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Author Topic: Gold collapsing. Bitcoin UP.  (Read 1805117 times)
adamstgBit
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August 29, 2014, 05:39:08 PM
 #11361

Thought people here might like this comment from the above youtube video

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If gold and silver are better than Bitcoin, why don't any businesses accept it for payment?  Bitcoin is accepted by tens of thousands of businesses, including very large merchants like Overstock, Newegg, and TigerDirect.

Gold bugs (and I used to be one) are all sitting around waiting for the other 99% of humanity to wake up and see gold as the true sound money platform, and in the process both vindicate themselves as being "right" and become rich in the process.

However, while they are patiently waiting decades, bitcoin adoption will grow and grow, realizing the vision they have for gold. At some point more and more gold bugs will switch, bitcoin is the sound money vindication they have been waiting for, it is just a different platform.

I really don't mind being paid in gold.  I actually like it quite a bit when it happens.
That is rare though.  Being paid in bitcoin is preferred to being paid in fiat.
Folks with gold rarely like to part with it.  Bitcoin is so much more liquid and divisible, so we should expect it to be more frequently transacted.
But, I still like being paid in gold when I can be.
yes i like to receive physical gold with costly insured shipping as payment as well. because i know i can turn around and with another costly insured shipping send said gold to silvergoldbull and get spot -1% paided out in BTC. i also like the fact there is no exchange rate volatility risk with gold, because gold is rock solid.

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There are several different types of Bitcoin clients. Hybrid server-assisted clients like Electrum get a lot of their network information from centralized servers, but they also check the server's results using blockchain header data. This is perhaps somewhat more secure than either server-assisted clients or header-only clients.
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cypherdoc
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August 29, 2014, 06:06:30 PM
 #11362

Crap. I missed the wall take down. Was on a bike ride. How did it happen? Did one or all of the walls get taken down at once or piece meal?

Whatever, it's a great victory for the bulls who stared  those walls down for almost 24 hours. That'll teach 'em.
notme
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August 29, 2014, 07:03:49 PM
 #11363

Crap. I missed the wall take down. Was on a bike ride. How did it happen? Did one or all of the walls get taken down at once or piece meal?

Whatever, it's a great victory for the bulls who stared  those walls down for almost 24 hours. That'll teach 'em.

I only saw stamp and bitfinex, but both were swallowed in a matter of minutes.

https://www.bitcoin.org/bitcoin.pdf
While no idea is perfect, some ideas are useful.
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notme
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August 29, 2014, 07:10:09 PM
 #11364

I have a problem with this debt creation means deflation meme.

In a restricted economic model, where we have some actors and some money, the value of each unit of money depends only on the actors willingness to hold. The demand and supply sides consists of the same people, where demand is the wish to hold more, and supply is the less willingness to hold.

Extending this with debt, a debt which is safe and of static volume, extends the money supply. The debt is more like money if it is transferable. If a debt is completely safe, have very low interest and is due very long time in the future, and is transferable, it is in practise equivalent to money.

In all cases up till now in the model, the money supply is static and we should have stable price level on goods in the market.

Extending the model again, now with an expanding money supply in the form of base money and debt, which is the current situation in the world, value of the money unit should fall, as the supply is now the willingness to hold less plus the new money, demand being the willingness to hold is the same.

Now the big unknown, hitherto considered static, is the willingness to hold. This is of course not static in the real world, as it depends on the actors life situation and the world situation, including the important prospect of the future value of the money. Basically, if there is an expectation that the money will fall in value, people will hold less money and hold long lasting, transferable goods instead. But this will only accelerate the fall of the value of the money, it will not be an upward pressure of the value of the money unit (otherwise called deflation).

I do not disagree that deflation is a real risk (or that it is happening now), i disagree only that it is the expanding money supply in the form of debt that is the reason for it.

In my view, it is a collapse of debt that is the reason for a possible deflation. A collapse of debt will happen when the market actors consider the risk of lending too high, or when other risks make people hoard wealth in the form of long lasting consumer goods like houses and cars, paid not with loans but paid for by less consumption of other goods.


The 'money supply' is only a fraction of total debt (USA 60 trillion). As long as debt creation in an economy is faster than productivity, you'll have inflation. As soon as the total debt sum doesn't increase as fast as productivity, you'll have deflation (Japan first and now the rest of the western world following).

Good point.  Increasing productivity has been known to cause deflation since at least Adam Smith (1776).  I still don't see how collapse of debt (which reduces the demand for money because now that debt isn't going to be repaid) causes deflation.  If you have to make debt payments, you will try make sure you have enough dollars to pay them.  This is why debt increases demand for dollars.  Again, yes initial issuance is short term inflationary, but I don't see how you can claim it is inflationary overall.

Imagine that 99 pct of the 60 trillions of debt would be wiped out. That means that the other side of the balance sheet would be wiped out as well. The price level in the economy would return to that level on which it had been as the total debt sum was at 0.6 trillions.

Sure the banks would lose a lot of "assets" but all the entities who owed that money previously would find themselves keeping more of their income.  We know the banks aren't spending, but can we count on the general population and the government to sit on a surplus?

https://www.bitcoin.org/bitcoin.pdf
While no idea is perfect, some ideas are useful.
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cypherdoc
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August 29, 2014, 07:10:41 PM
 #11365

Crap. I missed the wall take down. Was on a bike ride. How did it happen? Did one or all of the walls get taken down at once or piece meal?

Whatever, it's a great victory for the bulls who stared  those walls down for almost 24 hours. That'll teach 'em.

I only saw stamp and bitfinex, but both were swallowed in a matter of minutes.

So the manipulator actually lost control of the coins as opposed to pulling down the wall? That's bullish as he will be forced to buy back later.
adamstgBit
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August 29, 2014, 07:14:08 PM
 #11366

Crap. I missed the wall take down. Was on a bike ride. How did it happen? Did one or all of the walls get taken down at once or piece meal?

Whatever, it's a great victory for the bulls who stared  those walls down for almost 24 hours. That'll teach 'em.

I only saw stamp and bitfinex, but both were swallowed in a matter of minutes.

So the manipulator actually lost control of the coins as opposed to pulling down the wall? That's bullish as he will be forced to buy back later.

he kept putting up fresh walls as it was being bought, he wasted all 2K on the front line.

FNG
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August 29, 2014, 07:25:41 PM
 #11367

Crap. I missed the wall take down. Was on a bike ride. How did it happen? Did one or all of the walls get taken down at once or piece meal?

Whatever, it's a great victory for the bulls who stared  those walls down for almost 24 hours. That'll teach 'em.

I only saw stamp and bitfinex, but both were swallowed in a matter of minutes.

So the manipulator actually lost control of the coins as opposed to pulling down the wall? That's bullish as he will be forced to buy back later.

he kept putting up fresh walls as it was being bought, he wasted all 2K on the front line.
Nice. Will suck for him as we breach 520
Erdogan
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August 29, 2014, 08:15:04 PM
 #11368

I have a problem with this debt creation means deflation meme.

In a restricted economic model, where we have some actors and some money, the value of each unit of money depends only on the actors willingness to hold. The demand and supply sides consists of the same people, where demand is the wish to hold more, and supply is the less willingness to hold.

Extending this with debt, a debt which is safe and of static volume, extends the money supply. The debt is more like money if it is transferable. If a debt is completely safe, have very low interest and is due very long time in the future, and is transferable, it is in practise equivalent to money.

In all cases up till now in the model, the money supply is static and we should have stable price level on goods in the market.

Extending the model again, now with an expanding money supply in the form of base money and debt, which is the current situation in the world, value of the money unit should fall, as the supply is now the willingness to hold less plus the new money, demand being the willingness to hold is the same.

Now the big unknown, hitherto considered static, is the willingness to hold. This is of course not static in the real world, as it depends on the actors life situation and the world situation, including the important prospect of the future value of the money. Basically, if there is an expectation that the money will fall in value, people will hold less money and hold long lasting, transferable goods instead. But this will only accelerate the fall of the value of the money, it will not be an upward pressure of the value of the money unit (otherwise called deflation).

I do not disagree that deflation is a real risk (or that it is happening now), i disagree only that it is the expanding money supply in the form of debt that is the reason for it.

In my view, it is a collapse of debt that is the reason for a possible deflation. A collapse of debt will happen when the market actors consider the risk of lending too high, or when other risks make people hoard wealth in the form of long lasting consumer goods like houses and cars, paid not with loans but paid for by less consumption of other goods.


The 'money supply' is only a fraction of total debt (USA 60 trillion). As long as debt creation in an economy is faster than productivity, you'll have inflation. As soon as the total debt sum doesn't increase as fast as productivity, you'll have deflation (Japan first and now the rest of the western world following).

I of course include debt in the money supply, see above (red).
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August 29, 2014, 08:18:00 PM
 #11369

"Why Bitcoin is Better Than Gold, with Wences Casares"
https://www.youtube.com/watch?v=gKkfhi8Eaiw


I think his talk from Bitcoin2014 (https://www.youtube.com/watch?v=NERAN-89j8M) is better, but the above is shorter and more recent (published today).

"Barter never happened" This is the truth. It's the debt, stupid....

Indirect trade is more effective, but barter happens all the time. A merger where shareholders of the bought company are paid with shares in the new company, is barter.
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August 29, 2014, 08:23:59 PM
 #11370

I have a problem with this debt creation means deflation meme.

In a restricted economic model, where we have some actors and some money, the value of each unit of money depends only on the actors willingness to hold. The demand and supply sides consists of the same people, where demand is the wish to hold more, and supply is the less willingness to hold.

Extending this with debt, a debt which is safe and of static volume, extends the money supply. The debt is more like money if it is transferable. If a debt is completely safe, have very low interest and is due very long time in the future, and is transferable, it is in practise equivalent to money.

In all cases up till now in the model, the money supply is static and we should have stable price level on goods in the market.

Extending the model again, now with an expanding money supply in the form of base money and debt, which is the current situation in the world, value of the money unit should fall, as the supply is now the willingness to hold less plus the new money, demand being the willingness to hold is the same.

Now the big unknown, hitherto considered static, is the willingness to hold. This is of course not static in the real world, as it depends on the actors life situation and the world situation, including the important prospect of the future value of the money. Basically, if there is an expectation that the money will fall in value, people will hold less money and hold long lasting, transferable goods instead. But this will only accelerate the fall of the value of the money, it will not be an upward pressure of the value of the money unit (otherwise called deflation).

I do not disagree that deflation is a real risk (or that it is happening now), i disagree only that it is the expanding money supply in the form of debt that is the reason for it.

In my view, it is a collapse of debt that is the reason for a possible deflation. A collapse of debt will happen when the market actors consider the risk of lending too high, or when other risks make people hoard wealth in the form of long lasting consumer goods like houses and cars, paid not with loans but paid for by less consumption of other goods.


The 'money supply' is only a fraction of total debt (USA 60 trillion). As long as debt creation in an economy is faster than productivity, you'll have inflation. As soon as the total debt sum doesn't increase as fast as productivity, you'll have deflation (Japan first and now the rest of the western world following).

Good point.  Increasing productivity has been known to cause deflation since at least Adam Smith (1776).  I still don't see how collapse of debt (which reduces the demand for money because now that debt isn't going to be repaid) causes deflation.  If you have to make debt payments, you will try make sure you have enough dollars to pay them.  This is why debt increases demand for dollars.  Again, yes initial issuance is short term inflationary, but I don't see how you can claim it is inflationary overall.

Decreasing prices due to increased productivity should not scare anyone, that was how Britain evolved from 5 million hungry people to 50 million well fed people.
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August 29, 2014, 08:44:11 PM
 #11371

I have a problem with this debt creation means deflation meme.

In a restricted economic model, where we have some actors and some money, the value of each unit of money depends only on the actors willingness to hold. The demand and supply sides consists of the same people, where demand is the wish to hold more, and supply is the less willingness to hold.

Extending this with debt, a debt which is safe and of static volume, extends the money supply. The debt is more like money if it is transferable. If a debt is completely safe, have very low interest and is due very long time in the future, and is transferable, it is in practise equivalent to money.

In all cases up till now in the model, the money supply is static and we should have stable price level on goods in the market.

Extending the model again, now with an expanding money supply in the form of base money and debt, which is the current situation in the world, value of the money unit should fall, as the supply is now the willingness to hold less plus the new money, demand being the willingness to hold is the same.

Now the big unknown, hitherto considered static, is the willingness to hold. This is of course not static in the real world, as it depends on the actors life situation and the world situation, including the important prospect of the future value of the money. Basically, if there is an expectation that the money will fall in value, people will hold less money and hold long lasting, transferable goods instead. But this will only accelerate the fall of the value of the money, it will not be an upward pressure of the value of the money unit (otherwise called deflation).

I do not disagree that deflation is a real risk (or that it is happening now), i disagree only that it is the expanding money supply in the form of debt that is the reason for it.

In my view, it is a collapse of debt that is the reason for a possible deflation. A collapse of debt will happen when the market actors consider the risk of lending too high, or when other risks make people hoard wealth in the form of long lasting consumer goods like houses and cars, paid not with loans but paid for by less consumption of other goods.


The 'money supply' is only a fraction of total debt (USA 60 trillion). As long as debt creation in an economy is faster than productivity, you'll have inflation. As soon as the total debt sum doesn't increase as fast as productivity, you'll have deflation (Japan first and now the rest of the western world following).

I of course include debt in the money supply, see above (red).


Yes, any definition of money supply needs to include debt.
tabnloz
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August 29, 2014, 09:18:14 PM
 #11372

If the ruski's do get punted from SWIFT like the UK is reportedly urging, then it will be a boon for btc & PM's

Don't think it will happen, but these financial pot shots always have the potential to escalate quickly.

http://rt.com/business/183780-uk-eu-swift-ban/
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August 29, 2014, 09:21:41 PM
 #11373

"Why Bitcoin is Better Than Gold, with Wences Casares"
https://www.youtube.com/watch?v=gKkfhi8Eaiw


I think his talk from Bitcoin2014 (https://www.youtube.com/watch?v=NERAN-89j8M) is better, but the above is shorter and more recent (published today).

"Barter never happened" This is the truth. It's the debt, stupid....

Indirect trade is more effective, but barter happens all the time. A merger where shareholders of the bought company are paid with shares in the new company, is barter.


'Barter never happened' means: the basis of an economy was never ever barter, it's always debt (fulfilling debt contracts).

"Staat nenne ich's, wo alle Gifttrinker sind, Gute und Schlimme: Staat, wo alle sich selber verlieren, Gute und Schlimme:
Staat, wo der langsame Selbstmord aller – »das Leben« heisst."
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August 29, 2014, 09:29:08 PM
 #11374


Dear lord. I think the Fed and the ECB will call Ripple labs for tips soon!

now i feel bad for ripple pumper dude that comes on here every once in a while.

He was absent for quite a while after the big crash (which happened when one ex-developer announced he was going to dump a lot)

he came by the wall thread every once in a while, to remind us how cool ripple is, he will be dearly missed.


anyone remember his name?

mah87 I think: https://bitcointalk.org/index.php?action=profile;u=67181

French dude, often in french section. Seemed 'bullish' with that fidor bank collaborating with ripple lately.

Yes the bank must be really impressed with their printing press.

Zarathustra
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August 29, 2014, 09:50:56 PM
 #11375



I do not disagree that deflation is a real risk (or that it is happening now), i disagree only that it is the expanding money supply in the form of debt that is the reason for it.

It is the reason. The higher the Debt/GDP ratio (that caused inflation) - the nearer the tipping point that leads to a reversal. Debt can't be created fast enough anymore at a debt level of 4 x GDP.

"Staat nenne ich's, wo alle Gifttrinker sind, Gute und Schlimme: Staat, wo alle sich selber verlieren, Gute und Schlimme:
Staat, wo der langsame Selbstmord aller – »das Leben« heisst."
cypherdoc
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August 29, 2014, 09:57:18 PM
 #11376



I do not disagree that deflation is a real risk (or that it is happening now), i disagree only that it is the expanding money supply in the form of debt that is the reason for it.

It is the reason. The higher the Debt/GDP ratio (that caused inflation) - the nearer the tipping point that leads to a reversal. Debt can't be created fast enough anymore at a debt level of 4 x GDP.

What he's missing is that the ever expanding debt is preferentially being extended to the Treasury market, ie gvt, versus the private sector by speculators looking for risk free return and leading to severe misallocations of capital and even suppression of free markets. This is deflationary.
Erdogan
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August 29, 2014, 10:09:45 PM
 #11377

"Why Bitcoin is Better Than Gold, with Wences Casares"
https://www.youtube.com/watch?v=gKkfhi8Eaiw


I think his talk from Bitcoin2014 (https://www.youtube.com/watch?v=NERAN-89j8M) is better, but the above is shorter and more recent (published today).

"Barter never happened" This is the truth. It's the debt, stupid....

Indirect trade is more effective, but barter happens all the time. A merger where shareholders of the bought company are paid with shares in the new company, is barter.


'Barter never happened' means: the basis of an economy was never ever barter, it's always debt (fulfilling debt contracts).

Silly me, I thought "barter never happened" meant that barter never happened.
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August 29, 2014, 10:10:59 PM
 #11378



I do not disagree that deflation is a real risk (or that it is happening now), i disagree only that it is the expanding money supply in the form of debt that is the reason for it.

It is the reason. The higher the Debt/GDP ratio (that caused inflation) - the nearer the tipping point that leads to a reversal. Debt can't be created fast enough anymore at a debt level of 4 x GDP.

What he's missing is that the ever expanding debt is preferentially being extended to the Treasury market, ie gvt, versus the private sector by speculators looking for risk free return and leading to severe misallocations of capital and even suppression of free markets. This is deflationary.

Yes. The higher the total debt level, the smaller the ability (of the private sector) to create additional debt (which is money).
Additional debt (that increased faster than productivity) is suffering a diminishing return, and this line with direction zero correlates with the inflation rate:




"Staat nenne ich's, wo alle Gifttrinker sind, Gute und Schlimme: Staat, wo alle sich selber verlieren, Gute und Schlimme:
Staat, wo der langsame Selbstmord aller – »das Leben« heisst."
Erdogan
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August 29, 2014, 10:14:33 PM
 #11379



I do not disagree that deflation is a real risk (or that it is happening now), i disagree only that it is the expanding money supply in the form of debt that is the reason for it.

It is the reason. The higher the Debt/GDP ratio (that caused inflation) - the nearer the tipping point that leads to a reversal. Debt can't be created fast enough anymore at a debt level of 4 x GDP.

So what you are saying is that the expansion of debt, which normally drives inflation, is risky, and that risk becomes critical when debt level rises to a certain fraction (or multiple) of GDP, and when that risk manifests into loss, the money supply collapses and we therefore get deflation. Nice. Thought so too.
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August 29, 2014, 10:20:41 PM
 #11380



I do not disagree that deflation is a real risk (or that it is happening now), i disagree only that it is the expanding money supply in the form of debt that is the reason for it.

It is the reason. The higher the Debt/GDP ratio (that caused inflation) - the nearer the tipping point that leads to a reversal. Debt can't be created fast enough anymore at a debt level of 4 x GDP.

What he's missing is that the ever expanding debt is preferentially being extended to the Treasury market, ie gvt, versus the private sector by speculators looking for risk free return and leading to severe misallocations of capital and even suppression of free markets. This is deflationary.

Misallocation of capital should decrease productivity, which should drive prices higher.

So there must be something else, or, an indirect causality creating the deflation.

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