t seem to be concerned about for some reason. A rising dollar means that U.S. multinationals (those big international dogs that lead the market) get to book fewer dollars as revenue and profits back home in the U.S. It´s lagging but has to hit stock prices sooner or later.

[galdur]

But it may not mean that much. After all financial services account for a whopping 36% of the total market cap of the U.S. stock market. Is that staggering or what? 

[abercrombie]

is crypto done?? 

[billyjoeallen]

Current US dollar strength is due to deleveraging. If net outstanding debt is being payed back, then the fractional reserve money multiplier runs in reverse.  Debts that default also reduce the money supply.  

Why was the Euro EVER worth so much....?

What magic is going on that allows the Reserve to deposit trillions into bank accounts but there is no inflation?

A rising dollar imports deflation into the U.S. obviously. Unfortunately for the U.S. it also exports inflation (making exports less competitive) but that´s not really a big deal since the most important products are weapons, porn, hollywood crap and of course dollars.

that's correct. A big factor is all the neomercantilist emerging economies are blowing up, doing more or less the same thing Japan did 20 years ago. This puts a downward pressure on commodity prices everywhere and that ripples through the economy. For example, I'm an oilfield trucker getting paid almost nothing but there is no upward pressure on wages because there are more drivers than loads with WTI crude at $42/bbl.

There´s one pretty major drawback in this dollar rise which the stock market doesn´t seem to be concerned about for some reason. A rising dollar means that U.S. multinationals (those big international dogs that lead the market) get to book fewer dollars as revenue and profits back home in the U.S. It´s lagging but has to hit stock prices sooner or later.

That's true but it may take a while. When it's looking bad everywhere, capital flows to the lepers with the most toes.  If you a're fund manager were a hedge had a billion or so to invest right now, where would you park it?  Bonds? interest rates are too low and default risks make them almost as risky as stocks. As JM Keynes said, "markets can stay irrational longer than you can stay solvent".

[billyjoeallen]

But it may not mean that much. After all financial services account for a whopping 36% of the total market cap of the U.S. stock market. Is that staggering or what? 

That's almost all a deadweight loss in efficiency. We now or soon will have the technology to replace every stockbroker and investment bankster with software.  BUT, we have this little scaling problem....

[galdur]

Current US dollar strength is due to deleveraging. If net outstanding debt is being payed back, then the fractional reserve money multiplier runs in reverse.  Debts that default also reduce the money supply.  

Why was the Euro EVER worth so much....?

What magic is going on that allows the Reserve to deposit trillions into bank accounts but there is no inflation?

A rising dollar imports deflation into the U.S. obviously. Unfortunately for the U.S. it also exports inflation (making exports less competitive) but that´s not really a big deal since the most important products are weapons, porn, hollywood crap and of course dollars.

that's correct. A big factor is all the neomercantilist emerging economies are blowing up, doing more or less the same thing Japan did 20 years ago. This puts a downward pressure on commodity prices everywhere and that ripples through the economy. For example, I'm an oilfield trucker getting paid almost nothing but there is no upward pressure on wages because there are more drivers than loads with WTI crude at $42/bbl.

There´s one pretty major drawback in this dollar rise which the stock market doesn´t seem to be concerned about for some reason. A rising dollar means that U.S. multinationals (those big international dogs that lead the market) get to book fewer dollars as revenue and profits back home in the U.S. It´s lagging but has to hit stock prices sooner or later.

That's true but it may take a while. When it's looking bad everywhere, capital flows to the lepers with the most toes.  If you a're fund manager were a hedge had a billion or so to invest right now, where would you park it?  Bonds? interest rates are too low and default risks make them almost as risky as stocks. As JM Keynes said, "markets can stay irrational longer than you can stay solvent".

Yeah, the U.S. is the least ugly gal at the dance. I can buy that.

BTW, I noticed that The Donald´s book is on the torrents. Audiobook. What the hell is it called again , Lame America?
No, it´s that other word

Crippled America: How to Make America Great Again, by Donald J. Trump.

[ChartBuddy]

Coin

Explanation

[billyjoeallen]

BTW, I noticed that The Donald´s book is on the torrents. Audiobook. What the hell is it called again , Lame America?
No, it´s that other word

Crippled America: How to Make America Great Again, by Donald J. Trump.

Trump apparently doesn't really understand macroeconomics, but if he gets elected and bans remittances to Mexico, Bitcoin will do well. 

actual quote:  "I'm 100% a free trader, but we need better deals."

[galdur]

But it may not mean that much. After all financial services account for a whopping 36% of the total market cap of the U.S. stock market. Is that staggering or what? 

That's almost all a deadweight loss in efficiency. We now or soon will have the technology to replace every stockbroker and investment bankster with software.  BUT, we have this little scaling problem....

Yeah and imagine the gigantic interests in this obsolete industry, there´s 8-9 trillion dollars in stock value and then there´s real estate and other assets and armies upon armies of vastly overpaid personnel. Not to mention that they fund politicians, appoint the president´s administration and much more. Gonna take decades and maybe a world war to cut that mess down to the desperately needed size.

[AlexGR]

What is the true value of 1 bitcoin? Nobody knows.

1 full bitcoin (1.0 BTC) is as scarce as 12kg of above ground gold. The price will readjust itself in the long run to reflect this. I'm not saying it will go to the value of 12kg gold, but price has to adjust to accommodate the scarcity factor.

Nice metaphor.

I have two keys to a locker that may or may not contain 24 billion dollars - how much are they worth? Scarcity does not equate to value.

Scarcity on something that is useless in every sense, probably not. But bitcoin is not in that category.

Gold's annual production is around 2500 tons. There are a few metals which have a production that is counted in just a few tons per year, typically in the PGE (Platinum Group of Elements). These metals fluctuate wildly in their prices as their scarcity alone allows their marketcap and price to be squeezed high through a single buy, or dumped quite lower with a few not-so-dramatic moves in terms of $$$. But noone says "ohh Iridium is a pump and dump because it was $400 in 2010, $1100 in 2012 and fell to $400 in 2013". You know it's a small market and that fluctuations are to be expected.

Bitcoin is similar in a sense. Yet, beside being scarce, it also has something to offer. It can do online payments, it can preserve wealth in the long run - especially for multiple countries that run double digit inflation, it can be a diversification asset, it can bypass capital controls, it can offer banking services even to kids who are gaming and want to sell or buy a fictional item or a game account in an MMORPG - which would otherwise be impossible without using their parents bank/CC/paypal etc, it can even be considered a collectible as the first decentralized digital currency (which is a historic event analogous to the first coins or first paper notes). People are paying hundreds or thousands of dollars for a good condition uncirculated coin of 100 years ago, just because this type of coin is harder harder to find than a coin in average circulated or worn condition. In any case, as far as BTC is concerned, the scarcity factor means that not many people can hold 1 BTC - but we all know that. Which, by necessity, will make the prices go much higher.

Many people that are trading bitcoin do so from the U.S. or Europe and they have a fundametal problem in appreciating it. We do not really understand or appreciate the benefits of what bitcoin can do for countries that do not have numismatic stability or easy international transactions through banks/paypal/credit cards etc due to quotas, controls, government approvals to buy even 10 dollars worth of stuff, etc.

For an American or a European, bitcoin is a very misunderstood asset because most of its benefits are not readily visible. The same is true for gold btw - most people will prefer money in the bank rather than gold. Having numismatic stability for a few decades makes you forget that your currency is just faith-backed money that can fall over the cliff overnight just because there was an international shock, a war, some political mess, etc etc. But countries that are immersed in that kind of shit do not value their fiat - they only value land, gold, tangible assets, hard currency (if they can get their hands on it) and Bitcoin (because through bitcoin they can actually have the equivalent of hard currency - despite their government blocking access to hard currency). So, in a sense, hard currencies like the dollar are not directly competitive with Bitcoin, but weaker ones are, because Bitcoin is the medium to have access to dollars despite a government's effort to prevent the population from stacking foreign exchange or using it to store wealth, or using it to conducting international trade.

Traders are in awe when they see a nice 10-15% spread to a Chinese exchange, but they have no idea that some people are arbing 50 or 100% for selling BTCs (in local currency equivalent of $$$) in countries that have numismatic instability.

[billyjoeallen]

But it may not mean that much. After all financial services account for a whopping 36% of the total market cap of the U.S. stock market. Is that staggering or what? 

That's almost all a deadweight loss in efficiency. We now or soon will have the technology to replace every stockbroker and investment bankster with software.  BUT, we have this little scaling problem....

Yeah and imagine the gigantic interests in this obsolete industry, there´s 8-9 trillion dollars in stock value and then there´s real estate and other assets and armies upon armies of vastly overpaid personnel. Not to mention that they fund politicians, appoint the president´s administration and much more. Gonna take decades and maybe a world war to cut that mess down to the desperately needed size.

Agreed. There will need to be a change from a consumer-based economy with depreciating currency to a savings-based economy and that will not occur without major disruptions.

[galdur]

BTW, I noticed that The Donald´s book is on the torrents. Audiobook. What the hell is it called again , Lame America?
No, it´s that other word

Crippled America: How to Make America Great Again, by Donald J. Trump.

Trump apparently doesn't really understand macroeconomics, but if he gets elected and bans remittances to Mexico, Bitcoin will do well. 

actual quote:  "I'm 100% a free trader, but we need better deals."

I just hope that he has top class 100% security. The way he talks I fear that a lone gunman may be lurking out there. He´d probably screw the war scams way down and put big dollars into the infrastructure, crumbling roads bridges etc. Plenty of jobs. Also he´d probably clean up the crime situation. It´s a war out there, homeowners are shooting robbers every day and vice versa. It´s intolerable.

[makeacake]

... But countries that are immersed in that kind of shit do not value their fiat - they only value land, gold, tangible assets, hard currency (if they can get their hands on it) and Bitcoin (because through bitcoin they can actually have the equivalent of hard currency - despite their government blocking access to hard currency). So, in a sense, hard currencies like the dollar are not directly competitive with Bitcoin, but weaker ones are, because Bitcoin is the medium to have access to dollars despite a government's effort to prevent the population from stacking foreign exchange or using it to store wealth, or using it to conducting international trade.

So you're telling me people in those countries use Bitcoin to convert their shit currencies into US dollars?

http://s9.postimg.org/mfb0rbzjz/Capture.png

[AlexGR]

... But countries that are immersed in that kind of shit do not value their fiat - they only value land, gold, tangible assets, hard currency (if they can get their hands on it) and Bitcoin (because through bitcoin they can actually have the equivalent of hard currency - despite their government blocking access to hard currency). So, in a sense, hard currencies like the dollar are not directly competitive with Bitcoin, but weaker ones are, because Bitcoin is the medium to have access to dollars despite a government's effort to prevent the population from stacking foreign exchange or using it to store wealth, or using it to conducting international trade.

So you're telling me people in those countries use Bitcoin to convert their shit currencies into US dollars?

No because they can't go to an exchange, sell BTC, get USD to their bank account and then go to their bank and withdraw USD. They can't do that. They will get national currency instead - in most cases.

So they use BTC as a hard currency / USD-equivalent currency. The BTC payment processors do the rest: If a payment processor can accept BTC as currency and send you a shipment of tangible assets like gold, silver, technology stuff (iphones, laptops, etc etc), it's like you have actually paid with USD and paypal. But it's not necessary to spend your BTC - you can also hold them as a safer alternative (compared to local currency that is devaluating), as some do with their hard currency holdings.

[makeacake]

...
No because they can't go to an exchange, sell BTC, get USD to their bank account and then go to their bank and withdraw USD. They can't do that. They will get national currency instead - in most cases.

So they use BTC as a hard currency / USD-equivalent currency. The BTC payment processors do the rest: If a payment processor can accept BTC as currency and send you a shipment of tangible assets like gold, silver, technology stuff (iphones, laptops, etc etc), it's like you have actually paid with USD and paypal. But it's not necessary to spend your BTC - you can also hold them as a safer alternative (compared to local currency that is devaluating), as some do with their hard currency holdings.

Can you point me to a country where that's actually happening, on non-trivial scale?
Or are you talking about China, wher that's simply not the case?