Bitcoin in a hyperbolic bubble

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Duke of Marmalade

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Eh, just to clarify the 'clarity' I recommended no such thing.
What I did say was that for the first time poor people could claim a stake on property. Something that is denied to them in near perpetuity under the fiat system.
It was your suggestion that these poor El Salvadorians could lose everything they own. That there best bet was to stick with the status quo, to watch what meagre savings they have depreciate by a guaranteed 2%pa.

I just an advocate of having a option to opt out of such a system. Bitcoin offers that option.
Wolfie a while back said:
So there are risks for poor people in El Salvador getting involved in bitcoin. But how much poorer will they be if bitcoin returns to zero than had they not involved?
On the other hand, if bitcoin shoots for the stars, then imagine for the first time in history poor people having some leverage for their own well-being and affairs.

The alternative, not buying bitcoin, seems to say to El Salvadorians - you are poor, you will stay poor, and as unfortunate as that is, that is the way it is and will be.
I don't think I was too outa line in paraphrasing this philosophy as "you have nothing to lose, but bitcoin might change all that" i.e. an appeal to the lotto mentality.
 

DublinHead54

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Market manipulation can lead to a volatile market. It is not a given. My view is that the greater size market, both in terms of capital investment and the numbers of investors, the harder it will be for the price to be manipulated. Its not rocket science what I am saying. I'm using money markets as an example. So vast, and wielding is the international global financial system, only entities such as CB and governments have the wherewithal to manipulate the prices as they are being manipulated.
That is not the case for bitcoin. We can see the impact that someone like Musk can have from his comments, inducing higher levels of volatility in bitcoin market than say the volatility of the Telsa market price, following his comments that it was overpriced.
Volatility does not originate solely from manipulation, or attempted manipulation. It can occur for many reasons.

BTC is a volatile asset, an increase in adoption is not going to stop it being a volatile asset. That is simple a fact of its design. Thanks for clarifying what you meant when you liked BTC and its volatility due to market manipulation. Please feel free to provide any evidence / facts you have to debate that statement

I think the best way to put it is, that as regulation and effective controls are put in place the level of volatility of BTC may reduce in future or be more easily anticipated. But have a google (flash crash), to understand that in established financial market volatility still exists and this will be no different for how BTC operates today. I assume this is what you meant by introducing Musks market manipulation.

I do want to clarify that your statement on CB and governments are the only entities manipulating prices as being incorrect. One example that comes to mind is the Libor Interest Rate scandal that was coordinated by private individuals to benefit a private corporation. Ask your friend Tecate, as he is often posting examples of market manipulation in support of BTC adoption.

If there was no volatility then BTC would likely end up having some inflationary properties and then you wouldn't be advocating for it all.
 

Duke of Marmalade

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That there best bet was to stick with the status quo, to watch what meagre savings they have depreciate by a guaranteed 2%pa.
I am not going to apologise for giving a brief economics lesson.
Nobody is recommending fiat as a good long term sov. One of the great advantages in breaking from the gold standard is precisely that it does not have a long term sov. When linked to gold there was always the risk that folk would HODL money which can be counter to its effectiveness as a medium of exchange.
The safest form of fiat based sov are deposits. The current interest rate in El Sal is 3.8% so $ deposits are gaining value. (Possibly poor folk do not have access to this interest rate but that is the fault of the El Sal government/financial system).
Here in Ireland state savings provide inflation beating returns which would satisfy the needs of the majority of folk.
 

tecate

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I am not going to apologise for giving a brief economics lesson.
:D

Nobody is recommending fiat as a good long term sov. One of the great advantages in breaking from the gold standard is precisely that it does not have a long term sov.
Ok, and so where do most people park their savings? Yes, they can buy equities but if we're talking about ordinary people that aren't so savvy, their savings end up in deposit accounts.

YOU are not recommending that Duke - but there is no such warnings to the general public on that. Most people don't fully understand inflation. Can you take your recommendation a step further and acknowledge that inflation is a stealth tax?
Can you acknowledge that its an inflationary system that has resulted in climate change (the irony that bitcoin gets a kicking on this basis!).

One of the great advantages in breaking from the gold standard is precisely that it does not have a long term sov.
Great advantages!? Please.

When linked to gold there was always the risk that folk would HODL money which can be counter to its effectiveness as a medium of exchange.
Disagree entirely. What you mean is that a Keynesian based economic system has to be kept fed at all costs.

The current interest rate in El Sal is 3.8% so $ deposits are gaining value. (Possibly poor folk do not have access to this interest rate but that is the fault of the El Sal government/financial system).
As you've indentified, null and void given that 70% of the population have been shut out of the banking system. As regards, who's to blame - all the stakeholders in the fiat system - i.e. a combination of government, central bank and general banking system/financial system.
Upon the announcement of El Salvador's bitcoin move, we had several people here say this could all be achieved via the banking system. Well - how many years did they have to achieve that? Times up!

Can your economics lesson clarify why the Lebanese kicked in the doors of their central bank the other night?
 
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DublinHead54

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I am not going to apologise for giving a brief economics lesson.
Nobody is recommending fiat as a good long term sov. One of the great advantages in breaking from the gold standard is precisely that it does not have a long term sov. When linked to gold there was always the risk that folk would HODL money which can be counter to its effectiveness as a medium of exchange.
The safest form of fiat based sov are deposits. The current interest rate in El Sal is 3.8% so $ deposits are gaining value. (Possibly poor folk do not have access to this interest rate but that is the fault of the El Sal government/financial system).
Here in Ireland state savings provide inflation beating returns which would satisfy the needs of the majority of folk.

Hey dukey but as the crypto maximalists will say in a rebuke....

HAVE FUN STAYING POOR


I've been having a back and forth with Wolfetone and I've come to the conclusion you can't use logic on this forum. It has already been decided that Bitcoin is the solution to every economic problem the big bad government has gotten us into. It is truely baffling some of the contradictory statements used.

Markets can stay irrational longer than I can remain solvent, and this thread can remain irrational longer than I can stay patient. So I will ride off into the sunset with my BTC, waiting for this adoption to happen and the price to rise so I can dump at the expense of the El Salvadorians who were duped into investing their life savings.
 

WolfeTone

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I do want to clarify that your statement on CB and governments are the only entities manipulating prices as being incorrect.

Please stop! Your habit of taking comments out of context and coming to conclusions that were never made is annoying now.
I never said they were the only entities, I said

So vast, and wielding is the international global financial system, only entities such as CB and governments have the wherewithal to manipulate the prices as they are being manipulated.

Do you know of other entities that are pumping trillions into the financial system right now? Do you know of other entities that have this capability?
Your Libor reference? So what? That was a corrupt practice was it not? Manipulation may not always be the result of corrupt practises. They can be perfectly legal, above board and in the open. When a government puts a freeze on rental prices, that is market manipulation.
Central Bank cuts interest rates, more market manipulation.
Is there any entities that you are aware of that can manipulate money markets to the extent that they are currently being manipulated by CB's and governments?
 

DublinHead54

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Please stop! Your habit of taking comments out of context and coming to conclusions that were never made is annoying now.
I never said they were the only entities, I said



Do you know of other entities that are pumping trillions into the financial system right now? Do you know of other entities that have this capability?
Your Libor reference? So what? That was a corrupt practice was it not? Manipulation may not always be the result of corrupt practises. They can be perfectly legal, above board and in the open. When a government puts a freeze on rental prices, that is market manipulation.
Central Bank cuts interest rates, more market manipulation.
Is there any entities that you are aware of that can manipulate money markets to the extent that they are currently being manipulated by CB's and governments?
Wolfetone, you need to make your points clearer, this "thats not what I meant" rebuke to challenge is getting old. You've now asked a stupid question because what you are defining as market manipulation is actually known as monetary policy. Monetary policy can only be enacted by central banks, so to answer your silly question no the only entities that can use monetary policy are central banks.

I'm not sure how any logical individual can deny that market manipulation can be performed outside of Central Banks. You are basically then saying there is no need for any type of regulation. Even the definition of market manipulation, proves you are wrong.
 

WolfeTone

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Even the definition of market manipulation,

Ok, I will concede that in common parlance the word "manipulation" refers to malpractice and unfair interference.

Nevertheless, you may have noted at some point that a central tenet in my participation in bitcoin is on the basis that I consider much of monetary policy being applied is not based on sound economic thinking but rather as consequence to cover over widespread malpractice in the financial sector (Libor scandal being a part of it) , leading to unfair (albeit sometimes well-intended) interference by CB's. Let's not go down the rabbit-hole of why I should think that, it is my opinion based on a lot of observations. I'm happy to concede my understandings are not always correct, but by and large, the reason to hold bitcoin has been proven to be correct.
 

DublinHead54

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I hold bitcoin, it has cost me nothing and is now worth a considerable sum.

Your reason to hold Bitcoin is that it has made you money?

I thought you were a believer in the economic freedom of the big bad central banks.

I would bet 10 BTC that if you didn't have skin in the game you'd be able to see the holes in your arguments.

I feel sorry for anybody reading this thread and buying BTC at $60k, $50k, $40k or whatever price.
 

Duke of Marmalade

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Ok, and so where do most people park their savings? Yes, they can buy equities but if we're talking about ordinary people that aren't so savvy, their savings end up in deposit accounts.

What would you recommend poor people to do?
Obviously I have to draw diagrams. Absolutely they can invest in deposits or in our case state savings, as I said. The following are the long term returns on deposits (here referred to as cash).
Damodaran said:
And the annual returns from 1928 to 2020:
Stocks +9.8%
Bonds +4.9%
Cash +3.3%

Damodaran also includes the inflation rate in his data which allows you to view real returns. In these 93 years the annual inflation rate was 3%, meaning the real returns were as follows:
Stocks +6.8%
Bonds +1.9%
Cash +0.3%
I have highlighted the key figure. A "real" return of 0.3% p.a. on cash. Both the inflation and the interest rate on deposits are effectively managed by the Central Bank. It's quite clever really. M1 is what we call fiat and is the medium of exchange and it is reckoned by the experts that the optimum target for M1 is that it loses value at 2% p.a. M1 is for buying things. Under the gold standard M1 could increase in value versus other goods and services if gold was doing so. That completely complicated its main role as a medium of exchange.
M3 are deposits or their equivalent (e.g. state savings). This allows ordinary folk to have a store of value which is both secure and broadly matches inflation.
Please do not tell me the experience of Lebanon destroys these self evident truths about the system that I live in. Likewise the dysfunctional financial landscape in El Sal is not relevant to my situation.
 

WolfeTone

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Your reason to hold Bitcoin is that it has made you money?

No, wrong again. I was interested in the concept of being able to avail of and take custody of private money.
That it has paid off in terms of increased value is my good fortune.

I thought you were a believer in the economic freedom of the big bad central banks.

I am a believer in economic freedom. But this nonsense of the "big bad central banks" is your interpretation of what you think I am a believer in or not.
The irony is the cultists are the sycophants who dribble at the alter of all that central banks do and say.
I am a believer in economic freedom but that freedom is conditioned on a rules based system that one and all can operate off. Instead rules are changed to sustain and perpetuate bad monetary policy - that is what I oppose, am wary of. The consequences of which is the totally nonsensical unprecedented monetary policy in place now that is nothing to do with economic freedom but rather to sustain a centralised command banking economy.
Anyone who thinks the euro can survive as a stable currency without constant CB emergency intervention is truly the indoctrinated.

I would bet 10 BTC that if you didn't have skin in the game you'd be able to see the holes in your arguements

You are talking to someone who derided bitcoin from the first moment I heard about it. The 'holes', I assume you mean - Ponzi, criminals, energy usage, BOHA, China Crackdown, G7 crackdown, have all fallen by the wayside. Maybe you are talking about some other holes?

I feel sorry for anybody reading this thread and buying BTC at $60k, $50k, $40k or whatever price.

Why?
 

WolfeTone

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@Duke of Marmalade you are taking the p now. You mean to say poor people need never have been poor if, through the generations, they had just routinely saved in a post office account?
Give me a break. You know only too well when economic and/or fiscal policy goes sour it is broadly those who are on the lowest rung of the economic ladder that get squeezed most of what they hold.
 

Duke of Marmalade

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@Duke of Marmalade you are taking the p now. You mean to say poor people need never have been poor if, through the generations, they had just routinely saved in a post office account?
Give me a break. You know only too well when economic and/or fiscal policy goes sour it is broadly those who are on the lowest rung of the economic ladder that get squeezed most of what they hold.
That was out of left field:eek: Now bitcoin is the salvation of the world's poor - cult indeed. I was explaining fiat monetary economics that's all.
I guess it hurt my exposing your crude denial that you advised the poor of El Sal to have a punt on bitcoin since they have nothing to lose. (the poor will remain poor with virtue signalling champions like your good self)
@Dublinbay12 has the right idea. I leave this thread which I started 6 months and 54 pages ago. It may continue as a cultists' echo chamber though maybe some moderator will put it out of its misery. Bye.
 
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