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Author Topic: Can you guess what this bubble is from and why they have it..  (Read 2424 times)
GriTBitS
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December 13, 2013, 02:45:03 AM
 #1



so this is the germany paper mark / german gold mark money after WW1 looks alot like the dollar / bitcoin.....

so if there is a bubble its the dollar not bitcoin!
read here,,,   http://www.usagold.com/germannightmare.html
or read a little below


The mechanism of inflation was simple. The government issued paper promises to pay, and the Reichsbank issued money on the security of these promises. When a government spends more than its income, it must borrow. If it merely borrows money from its citizens by selling them bonds, there need be no inflation. Instead of that money being spent or invested by the citizen, it is borrowed and spent by the government, but the total amount of money is not increased.

When the government needs more money than its people are able or willing to lend it, it monetizes the debt. That is what happens in this country when the government runs a big deficit. The Federal Reserve (our central bank) "buys" as many bonds as necessary to stabilize the market. It prints money on the security of these bonds. Despite the facade of the government supposedly "borrowing," the net result is the creation of printing press money. (Actually these days the money is created in the form of new bank deposits--checkbook money--but the net result is exactly the same as if bills were printed.)

This is what happened in Germany. The government issued notes which were promptly discounted by the Reichsbank, i.e., the bank issued money on the "security" of these worthless notes. To compound the evil, the bank failed to raise its interest rate sufficiently. Businessmen found it very profitable to borrow money from the bank and buy up goods, shares and companies. Their debt was wiped out within weeks by the rapid inflation, and the businessman remained holding the valuable assets he had bought. The net result was a huge "private inflation" caused by the rapid expansion of credit. Even foreign exchange was bought with borrowed money, so that the Reichsbank actually financed speculation against its own currency. Yet the bank refused to raise interest rates, arguing that this would only add to the cost of business and thus would increase inflation!

The tax system virtually broke down. Businessmen found that by merely delaying tax payments, the depreciation in the mark would virtually eliminate their true value. But the government, lacking adequate income, felt forced to resort more and more to creating money. By October 1923, 1% of government income came from taxes and 99% from the creation of new money.


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GriTBitS
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December 13, 2013, 02:50:59 AM
 #2

This is exactly why there is no reason to cash out!!!!!


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adamstgBit
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December 13, 2013, 02:56:14 AM
 #3

being inflation proof is merely a consequence of bitcoin awesomeness.


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December 13, 2013, 02:57:54 AM
 #4

If all of this is only because the dollar was depreciating, then everything else (food, gazoline, news paper) would be rising as fast in price as bitcoin, so no.
However, you are right that monetary inflation is a large incentive to get into bitcoin.
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December 13, 2013, 03:12:52 AM
 #5

It's not rising because most of the inflation is passed to other countries requiring dollars to buy oil, then that money is turned around and used to buy US bonds. Its a Circle jerk, also every country out there is in a race to debase there currency. Other wise the goods they produce would be more expensive to make, then the imports they send to the US to obtain dollars would be harder to get because the are competing against other countries that are importing to the US. NAFTA was a must to keep the free imports coming! So they dont have to use their own money to buy dollars causing massive currency scarcity in there own coutry. I love that everyone is all about bitcoin.. But money people need to go read and learn about money. Like really learn about the US dollar and the true history behind it. After you do. Price really doesnt matter because you know the dollar will fail and anyone holding any thing other then bitcoin is going to be fucked. You might be like i have gold and silver... Well you need to think about that for a second... Under Obama care everyone has to register there holding and the exchanges have to get proper identification on who owns these precious metals. Think they can't or wont come get your gold?.?.?. Its already happen once in the past 100 years and it will probably happen again. Also it was illegal to even own gold bullion... Im not a gold bug but i do know that atleast no one can take your bitcoins. So that in its self should be all the more reason to never sell!


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*   Collect with Trust   *
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