31–40 of 43 posts
Speculation excluded, currency controls would be a good reason for a Chinese citizen to "invest" in bitcoin (and cash it out on USD at the other side.)
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Why cash out on USD when you can avoid doing so?
As BTC becomes more widely accepted the ubiquity of BTC acceptance will growWhat everyone needs to understand is that Bitcoin is a gift from heaven for every "productive" country's central bank. Much of the world is trying to get away from the USD as a global "reserve" and trade-settlement currency, without the masses jumping into gold and without pissing of the US (govt, economy, Wall St). Bitcoin is so much more "tolerated" by Germany and China than it is by the UK and the US, it's pretty…
> globally-accepted (at the central bank level) reserve asset that's not subjected to any one nation-state's (or state union's) wims or woes Gold is hardly that; Chinese reserves of gold right now are unknown, but they are currently the largest miner and buyer of it (the government, consumers also buy). Given that we aren't sure what the real supply is (China's biggest state secret), the price of gold will remain vol…
Saving means keeping something aside that people will want in the future. Which means you can save without someone spending at the same time.
What everyone needs to understand is that Bitcoin is a gift from heaven for every "productive" country's central bank. Much of the world is trying to get away from the USD as a global "reserve" and trade-settlement currency, without the masses jumping into gold and without pissing of the US (govt, economy, Wall St). Bitcoin is so much more "tolerated" by Germany and China than it is by the UK and the US, it's pretty…
This is done because while currency fluctuations and inflation can jump and fall hugely overnight, an industrial base takes DECADES to build up and decades to destroy. China is planning for the long term.
If there ever comes a point where the US industrial base has been effectively destroyed and China makes everything, they can stop the treasury buying and start cashing in. Inflation in the US will go NUTS and the US will have to build an industrial base from scratch -- starting essentially in China's position circa 1980. Not a happy place.
China will have lost trillions following this strategy, but the US will effectively stop being a strategic or military threat if it is followed through to its logical conclusion.
Bitcoin is not a godsend to the Chinese government, as it creates a means to let capital exit the country (which they are desperately trying to prevent).
If you look into China's real estate market they've invested billions to build cities...empty cities. They continue to build because citizens' investment options are limited, so real estate is one of the few "attractive" options. So they end up with ghost cities full of unoccupied office buildings, condos, malls, etc. Crazy, right? And now they have bitcoin to put their money into. That's a large part of what's drivi…
What everyone needs to understand is that Bitcoin is a gift from heaven for every "productive" country's central bank. Much of the world is trying to get away from the USD as a global "reserve" and trade-settlement currency, without the masses jumping into gold and without pissing of the US (govt, economy, Wall St). Bitcoin is so much more "tolerated" by Germany and China than it is by the UK and the US, it's pretty…
The Chinese are not acquiring USD and treasuries so that they can own spendable assets. They are doing so in order to push the value of their currency down, so that their export goods become more competitive. This is done because while currency fluctuations and inflation can jump and fall hugely overnight, an industrial base takes DECADES to build up and decades to destroy. China is planning for the long term. If the…
His answer blew me away. He explained to me that Chinese families don't think like western families. He pays his parents a seriously large percentage of his earnings every month. If he wants to buy a house or a car or anything that has a large ticket price then he, or his siblings just have to ask his parents. They never have to go into debt and debt was very actively discouraged.
When I asked him why he explained to me that they see the extended family as a single unit or entity. Every generation is deeply involved with the next financially. Companies started by the family are seen as very long term investments. Those investments span more than one generation. In other words, he could start a company that is successful by the time his grandchildren take it over.
The idea that I personally would not benefit, but my grandchildren would, was nuts at the time. Now I have children I'm starting to understand this paradigm shift.
This is of course a generalization, but the Chinese appear to be very patient and serious long term investors.
Earlier quoted context omitted.
The Chinese are not acquiring USD and treasuries so that they can own spendable assets. They are doing so in order to push the value of their currency down, so that their export goods become more competitive. This is done because while currency fluctuations and inflation can jump and fall hugely overnight, an industrial base takes DECADES to build up and decades to destroy. China is planning for the long term. If the…
This reminds me of a friend of mine who is Hong Kong born Chinese. I asked him if he wanted to go to a festival, but he said that he couldn't afford it. I knew that he earned quite a lot of money and pay day had just gone by, so I asked him if everything was OK financially. His answer blew me away. He explained to me that Chinese families don't think like western families. He pays his parents a seriously large percen…
It's a little different with us. Her sister has a family in China (Hohhot) and her parents sometimes live with us (for several years at a time) and sometimes over there. Whoever they live with supports them completely, and get their pensions. So the flow is reversed from what you describe, but the basic principle of shared financial resources and support is the same. e.g. My wife's parents own two flats in China and the revenue from them go to the Chinese branch of the family. We all know basically what everyone else earns and the money from the 'apex' of the family tree goes where it makes best sense. In contrast on my English side, every family unit is discrete. My parents helped us with the purchase of our first house, it's not that there's a lack of generosity in any way, but arrangements are on the basis of one-time gifts. The Chinese way is continuous real-time resource management but in service of a very long term view.
What everyone needs to understand is that Bitcoin is a gift from heaven for every "productive" country's central bank. Much of the world is trying to get away from the USD as a global "reserve" and trade-settlement currency, without the masses jumping into gold and without pissing of the US (govt, economy, Wall St). Bitcoin is so much more "tolerated" by Germany and China than it is by the UK and the US, it's pretty…
We're toast!
The Japanese tried that back in the 70s and 80s. How did that work out for them? I also seem to remember they had a huge construction boom, skyrocketing property prices and a very high domestic savings rate.
Earlier quoted context omitted.
This reminds me of a friend of mine who is Hong Kong born Chinese. I asked him if he wanted to go to a festival, but he said that he couldn't afford it. I knew that he earned quite a lot of money and pay day had just gone by, so I asked him if everything was OK financially. His answer blew me away. He explained to me that Chinese families don't think like western families. He pays his parents a seriously large percen…
I'm a native Brit but my wife is mainland Chinese. My wife and I have always shared our accounts anyway, and now we're completely plugged in to the family financial system. It's a little different with us. Her sister has a family in China (Hohhot) and her parents sometimes live with us (for several years at a time) and sometimes over there. Whoever they live with supports them completely, and get their pensions. So t…
If managed well it can be great though. My college roommate has a "college sponsorship" program within his extended family which helps pay his tuition.
Earlier quoted context omitted.
> globally-accepted (at the central bank level) reserve asset that's not subjected to any one nation-state's (or state union's) wims or woes Gold is hardly that; Chinese reserves of gold right now are unknown, but they are currently the largest miner and buyer of it (the government, consumers also buy). Given that we aren't sure what the real supply is (China's biggest state secret), the price of gold will remain vol…
> Put it this way: money simply can't be saved without someone else spending that same money at the same time. Saving means keeping something aside that people will want in the future . Which means you can save without someone spending at the same time.
Saving is normally transmuted into investment: spending money on machinery/land/buildings/software development etc that will offer a positive return in the future. Investment counts as someone else's income and therefore increases GDP.
Simply putting cash aside is basically hoarding, and normally loses you value over time unless the economy becomes deflationary, which tends to turn into a disinvestment and unemployment disaster.
http://www.washingtontimes.com/news/2013/nov/13/bill-would-o...