Mt Gox's demise/aftermath is actually a heavy blow to Keynesian economic theory

[solid12345]

A lot of the trolls on CNN's comment section were gloating yesterday, but we are having the last laugh, when you think about it the Lehman Brothers or Bear Sterns of the crypto world folded yesterday...and nothing happened. In fact BTC and other alts are rallying because of it. If Mt Gox were a major US bank, we'd be having fed policy makers locked behind doors for days on end figuring out how to bail them out and arguing if we don't do anything, bitcoin could suffer a "Catastrophic" collapse.

I am convinced '08 was nothing more than a big lie to steal trillions in wealth from middle-class Americans with fears that if we don't bail out the big banks, our whole economic way of life is on the line. I think had we gone over the cliff and let these big banks failed we might have even seen a major market rally due to the free market correction.

[Peter Lambert]

A lot of the trolls on CNN's comment section were gloating yesterday, but we are having the last laugh, when you think about it the Lehman Brothers or Bear Sterns of the crypto world folded yesterday...and nothing happened. In fact BTC and other alts are rallying because of it. If Mt Gox were a major US bank, we'd be having fed policy makers locked behind doors for days on end figuring out how to bail them out and arguing if we don't do anything, bitcoin could suffer a "Catastrophic" collapse.

I am convinced '08 was nothing more than a big lie to steal trillions in wealth from middle-class Americans with fears that if we don't bail out the big banks, our whole economic way of life is on the line. I think had we gone over the cliff and let these big banks failed we might have even seen a major market rally due to the free market correction.

I would hardly call the price dropping from 850 to 550 "nothing" (if you go back to before the mtgox trouble started). MtGox started having trouble almost a year ago, when they suddenly stopped being served by Dwolla and withdrawals slowed or stopped. In that time, the bitcoin community has had the chance to move to other exchanges. It boggles my mind that MtGox still had millions of dollars left to lose.

This should be moved to 'economics'.

[Sheldor333]

So the people who lost hundreds of thousands or millions of dollars just get a pat on the head and a consolatory, 'free market economics lol''?
Mt. Gox just beebopped away with a king's ransom and everyone on this sub just can't wait to tell the next rube about how now is the best time to buy Bitcoin...it truly boggles my mind.

[user2]

What Keynes has to do with bailing out banks?

[proudhon]

So the people who lost hundreds of thousands or millions of dollars just get a pat on the head and a consolatory, 'free market economics lol''?
Mt. Gox just beebopped away with a king's ransom and everyone on this sub just can't wait to tell the next rube about how now is the best time to buy Bitcoin...it truly boggles my mind.

It is harsh, I understand that, but many of us early adopters experienced pretty significant losses years ago, reported about them, and have warned people against letting 3rd parties hold significant sums of bitcoin.  It's difficult for me to imagine that anybody with assets on Gox wasn't aware of the risk. 

With bitcoin people you can choose to securely hold them themselves.  Sure, it can be a bit technical, but if you can follow cooking instructions, pretty much anybody can do it.  In a market like this, people learn from their own mistakes or the mistakes of others and adapt and educate themselves, or they assume the risks of great potential loss.

A very large number of people who failed to learn from the lessons of those of us who lost money years ago just got their own very costly lesson.  I'm sorry for it.  Either those people will leave this market, or they'll adapt.  Either way the maturity level and education level of this economy will go up.

[bananas]

Keynes is the most wrong person in economy after Marx, the world has proven it already.

[Lauda]

If you look at Bitstamp today, the price has been recovering and I'm hoping for $600+ soon.

[leopard2]

Keynes is the most wrong person in economy after Marx, the world has proven it already.

Keynes invention, the world currency bancor, was supposed to be partially covered by gold

http://en.wikipedia.org/wiki/Bancor

Of course if Gox was a bank, it would be bailed out. It is intended that USD survives but not BTC. What bailouts do is that they prevent small bubbles from bursting by creating a big one.

BTC is already a world currency, just not one that is accepted from the top.

[benjamindees]

A lot of the trolls on CNN's comment section were gloating yesterday, but we are having the last laugh, when you think about it the Lehman Brothers or Bear Sterns of the crypto world folded yesterday...and nothing happened. In fact BTC and other alts are rallying because of it. If Mt Gox were a major US bank, we'd be having fed policy makers locked behind doors for days on end figuring out how to bail them out and arguing if we don't do anything, bitcoin could suffer a "Catastrophic" collapse.

More accurately, BitInstant was more like the "Bear Stearns" of the Bitcoin market.  When it folded, not just Keynesians but Austrian economists predicted the end of Bitcoin.  Instead, Bitcoin rose 800%.

MtGox is like the JP Morgan Chase of Bitcoin.  Anything analogous is completely unprecedented in fiat banking.

I am convinced '08 was nothing more than a big lie to steal trillions in wealth from middle-class Americans with fears that if we don't bail out the big banks, our whole economic way of life is on the line.

It was.

[glendall]

'08 bail outs was a big scam.

They are banks. They have to do some really catastrophic fuck-up in order to actually lose money.  And they did.

For decades now, banking interests have been indistinguishable from  the governments' interests. Bankers set much of the gov' monetary policy now a days. Banking heads also have more say on economic policy that most of the democratically elected officials. Your so called 'representatives'. It wasn't always like this. But it is so ingrained today that most people can not imagine any other way.

I know I couldn't imagine any other way out of it, until bitcoin came along.

[pening]

And i'm convinced the OP and many others don't really understand what happened in '08, or why.  The reason MtGox didn't cause a catastrophic impact is because, really, Bitcoin just isn't significant enough at this time. I'm not sure what this has to do with Keynesian economics either way.

[Noisskal]

News are usually troll no troll no people watch 

[simonvrouwe]

Think the point is that the collapse of one large bitcoin exchange did not (yet) trigger the collapse of other exchanges. Like the domino effect in 08' causing many banks get into trouble after Lehman's bankruptcy, will not happen with Bitcoin. Let mtGox's failure be a lesson that will not be forgotten and the bitcoin system will be stronger in the long run. Sorry for people that lost BTC on mtGox, I lost some 80 BTC myself.

[inoob]

A lot of the trolls on CNN's comment section were gloating yesterday, but we are having the last laugh, when you think about it the Lehman Brothers or Bear Sterns of the crypto world folded yesterday...and nothing happened. In fact BTC and other alts are rallying because of it. If Mt Gox were a major US bank, we'd be having fed policy makers locked behind doors for days on end figuring out how to bail them out and arguing if we don't do anything, bitcoin could suffer a "Catastrophic" collapse.

I am convinced '08 was nothing more than a big lie to steal trillions in wealth from middle-class Americans with fears that if we don't bail out the big banks, our whole economic way of life is on the line. I think had we gone over the cliff and let these big banks failed we might have even seen a major market rally due to the free market correction.

Man you just lit up my brain! Good frickin point! WOW... ... Whoever fell for "the sky's gonna fall if you don't give us your money" answer, the government fed us, should feel used! 

[Beliathon]

BTC is already a world currency, just not one that is accepted from the top.

http://www.youtube.com/watch?v=b3_lVSrPB6w

[tabnloz]

A lot of the trolls on CNN's comment section were gloating yesterday, but we are having the last laugh, when you think about it the Lehman Brothers or Bear Sterns of the crypto world folded yesterday...and nothing happened. In fact BTC and other alts are rallying because of it. If Mt Gox were a major US bank, we'd be having fed policy makers locked behind doors for days on end figuring out how to bail them out and arguing if we don't do anything, bitcoin could suffer a "Catastrophic" collapse.

More accurately, BitInstant was more like the "Bear Stearns" of the Bitcoin market.  When it folded, not just Keynesians but Austrian economists predicted the end of Bitcoin.  Instead, Bitcoin rose 800%.

MtGox is like the JP Morgan Chase of Bitcoin.  Anything analogous is completely unprecedented in fiat banking.

I am convinced '08 was nothing more than a big lie to steal trillions in wealth from middle-class Americans with fears that if we don't bail out the big banks, our whole economic way of life is on the line.

It was.

From the book Griftopia, IIRC, companies like GS held the economy to ransom. Firstly, not only did they sell glitter covered shit and call it gold (repackage high risk MBS as AAA+), they actively bet against those "AAA+'s" as they sold them to unknowing pension funds etc. Then, when shit hit the fan they threatened to wipe out AIG by demanding debt repayment, something that would have bankrupted multiple cities / towns in the US. So, the govt bent over and repayed AIG's debt thru TARP / bailout funds.

note: all from memory, read it a while back.

[bananas]

If you look at Bitstamp today, the price has been recovering and I'm hoping for $600+ soon.

It is not a recover, the price is in a daily zig-zag trying to decide if it goes lower or not. The chinese are buying a lot , if it was not for them, i think there will be no "zig zag", it would just fall to $100.