Gold collapsing. Bitcoin UP.
- Thread starter cypherdoc
- Start date
I agree with all of this. The concern that a Bitcoin monetary system might concentrate wealth is an understandable concern, but one that I do not share.
The history of western societies since the renaissance shows that the combination of sound money and free market capitalism is more effective at distributing and decentralizing wealth than any other system I've seen. In Europe this was the mechanism which slowly drew wealth and power out of the feudal system and into the hands of those who were productive.
In the US the banking system is an excellent example of how sound money distributes wealth. In the 1800's under the gold standard the US banking system was highly decentralized and distributed. The vast majority of banks were small regional entities, and the total wealth stored in the small banks exceeded the total wealth in the larger banks (which by today's standards would be considered small). This this was quite different from Europe where large banking houses, that were historically connected feudal rulers, dominated the industry.
However since the FED was created, the banking industry rapidly started a consolidation process, to the point where we have just 4 large banks that control most of the nation's wealth. This concentration was made possible for two reasons: 1) The FED's insurance policies which guarantees deposits removed the need for depositors to evaluate the health of a bank, enabling banks to rapidly grow in a risky manner without concern of losing clients (which they did in the 1800s). 2) The FED's Too Big to Fail policy actually incentives banks to grow as large as possible, simply because if they do then the government will protect them against failure.
Under a sound money system, every single large bank we have today would be insolvent in a matter of hours (which is what happened to lehman after the FED announced they would not protect lehman anymore).
Yes under a sound money system some capitalists will grow extremely wealthy (think Standard Oil or Rockefeller), but these entities become wealthy by providing productive services, not leaching from the system (and anti-monopoly laws address this, by not stealing money from those who were successful but by ensuring a continued level playing field).
@rocks
what interests me most is that the 3/09 low violated the low of 9/02. what that means for the next downturn is unclear:
this is the greatest threat we face in the next downturn. the country missed a great opportunity to pair down these entities but instead they did the opposite of what was necessary; they concentrated the risk even further.
what interests me most is that the 3/09 low violated the low of 9/02. what that means for the next downturn is unclear:
Kupsi
New Member
- Aug 28, 2015
- 11
- 31
TLT continuing to call Yellen's bluff:
the dollar, gold, oil, and stocks are not supposed to all be down together.
-273
not good
the dollar, gold, oil, and stocks are not supposed to all be down together.
-273
not good
It is even scarier if you do the following:
1) Show the chart in real, not nominal, terms. This shows an even greater fall in '08 over the valuations from the previous post dot com low.
2) Show the chart over the past 100 years in real terms. This shows just how much farther it can fall and still be within historical norms.
One of the biggest problems IMHO is how the central bank artificial inflation engine has encouraged everyone to ignore valuations "because things always go up". Under continuous inflation everything rises over time, housing, stocks, land, etc. Any bad investment can be made to look good by just waiting.
This has encouraged everyone to ignore risk and buy buy buy, which in turn has caused real prices to rise above their historic norms.
Once the artificial inflation engine stops, this "wait and be made whole" process will no longer work. The market will be forced to look at valuations, and the result will be much lower in real terms than what we see today.
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It was a great scam while it lasted.
Use inflation to hide real losses contained inside nominal gains.
Rely in increasing output caused by population growth and improved productivity from technological advancements to mask the effects of reduced purchasing power.
As long as natural market forces create wealth faster than you can destroy it, everything looks fine. Nobody will protest what they have lost because they never got to experience what could have been. They also won't immediately notice continual small underminings of the market's ability to continue this process.
This creates the conditions under which the State can grow faster than the host economy and thus exceed its capacity to sustain both itself and the parasite.
Game over.
molecular
Active Member
- Aug 31, 2015
- 372
- 1,391
@molecular it seems unrelated to btc, in fact if you toggle "other crypto cash" suddenly the big red bubble over Ukraine disappear.
@molecular not spamming at all. unfortunately at the moment I cannot check it properly since I'm on my mobile, as soon as I'll get my hand on my workstation I will have a look
Stereotype
New Member
- Aug 28, 2015
- 17
- 7
This is why we have block halving and the reason you don't want miners to vote on block size. Just because they probably know what they are doing over @ 21 inc
Just befor the Ukrainian experienced it's gold plunder and double digit monthly inflation a bank over there allowed bitcoin withdrawals on all ATMs.
It was from my perspective a macro economic experiment on a national level. Give all the happenings Bitcoin was positioned as a safe haven with pending capital controls and very accessible ATMs.
I think it was a flop because the ATMs were charging too high a markup or the idea of Bitcoin didn't go viral.
Anyway we live and learn.
- Aug 22, 2015
- 1,558
- 4,693
I think that what is happening here is distressed selling. Investors, funds, and some banks, are suffering from underwater leveraged positions. Glencore is like an Enron, a behemoth with lots of derivatives hanging off it. The distressed sellers dump good positions to make up for losses on the bad ones. Gold can get a temporary hammering in this scenario, but should recover quickly.
Gold is still a safe asset for some time to come, and I think, not affected by Bitcoin until volume reaches more like 300 tps instead of the current small 3 tps. Then we should see some negative effect on the gold price, and a sustained transfer of capital between them.