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

[spud21]

Capital controls are meant to work for exporting money outside of the county. Since the Chinese will deposit money directly to a Chinese company's account, that's being taxed for every transaction, it's perfectly legal.

Please be specific.  Which "Chinese company's account"?
Exactly how will that be done, considering https://en.wikipedia.org/wiki/Legality_of_bitcoin_by_country#China ?

A. I'd indulge you to read the article here.
B. Busted. I don't live in China. I live in Greece and judge from my own country what the capital controls look like.
C. Are you suggesting that the article is wrong or you're just in denial with the concept? I don't follow. Please enlighten me.

I think most of the facts in the article look correct.

However I'm not sure if this quoted speculation it concludes with is correct because from what I understand the Chinese government has made it difficult to buy Bitcoins in China. The Chinese government will do everything it can to stop money leaving the country through Bitcoin or any other means now its economy is crashing. Its already banned bank transfers to Bitcoin exchanges, and buying vouchers to purchase Bitcoins with.

if a few hundred million Chinese decide that the time has come to use bitcoin as the capital controls bypassing currency of choice, and decide to invest even a tiny fraction of the $22 trillion in Chinese deposits...

... in bitcoin (whose total market cap at last check was just over $3 billion), sit back and watch as we witness the second coming of the bitcoin bubble, one which could make the previous all time highs in the digital currency, seems like a low print.

[ChartBuddy]

Coin
Explanation

[macsga]

A.  zerohedge.
B.  Communist China is not just like Greece.  Go figure.
C.  A zerohedge article?  Wrong?!  If you can't trust zerohedge, who can you trust?

@spud21 even if the Chinese could buy BTC directly from miners (miners who could themselves sell that BTC on exchanges for USD or Euro), what would that change?

A. Zerohedge has an agenda. It's no secret; but judging a book by the cover will probably not allow you to obtain some knowledge. I read his articles - not always accept them. In this case though, he has solid points and that's the reason I've crossposted it from klee's comment on another thread.

B. I don't want to comment. I vowed not to talk about politics in public ever since I voted for the previous government of ours with 62% NO to new austerity measures and our PM acted as the sockpuppet of the EU politics. Communism? No, just economic totalitarianism. Yeah, it's different as a concept, not as an outcome to the people though. FWIW, we're en route for new elections. We have no government anymore in Greece and I think we will never have under these circumstances.

[rebuilder]

Are you suggesting that (mined) BTC will be sold for (presumably undesirable) Yuan, rather than for USD or Euro?
Would that be instrumental in bypassing capital controls?  If so, how?

I'm not suggesting anything, just pointing out that unlike other countries with capital controls popping up of late, China at least has a better handle on the supply side of BTC. The miners must pay for electricity where they operate, and anyone looking to bypass capital controls would likely be willing to pay a premium, so there's a certain amount of opportunity there. Doesn't mean it would happen - for one, any mining operation would likely be leery of stepping on the state's toes in China.

[gentlemand]

Yeah, it's always the logic that's flawed.  If buying Bitcoin was trivial for those in China who wished to bypass capital controls, and if bypassing capital controls was the reason for buying BTC, what's the incentive for holding that BTC?  BTC  could be instantly sold for USD on any exchange.

I would guess that the main reason Chinese folks bother with BTC is playing with the market. You certainly can't use it for anything else in China. The Chinese government permits its trade as a collectible asset and nothing else.

[JayJuanGee]

Capital controls are meant to work for exporting money outside of the county. Since the Chinese will deposit money directly to a Chinese company's account, that's being taxed for every transaction, it's perfectly legal.

Please be specific.  Which "Chinese company's account"?
Exactly how will that be done, considering https://en.wikipedia.org/wiki/Legality_of_bitcoin_by_country#China ?

Besides, when you hold Bitcoins right now, why should you transfer it abroad? It's where you live at anytime; I could understand diversification reasons, but would not advise BTC as a "means of fleeing capital abroad".

By that logic, Chinese people should be able to buy Euro or USD, as long as they keep it in China, right?  What am I missing?

@aztecminer we're talking about China.

right... but the election is 16 months away. .. instead of us focusing on immigration suddenly the election is about the obama's failing economy ... things china is doing probably is causing the stock market to crash .

It's crashing up today, so far.

[billyjoeallen]

China Scrambles To Enforce Capital Controls (Which Is Great News For Bitcoin)

Care to explain how capital controls are good for Bitcoin?  This is China we're talking about, do you suppose the government officials failed to consider that people might spirit away their money by "investing" it in foreign currencies, stockes, or even Bitcoin?

its gimped: http://www.newsmax.com/Finance/StreetTalk/jim-rogers-federal-reserve-economy-slowdown/2015/08/31/id/672878/

if the federal reserve rallies the stock market with more QE then all the money will go into stocks to ride the pump.

if QE fails and people start leaving the dollar then that is another story..

I have a lot of respect for Jim Rogers, but think about what you're saying: If QE IV fails, then we will be in a serious depression with DEFLATION.  Credit contraction will throw the money multiplier into reverse. Capital controls will compound the problem if they are implemented.

You are confusing the cause with the effect.  If the Fed resorts to more outright money printing (as opposed to merely keeping interest rates artificially low), then it means they (and by extension we) have already lost.  QE is straight up counterfeiting to reflate a bubble that has already popped.

People won't be leaving the dollar. The dollar will gain a lot of value because there won't be hardly any to go around.  TOO MUCH QE could cause hyperinflation, but only after a deflationary period.

Let's back up to look at the big picture: For decades, the cost of money has been artificially low because every little hiccup in the economy was treated with a dose of cheap credit.  The amount of private and public debt has gotten massive because some were borrowing to pay off earlier loans and others were borrowing to invest, chasing higher returns. Bubbles are caused by LEVERAGED investing. When the bubble pops, it's not the investors who suffer the lion's share of the loss. It's the creditors of those investors.

The banking system needs the equities bubbles to continue because if it doesn't, their losses will be so great as to make them insolvent. Not just a few banks. The entire system. No FDIC insurance can keep your deposits safe. 

Capital controls never work long term because it's like shutting the barn door after the horse has already escaped. Who in their right mind would invest in a country with capital controls? It's like throwing your money into a black hole. Even if your investments produce high returns, how can you get the money out to spend it? Crypto can and will be used to skirt capital controls but we don't have nearly the market liquidity or the network capacity to make a dent in the macro picture. 

[aztecminer]

Capital controls are meant to work for exporting money outside of the county. Since the Chinese will deposit money directly to a Chinese company's account, that's being taxed for every transaction, it's perfectly legal.

Please be specific.  Which "Chinese company's account"?
Exactly how will that be done, considering https://en.wikipedia.org/wiki/Legality_of_bitcoin_by_country#China ?

Besides, when you hold Bitcoins right now, why should you transfer it abroad? It's where you live at anytime; I could understand diversification reasons, but would not advise BTC as a "means of fleeing capital abroad".

By that logic, Chinese people should be able to buy Euro or USD, as long as they keep it in China, right?  What am I missing?

@aztecminer we're talking about China.

right... but the election is 16 months away. .. instead of us focusing on immigration suddenly the election is about the obama's failing economy ... things china is doing probably is causing the stock market to crash .

It's crashing up today, so far.

looking at BFX as though more margin longs are opening. i'm just pointing out the facts.. maybe china will stop doing whatever it is they are doing causing the stock market to crash and everything will be great for election.. the fed can raise the rates to .25% as planned . .. i'm just saying that if the stock market keeps crashing then the fed might rally it again with QE and that would mean everyone will pile into stocks for the QE pump. i posted the link.. here it is again in case you missed it: http://www.newsmax.com/Finance/StreetTalk/jim-rogers-federal-reserve-economy-slowdown/2015/08/31/id/672878/

[findftp]

These cripplecoins are always many magnitudes better than our current quasi finite monetary counterpart (gold)

That's true...except for capacity.  There is no limit to the number of gold transactions/second.  

Brings up an interesting point.
How many physical gold transactions are currently made in the market?

[JayJuanGee]

Capital controls are meant to work for exporting money outside of the county. Since the Chinese will deposit money directly to a Chinese company's account, that's being taxed for every transaction, it's perfectly legal.

Please be specific.  Which "Chinese company's account"?
Exactly how will that be done, considering https://en.wikipedia.org/wiki/Legality_of_bitcoin_by_country#China ?

Besides, when you hold Bitcoins right now, why should you transfer it abroad? It's where you live at anytime; I could understand diversification reasons, but would not advise BTC as a "means of fleeing capital abroad".

By that logic, Chinese people should be able to buy Euro or USD, as long as they keep it in China, right?  What am I missing?

@aztecminer we're talking about China.

right... but the election is 16 months away. .. instead of us focusing on immigration suddenly the election is about the obama's failing economy ... things china is doing probably is causing the stock market to crash .

It's crashing up today, so far.

looking at BFX as though more margin longs are opening. i'm just pointing out the facts.. maybe china will stop doing whatever it is they are doing causing the stock market to crash and everything will be great for election.. the fed can raise the rates to .25% as planned . .. i'm just saying that if the stock market keeps crashing then the fed might rally it again with QE and that would mean everyone will pile into stocks for the QE pump. i posted the link.. here it is again in case you missed it: http://www.newsmax.com/Finance/StreetTalk/jim-rogers-federal-reserve-economy-slowdown/2015/08/31/id/672878/

Overall, I agree with your point.  I was merely making a snapshot observation regarding the stock market's price direction at that moment.... or at least, any such "stock market crash" seems to have leveled off in recent days.

[aztecminer]

China Scrambles To Enforce Capital Controls (Which Is Great News For Bitcoin)

Care to explain how capital controls are good for Bitcoin?  This is China we're talking about, do you suppose the government officials failed to consider that people might spirit away their money by "investing" it in foreign currencies, stockes, or even Bitcoin?

its gimped: http://www.newsmax.com/Finance/StreetTalk/jim-rogers-federal-reserve-economy-slowdown/2015/08/31/id/672878/

if the federal reserve rallies the stock market with more QE then all the money will go into stocks to ride the pump.

if QE fails and people start leaving the dollar then that is another story..

I have a lot of respect for Jim Rogers, but think about what you're saying: If QE IV fails, then we will be in a serious depression with DEFLATION.  Credit contraction will throw the money multiplier into reverse. Capital controls will compound the problem if they are implemented.

You are confusing the cause with the effect.  If the Fed resorts to more outright money printing (as opposed to merely keeping interest rates artificially low), then it means they (and by extension we) have already lost.  QE is straight up counterfeiting to reflate a bubble that has already popped.

People won't be leaving the dollar. The dollar will gain a lot of value because there won't be hardly any to go around.  TOO MUCH QE could cause hyperinflation, but only after a deflationary period.

Let's back up to look at the big picture: For decades, the cost of money has been artificially low because every little hiccup in the economy was treated with a dose of cheap credit.  The amount of private and public debt has gotten massive because some were borrowing to pay off earlier loans and others were borrowing to invest, chasing higher returns. Bubbles are caused by LEVERAGED investing. When the bubble pops, it's not the investors who suffer the lion's share of the loss. It's the creditors of those investors.

The banking system needs the equities bubbles to continue because if it doesn't, their losses will be so great as to make them insolvent. Not just a few banks. The entire system. No FDIC insurance can keep your deposits safe. 

Capital controls never work long term because it's like shutting the barn door after the horse has already escaped. Who in their right mind would invest in a country with capital controls? It's like throwing your money into a black hole. Even if your investments produce high returns, how can you get the money out to spend it? Crypto can and will be used to skirt capital controls but we don't have nearly the market liquidity or the network capacity to make a dent in the macro picture. 

i know.. they shouldn't "trust in god" for the fed to print more money .. i know this.. but they do dumb stuff all the time.. i seriously doubt that after six and half years of #abusivehightaxes that obama is suddenly going to start sending everyone checks like bush did to stimulate the economy.. if the stock market starts to crash they will have to do something or the election is about how gimp obama's and the demoncrats economy is.. maybe china will stop doing what they are doing and we wont have to worry about what the janet yellen will do about it... all what you said might be right but we cannot forget that politics we have an election ..

[billyjoeallen]

These cripplecoins are always many magnitudes better than our current quasi finite monetary counterpart (gold)

That's true...except for capacity.  There is no limit to the number of gold transactions/second.  

Brings up an interesting point.
How many physical gold transactions are currently made in the market?

Physical? Hard to calculate. Every jeweler, coin shop, pawnshop, futures settlement, paper gold redemption, dentist, mint, speaker wire purchase and bottle of Goldschläger would have to be included. I'm certain it's orders of magnitude over 7 tps.

[PoolMinor]

Probably a re-post.......


Quantitative Easing Explained

[ChartBuddy]

Coin
Explanation

[billyjoeallen]

i know.. they shouldn't "trust in god" for the fed to print more money .. i know this.. but they do dumb stuff all the time.. i seriously doubt that after six and half years of #abusivehightaxes that obama is suddenly going to start sending everyone checks like bush did to stimulate the economy.. if the stock market starts to crash they will have to do something or the election is about how gimp obama's and the demoncrats economy is.. maybe china will stop doing what they are doing and we wont have to worry about what the janet yellen will do about it... all what you said might be right but we cannot forget that politics we have an election ..

We will have an election between bankster cadidate "A" and bankster candidate "B".  It's Kang and Kodos https://en.wikipedia.org/wiki/Kang_and_Kodos, Giant Douche or a turd sandwich  https://en.wikipedia.org/wiki/Douche_and_Turd. The illusion of choice.  An anti-bankster candidate has zero chance. Look at what happened to Ron Paul.

The gov doesn't control the Banks. It's the other way around.  Just ask any Greek.

[findftp]

These cripplecoins are always many magnitudes better than our current quasi finite monetary counterpart (gold)

That's true...except for capacity.  There is no limit to the number of gold transactions/second.  

Brings up an interesting point.
How many physical gold transactions are currently made in the market?

Physical? Hard to calculate. Every jeweler, coin shop, pawnshop, futures settlement, paper gold redemption, dentist, mint, speaker wire purchase and bottle of Goldschläger would have to be included. I'm certain it's orders of magnitude over 7 tps.

Fair enough, I agree 7 tps is too small to cover current physical gold settlements although some are rather utility than investment grade settlements.

[billyjoeallen]

These cripplecoins are always many magnitudes better than our current quasi finite monetary counterpart (gold)

That's true...except for capacity.  There is no limit to the number of gold transactions/second.  

Brings up an interesting point.
How many physical gold transactions are currently made in the market?

Physical? Hard to calculate. Every jeweler, coin shop, pawnshop, futures settlement, paper gold redemption, dentist, mint, speaker wire purchase and bottle of Goldschläger would have to be included. I'm certain it's orders of magnitude over 7 tps.

Fair enough, I agree 7 tps is too small to cover current physical gold settlements although some are rather utility than investment grade settlements.

If there is no utility, then the investments are ponzi schemes. What gives Bitcoins their utility value is the ability to record titles and do timestamps of data on the blockchain.  With a transaction limit, that utility value is capped at the network transaction capacity.  A bitcoin that doesn't scale is like owning land where you are not allowed to develop it or use it for anything other than selling to some other sucker. Some people buy raw land like that in the hopes of use restrictions being relaxed in the future, but it is a huge gamble. That is the State of Bitcoin right now. Without a predictable schedule of blocksize increases, it's just a speculative bet, not an investment.

[ChartBuddy]

Coin
Explanation

[fonsie]

So let me guess, in 90 days nobody remembers this XT nonsense 

Wether XT gets adopted or not, it has served it's purpose and can already put a checkmark in the WIN category. If you are capable of recognising its victory is a problem you can better deal with on your own terms.

[rebuilder]

Why would the miners not sell their BTC directly for USD (on any exchange), instead of selling it to other Chinese people, who, in turn, would sell it for USD (thus bypassing capital controls)?  How would the latter create greater demand for BTC?

Edit: And how exactly would the miners (as in large-scale "business") sell BTC to (Chinese) individuals?  Would that not change their legal standing? (genuinely not sure)

Like I said, they have local costs to cover. If they can get a premium for selling in local currency there's a profit in selling at least enough to cover their running expenses for CNY.

As for legal standing, I'm as clueless as you are. The Wikipedia article you linked states banks and financial institutions are prohibited from transacting in BTC. A miner is hardly a bank, but what constitutes a financial institution, I can't say. Like I said, miners would likely be wary of irritating the state - even if they are allowed to sell BTC to the public now that might easily change.