Thanks for the point about weekly payments versus monthly payments. However a lot of things about the GLBSE seem weird to me. For example, a lot of miners are paying 1 to 3% per WEEK. If you have a background in finance you... well.. I won't say it here, but "wow, just wow".
Right. The primary issue there is scale. It's not so difficult to turn $1 into $2 again and again. There's even a story out there about a guy who (through multiple trades) traded up from a paperclip to a car. Or was it a house? It is a lot more difficult to turn $1 billion in to $2 billion, let alone do it repeatedly.
Warren Buffet has been warning that Berkshire Hathaway is getting so big it won't be able to generate the stellar rates of return it has in the past.
For example, if I told you I was offering a security on the GLBSE that paid 1% per month (guaranteed), no one would invest in it. But that's actually a really good price and for zero risk it's actually quite an unbelievable offer. I fear that interest rates are going to crash on the GLBSE within the year or prices will go up 4x to 5x or at least back up to where they were a year ago (say up by 3x to $15/btc).
Zero risk, huh? I'd take that action if it *really* were zero risk, but the reality is that there are always some risks. Even US Govt bonds have some risk. Congress almost defaulted last year. With more than $250k in a regular bank savings account you run the risk of loss if the bank goes under. Your brokerage probably only insures your cash up to $5mm.
You could say the "premium" return rates on many glbse securities are there in large part *because* a lot of the investors understand that they really are pretty risky (compared to the dow 30, reits, junk bonds, or even your buddy's new restaurant).