Earlier quoted context omitted.
Social security is a mandatory insurance program, not a mandatory investment program. Like any other insurance program, the solution to shortfall is to increase premiums or decrease payouts. Since there isn't yet a shortfall that can't be covered by existing funding sources, these solutions have not yet been implemented. Just like a private insurance company.
Social Security is a ponzi scheme. Insurance companies have assets the can fall back on to pay claims, they don't just pay them out of insurance payments as they come in. http://www.forbes.com/sites/richardsalsman/2011/09/27/social...
Bitcoins: The Second Biggest Ponzi Scheme in History
301–306 of 306 posts
Re: Bitcoins: The Second Biggest Ponzi Scheme in History
#302Earlier quoted context omitted.
But bitcoins are more fungible than either USD or CNY, because it is cross-border and "offshore". That's why the Chinese seem willing to pay a premium, because BTC cannot restricted by capital controls. The cross-border, "offshore", unseizable aspect was the biggest reason for my initial interest. Not the potential price gains (I always assumed price would top below $100 and remain a relatively tiny niche currency fo…
How does being offshore make it more fungible? I cannot buy groceries, pay my mortgage, put gas in my car, etc as I do with the USD right now. Because I can't use BTC as easily as USD it is by definition less fungible. It also seems seizable. Didn't Silk Road have their stuff taken? It does seem more safe in BTC form but again to use it for most things requires an exchange back into a popular currency and state actor…
Paypal-USD is not fungible with Alipay-CNY, they are separate payment networks (if you don't believe me, try to find an exchanger). The situation is like the days before SMTP, when AOL and Compuserve had different e-mail networks and a user of one couldn't send an e-mail to a user of the other. But BTC is easily exchanged for either Alipay-CNY or for Paypal-USD, so it is more fungible than both.
Re: Bitcoins: The Second Biggest Ponzi Scheme in History
#303Earlier quoted context omitted.
I wouldn't trust Graeber, as he is frequently wrong about easily verifiable facts in such a way that it supports his world view. There's no reason to trust a liar when he tries to tell you something you don't know about. My favorite Graeberism is when he describes the founding of Apple: > Apple Computers is a famous example: it was founded by (mostly Republican) computer engineers who broke from IBM in Silicon Valley…
2nd follow-up (can't edit my first). Wow , the DeLong piece is really epic. Graeber's caught in multiple errors (or faleshoods, or lies), gets epicly trolled by DeLong (a bit harsh, but ... on balance, called for), retaliates with taunting, name calling, and legal threats, anything but an "um, sorry, yeah, you were right", and ... As I said before: Graeber's premise is interesting, but he's definitely tainted goods f…
http://crookedtimber.org/2012/04/02/seminar-on-debt-the-firs...
Re: Bitcoins: The Second Biggest Ponzi Scheme in History
#304Earlier quoted context omitted.
No one can realistically claim they truly understand the current system. The Austrian economists seductively claim this, but that's because they reject empiricism as a way of challenging their axioms. Keynes seems to have hit upon the most predictive model we have for how economies operate at scale with currency, especially how we can get into depression-like circumstances when internet rates are 0% like they have be…
If Keynes's predictive model was so good then why has every application of his theory, whether in the US in the 30's, 70's and now, Japan in the past couple of decades, etc. failed so miserably? On what basis are you claiming that Detroit's collapse was structural, rather than being caused by bad governance? Other areas of the US, and other countries for that matter, have seen their main industries decline, but they'…
Keep in mind General Theory wasn't published until 1936. FDR didn't become a convert until 1938 -- after his attempt to balance the budget in 1937 led to a disastrous recession that undid a lot of the prior gains from the depression (the US government had a budget surplus!). WW2 spending was what wound up being the stimulus that dragged the world out of the recession.
Liaquat Ahamed's _Lords of Finance: The Bankers Who Broke the World_ goes into great detail as to why the great depression occurred (the Gold standard), and why it lingered.
I also think you may want to read more into Japan's economic policy and financial history. Japan's troubles started with a financial crisis and asset bubble bust twice - in the late 80's and late 90's, similar to the global 2008 crisis, Except Japan had a much, much weaker institutional response than the USA and even the UK did. They shuffled almost annually through a series of milquetoast PMs. Their central bank governors wouldn't commit to anything. Japan had to nationalize a lot of the private losses and bank bankruptcies that were occurring while contending with no growth and a deflationary spiral. Japan's debt was not the result of Keynesian stimulus (that would have required sudden and massive expenditure, given the size of Japan's economy), it was the result of "keeping the lights on" in an era of almost no growth.
Now, in 2013, Abe and Kuroda are finally attempting what looks like a quasi-Keynesian approach -- massive quantitative easing to drive inflation expectations skyward. I say "quasi" because it's not a fiscal stimulus (people are too nervous to try given their debt-to-GDP ratio). And this approach is more Krugman than Keynes. It will be interesting to watch.
Detroit was a case of structural problems combined with bad governance. Sorry if that was not clear. It was a side point to basically say that Southern Europe is not Detroit. They were a victim of private excesses fed by capital flows from the North and a lack of EU-wide fiscal integration to cushion their economy after the crisis.
Re: Bitcoins: The Second Biggest Ponzi Scheme in History
#305All these arguments apply equally to gold. Also, gold was becoming a money slower because millions of market participants were not one click away from each other to figure out why is this new metal is any good and whether they should make a bet that it will become more and more useful as money. The truth about USD vs Bitcoin is that Bitcoins you can own and USD you cannot. http://blog.oleganza.com/post/67362431718/yo…
You should see what crazy things bad monetary policies make possible:
http://www.bloomberg.com/news/2012-11-08/argentine-protectio...
cached version of an Economist article:
http://webcache.googleusercontent.com/search?q=cache:_MKsBta...
Re: Bitcoins: The Second Biggest Ponzi Scheme in History
#306All these arguments apply equally to gold. Also, gold was becoming a money slower because millions of market participants were not one click away from each other to figure out why is this new metal is any good and whether they should make a bet that it will become more and more useful as money. The truth about USD vs Bitcoin is that Bitcoins you can own and USD you cannot. http://blog.oleganza.com/post/67362431718/yo…
No, he really does want to cash out in a lot of USD, because its a very good medium of exchange, by design. They then proceed to use the USD to buy things that either provide immediate utility or provide a good store of value, but that's after "cashing out", which is an act designed to secure something useful in general exchange ("cash").