I am going out on a limb and calling this price peanuts. The rise is due to Cyprus, and if bankers keep stealing people's money (and printing it) ... which they sure will because they compete amongst themselves about who has the most multi-millions (regardless of how they got it)... a portion will move their wealth into bitcoin. Also, as fiat currencies lose value, bitcoin will rise. Bitcoin is a hedge against fiat.…
Bitcoin exchange rate reached $100 USD per BTC
471–480 of 600 posts
Re: Bitcoin exchange rate reached $100 USD per BTC
#472Earlier quoted context omitted.
> Gold is a piss poor investment. Relative to what? The USD? http://pricedingold.com/us-dollar/ Real estate? http://pragcap.com/real-estate-gold-ratio-falls-to-30-year-l... Gold is an asset that holds its purchasing power pretty well. It is what it is. It is not however a "piss poor" investment.
I just noticed something: your links are "lying with statistics". Everyone knows that if you want to "prove" that Gold is a good investment, just start your graphs at 1970s. After all, Gold reached a glorious bubble of inflation-adjusted $2200+ / ounce in 1970s, and has fallen since then. (yes, even with today's inflated prices, Gold is no where near its inflation-adjusted high). Lets take a more reasonable graph of…
Re: Bitcoin exchange rate reached $100 USD per BTC
#473Earlier quoted context omitted.
There are a few replies here that seem to be reacting negatively to the OP due to the tone of the submission instead of the content. To be clear, deflation is categorically bad for a currency. It's terrible, like great depression terrible. The reason it's bad is that deflation makes it more profitable to do nothing than to invest. When this happens, people react by not spending money. The market dies. While inflation…
> To be clear, deflation is categorically bad for a currency. It's terrible, like great depression terrible. I hear this argument a lot, but no nation that we know of has ever collapsed because of deflation, right? We've never (recently) been in a period of significant deflation, so how can we be so certain of its effects? > deflation makes it more profitable to do nothing than to invest. Investment won't ever stop,…
Of course, everyone likes deflation when it means they can buy more for less. Of course, if prices of things get so low that people start to purchase, then deflation will eventually reverse, unless you assume that deflation will continue forever until prices reach zero and everything is free. Of course, everyone force-fed a diet of Keynes assumes that hoarding relates to stuffing mattresses full of money instead of holding cash in banks, where the bank can lend the money out and still invest. They uncritically swallow the line that a central bank inflating at will is the best thing for an economy.
Inflation/deflation are just two phenomena with different winners and losers, the same as high/low currency values. Deflation favors lenders and savers, and inflation favors borrowers and spenders.
The inflationists always assume that the borrow/spend nexus is far more important than the lend/save. But of course saving drives all investment, so a period of deflation isn't necessarily a bad thing. In fact we see deflation in specific markets like housing which helps to clear out the bad decisions and mistakes and set the base for future expansion.
Once you clear your head of the foolish 'borrow and spend' mantra of the last 80 or so years, and realise that investment and production are more important than spending and consuming, it becomes obvious that a bit of mild deflation isn't necessarily the hobgoblin it is made out to be.
The simple fact is that no economy and social order has ever imploded due to deflation, but inflation has some pretty terrible economic and social effects when it gets out of control. Deflation, like any long position, can only ever go down to zero. Inflation, however, is like any short position and can go to infinity.
Re: Bitcoin exchange rate reached $100 USD per BTC
#474Earlier quoted context omitted.
That is one theory, and is the prevailing one. It is not necessarily correct. Regardless, it is certainly a consumer's right to store their assets in something that is not inflationary, as most do. Is the population holding empty real estate or gold instead of currency really that much better for the economy? No. Smart money will simply shift out of cash in an inflationary environment, and the value will not necessar…
Gold is a piss poor investment. Owning Real Estate (and making money off of it) entails taking care of it. People taking care of their land (so that it can appreciate in value) is a good thing. The typical Real Estate "investor" adds a ton of value to their home, not just through maintenance, but also additions (ie: a new deck). This maintenance is true value added to the economy. True value that wouldn't have been a…
This is a foolish statement no matter what the subject:
>dotcom stocks are a piss-poor investment >railroads area piss-poor investment >Apple is a piss-poor investment
All of these are true and false at some point. You can't make blanket statements like that. There are times when Gold as a store of value makes more sense than a central-bank inflated currency. There are times when the opposite is true.
What is certainly true is that Gold is a very good long-term store of value, and the prices of Gold relative to other things, such as a loaf of bread, a barrel of oil, a parcel of land are quite stable over a long period of time.
People often make the mistake of comparing Gold against fiat currencies and decide that Gold may be going up or down in value. What they don't do is look at Gold vs other things, which typically are rising in price just as fast as Gold.
Certainly one thing is for certain, putting your savings into a fiat currency is a very bad long term plan.
Re: Bitcoin exchange rate reached $100 USD per BTC
#475Earlier quoted context omitted.
Do you suppose that there is some sort of seed-factory producing the seeds at no cost and selling them into the market, or do the other seeds in the market come from plants which produce only 4% y/o/y growth in the number of seeds? In the latter case, has the entire seed-planting industry taken a loss over the last year? And if so, would less people plant the seeds this year, so that planting the seeds would again be…
I like using seeds as an example, because they make a nice toy model. They last a long time, and more of them can be produced through capital goods (that is, other seeds) and labor alone. In this model, seeds have no inherent depreciation, and our hero would have bought them from a seller, e.g. a storefront. In a deflationary environment, the nominal value of capital goods decreases, so anyone holding seeds, whether…
Re: Bitcoin exchange rate reached $100 USD per BTC
#476Earlier quoted context omitted.
The investor class doesn't benefit from inflation, it's the banker class that benefits. Here's how it works: The banks have a balance sheet of debts owed to them. Some of the debts come from companies like General Motors and United Airlines. If one of those companies threatens to go bankrupt, then the bankers simply lobby the congress to "bail out" the troubled company. This allows the banks to keep the troubled asse…
That's awfully convoluted. You're asserting that this Glenn-Beck's-whiteboard-esque arrangement holds more sway on banker's behavior than the effects of inflation on bankers' own personal wealth holdings. Do banks want to be bailed out? Sure. Who doesn't. Do rich bankers benefit more than the working class from higher inflation? Certainly not.
Yes, they do, because they are the first to get to spend the inflated money.
If you go back to a point in time when the royal mint could produce an inflated currency by diluting the metal content in coins, then they were the beneficiary of the inflated money by getting to spend it at the current price levels. By the time that money filters through the system to the poor, the prices have risen and the currency is worth less.
The same happens now when the central bank provides newly-minted funds to banks. The banks get first use of the money and get to use it at current price levels, before the flow-on effect of the increased supply takes hold.
In a hyperinflationary environment, here's how a million bucks in new money plays out: In week one, it buys you a new house In week two, it buys you a new car In week three, it buys you a new friday In week four, it buys you a restaurant meal In week five, it buys you a newspaper
That is a necessarily exaggerated example, but the beneficiaries of newly inflated money are those that first get to use it. And that is the banks. This is all entirely by design; the true purpose of having a central bank and a fiat currency.
Re: Bitcoin exchange rate reached $100 USD per BTC
#477Earlier quoted context omitted.
> To be clear, deflation is categorically bad for a currency. It's terrible, like great depression terrible. I hear this argument a lot, but no nation that we know of has ever collapsed because of deflation, right? We've never (recently) been in a period of significant deflation, so how can we be so certain of its effects? > deflation makes it more profitable to do nothing than to invest. Investment won't ever stop,…
Good luck. You're swimming against a tide of people minted from education with the mindset of deflation bad, inflation good. Of course, everyone likes deflation when it means they can buy more for less. Of course, if prices of things get so low that people start to purchase, then deflation will eventually reverse, unless you assume that deflation will continue forever until prices reach zero and everything is free. O…
As with anything, too much of any extreme is bad. Too much inflation or too much deflation. But with fiat currency, it's natural to expect steady inflation over time -- especially if it's not tied to a commodity (e.g. after we got off the gold standard). That's because there's value in lending money to some enterprise, and that's the time value of money. Organizations with good credit (e.g. banks) issue and lend money to organizations with worse credit. So they will expect a return in the enterprise, and overall if they guess right, the enterprise will have returned principal + interest to the lender. If they don't then the money disappears from the system, but in most booming economic times, more money is created, and eventually more money is printed to provide more base money in order to pay back all that interest.
So it's like an elastic money supply that's being prodded by lenders / banks looking for a return.
Re: Bitcoin exchange rate reached $100 USD per BTC
#478Earlier quoted context omitted.
What do you mean "higher quality"? Almost everything everyone buys is something they don't need. I would guess that almost everyone using Hacker News produces things people don't need. No one needs Google or Amazon or whatever your favorite tech company is.... The economy is built on things people don't need. The problem is that if I won't buy it for $100 today because I can buy it for $50 tomorrow, I won't buy it fo…
I just have a hard time believing deflation leads to perfect demand inelasticity at $0.
Of course, all those who insist that inflation is a superior state can't explain the economic effects of everyone deciding to purchase today before the prices go up, leading to much weaker demand and production in the future.
Bringing forward spending excessively is just as problematic as send it backward into the future.
Re: Bitcoin exchange rate reached $100 USD per BTC
#479Earlier quoted context omitted.
Gold is a piss poor investment. Owning Real Estate (and making money off of it) entails taking care of it. People taking care of their land (so that it can appreciate in value) is a good thing. The typical Real Estate "investor" adds a ton of value to their home, not just through maintenance, but also additions (ie: a new deck). This maintenance is true value added to the economy. True value that wouldn't have been a…
>Gold is a piss poor investment This is a foolish statement no matter what the subject: >dotcom stocks are a piss-poor investment >railroads area piss-poor investment >Apple is a piss-poor investment All of these are true and false at some point. You can't make blanket statements like that. There are times when Gold as a store of value makes more sense than a central-bank inflated currency. There are times when the o…
So you'll see it spike in value right before panics, and slowly lose value after things stabilize.
Of course, gold or any commodity is a worse investment than a stock market index over time.
Re: Bitcoin exchange rate reached $100 USD per BTC
#480Some people here seem to think that this is temporary, that sometime in the future Bitcoin will stabilize into a glorious future global currency -- never mind the new class of cryptobarons it will have created from its inner circle, through shameless hoarding. My question is, what then will happen when Bitcoin stabilizes, that is, when the time to new coin mined approaches practically infinity? Let's assume the globa…
There are a few replies here that seem to be reacting negatively to the OP due to the tone of the submission instead of the content. To be clear, deflation is categorically bad for a currency. It's terrible, like great depression terrible. The reason it's bad is that deflation makes it more profitable to do nothing than to invest. When this happens, people react by not spending money. The market dies. While inflation…
Ohhh, now I get it.