Gold collapsing. Bitcoin UP.

[cypherdoc]

Krugman is now hedging:

Do you think Bitcoin will gain momentum and become a viable currency?

No. I could be wrong, but Bitcoin is harder to use than other forms of electronic payment, and lacks any fundamental source of value (unlike dollars, which can be used to pay taxes). It’s possible that Bitcoin will somehow become self-supporting, but for now my guess is that it’s largely a fad that will collapse one of these days.

http://www.princetonmagazine.com/paul-krugman/

[Erdogan]

one of Erdogan's criteria for deflation is decreasing commodity prices.  here you go. oil about to break major support:

About early signs of a deflation:

"The first proposition is that the prices of gold and other raw commodities are
extremely sensitive to changes in monetary conditions and are therefore good predic-
tors of future movements of general consumer goods’ prices, which tend to respond
much more slowly to such changes. As Bruce Bartlett (2001) wrote, “When one sees
a sustained fall in sensitive commodity prices—those that lead changes in the general
price level—one can predict that eventually this trend will work its way through the
economy as a whole.”
"

Deflation is generally benign, except a form called "confiscatory deflation";

"There does exist an emphatically malign form of deflation that is coer-
cively imposed by governments and their central banks and that violates property
rights, distorts monetary calculation and undermines monetary exchange. It may
even catapult an economy back to a primitive state of barter if applied long and relent-
lessly enough. This form of deflation involves an outright confiscation of people’s
cash balances by the political and bureaucratic elites.
"

These are excempts from an article on deflation by Salorno, who is an excellent writer. The article:

AN AUSTRIAN TAXONOMY OF DEFLATION—WITH
APPLICATIONS TO THE U.S.
JOSEPH T. SALERNO
THE QUARTERLY JOURNAL OF AUSTRIAN ECONOMICS

In the article a recent episode in Argentina is described, historically interessant, you can even hear about real barter with grain (cars for grain), and the resulting hoarding of grain as money, envisioned by Adam Smith (near the end of the article).

https://mises.org/journals/qjae/pdf/qjae6_4_8.pdf

[cypherdoc]

5 yr weekly commodity charts:

DBA-food



Wheat futures:



Corn futures:



Soybean futures:



FCX-Copper proxy-world's largest copper mine:



BHP-one of the world's largest mines:

[cypherdoc]

here's the actual 5 yr copper price:

[Erdogan]

Can you find iron ore?

[Melbustus]

The cheapest Android phone can sufficiently operate a Bitcoin wallet, as long as it has a camera. Apple Pay will be on the newest devices only and which third world bum has a credit card (compared to each first world bum  ).

the best chance ApplePay has is in the US as it controls 40% of smartphones sold here.  but you're right, worldwide, Bitcoin + Android should still win.  and, as Apple continues to arguably lose US marketshare to Android, Bitcoin + Android should win here too long term as the fees involved with cc tx's hasn't changed.  in fact, in Oct 2015, liability for stolen cc's presented and accepted at merchant stores shifts to the merchant away from the banks and payment processors.

I don't like viewing bitcoin as primarily a payments-tech product. I feel the conversation has shifted largely to how bitcoin excels at executing online payments, which is true, and which I've myself pointed out to skeptics for a long time. The reality, though, is that the core proposition is control of your own money, an open ecosystem, and a mathematically known money supply (as we all appreciate). It just so happens that bitcoin is currently superior to virtually all payment networks as well, but that probably won't be the case forever. Legacy payments will probably get much better (more secure, faster, cheaper) over time, and then it should be clear that bitcoin's real distinction lies in the monetary characteristics. Perhaps ApplePay will re-shift the conversation.

[Melbustus]

Krugman is now hedging:

Do you think Bitcoin will gain momentum and become a viable currency?

No. I could be wrong, but Bitcoin is harder to use than other forms of electronic payment, and lacks any fundamental source of value (unlike dollars, which can be used to pay taxes). It’s possible that Bitcoin will somehow become self-supporting, but for now my guess is that it’s largely a fad that will collapse one of these days.

http://www.princetonmagazine.com/paul-krugman/

Heh... Funny how bitcoin has put the likes of Peter Schiff and Paul Krugman into the same gotta-hedge-my-statements corner.

[cypherdoc]

Can you find iron ore?

yes, and it's the worst of all.  new 5 yr low.

http://www.theaustralian.com.au/business/latest/iron-ore-price-at-new-five-year-low/story-e6frg90f-1227053318529:

[Erdogan]

Another commonly used indicator (for early deflation detection), is the Caterpillar company. It expands its profit (and debt to capital ratio), but the sales of machinery is down. This tells me that the company, like most large companies, is transforming from a production company to something like a bank.

http://www.caterpillar.com/en/investors/quarterly-results.html

I would be interested in the actual tonnage of machinery produced, which I suspect is also down, but I am too lazy to look for it now.

[solex]

Krugman is now hedging:

Do you think Bitcoin will gain momentum and become a viable currency?

No. I could be wrong, but Bitcoin is harder to use than other forms of electronic payment, and lacks any fundamental source of value (unlike dollars, which can be used to pay taxes). It’s possible that Bitcoin will somehow become self-supporting, but for now my guess is that it’s largely a fad that will collapse one of these days.

http://www.princetonmagazine.com/paul-krugman/

This is the error which is obvious to many here, but not many mainstream economists.

Bitcoin has enormous fundamental value because of its utility. Rapid, global, transfer of monetary value without third-party intervention, is fundamentally of value. The security of the system, through mining, and the cap on total issuance are pillars which makes the technology monetarily viable.

There is a subtlety here: the stored value of Bitcoin derives from its ability to transfer value.

Eventually Krugman will figure this out, but it will be hard to accept as he will still cling onto the inflation-is-good meme.

[Kupsi]

Krugman is now hedging:

Do you think Bitcoin will gain momentum and become a viable currency?

No. I could be wrong, but Bitcoin is harder to use than other forms of electronic payment, and lacks any fundamental source of value (unlike dollars, which can be used to pay taxes). It’s possible that Bitcoin will somehow become self-supporting, but for now my guess is that it’s largely a fad that will collapse one of these days.

http://www.princetonmagazine.com/paul-krugman/

This is the error which is obvious to many here, but not many mainstream economists.

Bitcoin has enormous fundamental value because of its utility. Rapid, global, transfer of monetary value without third-party intervention, is fundamentally of value. The security of the system, through mining, and the cap on total issuance are pillars which makes the technology monetarily viable.

There is a subtlety here: the stored value of Bitcoin derives from its ability to transfer value.

Eventually Krugman will figure this out, but it will be hard to accept as he will still cling onto the inflation-is-good meme.

I think Erik Voorhees' open letter to Peter Schiff on this subject is very good.

http://www.reddit.com/r/Bitcoin/comments/1rxmk3/my_open_letter_to_peter_schiff_followup_from_the

[cypherdoc]

Krugman is now hedging:

Do you think Bitcoin will gain momentum and become a viable currency?

No. I could be wrong, but Bitcoin is harder to use than other forms of electronic payment, and lacks any fundamental source of value (unlike dollars, which can be used to pay taxes). It’s possible that Bitcoin will somehow become self-supporting, but for now my guess is that it’s largely a fad that will collapse one of these days.

http://www.princetonmagazine.com/paul-krugman/

This is the error which is obvious to many here, but not many mainstream economists.

Bitcoin has enormous fundamental value because of its utility. Rapid, global, transfer of monetary value without third-party intervention, is fundamentally of value. The security of the system, through mining, and the cap on total issuance are pillars which makes the technology monetarily viable.

There is a subtlety here: the stored value of Bitcoin derives from its ability to transfer value.

Eventually Krugman will figure this out, but it will be hard to accept as he will still cling onto the inflation-is-good meme.

don't overlook a few posts up:

I don't like viewing bitcoin as primarily a payments-tech product. I feel the conversation has shifted largely to how bitcoin excels at executing online payments, which is true, and which I've myself pointed out to skeptics for a long time. The reality, though, is that the core proposition is control of your own money, an open ecosystem, and a mathematically known money supply (as we all appreciate). It just so happens that bitcoin is currently superior to virtually all payment networks as well, but that probably won't be the case forever. Legacy payments will probably get much better (more secure, faster, cheaper) over time, and then it should be clear that bitcoin's real distinction lies in the monetary characteristics. Perhaps ApplePay will re-shift the conversation.

[justusranvier]

Krugman serves the ruling class who derive their wealth and lifestyle from their ability to be the first spenders of newly-printed money.

Of course he's never going to acknowledge that Bitcoin's limited supply is what makes it superior - his job is to help keep the hoi polloi ignorant of how they are being robbed.

The job of an economist is to cloak theft in the mantle of science to reduce the cost of keeping the masses compliant.

[cypherdoc]

Another commonly used indicator (for early deflation detection), is the Caterpillar company. It expands its profit (and debt to capital ratio), but the sales of machinery is down. This tells me that the company, like most large companies, is transforming from a production company to something like a bank.

http://www.caterpillar.com/en/investors/quarterly-results.html

I would be interested in the actual tonnage of machinery produced, which I suspect is also down, but I am too lazy to look for it now.

thanks for reminding me of them.  i usually follow them too but with what i think are all the stock mkt manipulations, i'm not sure how their stock price is reflective of what actually is going on other than entrenched Fed easing expectations or outright PPT pumping.

volume looks sick as hell and we have a lower high but what else is new considering the overall stock mkt indices looking like shit too:

[marcus_of_augustus]

Krugman is now hedging:

Do you think Bitcoin will gain momentum and become a viable currency?

No. I could be wrong, but Bitcoin is harder to use than other forms of electronic payment, and lacks any fundamental source of value (unlike dollars, which can be used to pay taxes). It’s possible that Bitcoin will somehow become self-supporting, but for now my guess is that it’s largely a fad that will collapse one of these days.

http://www.princetonmagazine.com/paul-krugman/

This is the error which is obvious to many here, but not many mainstream economists.

Bitcoin has enormous fundamental value because of its utility. Rapid, global, transfer of monetary value without third-party intervention, is fundamentally of value. The security of the system, through mining, and the cap on total issuance are pillars which makes the technology monetarily viable.

There is a subtlety here: the stored value of Bitcoin derives from its ability to transfer value.

Eventually Krugman will figure this out, but it will be hard to accept as he will still cling onto the inflation-is-good meme.

Krugman needs to read more John Nash ... money falls into the subset of Game Theoretic studies "games with transferable utility"

http://sites.stat.psu.edu/~babu/nash/money.pdf

... to understand how bitcoin derives value purely from utility.

[cypherdoc]

the ultimate deflators deflate moar:

http://www.zerohedge.com/news/2014-09-09/historic-first-bank-japan-monetizes-debt-negative-rates

[600watt]

Krugman is now hedging:

Do you think Bitcoin will gain momentum and become a viable currency?

No. I could be wrong, but Bitcoin is harder to use than other forms of electronic payment, and lacks any fundamental source of value (unlike dollars, which can be used to pay taxes). It’s possible that Bitcoin will somehow become self-supporting, but for now my guess is that it’s largely a fad that will collapse one of these days.

http://www.princetonmagazine.com/paul-krugman/

This is the error which is obvious to many here, but not many mainstream economists.

Bitcoin has enormous fundamental value because of its utility. Rapid, global, transfer of monetary value without third-party intervention, is fundamentally of value. The security of the system, through mining, and the cap on total issuance are pillars which makes the technology monetarily viable.

There is a subtlety here: the stored value of Bitcoin derives from its ability to transfer value.

Eventually Krugman will figure this out, but it will be hard to accept as he will still cling onto the inflation-is-good meme.

I think Erik Voorhees' open letter to Peter Schiff on this subject is very good.

http://www.reddit.com/r/Bitcoin/comments/1rxmk3/my_open_letter_to_peter_schiff_followup_from_the

nice one from erik. needed that, thx 

[oda.krell]

The cheapest Android phone can sufficiently operate a Bitcoin wallet, as long as it has a camera. Apple Pay will be on the newest devices only and which third world bum has a credit card (compared to each first world bum  ).

the best chance ApplePay has is in the US as it controls 40% of smartphones sold here.  but you're right, worldwide, Bitcoin + Android should still win.  and, as Apple continues to arguably lose US marketshare to Android, Bitcoin + Android should win here too long term as the fees involved with cc tx's hasn't changed.  in fact, in Oct 2015, liability for stolen cc's presented and accepted at merchant stores shifts to the merchant away from the banks and payment processors.

I don't like viewing bitcoin as primarily a payments-tech product. I feel the conversation has shifted largely to how bitcoin excels at executing online payments, which is true, and which I've myself pointed out to skeptics for a long time. The reality, though, is that the core proposition is control of your own money, an open ecosystem, and a mathematically known money supply (as we all appreciate). It just so happens that bitcoin is currently superior to virtually all payment networks as well, but that probably won't be the case forever. Legacy payments will probably get much better (more secure, faster, cheaper) over time, and then it should be clear that bitcoin's real distinction lies in the monetary characteristics. Perhaps ApplePay will re-shift the conversation.

I think it is important to highlight both points, Bitcoin as a non-governed (and extremely secure) transfer mechanism, and the "monetary characteristics" you mention. Keep in mind that not everybody is sold on the superiority of fixed supply, or at least, not enthusiastic enough about it alone to become a supporter - but the self-determination of your own finances aspect might be what makes him or her a supporter.  I know I belong to that group.

[cypherdoc]

Krugman is now hedging:

Do you think Bitcoin will gain momentum and become a viable currency?

No. I could be wrong, but Bitcoin is harder to use than other forms of electronic payment, and lacks any fundamental source of value (unlike dollars, which can be used to pay taxes). It’s possible that Bitcoin will somehow become self-supporting, but for now my guess is that it’s largely a fad that will collapse one of these days.

http://www.princetonmagazine.com/paul-krugman/

This is the error which is obvious to many here, but not many mainstream economists.

Bitcoin has enormous fundamental value because of its utility. Rapid, global, transfer of monetary value without third-party intervention, is fundamentally of value. The security of the system, through mining, and the cap on total issuance are pillars which makes the technology monetarily viable.

There is a subtlety here: the stored value of Bitcoin derives from its ability to transfer value.

Eventually Krugman will figure this out, but it will be hard to accept as he will still cling onto the inflation-is-good meme.

Krugman needs to read more John Nash ... money falls into the subset of Game Theoretic studies "games with transferable utility"

http://sites.stat.psu.edu/~babu/nash/money.pdf

... to understand how bitcoin derives value purely from utility.

hot damn marcus!  great find!  

i had no idea Nash was an Austrian.  this is must reading for all Bitcoiners and i find it very ironic given my independent contention a coupla months back on the Pure Strategy Nash Equilibrium and its application to mining.

excellent!

edit: i'm gonna link your post to Twitter...

[molecular]

It was, see The fifth growth spurt from December 24, 2013

I wish people would adopt this terminology because "bubble" now is even used by the people that don't believe one of the peaks in the growth represents a large overvaluation (which is the meaning of the word bubble).

Precisely my point: If falllling or other trolls talk about bubbles, I don't really mind. But it became the de facto standard term even by long-term supporters of Bitcoin, which is odd in my opinion, and maybe it's my Asperger's gland^* acting up, but I don't like the abuse of the word 'bubble' that way.


^{* Yes, I know. Doesn't exist.}

I'm guilty of using the dreaded term. In my defense: at some point I just accepted the term to be used differently in bitcoin land.

Will try to use "growth spurt" (kind of a tongue-breaker, ain't it?) from now on.