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Author Topic: Down to zero it goes!  (Read 6147 times)
bitcoin0918
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June 25, 2011, 04:00:30 PM
 #1

Well, there it goes, down to zero. It had a good run while it lasted, but this was the obvious end result.

Here's the chart of its lifetime:



Goodbye USD, hello BTC! Why, what did you think I was talking about? Grin

"So you think that money is the root of all evil?" said Francisco d'Aconia. "Have you ever asked what is the root of money?" [contd.]
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Gabi
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June 25, 2011, 04:04:32 PM
 #2

Lol nice graph
onesalt
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June 25, 2011, 04:42:38 PM
 #3

Huh wierd because most banks offer intesterest at rates better than inflation and I can still use my money to buy things?
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June 25, 2011, 04:48:57 PM
 #4

Huh wierd because most banks offer intesterest at rates better than inflation and I can still use my money to buy things?

Higher than the CPI, not the real price inflation.
bitcoin0918
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June 25, 2011, 04:58:54 PM
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Huh wierd because most banks offer intesterest at rates better than inflation and I can still use my money to buy things?
Wow, bank rates higher than 10%?! Where do you live?

"So you think that money is the root of all evil?" said Francisco d'Aconia. "Have you ever asked what is the root of money?" [contd.]
Justsomeforumuser
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June 25, 2011, 04:59:30 PM
 #6

I can get 4.2% interest for a 3 year guaranteed treasury/whatever it's called in english deposit.

Yay EUR land.


Also what bollocks in the OP. The USDX is back over 75 and it's going to move higher again, just like Gold is going to lose that 1500$ mark.

Nobody anywhere benefits from the USD "going to zero".


Also lal @ shadowstats. I should just start selling tinfoil hats for BTC, would go like hotcakes. Next to the tulips and bridges, that is.

Ho-Hum.
bitcoin0918
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June 25, 2011, 05:04:06 PM
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Also lal @ shadowstats. I should just start selling tinfoil hats
How is it a conspiracy theory? It's a fact that CPI measurement techniques have changed multiple times over the last few decades, with the observed result of reporting a lower amount of inflation as compared to previous measurement techniques. Whether or not there were political motives behind these CPI changes is irrelevant when one's only goal is to accurately compare present inflation to past inflation.

I'm not interested in conspiracies, only in preserving my wealth. And to do so requires that I am able to objectively measure long-term changes in the value of the dollar. If CPI measurement techniques change over time, they necessarily must be re-adjusted to correct for these changes. This is not an argument, not a conspiracy theory, but a fact.

"So you think that money is the root of all evil?" said Francisco d'Aconia. "Have you ever asked what is the root of money?" [contd.]
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June 25, 2011, 05:08:54 PM
 #8

Oh I agree that a ton of stats are misreported or measured (NFP birth/death adjustment just as an example).

I just would also say that SS is a classic "zomgwtfbbq" site in tone and usually used by people who talk about "the amero" and other such sillyness.
It's been a consistent phenomenon.

And ever since seeing my first "zomg USD going to 0" post in 2006 on a forex related forum this has continuously been a recurring theme, month in, month out. Stuff like inflation talk, gold hyping and "one world currency" is usually not far behind. Sometimes the Rothschilds and masons get a go, too!

Ho-Hum.
bitcoin0918
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June 25, 2011, 05:10:23 PM
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I just would also say that SS is a classic "zomgwtfbbq" site in tone and usually used by people who talk about "the amero" and other such sillyness.
It's been a consistent phenomenon.
Yes, it has been. Another consistent phenomenon has been the rejection of alternative CPI measurements via guilt-by-association fallacies such as the one you present above.

"So you think that money is the root of all evil?" said Francisco d'Aconia. "Have you ever asked what is the root of money?" [contd.]
ribuck
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June 25, 2011, 05:25:48 PM
 #10

I can get 4.2% interest for a 3 year guaranteed treasury/whatever it's called in english deposit.
Inflation in the UK is 4.2% if measured by the CPI, 5.1% if measured by the more realistic RPI, and a bit more still if measured by how much the cost of living is increasing for the average person.

So an interest rate of 4.2% is, at best, not making any money. At worst, it's losing a few percent of real value each year. And that's before taking into account that most people will need to pay tax on any interest that they earn. And before taking into account that inflation will probably be a lot higher before this 3-year investment matures.

When I was younger, you could generally count on making 3% from a savings account after tax and after inflation. That hasn't been possible for a few decades now.
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June 25, 2011, 05:58:29 PM
 #11

nice graph

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JTaBitCoinKing
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June 25, 2011, 06:46:10 PM
 #12

I got some dehydrated food, some silver, and my first Bitcoin miner arrives on Monday. I'm ready for the Apocalypse. Let the p2p revolution begin! Send these greedy bankers packing!

REMEMBER THE ALAMO!!!!...

Actually, I don't care about the Alamo.
I'm in California!  Grin
unk
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June 26, 2011, 01:37:40 AM
 #13

I can get 4.2% interest for a 3 year guaranteed treasury/whatever it's called in english deposit.
Inflation in the UK is 4.2% if measured by the CPI, 5.1% if measured by the more realistic RPI, and a bit more still if measured by how much the cost of living is increasing for the average person.

So an interest rate of 4.2% is, at best, not making any money. At worst, it's losing a few percent of real value each year. And that's before taking into account that most people will need to pay tax on any interest that they earn. And before taking into account that inflation will probably be a lot higher before this 3-year investment matures.

When I was younger, you could generally count on making 3% from a savings account after tax and after inflation. That hasn't been possible for a few decades now.

bitcoin doesn't change any of this. the inflation of fiat currencies, and its effects, are very poorly understood on these forums in general.

the income from interest came from the participation of your savings accounts in the growth of the economy. the income from the hoped-for deflation of your bitcoins (based on bitcoin's future monetary policy, because of course bitcoins are right now substantially more inflationary than any fiat currencies, monetarily speaking, and they will remain so for some time) will come from exactly the same source. if the economy does not grow in real terms, there's no way that everyone can receive positive risk-free returns; there's nothing to do but shift the existing or dwindling wealth from person to person.

i still bristle when i see people in these forums angry at the inflation of fiat currencies. the comparison to bitcoins is misleading. nobody received a dollar in 1913 and expected it to have the same purchasing power in 1999. and during the inflation that the original poster's chart shows, the united states was, with a handful of exceptions, both prospering and increasing its prosperity; the inflation of the money supply did not stop that. moreover, as i've tried to explain before, monetary policy does not force inflation's effects on people; anyone could purchase other assets (though not with infinite flexibility, given the outlawing of private holding of gold, which is a more serious regulatory intrusion than monetary inflation) with their cash if they wanted to avoid the effects of inflation. other regulations, including tax laws, have imposed limits on people's abilities to invest arbitrarily, but that is not the fault of monetary policy. the anger at the 'inflation' of 'fiat currencies' is, for these reasons, rather bizarre, and honestly the frequency with which it's repeated here increases the amateurish and fringe feel of the community.

there are a lot of things to be angry at central banks for. that the dollar inflated throughout the 20th century is not one of them.
bitcoin0918
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June 26, 2011, 02:27:44 AM
 #14

the income from interest came from the participation of your savings accounts in the growth of the economy. the income from the hoped-for deflation of your bitcoins (based on bitcoin's future monetary policy, because of course bitcoins are right now substantially more inflationary than any fiat currencies, monetarily speaking, and they will remain so for some time) will come from exactly the same source.
Nobody but speculators are hoping to gain *income* from bitcoins. Bitcoins are not an investment, and are not supposed to pay a return.

Quote
if the economy does not grow in real terms, there's no way that everyone can receive positive risk-free returns; there's nothing to do but shift the existing or dwindling wealth from person to person.
Economic growth requires capital, which comes from savings. It is not savings that depends on economic growth, but the other way around. So long as people save, there will be money for future economic growth. Only when monetary policy intervenes to discourage savings does the economy suffer.

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nobody received a dollar in 1913 and expected it to have the same purchasing power in 1999.
From where have you summoned such omniscience? Look up the concept of the "99-year loan" - which was much more common in the past, but is unheard of today.

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during the inflation that the original poster's chart shows, the united states was, with a handful of exceptions, both prospering and increasing its prosperity
Correlation is not causation. The US was prosperous despite its degrading purchasing power, and would have been even more prosperous had the currency been stable.

Quote
moreover, as i've tried to explain before, monetary policy does not force inflation's effects on people
Given that the US dollar has a government-backed monopoly on legal tender, forcing people who want to trade with others to accept US dollars, I will vehemently disagree with this claim. You are basically saying, "if you don't like it - leave!" That is not an argument.

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the anger at the 'inflation' of 'fiat currencies' is, for these reasons, rather bizarre, and honestly the frequency with which it's repeated here increases the amateurish and fringe feel of the community.
Fortunately, feelings are no substitute for rationale. Your feelings will be disregarded.

"So you think that money is the root of all evil?" said Francisco d'Aconia. "Have you ever asked what is the root of money?" [contd.]
unk
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June 26, 2011, 02:37:04 AM
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the income from interest came from the participation of your savings accounts in the growth of the economy. the income from the hoped-for deflation of your bitcoins (based on bitcoin's future monetary policy, because of course bitcoins are right now substantially more inflationary than any fiat currencies, monetarily speaking, and they will remain so for some time) will come from exactly the same source.
Nobody but speculators are hoping to gain *income* from bitcoins. Bitcoins are not an investment, and are not supposed to pay a return. If there were bitcoin banks that paid interest for bitcoin savings, then the situation would be identical to current savings banks.

you misunderstand my point, or perhaps you haven't fully thought through the economic landscape. right now, bitcoins are used almost entirely as a speculative vehicle, but if they took on the form of an operational currency, there could indeed be 'income' through simple monetary deflation against the economy that bitcoin represented.

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Economic growth requires capital, which comes from savings. It is not savings that depends on economic growth, but the other way around. So long as people save, there will be money for future economic growth. Only when monetary policy intervenes to discourage savings does the economy suffer.

again, you misunderstand or are applying insufficient analysis. a statement like 'it is not savings that depends on economic growth, but the other way around' is not analytically coherent because we're not describing a mutually exclusive causal process. economic growth in a capitalistic system both requires and rewards investment; 'requires' does not eliminate or oppose 'rewards' in that sentence.

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nobody received a dollar in 1913 and expected it to have the same purchasing power in 1999.
You have summoned this omniscience from where, exactly? Look up the concept of the "99-year loan" - which was much more common in the past, but is unheard of today.

again, this is a misunderstanding. a long-term loan is not inconsistent with anything i've said.

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Given that the US dollar has a government-backed monopoly on legal tender, forcing people who want to trade with others to trade in US dollars, I will vehemently disagree with this claim. You are basically saying, "if you don't like it - leave!" That is not an argument.

i've shown at least two or three times, in other discussions, exactly why this is wrong. i said that in my last message, and you could have looked it up before responding in ignorance. the 'legal tender' laws do not force anyone to hold fiat currencies long-term and thus experience their long-term inflationary effects. the transaction costs of moving out of fiat currency are minimal in most contexts. moving back in occasionally incurs capital-gains taxes, but that is then a feature of the taxing laws, not the legal-tender laws, that may discourage particular types of investments; the taxing laws are not neutral as to the choice of investments, but that is not an indictment of monetary policy. and in any event, it is easy to avoid capital-gains taxes, in these contexts, in nations like the united states and the united kingdom using a variety of practical mechanisms.

if you think that you are forced to experience the inflation of fiat currencies, you're simply mistaken. i have significant holdings, and about 5% of them are in fiat currencies and thus subject to any sort of inflation. few people with significant wealth choose a portfolio more weighted toward cash in the long term, for obvious reasons.

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Fortunately, feelings are no substitute for rationale. Your feelings will be disregarded.

yet my scholarship is often cited, my businesses prosper, and my teaching is influential. your dismissive arrogance in response to me is startling given that you don't appear to have understood anything i've said.
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June 26, 2011, 02:47:02 AM
 #16

I got some dehydrated food, some silver, and my first Bitcoin miner arrives on Monday. I'm ready for the Apocalypse. Let the p2p revolution begin! Send these greedy bankers packing!

REMEMBER THE ALAMO!!!!...

Actually, I don't care about the Alamo.
I'm in California!  Grin
Actually, no.

Remember A.Lamo  Angry

I'm just a poor boy, from a poor family:
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June 26, 2011, 03:03:18 AM
 #17








What's wrong with that chart? It's a masterpiece!

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bitcoin0918
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June 26, 2011, 03:06:11 AM
 #18

few people with significant wealth choose a portfolio more weighted toward cash in the long term, for obvious reasons.
Exactly, and because these reasons discourage savings, and savings is a necessity for economic growth, the economy suffers. It may still prosper overall, but it will not prosper as much as it could have.

No matter how you try to paint it, the loss of real purchasing power does not benefit anyone but those who use it to their advantage (which in this case are politicians who use deficit spending to fund short-term projects to gain votes, and then encourage an inflationary policy to pay off past debt with devalued currency)

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yet my scholarship is often cited, my businesses prosper, and my teaching is influential.
Your appeal to authority, on the other hand, is not influential.

"So you think that money is the root of all evil?" said Francisco d'Aconia. "Have you ever asked what is the root of money?" [contd.]
CurbsideProphet
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June 26, 2011, 03:06:42 AM
 #19

Where are you getting rates better than inflation? I think inflation has been about 4% lately (at least that is what the government says), but banks around here are only offering like 2% if you are lucky.

Where are you getting 4% inflation?  TIPS just sold for a record low last week.  If the market (read: not the gov't) was pricing for inflation, TIPS would not be at the yield they are.  I'm curious where you're getting your information.

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June 26, 2011, 03:08:03 AM
 #20

i still bristle when i see people in these forums angry at the inflation of fiat currencies. the comparison to bitcoins is misleading. nobody received a dollar in 1913 and expected it to have the same purchasing power in 1999

To the contrary, I imagine plenty of the people who received silver dollars in 1913 expected those dollars to have the same purchasing power... or even greater... by the end of their children's lifetimes. And, hey, they pretty much were right! It's those who held paper dollars that got screwed. Sad

Oh, but that's their own fault though, right? These largely rural, pre-WWI folks should have known not to trust the government, and to save and conduct business in precious metals only... that's what their government schools taught them to do, after all. (Not.)


Quote
there's a lot to be angry at central banks for. that the dollar inflated throughout the 20th century is not one of them.

Yes, it absolutely is the fault of the central bank. Inflation is an increase in the money supply. The central bank is the primary entity which increases the money supply. Ergo, the central bank is responsible for inflation throughout the 20th century.

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The idea that deflation causes hoarding (to any problematic degree) is a lie used to justify theft of value from your savings.
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