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Author Topic: Counter to "Why Bitcoin is dropping ...buying." AMA format / doomsday debunked  (Read 5525 times)
Ultros
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January 07, 2015, 01:07:46 PM
 #61


5.  Yes, as far as making sure that no one else does, WWII certainly comes to mind.  Of course, a privately funded militia of sulky middle-aged libers would have done the job far better, cheaper, and in half the time  ...wait, aren't you French?  Nevermind then, disregard.  



For the record. 90% of french population is made of socialist jerks with exactly your arguments. Idk if he's french, but maybe you are? If not, you should ask for a Visa.
NotLambchop
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January 07, 2015, 01:13:11 PM
 #62

...Idk if he's french, but maybe you are? If not, you should ask for a Visa.

He is.  I'm not.  Been there.
Do you have a point, or just venting?
Ultros
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January 07, 2015, 01:28:24 PM
 #63

...Idk if he's french, but maybe you are? If not, you should ask for a Visa.

He is.  I'm not.  Been there.
Do you have a point, or just venting?

My point is that you should live in a country that incarnate your political views so you could experience how good they are, but I shouldn't bother since you're probably not sincere. Acting as a socialist jerk is perfect for trolling this board. You do what you have to do. Move along.
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January 07, 2015, 01:35:13 PM
 #64

^
I live in US.  My family moved here from Soviet Union.  We were made to wait two and a half years for an exit visa.  My father was jailed during that time for a protest demonstration which lasted all of 30 seconds.

So yeah, I moved to a country that "incarnate [sic] my political views."  Now what the fuck have you done?
btc_n_economics (OP)
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January 07, 2015, 03:13:42 PM
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Poor logic buddy.  Debt isn't an asset.  Or perhaps you are claiming that we're close to the point where that debt will start deflating rapidly  Grin
Debt is an asset to people that hold it.  If you have bonds in your 401k you are holding the debt of companies and governments but it is an asset to you.  Removing all US debt would be devastating and will not happen.

You assume that the taxpayer can pay the interest on the debt every year. But the interest on the debt has risen to one of the top 6 budget expenses and as it rises we will reach the point where there are not enough taxes to cover the interest plus any sort of other expenses. Debt cannot continue to climb with no detrimental results.

And when the Fed needs to print money to buy US treasury bonds to keep down that interest rate and allow the US to continue to be solvent, they are shifting the burden by devaluing the dollar.

In short burts they can bounce back. Over the long term it leads to inflation.

Sure we have the military which is one of the top 3 budget items, and they can attack countries like Iraq who started talking about going off of the dollar for oil sales. But that just adds to the spending and adds to the problem. And higher taxes do not necessarily result in higher income as people work to shelter their money from those taxes, just look at the failure of the 75% tax in France.

Depending on violence and force to prop up your economy is not the best way forward even if in the short term it seems like it is working. That system always requires more force and more violence before it comes to an end.
Interest expense as a % of total government outlays has actually been coming down and is currently very low!  Since interest rates are so low our interest expense is low - there is not this problem of things spiraling out of control.  Plus, like I said, the US Treasury can issue shorter maturity debt or debt with low coupons indefinitely so we can actually control the interest expense further if we wanted to - I repeat we can issue currency if we needed to pay interest and would never go bankrupt like this!  The Fed printing (creating reserves, which is not putting money into the economy directly, it nets to $0) has not devalued the USD - it is in fact in multi-year highs.  Dollar's value is based on inflation, among other things, and that is very LOW right now.  So please don't make these assumptions, just follow the facts.

I agree, the US doesn't need oil to be priced in USD to print money. I never said that. What I was alluding to was because oil happens to be dominated in USD, the US (aka the Fed-a private entity) can print money that is never disseminated into the economy (i.e. lended to banks as you've said above). What this allows the US to do is simultaneously buy oil with money that is non-inflationary on the US economy, purchase a commodity and sell it back to its economy at deflationary prices for a profit. Essentially, on the books it looks like the US economy is booming with all the capital coming in (cheap gas prices mean more spending, traveling; generally linked to improved economic conditions), but in reality, the money never existed and is being injected into the economy from an outside way to mitigate economic inflation on the home front due to the printing of USD. The commodity oil is like fake money. It is a vehicle to control economic factors based upon what the commodity is denominated in primarily (currently USD). The US is the best house on a bad block right now.

Secondly, printing of money alone does not cause inflation (again I did not say this). When the real value of the economic output is mismatched with the amount of dollars circulating, this is how printing excess money (QE) becomes a problem. Without having the output to back up the QE, the US experiences inflation. If the US doesn't have the goods to support the high exchange value of the USD in the world economy, you get inflation. The only reason we have QE in the first place is because an economy that wants to grow fast and beyond its means (the US since forever) has to do it somehow

Step 1: you tell everyone your country has a ton of money by printing it
Step 2: Get them to buy your stuff/invest in you with 'real money'
Step 3: Economic boom town - profit
Step 4: Continue the process until every one is entirely dependent on your country for its economic value based on their currency that they won't let you fail
 
The US isn't ramping up manufacturing in response to some event. What I was talking about was bringing our manufacturing back to US soil and beginning to increase our world stake in the export market. Right now, all we export is dollars. You will see a return to American made products and a reinvestment in corporations housed in the the US. What this will do it allow us to export more products, decrease our reliance on QE and strengthen our hold on the world market. If we let go of being the reserve currency (we will eventually), we have to be a frontrunner in something otherwise the US stands to lose a hold on the world.

The debt in the US doesn't matter, it never has. In the 40s/early 50s, we actually volunteered as a country more or less to be the world reserve post WWII (see Bretton Woods Conference) since we had lots of economic resources and much power.

The volatility of Bitcoin right now is purely because of lack of no clear authoritative governance (as posters below say: a military). Eventually, if Bitcoin becomes a real thing, governments with lots of power and money and military will assume their slot in this, set up shop and push their economies in new ways using this technology.
The US cannot just spend those reserves on things like oil.. they literally sit on the bank's balance sheet as an accounting journal entry.  They cannot use it to buy oil or anything else.  You see, the dollars never make it to the economy UNLESS they are borrowed by people.  The only way you can say QE is inflationary is if you think banks DID NOT HAVE ENOUGH RESERVES TO LEND BEFORE and this "new" QE money allows them to lend and that causes inflation.  BUT, critically, the banks NEVER had a problem with having reserves before!  In fact, banks don't actually need reserves to lend - they lend FIRST then create the reserves as an offset on their books!  This is so important.  If you understand that you understand that QE is just an asset for asset swap which nets to 0 - swap reserves for US Treasurys - cash for cash - a checking account for a savings account!!  So many people got this wrong since 2009, please understand how important it is.

Look up sectoral balances to understand relationship between public vs private deficits and surpluses
^this.

Military might and nuclear arsenal aside, the petrodollar is the engine of America's global economic domination. It essentially creates an endless loop of demand for U.S. dollars and U.S. debt, which allows the United States to print money endlessly, export its inflation abroad, and smash foreign economies on a whim by tinkering with oil prices, interest rates, and the overall U.S. money supply. Foreign countries, with no other choice but to obtain U.S. dollars in order to purchase the world's most precious commodity (oil), are forced to play this hopelessly rigged game.
This is so wrong.  Please read all my posts here and you will see all you questions addressed.  We don't need oil to be priced in dollars for people to buy our debt.. they do that because we trade with them and they want to hold safe investments.  The US does not need permission to "print" anything, our Fed has the Congressional right to do that all their own.  We don't need permission.

Man oh man. You need to get your arguments squared away and correct guy.

1. China's economy is not fabricated. It is quite the opposite; it is predicted to become the largest economy in the world in the coming years. This is mirrored by India's sentiment on China's Silk Road Initiatives of 2014. India is worried because China has an increasingly large slice of the Indo-Pacific corridor. Couple this with DPRK ties, the Russian-China oil pipeline proposals and major infrastructure ties with large African nation governments and you will quickly see China is not some joke.

2. Europe isn't teetering on collapse. The European Union Commissions latest report out in autumn of last year indicated all EU countries were set for growth through fiscal years 2015-16. Historic government deficients are being refinanced and paid due to strengthened economic activity.

3. Great Britain was NOT fine after losing reserve status with the Sterling. Since the early 1900s, the Pound has been decreasing. Since the 1950s after the end of WWII, the pound has been devalued by HALF in comparison to the USD.

4. China will happily take BTC or a regulated, world approved digital currency for their goods and services. What they want to make sure of is that Chinese money is primarily spent in the Chinese economy and that when it comes to foreign affairs, they get their fair shake with the debt they are holding on behalf of others.

5. The US won't be able to tax its citizens the amount necessary to make the debt interest payments one day in the future. We can only tax so many unborn future citizens (this is a disgusting concept that is mostly true). The government cannot infinitely raise tax burdens on the public without them getting angry. See any history textbook for prime examples. It's a fine line to walk.

6. Having the best legal system has nothing to do with America being in the shitter. Having the best military has nothing to do with it either, but I'll let you rationally decide which one gets the money and which doesn't. Military spending/strength has always been an economic indicator.

7. Stop thinking so small and US-centric. Interest rates and currency strength are proxies for everything else.
For a guy that claims to be in the financial industry, reading your posts makes me think you're a teller who has sat in on a few loan officer meetings. I don't want to take away from this thread, I like your ideas and for facilitating a discussion, just don't parrot things. The world is much larger than the US and on the contrary, many countries are superior to the US in many ways.
1 - no professional investor or businessman trusts data that comes out of China.  They make up numbers and hide problems.  Of course they are a huge economy that will continue to grow, the issue is that people do not trust their government to put all their cash in CNY.  Their legal system is nowhere near the USA, which is why China is nowhere near ready to be reserve status.
2 - Europe - lol - dude they've been saying that every year for the last half decade!  Those are just projections!  Greece is ready to leave and the structural problems that Europe has cannot be fixed without full fiscal and monetary integration of their banking system - something the Germans are wildly opposed to.
3 - Britain's currency being devalued is good for their economy.. they can sell more of their goods.  It is only bad for people who want to take vacations, because they have to spend more.  That is anything but a collapse.
4 - Dude, China was one of the first to ban BTC transactions..
5 - You are speculating, wildly.  Interest expense is down as a % of total government outlays because rates have fallen.  And again, the way our country works we can use the Treasury and primary dealers to buy US debt - we don't need outside forces to do this.  You are saying that people will pay fewer taxes in the future - why?  The US economy collapses?  I think not.  Because interest expense will be high?  No - we can control this by issuing shorter debt maturities, and besides rates have been PLUNGING for the last 30 years, so that part of your argument is also false.
6 - Dude having best legal system is what makes people want to do business with us and supports reserve currency status, which you seem to think is so important.  That is why I mentioned it.
7 - I'm not sure what this is referencing.
And BAS please understand that when I read your comments it is very clear you do not know what you are talking about so don't tell me I am a bank teller.  If you are delusional enough to not see that what I am saying is based on FACTS and what you are saying is based on speculation, things you read online and general surfacy BS then please, move on.  Quoting things like European estimates is just obviously clear that you are naive about many topics.  Every economist every Wall Street analyst 99% of the time predicts things to get better and follow a trend.  If you look at what actually happens and how often they are right, you will see that stuff like that is not worth a lick.  We all know the world is more global than the US, I'm trying to address everything that I can and I am not implying that the world is not connected globally.

1 What effect has the recent years of central bank commanded low interest rate had on the physical capital structure in the US and in the world?

2 Do you think that the current oil glut has something to do with the low interest rate?
1 - it has largely benefited the world because businesses can borrow for less and money has flowed into emerging markets to move their economies forward.  Honestly, it is so difficult to say if that was because of QE or because of things that would have happened without QE anyway.  Even the Fed does not know and cannot quantify QE impact.  Could just be low inflation doing all this like causing low rates.  Overall, it is good for growth to have low rates.  Of course, there are potential issues that come up.. most notably money flows into riskier assets.  Like oil and gas drilling that only works at $100 oil.. and now we will see defaults in that space.
2 - Yes, there are many shale, deepwater and oil sands companies that were able to borrow at very low rates and that increased supply of oil, which started this decline.  By the way - low gas prices are great for consumers worldwide and this should be seen as a VICTORY for the people of the world.  Just bad for companies and certain governments.  More generally, oil prices and interest rates move in the same direction a lot of the time because if you have low inflation caused by low oil prices you get lower bond yields, because you don't need to be worried about higher prices coming up in teh future which makes the value of the interest you are receiving less lucrative.  Low inflation = low yields = low oil prices.

I mean come on. China, a fabricated economy? I'm an Australian, and I know that China is by far Australia's largest trading partner (both imports and exports). Unless Australia's economy is fabricated too, you've got some explaining to do.
I meant that a lot of the data that comes out of their government is fabricated.  Of course it is a real country with real output.. just look at where all your clothes and electronics come from.  I was talking about whether or not they would be qualified to be a reserve currency, please do not take my quotes out of context.
--

PS I like talking to you guys and this has been surprisingly civil (mostly) so far.  Of course I have views that can be challenged but I am trying to keep opinion out of it and reference how things work so you can all make your own decisions.  That is why I stress the Treasury, Fed and FX concepts so much, cheers.
dinofelis
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January 07, 2015, 03:29:34 PM
 #66

Taxation is no more theft than Bitcoin is child pornography Smiley


Consider this:

1) someone with a gun puts that gun against your head and tells you to pay them half of your income.
2) ten strong guys put you in a cage and tell you they will let you out if you give them half of your income.
3) ten strong guys put you in a cage, and tell you they will let you out if you buy for half of your income, beany babies.
4) ten strong guys put you in a cage, and tell you they will let you out if you pay them half of your income, and then they will make sure that no other guys will put you in a cage again.
5) the gouvernment will put you in a cage unless you pay them half of your income, and in return they will make sure that nobody else will put you in a cage.  On top of that, you get a museum of modern art for it which you can then visit by paying an entrance ticket.

Where's the difference ?


Hello my born-again libertarian friend!  And what a purty hobby horse it is you're riding today, never seen one quite like it before, such original, very wow!

1-4:  The reason it doesn't happen is I live in a country where there are laws, and enough muscle to enforce those laws in a meaningful way.  Those musclebound jackbooted thugs work up a big appetite, so some of my taxes go towards buying them fresh children to eat.
Good things cost money.


The point was not whether it happened or not, but rather what is the difference between 10 maffia thugs putting you in a cage unless you pay them, or 10 000 state-paid thugs doing the same (but carrying a police uniform or the robe of a judge instead of a leather jacket).

A gedanken-experiment, if you like.  What's the difference ?  Why is the former "crime" and the latter "paying taxes" ?  What's the fundamental difference as seen from the individual undergoing the action ?

Quote
5.  Yes, as far as making sure that no one else does, WWII certainly comes to mind.  Of course, a privately funded militia of sulky middle-aged libers would have done the job far better, cheaper, and in half the time  ...wait, aren't you French?  Nevermind then, disregard.

No, I'm not talking about that.  I'm talking about all those goods and services OTHER than protection against violence that the state buys for you in your name with your extorted money.  Like public services of bad quality and high cost that you don't ask for, wellfare that you don't ask for, military adventures abroad that you don't ask for, and a lot of people on a state's payroll with ill-defined tasks but important salaries that you have to pay for.

dinofelis
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January 07, 2015, 03:34:16 PM
 #67

^
I live in US.  My family moved here from Soviet Union.  We were made to wait two and a half years for an exit visa.  My father was jailed during that time for a protest demonstration which lasted all of 30 seconds.

So yeah, I moved to a country that "incarnate [sic] my political views."  Now what the fuck have you done?

Ah, then I can understand you of course.  If you come out of Hell, of course the kitchen oven seems cold to you :-) and you do not understand people complaining about the heat.

But maybe you're not aware that even the western governments (more Europe than the USA probably) are slowly evolving in the same direction as the former Soviet Union: total state control of everything.  Of course there's still more freedom in the west than under Stalin, but that's not difficult :-)  But the amount of freedom is melting like snow in Hell.
dakota neat
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January 07, 2015, 03:47:08 PM
 #68

^
I live in US.  My family moved here from Soviet Union.  We were made to wait two and a half years for an exit visa.  My father was jailed during that time for a protest demonstration which lasted all of 30 seconds.

So yeah, I moved to a country that "incarnate [sic] my political views."  Now what the fuck have you done?

And now after gods own country saved you you've found out waisting your life spitting poison on the bitcointalk forums is your destiny.
NotLambchop
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January 07, 2015, 03:50:26 PM
 #69

...what is the difference between 10 maffia thugs putting you in a cage unless you pay them, or 10 000 state-paid thugs doing the same (but carrying a police uniform or the robe of a judge instead of a leather jacket)...

None.  That's why I'm going to come & live at your house, and won't pay you rent.  Because there's no difference between charging rent and mafia thuggery either.
Please remodel & hire some good help before I move in--I wouldn't want to put up with substandard services.

Quote
Quote
5.  Yes, as far as making sure that no one else does, WWII certainly comes to mind.  Of course, a privately funded militia of sulky middle-aged libers would have done the job far better, cheaper, and in half the time  ...wait, aren't you French?  Nevermind then, disregard.

No, I'm not talking about that.  I'm talking about all those goods and services OTHER than protection against violence that the state buys for you in your name with your extorted money.  Like public services of bad quality and high cost that you don't ask for, wellfare that you don't ask for, military adventures abroad that you don't ask for, and a lot of people on a state's payroll with ill-defined tasks but important salaries that you have to pay for.

Living in a country is a package deal.  Like renting a hotel room--you get charged for the pillow mints you didn't eat & the bed you haven't slept in.
Don't like the deal?  Go to a different hotel, or sleep in the gutter.  Give up your citizenship & GTFO like that petty criminal Ver (who is now whining that US won't give him an entry visa).
NotLambchop
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January 07, 2015, 03:56:16 PM
 #70

^
I live in US.  My family moved here from Soviet Union.  We were made to wait two and a half years for an exit visa.  My father was jailed during that time for a protest demonstration which lasted all of 30 seconds.

So yeah, I moved to a country that "incarnate [sic] my political views."  Now what the fuck have you done?

And now after gods own country saved you you've found out waisting your life spitting poison on the bitcointalk forums is your destiny.

You seem too flustered to type.  Take a few breaths and cool down 'til you can form a coherent sentence Smiley
dakota neat
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January 07, 2015, 04:01:25 PM
 #71

^
I live in US.  My family moved here from Soviet Union.  We were made to wait two and a half years for an exit visa.  My father was jailed during that time for a protest demonstration which lasted all of 30 seconds.

So yeah, I moved to a country that "incarnate [sic] my political views."  Now what the fuck have you done?

And now after gods own country saved you you've found out waisting your life spitting poison on the bitcointalk forums is your destiny.

You seem too flustered to type.  Take a few breaths and cool down 'til you can form a coherent sentence Smiley

The confessions of Notlambchop. Made my day lol
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January 07, 2015, 04:24:53 PM
 #72

I guess my biggest question would be, why are you on a Bitcoin forum if you have no interest in Bitcoin?

Are you trying to "save us" from ourselves?

First seastead company actually selling sea homes: Ocean Builders https://ocean.builders  Of course we accept bitcoin.
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January 07, 2015, 04:30:25 PM
 #73

^
Nah, just keeping you from roping in more marks.  And won't lie, the luls here are top notch.
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January 07, 2015, 04:47:08 PM
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I agree, the US doesn't need oil to be priced in USD to print money. I never said that. What I was alluding to was because oil happens to be dominated in USD, the US (aka the Fed-a private entity) can print money that is never disseminated into the economy (i.e. lended to banks as you've said above). What this allows the US to do is simultaneously buy oil with money that is non-inflationary on the US economy, purchase a commodity and sell it back to its economy at deflationary prices for a profit. Essentially, on the books it looks like the US economy is booming with all the capital coming in (cheap gas prices mean more spending, traveling; generally linked to improved economic conditions), but in reality, the money never existed and is being injected into the economy from an outside way to mitigate economic inflation on the home front due to the printing of USD. The commodity oil is like fake money. It is a vehicle to control economic factors based upon what the commodity is denominated in primarily (currently USD). The US is the best house on a bad block right now.

Secondly, printing of money alone does not cause inflation (again I did not say this). When the real value of the economic output is mismatched with the amount of dollars circulating, this is how printing excess money (QE) becomes a problem. Without having the output to back up the QE, the US experiences inflation. If the US doesn't have the goods to support the high exchange value of the USD in the world economy, you get inflation. The only reason we have QE in the first place is because an economy that wants to grow fast and beyond its means (the US since forever) has to do it somehow

Step 1: you tell everyone your country has a ton of money by printing it
Step 2: Get them to buy your stuff/invest in you with 'real money'
Step 3: Economic boom town - profit
Step 4: Continue the process until every one is entirely dependent on your country for its economic value based on their currency that they won't let you fail
 
The US isn't ramping up manufacturing in response to some event. What I was talking about was bringing our manufacturing back to US soil and beginning to increase our world stake in the export market. Right now, all we export is dollars. You will see a return to American made products and a reinvestment in corporations housed in the the US. What this will do it allow us to export more products, decrease our reliance on QE and strengthen our hold on the world market. If we let go of being the reserve currency (we will eventually), we have to be a frontrunner in something otherwise the US stands to lose a hold on the world.

The debt in the US doesn't matter, it never has. In the 40s/early 50s, we actually volunteered as a country more or less to be the world reserve post WWII (see Bretton Woods Conference) since we had lots of economic resources and much power.

The volatility of Bitcoin right now is purely because of lack of no clear authoritative governance (as posters below say: a military). Eventually, if Bitcoin becomes a real thing, governments with lots of power and money and military will assume their slot in this, set up shop and push their economies in new ways using this technology.

The US cannot just spend those reserves on things like oil.. they literally sit on the bank's balance sheet as an accounting journal entry.  They cannot use it to buy oil or anything else.  You see, the dollars never make it to the economy UNLESS they are borrowed by people.  The only way you can say QE is inflationary is if you think banks DID NOT HAVE ENOUGH RESERVES TO LEND BEFORE and this "new" QE money allows them to lend and that causes inflation.  BUT, critically, the banks NEVER had a problem with having reserves before!  In fact, banks don't actually need reserves to lend - they lend FIRST then create the reserves as an offset on their books!  This is so important.  If you understand that you understand that QE is just an asset for asset swap which nets to 0 - swap reserves for US Treasurys - cash for cash - a checking account for a savings account!!  So many people got this wrong since 2009, please understand how important it is.

I know they sit on a balance sheet! That's my point, they don't exist! This is how the US can mitigate inflation. They buy oil shares with money they doesn't exist! They when the oil shares are sold for profit, money comes into the US economy they never existed before. What this does is allows the US to increase its economic activity without having to print money for banks to lend to citizens (QE = this option equates to inflation).

That is the problem: Banks do not need reserves to lend! Debt is only an asset to the dispensers of that debt. Banks that originally started in the US never had their own money, they were public businesses that lent money loaned to them from the Fed to the citizens of the US.

I understand how important this. It's one of the single largest reasons that US capitalism is killing itself. When citizens/businesses/institutions fail to pay back their debts to banks, few if any banks truly go under. What happens is they bundle all that debt, refinance the it, sell it parted out to other banks and lenders, and file some nice documents to get the Fed to stimulate the economy again with newly printed dollars they can lend.

All money in the US economy since its 'humble' beginnings in 1776 are debt. Money cannot be created out of nothing.


Man oh man. You need to get your arguments squared away and correct guy.

1. China's economy is not fabricated. It is quite the opposite; it is predicted to become the largest economy in the world in the coming years. This is mirrored by India's sentiment on China's Silk Road Initiatives of 2014. India is worried because China has an increasingly large slice of the Indo-Pacific corridor. Couple this with DPRK ties, the Russian-China oil pipeline proposals and major infrastructure ties with large African nation governments and you will quickly see China is not some joke.

2. Europe isn't teetering on collapse. The European Union Commissions latest report out in autumn of last year indicated all EU countries were set for growth through fiscal years 2015-16. Historic government deficients are being refinanced and paid due to strengthened economic activity.

3. Great Britain was NOT fine after losing reserve status with the Sterling. Since the early 1900s, the Pound has been decreasing. Since the 1950s after the end of WWII, the pound has been devalued by HALF in comparison to the USD.

4. China will happily take BTC or a regulated, world approved digital currency for their goods and services. What they want to make sure of is that Chinese money is primarily spent in the Chinese economy and that when it comes to foreign affairs, they get their fair shake with the debt they are holding on behalf of others.

5. The US won't be able to tax its citizens the amount necessary to make the debt interest payments one day in the future. We can only tax so many unborn future citizens (this is a disgusting concept that is mostly true). The government cannot infinitely raise tax burdens on the public without them getting angry. See any history textbook for prime examples. It's a fine line to walk.

6. Having the best legal system has nothing to do with America being in the shitter. Having the best military has nothing to do with it either, but I'll let you rationally decide which one gets the money and which doesn't. Military spending/strength has always been an economic indicator.

7. Stop thinking so small and US-centric. Interest rates and currency strength are proxies for everything else.
For a guy that claims to be in the financial industry, reading your posts makes me think you're a teller who has sat in on a few loan officer meetings. I don't want to take away from this thread, I like your ideas and for facilitating a discussion, just don't parrot things. The world is much larger than the US and on the contrary, many countries are superior to the US in many ways.


1 - no professional investor or businessman trusts data that comes out of China.  They make up numbers and hide problems.  Of course they are a huge economy that will continue to grow, the issue is that people do not trust their government to put all their cash in CNY.  Their legal system is nowhere near the USA, which is why China is nowhere near ready to be reserve status.
2 - Europe - lol - dude they've been saying that every year for the last half decade!  Those are just projections!  Greece is ready to leave and the structural problems that Europe has cannot be fixed without full fiscal and monetary integration of their banking system - something the Germans are wildly opposed to.
3 - Britain's currency being devalued is good for their economy.. they can sell more of their goods.  It is only bad for people who want to take vacations, because they have to spend more.  That is anything but a collapse.
4 - Dude, China was one of the first to ban BTC transactions..
5 - You are speculating, wildly.  Interest expense is down as a % of total government outlays because rates have fallen.  And again, the way our country works we can use the Treasury and primary dealers to buy US debt - we don't need outside forces to do this.  You are saying that people will pay fewer taxes in the future - why?  The US economy collapses?  I think not.  Because interest expense will be high?  No - we can control this by issuing shorter debt maturities, and besides rates have been PLUNGING for the last 30 years, so that part of your argument is also false.
6 - Dude having best legal system is what makes people want to do business with us and supports reserve currency status, which you seem to think is so important.  That is why I mentioned it.
7 - I'm not sure what this is referencing.
And BAS please understand that when I read your comments it is very clear you do not know what you are talking about so don't tell me I am a bank teller.  If you are delusional enough to not see that what I am saying is based on FACTS and what you are saying is based on speculation, things you read online and general surfacy BS then please, move on.  Quoting things like European estimates is just obviously clear that you are naive about many topics.  Every economist every Wall Street analyst 99% of the time predicts things to get better and follow a trend.  If you look at what actually happens and how often they are right, you will see that stuff like that is not worth a lick.  We all know the world is more global than the US, I'm trying to address everything that I can and I am not implying that the world is not connected globally.


1- Don't hand wave by saying "no professional investor." That's a cheesy line and dates your age at about 21. China doesn't want reserve status. Why would they? It would mean losing out on collection of all the debts they have from the US and other countries. If you put yourself in the shoes of Chinese economic power, think about it? The US is the example of what happens if you take on reserve status. Why the hell would they want to wreck their economy? What they would do is given a world currency, China would back it's use for foreign economic affairs provided when they exchange all their debts both held/personal would be given an exchange rate equal to the country the currency was held in.

2- Not to sound condescending, but Europe is a conglomerate of countries, not one economic house. You talk as if all Europe functions as one. Greece was bailed out not to long ago. The Germans (one of the economic powerhouse manufacturers of Europe) want Greece to remain out of austerity. The point of the Euro was to unit Europe after the war. There are too many competing currencies and countries in the area, so the idea was to unite making trade, travel and access to Europe easier for all Europeans. In a sense bolster the economy after being crushed from the war. Of course the Germans are pissed - do you realize what happen to them after the fall of the Berlin Wall? - Try supporting an entire new eastern half of your country that was decimated by the Russians with massive influx of poor eastern Germans.

3- The devaluing is not good. Everything in the world economy is tied to the reserve currency. When you are selling products from your country at a lower value, you may sell more, but you still make less on the economic scale. How do you think GB borrows their capital? and from who? Credit lines to GB come from the US (mostly). GB may have a booming economy from sale of its goods, but when it has to borrow 2:1 to finance the increased production of those goods, it's a net loss for GB.

4- China banned Bitcoins because it meant Chinese dollars were leaving the Chinese economy. China has a heavy tradition of gambling and superstition. For instance, similar to the US, Chinese elevators don't contain the number of certain floors. Certain numbers in Chinese signify death or life and people live by it. It's may sound like a farce, but it is heavily steeped into Chinese culture and business practice. Much of Chinese is rural and poor. Bitcoin was seen as a chance to make a lot of money quickly. The government locked it down because of that.

5- I never said any of this. What I said was that every year there are taxes taken from the citizens of the US. As the debt level rises, the Fed can either adjust the interest rates/the government can increase taxes or a combination of both. For the next decades to come, the US economy is shooting out of control. There are not enough US citizens to tax (at whatever future rate needed) to make the debt payments in the future. Tax rates are based on economic status which is ultimately determined by debt ratios.

6- I quote things because that is how I root my arguments. When you want to make a statement regarding something, one must references his facts. For instance:

"Every economist every Wall Street analyst 99% of the time predicts things to get better and follow a trend." - said by you


This has nothing to do with anything. 99% of all Wall Street analysts don't agree with 1% of Wall Street analysts. This is all that you are telling me. I don't want to harp on you, but in all your responses to me, you have not stated one clear fact at all nor backed up anything besides saying "I'm in finance." I don't care if you're in Sewage sales. Everyone is entitled to their opinion, but clowning around on an internet forum where many young up and comers stop to get a perspective on Bitcoin and finance get ruined by your unsubstantiated statements.



NotLambchop
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January 07, 2015, 04:50:37 PM
 #75

...
Money cannot be created out of nothing.
...

And yet there's Bitcoin Smiley
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January 07, 2015, 05:01:00 PM
 #76

...
Money cannot be created out of nothing.
...

And yet there's Bitcoin Smiley


I agree, that's the whole point of Bitcoin. You cannot create more Bitcoin after 21 million. That's all there will ever be.

However, I'd argue Bitcoin is not money. It's a store of value that can be exchanged for currencies to buy things. This technology will one day become the placeholder many countries will exchange their own currencies to hedge economic ups and downs.

When the digital currency store of value price has a favorable exchange rate for some country's own currency, that country will exchange back to their currency it and deliver it to their economy through any number of ways to drive their economy. Conversely, if their economy is tanking, they will borrow funds at a favorable rate and hedge the loss by exchanging into the digital store of value. Once their economy flips, they make the exchange.

It's a genius idea.
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January 07, 2015, 05:12:31 PM
Last edit: January 07, 2015, 05:23:10 PM by NotLambchop
 #77

...
Money cannot be created out of nothing.
...

And yet there's Bitcoin Smiley


I agree, that's the whole point of Bitcoin! Bitcoin is not money, but it was surly created out of nothing. It's a store of value that can be exchanged for money to buy things.

Two-thirds of the value lost over the past year.  Where did it go Huh

Quote
This technology will one day become the place many countries will exchange their own currencies for a piece of that digital asset.

No country would ever adopt a currency it neither issues, backs, nor controls.

Quote
When the digital price shoots up and has a favorable exchange rate for their own currency, that country will pull it out and deliver it to their economy through any number of ways.

Read up on what fiat money is and how it works.  Above makes no sense.

Quote
It's a genius idea.

Nah.  Beanie Babies' artificially limited supply was a genius idea.  Bitcoin simply borrowed it.
btc_n_economics (OP)
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January 07, 2015, 05:18:46 PM
 #78

I know they sit on a balance sheet! That's my point, they don't exist! This is how the US can mitigate inflation. They buy oil shares with money they doesn't exist! They when the oil shares are sold for profit, money comes into the US economy they never existed before. What this does is allows the US to increase its economic activity without having to print money for banks to lend to citizens (QE = this option equates to inflation).

That is the problem: Banks do not need reserves to lend! Debt is only an asset to the dispensers of that debt. Banks that originally started in the US never had their own money, they were public businesses that lent money loaned to them from the Fed to the citizens of the US.

I understand how important this. It's one of the single largest reasons that US capitalism is killing itself. When citizens/businesses/institutions fail to pay back their debts to banks, few if any banks truly go under. What happens is they bundle all that debt, refinance the it, sell it parted out to other banks and lenders, and file some nice documents to get the Fed to stimulate the economy again with newly printed dollars they can lend.

All money in the US economy since its 'humble' beginnings in 1776 are debt. Money cannot be created out of nothing.

1- Don't hand wave by saying "no professional investor." That's a cheesy line and dates your age at about 21. China doesn't want reserve status. Why would they? It would mean losing out on collection of all the debts they have from the US and other countries. If you put yourself in the shoes of Chinese economic power, think about it? The US is the example of what happens if you take on reserve status. Why the hell would they want to wreck their economy? What they would do is given a world currency, China would back it's use for foreign economic affairs provided when they exchange all their debts both held/personal would be given an exchange rate equal to the country the currency was held in.

2- Not to sound condescending, but Europe is a conglomerate of countries, not one economic house. You talk as if all Europe functions as one. Greece was bailed out not to long ago. The Germans (one of the economic powerhouse manufacturers of Europe) want Greece to remain out of austerity. The point of the Euro was to unit Europe after the war. There are too many competing currencies and countries in the area, so the idea was to unite making trade, travel and access to Europe easier for all Europeans. In a sense bolster the economy after being crushed from the war. Of course the Germans are pissed - do you realize what happen to them after the fall of the Berlin Wall? - Try supporting an entire new eastern half of your country that was decimated by the Russians with massive influx of poor eastern Germans.

3- The devaluing is not good. Everything in the world economy is tied to the reserve currency. When you are selling products from your country at a lower value, you may sell more, but you still make less on the economic scale. How do you think GB borrows their capital? and from who? Credit lines to GB come from the US (mostly). GB may have a booming economy from sale of its goods, but when it has to borrow 2:1 to finance the increased production of those goods, it's a net loss for GB.

4- China banned Bitcoins because it meant Chinese dollars were leaving the Chinese economy. China has a heavy tradition of gambling and superstition. For instance, similar to the US, Chinese elevators don't contain the number of certain floors. Certain numbers in Chinese signify death or life and people live by it. It's may sound like a farce, but it is heavily steeped into Chinese culture and business practice. Much of Chinese is rural and poor. Bitcoin was seen as a chance to make a lot of money quickly. The government locked it down because of that.

5- I never said any of this. What I said was that every year there are taxes taken from the citizens of the US. As the debt level rises, the Fed can either adjust the interest rates/the government can increase taxes or a combination of both. For the next decades to come, the US economy is shooting out of control. There are not enough US citizens to tax (at whatever future rate needed) to make the debt payments in the future. Tax rates are based on economic status which is ultimately determined by debt ratios.

6- I quote things because that is how I root my arguments. When you want to make a statement regarding something, one must references his facts. For instance:

"Every economist every Wall Street analyst 99% of the time predicts things to get better and follow a trend." - said by you


This has nothing to do with anything. 99% of all Wall Street analysts don't agree with 1% of Wall Street analysts. This is all that you are telling me. I don't want to harp on you, but in all your responses to me, you have not stated one clear fact at all nor backed up anything besides saying "I'm in finance." I don't care if you're in Sewage sales. Everyone is entitled to their opinion, but clowning around on an internet forum where many young up and comers stop to get a perspective on Bitcoin and finance get ruined by your unsubstantiated statements.

I don't think you are understanding this whole reserve thing.  If you are saying they don't exist, how can they buy oil with them.  The point about QE that you make, about how money isn't real and how it is buying oil I just don't understand it.  Loans are created when banks lend, that is new money.  Going out and buying oil has nothing to do with QE or reserves.. the banks, if they buy oil, could have sold their US Treasurys and bought oil with that, so the fact that QE happened has nothing to do with it.  If you read my posts which explain that QE was an asset swap of one type of money for another, there is no change that happened.  Look, if you are talking about how the USD is not going to be reserve status anymore we are missing one major step - them losing that status.  You have to convince central banks around the world to dump their dollars when the USD has been very strong and stable.  And I have argued over and over that it is stable and will likely continue to be stable.  Talking about losing status, or how inflation is coming is too far ahead.  There is no inflation right now, that is the problem.  QE did not create it.  The Fed can't create it.  So let's move past this point you are trying to make which is that somehow inflation is being created because that's not how it works.

Banks do lose money when people default on debt.. they lose all the money they gave to the person.  And banks do fail, thousands of times.  Getting things moving again with government intervention is the only way to prevent a depression.  You say that all the money created since 1776 has been debt but that is not true and I'm saying it again you are not understanding or reading what I am writing - money is only CREATED or truly put into circulation by the US TREASURY they are the only ones who can create physical money.  But that is not the only thing that money is.  Money is also money in checking accounts and savings accounts, which is created by other borrowing and lending and so on.  The important thing is that there IS a ton of money out that that is BEYOND the debt.  Household assets in the US are about $80 TRILLION with liabilities of like $12 trillion, so there is WEALTH there.  Tons of it.  Not just that came out of debt.  What I think you are getting at is that all wealth is backed by the full faith and power of the US Government, which is true - the cash and wealth is not backed by anything like gold.  But look at what happened to stock markets and economic activity after we left the gold standard - it took off like a rocket.  That system is antiquated.  And if you are saying that that guarantee is worth nothing, I think you are wrong and I have talked about the things that protect the value of the dollar ad naseum in here.

1 - Dude the US did not get it's economy wrecked by having reserve status, that is nonsense and contradicts the other comments you made about how somehow they can buy things with money that doesn't exist it is false.
2 - The Eurozone has problems that cannot be fixed unless there is a union which the Germans oppose - that is a problem.  Greece was bailed out and they like 3 times and they need to be bailed out again.  The euro was created to facilitate trade, not to unite Europe in some political way.  I don't really know what you are arguing I said that Europe has a lot of problems and they clearly do, just look at their currency strength or lack thereof.
3 - Devaluing IS good.  What does it mean when you say you sell more but you make less on an economic scale?  That is not a real thing.  I don't care about GB I'm talking about the US which does NOT borrow in other currencies, because you were saying that somehow devaluation of the dollar would be disasterous.
4 - I hear that, but again that was entirely my point and I am not sure why we are arguing.
5 - This is wrong on so many levels.  Yo usay that it is shooting out of control but corporate profits are at all time highs.  Nothing of what you said is actually happening.  Can't make debt payments - are you serious?  They ARE doing so comfortably.  If this was true our interest rates would be 50%!  They are like 3% - this is simply false and misleading at best.  Economic status has nothing to do with debt ratios.. tax rates are based on how much money you make and that has nothing to do with what you said in the rest of your paragraph.

I can't tell if you really believe that all the stuff you are saying is true or not.  But let me assume that you do believe it.  You are talking about things like economic scale which is not a thing, you are saying that somehow banks are buying oil without real money, that China would happily accept BTC but then that they don't want to take BTC because well it means $ leaving their economy, and that is just to pick on a couple points.  Most of what I have said is based on facts, and the fact that you think I have not substantiated anything with facts speaks to how unhinged from reality you are.

No disrespect but it doesn't sound like you are reading my posts or if you do read them you then just quickly move onto the next manic point you may have and ignore the facts about how banks, the economy and real world work so that you can fit everything into your picture of the world.  This is not good for you.
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January 07, 2015, 05:25:06 PM
 #79

There's nothing wrong with creating money out of nothing, in and of itself.  I would rather a country can create money - which most in the world CAN since almost NO ONE is on the gold standard - and then backup that money by output, taxation, etc.  That is what fiat is.  Look at the last 50 years since we went off the gold standard - the world is 100x better off you cannot argue this fact.  You would rather we trade bits of gold and limit credit expansion?  Please.  Instead you have BTC which is backed by nothing, but is in a limited supply.  So what?  Who CARES that you cannot make more.  That does NOT mean that the value will be supported lol.  It just means there can't be more.
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January 07, 2015, 06:54:25 PM
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NotLambChop -

Where did the 2/3 go? -Into the pockets of worthless scoundrels who are taking speculators money. It's a damn theft market right now. You have a lot of money? -Start an exchange. Profit. Close up shop.

No country would adopt a currency it can't control? I never said they would. I am alluding to the idea of SDRs (Special Drawing Rights-Currency units). This concept already exists and is used by the US and a few other countries, but is in need of new lifeblood. This is where I believe Bitcoin's technology will take it.

BTC-

Comon? You really believe a country that can create its own money out of nothing is a good thing? Why aren't other countries doing because "in and of itself" it's good? Hell, why doesn't some small nation just get to printing? --They can't do it because everything is tied to the exchange rate of their currency to the reserve currency (the USD). We are in control of it; we set the price. This really is my only point out of all of my writings for you to see and internalize. The US is in control. That's why every thing I am saying to you sounds wildly outrageous. You are part of those in control. You are seeing it from one side and because that side is in control, you think that is reality for everyone.

The gold standard was dropped because after the war, Britain (the reserve currency at the time: the Sterling) had a massive run on the banks and they ran into a huge liquidity problem. They simply is not enough gold in the world to cover everything.

"The world is better off" as you say after dropping the gold standard was because this allowed the US most importantly to not have to keep reserves of a finite metal not because they just got rid of the stupid idea of gold. They instead used their own dollar (USD; which can be controlled and minted) as the new 'gold standard' for not only the US but the world. The US controls the "gold standard" of yesteryear today for the entire world. It's like being Midas pre-WWI. Dropping the gold standard allowed the US to boom as it could take on massive loads of debt without having to pay it back ever because they control it!

Problem:
Gold Standard = finite resource that cannot cover infinite growth

New Problem: The finite resource limits growth

Solution:
USD reserve currency standard = unlimited resource that can cover infinite growth

New Problem: Those who don't control the resource can't control their growth (anyone but the US -> dependency)


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