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The Wealthy Are Hoarding $10B of Bitcoin in Bunkers

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Re: The Wealthy Are Hoarding $10B of Bitcoin in Bunkers

#51

Post by frockington »

kfrzcode wrote: post #23
simias wrote: post #17

>the global currency of the future, that they need to buy some, and that he’s the man to safeguard it. Looks like in the future people hoard currency instead of spending and investing it then. That ought to be interesting. It also demonstrates the costs associated with non-reversible transactions, these vaults aren't storing gold ingots or priceless artifacts, just private keys. Banks around the world don't need to w…

> in the future people hoard currency People hoard(ed) currency in the past and present as well

Who is hoarding currency on a notable scale? Why would they at the very least not invest in short-term bonds/mmfs

Re: The Wealthy Are Hoarding $10B of Bitcoin in Bunkers

#52

Post by acdha »

imgabe wrote: post #39
acdha wrote: post #30

Earlier quoted context omitted.

Those were speculative investments, not bank accounts. Nobody lost money in an FDIC insured account. The comparison is also dubious for another reason: everyone who did even the tiniest bit of diligence knew the mortgage and derivative markets were in a huge bubble. Phrases like “liar loan” were common, they had to invent new ways to rate derivatives which didn’t meet the traditional standards, etc. but so many peopl…

It is relevant because the mantra of "traditional financial institutions have your best interests at heart, unlike those Bitcoin scammers" is demonstrably false.

That’s a rather blatant strawman: it’s literally a textbook example of the value of regulation and laws which make that happen, not the goodwill of bankers.

Re: The Wealthy Are Hoarding $10B of Bitcoin in Bunkers

#54

Post by gambiting »

simias wrote: post #17

>the global currency of the future, that they need to buy some, and that he’s the man to safeguard it. Looks like in the future people hoard currency instead of spending and investing it then. That ought to be interesting. It also demonstrates the costs associated with non-reversible transactions, these vaults aren't storing gold ingots or priceless artifacts, just private keys. Banks around the world don't need to w…

You can at the very least make copies of the keys, and have your protection protocol be "wipe when anything suspicious is detected". You can't do that with gold.

Re: The Wealthy Are Hoarding $10B of Bitcoin in Bunkers

#56

Post by hapnin »

frockington wrote: post #51
kfrzcode wrote: post #23

Earlier quoted context omitted.

> in the future people hoard currency People hoard(ed) currency in the past and present as well

Who is hoarding currency on a notable scale? Why would they at the very least not invest in short-term bonds/mmfs

It used to be called "savings".

Re: The Wealthy Are Hoarding $10B of Bitcoin in Bunkers

#57

Post by api »

buckthundaz wrote: post #32
kfrzcode wrote: post #23

Earlier quoted context omitted.

> in the future people hoard currency People hoard(ed) currency in the past and present as well

Indeed. The stockholm syndrome of Keynesianism is pervasive and unnoticed by many. The correct response to erosion of value is hoarding.

The correct response to erosion of value is investing as long as there are good investments to be found. This is the idea behind inflationary money (which is a broader concept than Keynesianism).

The important ideas of Keynes in a nutshell:

* Monetary velocity: wealth is a verb, not a noun. The wealth of nations is measured in their rate of transactions, not how much cash or idle assets they are hoarding.

* Idle vs. productive investment: if currency is deflationary people will store currency, a non-productive investment. If currency is inflationary people will invest it in productive activities.

I don't agree absolutely 100% with these, but I think Keynes was at least onto something especially with the first. The problem with the first is that velocity also includes transactions that don't actually do anything or that even "create" negative value. Gambling increases monetary velocity but doesn't accomplish anything and may actually destroy value. A real value-centric velocity statistic is impossible because value is a biological/humanistic concept and is non-computable. The main problem with the second is that if people are pessimistic about investments they will still hoard, but using things like real estate and gold. Another problem with the second point is that over-using this strategy to drive investment creates bubbles, as we have seen.

Finally I must point out that Keynes gets a ton of flak for stuff he did not advocate, like insane levels of public and private debt. Keynes would have been shocked and horrified at the levels of debt in our current system, and in fact his whole counter-cyclic government spending strategy was designed to prevent this.

Blame politicians and banks for the debt problem, not Keynes. Politicians invoke Keynes when they want to ratchet up spending during downturns but then they conveniently forget the other part-- namely that Keynes also advocated reducing government spending and repaying debt proportionally during times of abundance. Keynes basically argued that government could be used as ballast against economic oscillation.

Re: The Wealthy Are Hoarding $10B of Bitcoin in Bunkers

#58

Post by TomMarius »

Balero wrote: post #49
TomMarius wrote: post #37

Earlier quoted context omitted.

What do you mean, what inflation?

Bitcoin has no inflation, there are only a given number of total bitcoins in existence, which many (myself included) would argue makes it a poor currency.

I know, that's why I'm asking what does the commenter mean with inflation in their comment.

Re: The Wealthy Are Hoarding $10B of Bitcoin in Bunkers

#59

Post by Clubber »

Finnucane wrote: post #47
Clubber wrote: post #19

Earlier quoted context omitted.

Ya but you can have multiple accounts. I think that circumvents the limit. I think the limit was raised during the Bush administration, but not sure. >The standard deposit insurance amount is $250,000 per depositor, per FDIC-insured bank, per ownership category. https://www.fdic.gov/deposit/deposits/faq.html FWIW, I think it should definitely be higher than $250K. Probably $10M or so.

The problem with raising the insurance is that banks pay for it, and the FDIC maintains a fund for paying out claims. If the amount at risk was higher, fees would have to be higher and the FDIC would have to keep an enormous amount of cash on hand. Hell, even at that level, the FDIC was badly stressed during the 2008 crisis. The point of the FDIC anyway is not to protect rich people from all losses, but to prevent ru…

Yes, but since commercial banks and investment banks were allowed to merge after 70 or so years, banks certainly have a lot more income than they used to.

Re: The Wealthy Are Hoarding $10B of Bitcoin in Bunkers

#60

Post by imgabe »

acdha wrote: post #52
imgabe wrote: post #39

Earlier quoted context omitted.

It is relevant because the mantra of "traditional financial institutions have your best interests at heart, unlike those Bitcoin scammers" is demonstrably false.

That’s a rather blatant strawman: it’s literally a textbook example of the value of regulation and laws which make that happen, not the goodwill of bankers.

You mean the laws and regulations written by lobbyists paid by the bankers? Do you mean the regulators who leave their Federal jobs for multi-million dollar per year jobs at the banks they formerly regulated? Are those the ones you're talking about?

You seem to be implying that the regulations / laws and the banks are two separate entities. They're increasingly the same. Which means that yes, it is basically their goodwill we're dependent on, or more accurately how much they think they can get away with before there's literal blood in the streets.

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