Why BitCoin is about to explode again

[Matthew N. Wright]

Shouldn't this be in Speculation?

[Its About Sharing]

It is the only way to go, then they will reset all the worlds debts, introduce a digital coin or modify Bitcoin to where it's centralized, get rid of physical cash, and chip your butthole into the new world order.

This they that you speak of, is it the same they who are responsible for the current problems?

Something tells me that isn't going to go over real well...

same they, the crash might have already started Japan nikkei is having wild 600 point intraday swings. The Nikkei has always been volatile but this is still ridiculously volatile. Other world markets are in confirmed downtrends some are in bear markets, Greece and Japan, now it's the US turn to follow. If we don't get another massive QE pump the collapse may have already started, before year end.

I knew you knew the they... (see below)  

The thing that is not 100% clear to me is how do the markets drop if they are pumping them full of money, in two ways really:
1 - The artificially low interest rates make many savers (e.g. Japan, Germany, US, etc.) move money to the stock market - This adds to the building bubble.
2 - Banks are moving their money into assets (e.g. stock markets).

Now, how can that not be enough money to keep the markets going? Who is selling so much? It seems like the government is pumping the markets and thus allowing people with lots of shares to maybe start exiting before the crash? It isn't common Joe doing this.

Anyone?

Basically by inflating the markets this way it creates a false economy that is not in line with actual supply and demand, since the supply is artificial.

Imagine a game of Monopoly. The banker just gives you money from the box for the asking instead of making you actually earn it, which itself is paper and inherently worthless and more can be printed at any time. You use that money to buy houses and hotels to put on your properties also bought with this money. The problem is you can overbuild past demand because you can just keep getting more and more money. This creates an artificial economy. Building hotels on properties without any actual demand or need for them soon makes them insolvent as no one stays there. Soon the loans need paid back, and there is no rent coming in for these properties you built. You default on the loan, the bank has to add it to a mounting pile of unpaid debt. Otherwise called "insolvency". Soon your wive leaves you, you lose your house and become homeless, and probably use what you have left to start a drug addiction.

China has been doing exactly this, however they are building entire cities that are inhabited by no one and give nothing back to their real economy. The building keeps people employed, and construction businesses alive, and commodities markets alive to provide the raw materials. Without large bank loans to fund this construction, it would all grind to a halt because these cities are not generating any revenue to repay the loan needed to create them. 50 million workers would no longer have jobs, and the economy takes a serious hit when the reality of supply and demand snap back in line with how it really is. Businesses close, commodities markets bust, stock market goes down in flames, etc. This is in the process of happening right now.

This is going on all over the world thanks to Bernake's money press pumping funny money into the system constantly just to keep it all moving. There is no demand for the supply, because the supply is being driven by money that is created out of thin air and given away as credit instead of spent by people with a need for a service or product.


You can see how Bitcoin solves this by not allowing this kind of debt as our fractional reserve fiat system does, as Bitcoin essentially acts like a loan made in cash only, instead of a theoretical liability for the bank that can always just get more of the FEDs endlessly printed currency backed on absolutely nothing. As these markets start to burn bright, Bitcoin can swoop in and save the day, just like Cyprus.

Thanks for the thorough explanation. What is happening to PE ratios during this time? I mean are things getting back to the Internet bubble valuation days?

The interesting thing, which you alluded to, is that we the people are not really getting any of the money. It would be great if, like Max Keisser said, instead of giving the money to banks, they used some to raise the minimum wage rate to $20 hr.     

I just wonder how long this can continue? Bernanke said that they are going to ease up on QE. But if they touch interest rates, things might go BOOM. The USD will probably not fail before some other currencies go though.

They (we) are between a rock and a hard place, more like between two pieces of depleted uranium...

[jml]

Read up on fascist and communist governments there is plenty they can do to squash the idea and the people, especially with all the anti-gun idiots, who needs guns, we will defend against a fascist military force with bow and arrows.

When enough people get killed and murdered you won't hear much about said ideas, everyone will conform out of fear, I like your optimism but things are not going to get better when 99% of the people won't join in.

they cant suppress people forever. they failed to do this when there was no internet or phones. now people can communicate and coordinate actions which lessens advantage governments have over us. Also we always will be in bigger numbers and even police or army can join us too. They are also people who might not like new order even if it pays them.

More governments have been overthrown in the last 5 years than any other time in history, and tools like Twitter were integral to that. Remember what happened in Egypt? They shut down the Internet and that just made it worse. That regime is now dead. They still have a lot of problems for sure, but the point is all over the world right now this second people are not standing for it.

https://en.wikipedia.org/wiki/2013_protests_in_Turkey the 99% there seem to have no problem telling the police and government go fuck themselves

This isn't in America yet because we're doing better than the rest of the planet, because we print the worlds reserve currency. But look at Detroit and other cities that are crumbling, more and more now broke, jobless, and/or homeless. We already saw some sparks with the Occupy movement. The more freedoms are encroached upon, the more reaction there will be. When people lose the comfort of American Idol and blissful ignorance, they will be face to face with a cold, disgusting reality that the rest of the world already knows. Most people here no longer trust the media, with the NSA being outed as the 1984 Ministry it is public trust in our banks and government is vanishing quickly.

Decent Human beings don't want to believe such evil exists because it is so extreme. But I think we're starting to wake up finally to the simple fact something must be done. I myself am a financial exile with noting left to lose. All I am doing with my time now is whatever I can to kick the status quo in the teeth, and I am not alone.

You are definitely not alone and I share the same worries that you have stated.

Not only we live in a world were we are now worse off than our parents, but I am sure that if this trend continues where the rich get even richer and the middle class is squeezed to nothing, our children will end up much worse off than this generation. I believe it is time to advocate our right to the city and it is there where people SHOULD make a stand (Read Levebre http://en.wikipedia.org/wiki/Right_to_the_city). The problem is that too many people are either busy, home-owners or are dependent by others or are simply oblivious of the situation.

[savantguy]

I can't help but think the demand for alternatives will keep rising as the central planners and the death of socialism keeps on trucking...

[Pinwheel]

Read up on fascist and communist governments there is plenty they can do to squash the idea and the people, especially with all the anti-gun idiots, who needs guns, we will defend against a fascist military force with bow and arrows.

When enough people get killed and murdered you won't hear much about said ideas, everyone will conform out of fear, I like your optimism but things are not going to get better when 99% of the people won't join in.

 According to some calculation which been made in 1970s, around 60% world population will be killed during one year, and then situation will stabilize. Historically world been solving unsolvable problems by migrating, making economical growth or technological advancements, or by using military force. Non of other options on the table by military force at this time.

[Adrian-x]

According to some calculation which been made in 1970s, around 60% world population will be killed during one year, and then situation will stabilize. Historically world been solving unsolvable problems by migrating, making economical growth or technological advancements, or by using military force. Non of other options on the table by military force at this time.

According to contemporary economists exponential growth forever.
According to a bunch of calculating hippies from the 1970s the bubble's gona pop.   

[justusranvier]

According to some calculation which been made in 1970s, around 60% world population will be killed during one year, and then situation will stabilize.

Those calculations completely ignore the plummeting (and entirely unpredicted) global fertility rate that is right now hovering just barely over the replacement level. We'll see population growth stop and then gradually reverse within the next few decades because women are choosing to have fewer children as populations move away from subsistence level standards of living. The population will probably flatten out and then start a very slow decline at just under 10 billion.

[Crypt_Current]

According to some calculation which been made in 1970s, around 60% world population will be killed during one year, and then situation will stabilize.

Those calculations completely ignore the plummeting (and entirely unpredicted) global fertility rate that is right now hovering just barely over the replacement level. We'll see population growth stop and then gradually reverse within the next few decades because women are choosing to have fewer children as populations move away from subsistence level standards of living. The population will probably flatten out and then start a very slow decline at just under 10 billion.

But we need the magical number of 10 billion to mimic the neurons in a human brain, so as to promote "global consciousness"
 

[donjonson]

I dont think that even one cvprus citizen bought a bitcoin. When they seized your bucks the last think you want to do is put yourlast coins in a highly speculative market like btc is. Dont buy the press. I read the press that in Argentina we re almost paying in the supermarket with bitcoins because our outrageous crisis. None of them is true too.

BTC will really rise if it gets into the real economy (starbucks, real estate, restaurantes...) accepting it. This is why for me the new start ups that are now being funded are the real middle-term very good news.

[Bogdan]

Im not so sure this is something to celebrate about.

[Pinwheel]

According to some calculation which been made in 1970s, around 60% world population will be killed during one year, and then situation will stabilize. Historically world been solving unsolvable problems by migrating, making economical growth or technological advancements, or by using military force. Non of other options on the table by military force at this time.

According to contemporary economists exponential growth forever.
According to a bunch of calculating hippies from the 1970s the bubble's gona pop.   

in fact that was not a hippies calculation, but made by J Forrester father of System Dynamics and nowadays scenario not much different from how he described it in late 70s in his first book.

[Operatr]

I dont think that even one cvprus citizen bought a bitcoin. When they seized your bucks the last think you want to do is put yourlast coins in a highly speculative market like btc is. Dont buy the press. I read the press that in Argentina we re almost paying in the supermarket with bitcoins because our outrageous crisis. None of them is true too.

BTC will really rise if it gets into the real economy (starbucks, real estate, restaurantes...) accepting it. This is why for me the new start ups that are now being funded are the real middle-term very good news.

Moving your funds to Bitcoin, a place where no bank can touch you, certainly would beat out having your money stolen by your own bank. Is it any more risky to leave your money with an institution that can just steal it whenever they want to? If your money is in a bank, you no longer own it, the bank does.


More about Japan, set to be Cyprus 2.0

http://larouchepac.com/node/26931

[Matthew N. Wright]

I know the cultists will hate me saying this, but what's more likely-- a bank in your home country stealing your money or the price of bitcoin tanking as it's still a beta project of nerds that even the main developer says "don't put more into it than you can afford to lose"?

[BitcoinAshley]

So I'm a business in Cyprus (or another country with depositor bail-ins authorized, which is an increasing number of countries incl. USA, Canada, all of Europe, New Zealand, Japan, etc.)

I have $800,000 in my account for operating expenses.

After bail-in, I only have $100,000.

If I had put half of that $800,000 in Bitcoin, depending on when I invested -
-I might have twice that amount or 10 times that amount
-I might have exactly the same as that amount
-If I invested towards the top of the bubble, I might have half that amount.
In any case, I'd still have more money than the $100,000 that is left after the bail-in.

For comparison; if I had some in PMs I'd be able to sell it at ~25% below spot, which is STILL less of a loss than taking the bail-in head on, but PMs are much harder to use for the operating budget. (It's easy to convert BTC back and forth, and some companies pay employees in bitcoin and pay for web services, etc.)

I don't think the risk that bitcoin will flop is higher than the risk that a bail-in will occur in any given country. Remember, risk, in the end (beyond all the actuarial algorithms) comes down to judgement. One person can look at the financial news and say "Oh, that won't happen here ayntime soon; I'm safer in Fiat right now." Another person can look at the same news and say "A haircut could happen here any day; I don't want to be the fool who's all-in Fiat monday morning when the bank holiday is announced."

Remember, nobody in Cyprus had any idea it was coming (except those who were forewarned.) They woke up one day and all of a sudden the government had frozen their bank accounts and was talking about taking thousands upon thousands of dollars of their money. This strategy has been authorized in many other countries since then, and most of these countries are, for all intensive purposes, financially insolvent and hanging by a thread. The one thing I know for certain is that if there is a depositor haircut in my country, I am not going to know about it days in advance. And the strategy is already authorized by my government. I'm not a fool.

[Matthew N. Wright]

So I'm a business in Cyprus (or another country with depositor bail-ins authorized, which is an increasing number of countries incl. USA, Canada, all of Europe, New Zealand, Japan, etc.)

I have $800,000 in my account for operating expenses.

After bail-in, I only have $100,000.

If I had put half of that $800,000 in Bitcoin, depending on when I invested -
-I might have twice that amount or 10 times that amount
-I might have exactly the same as that amount
-If I invested towards the top of the bubble, I might have half that amount.
In any case, I'd still have more money than the $100,000 that is left after the bail-in.

I don't think the risk that bitcoin will flop is higher than the risk that a bail-in will occur in any given country. Remember, risk is individual. One person can look at the financial news and say "Oh, that won't happen here ayntime soon; I'm safer in Fiat right now." Another person can look at the same news and say "A haircut could happen here any day; I don't want to be the fool who's all-in Fiat monday morning when the bank holiday is announced."

Remember, nobody in Cyprus had any idea it was coming (except those who were forewarned.) They woke up one day and all of a sudden the government had frozen their bank accounts and was talking about taking thousands upon thousands of dollars of their money. This strategy has been authorized in many other countries since then, and most of these countries are, for all intensive purposes, financially insolvent and hanging by a thread. The one thing I know for certain is that if there is a depositor haircut in my country, I am not going to know about it days in advance. And the strategy is already authorized by my government. I'm not a fool.

I agree that if I were in Cyprus, I would have chosen Bitcoin over the banks (being already a bitcoiner of course). As a non-bitcoiner businessman with full knowledge of my company's legal requirements and responsibilities, much less accountability to investors or shareholders if any? Doubtful. As a business owner in any other country that doesn't seem to be in ruin like Cyprus? Most definitely *not*.

[Operatr]

So I'm a business in Cyprus (or another country with depositor bail-ins authorized, which is an increasing number of countries incl. USA, Canada, all of Europe, New Zealand, Japan, etc.)

I have $800,000 in my account for operating expenses.

After bail-in, I only have $100,000.

If I had put half of that $800,000 in Bitcoin, depending on when I invested -
-I might have twice that amount or 10 times that amount
-I might have exactly the same as that amount
-If I invested towards the top of the bubble, I might have half that amount.
In any case, I'd still have more money than the $100,000 that is left after the bail-in.

I don't think the risk that bitcoin will flop is higher than the risk that a bail-in will occur in any given country. Remember, risk is individual. One person can look at the financial news and say "Oh, that won't happen here ayntime soon; I'm safer in Fiat right now." Another person can look at the same news and say "A haircut could happen here any day; I don't want to be the fool who's all-in Fiat monday morning when the bank holiday is announced."

Remember, nobody in Cyprus had any idea it was coming (except those who were forewarned.) They woke up one day and all of a sudden the government had frozen their bank accounts and was talking about taking thousands upon thousands of dollars of their money. This strategy has been authorized in many other countries since then, and most of these countries are, for all intensive purposes, financially insolvent and hanging by a thread. The one thing I know for certain is that if there is a depositor haircut in my country, I am not going to know about it days in advance. And the strategy is already authorized by my government. I'm not a fool.

I agree that if I were in Cyprus, I would have chosen Bitcoin over the banks (being already a bitcoiner of course). As a non-bitcoiner businessman with full knowledge of my company's legal requirements and responsibilities, much less accountability to investors or shareholders if any? Doubtful. As a business owner in any other country that doesn't seem to be in ruin like Cyprus? Most definitely *not*.

I suppose in the end, at least in Bitcoin you actually have control. With a bank account in this world right now your "choice" is whatever the bank thinks is best for the bank. I'll trust my fellow tech nerds over the bankster thieves.

Bitcoin Ashley that is heinous 

[Jozzaboy]

So I'm a business in Cyprus (or another country with depositor bail-ins authorized, which is an increasing number of countries incl. USA, Canada, all of Europe, New Zealand, Japan, etc.)

I have $800,000 in my account for operating expenses.

After bail-in, I only have $100,000.

If I had put half of that $800,000 in Bitcoin, depending on when I invested -
-I might have twice that amount or 10 times that amount
-I might have exactly the same as that amount
-If I invested towards the top of the bubble, I might have half that amount.
In any case, I'd still have more money than the $100,000 that is left after the bail-in.

I don't think the risk that bitcoin will flop is higher than the risk that a bail-in will occur in any given country. Remember, risk is individual. One person can look at the financial news and say "Oh, that won't happen here ayntime soon; I'm safer in Fiat right now." Another person can look at the same news and say "A haircut could happen here any day; I don't want to be the fool who's all-in Fiat monday morning when the bank holiday is announced."

Remember, nobody in Cyprus had any idea it was coming (except those who were forewarned.) They woke up one day and all of a sudden the government had frozen their bank accounts and was talking about taking thousands upon thousands of dollars of their money. This strategy has been authorized in many other countries since then, and most of these countries are, for all intensive purposes, financially insolvent and hanging by a thread. The one thing I know for certain is that if there is a depositor haircut in my country, I am not going to know about it days in advance. And the strategy is already authorized by my government. I'm not a fool.

I agree that if I were in Cyprus, I would have chosen Bitcoin over the banks (being already a bitcoiner of course). As a non-bitcoiner businessman with full knowledge of my company's legal requirements and responsibilities, much less accountability to investors or shareholders if any? Doubtful. As a business owner in any other country that doesn't seem to be in ruin like Cyprus? Most definitely *not*.

I suppose in the end, at least in Bitcoin you actually have control. With a bank account in this world right now your "choice" is whatever the bank thinks is best for the bank. I'll trust my fellow tech nerds over the bankster thieves.

Bitcoin Ashley that is heinous 

Wow Ashley, I'm so sorry what happened to your money. People have killed for less.

All of europe though? the UK has a depositor bail-in? Well... shit. Maybe it's time to visit home and purchase silver.

[BitcoinAshley]

I agree that if I were in Cyprus, I would have chosen Bitcoin over the banks (being already a bitcoiner of course). As a non-bitcoiner businessman with full knowledge of my company's legal requirements and responsibilities, much less accountability to investors or shareholders if any? Doubtful. As a business owner in any other country that doesn't seem to be in ruin like Cyprus? Most definitely *not*.

I understand that businessmen with no knowledge of bitcoin wouldn't have any way to assess the risks of legacy banks vs. bitcoin.

As for the depositor bail-in risk assessment - The problem is, you are saying this after the fact. You say "any other country that doesn't seem to be in ruin like Cyprus" as if you would be able to see that coming. There are plenty of countries that are in financial ruin, taking bailouts, monetary debasement in full swing, housing, stock and bond bubbles galore...

It's easy to say "after the fact" that if you were a business owner in a country not "in ruin like Cyprus" you wouldn't take that risk. All I'm saying is that if you were a business owner in a country that WAS "in ruin like Cyprus," you wouldn't know it.

Wow Ashley, I'm so sorry what happened to your money. People have killed for less.

All of europe though? the UK has a depositor bail-in? Well... shit. Maybe it's time to visit home and purchase silver.

To clarify, I was outlining a hypothetical situation. There was in fact an IT business owner here who had approximately that sum in his company's bank account, and lost nearly all of it during the haircut (immediately moved his company to another country) and I was sort of echoing his situation. But I thank you for your sympathy

AFAIK, the ECB and other regulatory bodies have signalled that they are ready to take that approach in any Eurozone country to recapitalize banks. So if you are in the Euro and asking for a bailout, if the situation is bad enough, they will make a depositor bail-in a condition of the bailout.
The FDIC and some european agency collaborated on a formal strategy paper that included use of depositor haircuts to reimburse banks' gambling losses. This indicates that the policy is an option in the U.S. if it gets to that point.
Canada, Spain (already in Euro so doesn't really matter) and New Zealand have considered such legislation although I haven't followed through; I just assume that it passed.
Japan has just hopped on board now, it seems.

In the end, it doesn't matter whether it's legal or illegal in a specific country. If it's not explicitly legal, they can simply make it legal in an emergency session. What's important is that the precedent was set with Cyprus. And now Cyprus is scared to release its deposit stats for May because they need to figure out how to boost them back up after all the scared citizens dutifully withdrew 400EUR/day for the entire month. 

[Matthew N. Wright]

I agree that if I were in Cyprus, I would have chosen Bitcoin over the banks (being already a bitcoiner of course). As a non-bitcoiner businessman with full knowledge of my company's legal requirements and responsibilities, much less accountability to investors or shareholders if any? Doubtful. As a business owner in any other country that doesn't seem to be in ruin like Cyprus? Most definitely *not*.

I understand that businessmen with no knowledge of bitcoin wouldn't have any way to assess the risks of legacy banks vs. bitcoin.

As for the depositor bail-in risk assessment - The problem is, you are saying this after the fact. You say "any other country that doesn't seem to be in ruin like Cyprus" as if you would be able to see that coming. There are plenty of countries that are in financial ruin, taking bailouts, monetary debasement in full swing, housing, stock and bond bubbles galore...

It's easy to say "after the fact" that if you were a business owner in a country not "in ruin like Cyprus" you wouldn't take that risk. All I'm saying is that if you were a business owner in a country that WAS "in ruin like Cyprus," you wouldn't know it.

Your argument hinges on Cyprus having not given any notice (legal or otherwise) before taking funds, and I mean anywhere, not even in parliament. I'm not convinced "no one" saw this coming, as "someone" had to enact it.

[Chainsaw]

I agree that if I were in Cyprus, I would have chosen Bitcoin over the banks (being already a bitcoiner of course). As a non-bitcoiner businessman with full knowledge of my company's legal requirements and responsibilities, much less accountability to investors or shareholders if any? Doubtful. As a business owner in any other country that doesn't seem to be in ruin like Cyprus? Most definitely *not*.

I understand that businessmen with no knowledge of bitcoin wouldn't have any way to assess the risks of legacy banks vs. bitcoin.

As for the depositor bail-in risk assessment - The problem is, you are saying this after the fact. You say "any other country that doesn't seem to be in ruin like Cyprus" as if you would be able to see that coming. There are plenty of countries that are in financial ruin, taking bailouts, monetary debasement in full swing, housing, stock and bond bubbles galore...

It's easy to say "after the fact" that if you were a business owner in a country not "in ruin like Cyprus" you wouldn't take that risk. All I'm saying is that if you were a business owner in a country that WAS "in ruin like Cyprus," you wouldn't know it.

Your argument hinges on Cyprus having not given any notice (legal or otherwise) before taking funds, and I mean anywhere, not even in parliament. I'm not convinced "no one" saw this coming, as "someone" had to enact it.

You're correct there, Matthew. If you look at public withdrawal amounts, they "inexplicably" surged shortly before the bail-in was announced.  It seems to suggest that a few key players were informed ahead of time.