Price Alert: Bitcoin heading toward €10,000

[WolfeTone]

Pensions hit with negative interest on cash

The Economist: Beware the lure of free money

Goldman Sachs warns US Dollar status as reserve currency at risk

Even the most ardent supporters of the centralised command banking system must surely acknowledge that all is not well?
The corruption of the monetary system has entered its core, its foundations, and it is now only a matter of time before a financial re-set is required.

 

[Duke of Marmalade]

This is the dream scenario of the cultists, what they always warned us would happen.
And yet bitcoin is only about half its previous high.

 

[lledlledlled]

This is the dream scenario of the cultists, what they always warned us would happen.
And yet bitcoin is only about half its previous high.

It ain't worth zero either, which was the strong suggestion on this site

 

[WolfeTone]

This is the dream scenario of the cultists, what they always warned us would happen.

Oh dear Duke, you really need to come out of the trenches one day.
The 'dream scenario' would be for the global monetary system to operate without corruption, fraudulent malpractice that destroys the hard earned wealth of working people.
The faith of billions has been placed in Central Banks because, well, they are independent of corrupt governments. Central Banks would never print money like Zimbabwe, or tax wealth through negative interest rates.
I think, if you are looking for cultists, it is those who hold blind faith in Central Banks.

And yet bitcoin is only about half its previous high

Yes, as of today.

 

[Duke of Marmalade]

...that destroys the hard earned wealth of working people.
...or tax wealth through negative interest rates.

Theo you should form a political party, call it For Everybody in the Audience. When making a speech to the local working man's club wax lyrical about the destruction of their hard earned wealth and next evening when being hosted by IBEC demonise the destruction of their easy earned wealth.
It has been commented in this parish before that there is something of a generational imbalance in society. I agree and very low interest rates is helping to correct that imbalance IMHO.
I note that it only took 4 posts for the Tecate Principle* to demonstrate itself.

* Tecate Principle: the longer a thread on bitcoin proceeds the probability of Zimbabwe being mentioned approaches 1.

 

[WolfeTone]

Theo you should form a political party, call it For Everybody in the Audience. When making a speech to the local working man's club wax lyrical about the destruction of their hard earned wealth and next evening when being hosted by IBEC demonise the destruction of their easy earned wealth.

Nah, that's why we handed control of the monetary system to Central Banks - to avoid political interference in it.

I'm tempted to ask where, how or why you have come to this 'generational imbalance' theory, but then again... perhaps not.

I note that it only took 4 posts for the Tecate Principle* to demonstrate itself.

How long will it be before the bitcoin-will return-to-zero principle is mentioned ?

In any case, you demonstrate an innate capacity to avoid the views, news and articles presented by esteemed and established mainstream media as presented at the top of this thread and instead, revert to narrow pitch of AAM battlegrounds.

The title of thread notes a surge in the price increase of bitcoin, similar to the 'Bitcoin (digital gold) crashing' thread noted a sudden drop in the price.

Both OP subsequently made reference to prevailing economic conditions.

Is there a connection between an increasing bitcoin price and the free money/negative interest rates highlighted in the mainstream media articles above?

In my opinion, I would suggest there is.

 

[Duke of Marmalade]

In any case, you demonstrate an innate capacity to avoid the views, news and articles presented by esteemed and established mainstream media as presented at the top of this thread and instead, revert to narrow pitch of AAM battlegrounds.

I'll admit I didn't read the links first time round, I have since corrected that (albeit Charlie Weston was mostly behind a paywall). Your use of the word "corruption" inclined me not to take your OP seriously. Humans are frail, that is our condition, the Economist podcast highlights this by covering economic developments over the last century. My sense is that at least in the West the powers that be are doing their best to address these unprecedented developments - this is not Zimbabwe.

A few takeaways for me from those interesting links in OP.
I was of the view that the ordinary punter is safe from negative interest rates because she can hoard hard cash. The Economist podcast makes this point but the counter point is also made that the authorities could put big penalties on re-entry of the hard cash into the financial system. Never thought of that one - made me think what would I do with my savings if interest rates were -4% p.a. However, I remain of the view that this is a very unlikely development.
On the main point of OP it is clear that there could hardly be a more uncertain set of circumstances for the current financial system. No wonder Gold is on a roll. Bitcoin is on a bit of a roll too because for many the whole rationale for bitcoin is the potential collapse of the financial system - unlikely in my view, but with such unprecedented interventions certainly enough ammunition for the doomsayers. The surprise is, as I said, that bitcoin is still only about half of what it was 2 years ago. Hard to see it making the €1m mark predicted by the more enthusiastic cultists.

I note that markets expect US inflation to be 1.6% p.a. over the next 10 years, meaning real interest rates are about -2%p.a. I can see why that is underpinning a surge in the Gold price. My central projection would be that over the next 10 years we will indeed see inflation of about 2% p.a. but that the huge interventions will have been slowly unwound - the system will have survived. That would leave the price of Gold largely untouched but would herald the drop to zero of bitcoin. Bitcoin's status as digital gold is not based on its inflation hedge but on a belief by the cultists that the mainstream financial system will crash and burn and bitcoin will rise phoenix like form its ashes. For bitcoin cultists now is the time they have been waiting for - if it doesn't happen now it won't happen.

 

[WolfeTone]

Ok, the Zimbabwe reference is purely in the context of how governments or central banks (depending on the prevailing political ideology of the day) react when the monetary system that they are charged with managing starts to collapse.
Zimbabwe - one of the most recent examples and hence its frequent referencing, is a microscopic economy in the round, was duly sanctioned by worlds powers of US, EU etc inducing the inflationary effect on its economy for trying to pretend its economy was worth more than it actually was through the corrupt, sorry, 'frail' practices of money printing.
Having embarked on the same practice themselves through QE, it is most inconceivable that the US, ECB, UK and Japan would impose sanctions on themselves, or inconceivable that any other power would have the wherewithal, or suicidal tendency to try impose economic sanctions.

My sense is that at least in the West the powers that be are doing their best to address these unprecedented developments - this is not Zimbabwe.

They are doing what they believe is in their best interests, for sure. It does not mean they will succeed in resucitating the monetary system to anything near a transparent, robust, functioning system. I honestly wish them well, but it is my view that everything they are doing is short-term plastering. Long-term, if prevailing economic theory surrounding money printing is anyway accurate, serious damage is being wilfully imposed on global economic affairs by our trusted but 'frail' financial institutions.

what would I do with my savings if interest rates were -4% p.a. However, I remain of the view that this is a very unlikely development.

The Economist podcast makes this point but the counter point is also made that the authorities could put big penalties on re-entry of the hard cash into the financial system.

I note that markets expect US inflation to be 1.6% p.a. over the next 10 years, meaning real interest rates are about -2%p.a. I can see why that is underpinning a surge in the Gold price.

My central projection would be that over the next 10 years we will indeed see inflation of about 2% p.a. but that the huge interventions will have been slowly unwound - the system will have survived.

There is a lot to unpack in there, so I will try to summarize.
I get a sense that there is an absence of the unknown factor in your views. That there is, from prevailing economic theory mathematical and quantitatively applicable formulae than can be applied at any given time to confidentially repair and steer the good ship 'global economy' back to safer waters. And that you have full confidence in our CB's and in Western government interventions to get the job done.

I'm on the other side of that equation. I have little confidence that the tools available are adequate, proven, or even if so, will ever be applied in such way as to avoid the erosion of confidence in the system.

I bought a house in 2002. I fixed the mortgage rate because of the prevailing economic analysis of impending interest rate rises. I continued to fix each 5yr period because the mantra was always the same - interests rates are low, or going lower, but for how long? The longer lower interest rates prevailed, then it would be a case of sooner rather than later that they would rise and mortgage holders would be in for a nasty shock.
18yrs later, not only has the dreaded spike in interest rates not materialised, but we are now into negative territory.

So I have come to the realisation, that regardless of CB's, government interventions (they can't even get inflation to 2%) etc, that economic forces are beyond their control. They may be able to interfere, alter, impact such forces to some extent, but it is sandbags against a rising tide.

 

[Duke of Marmalade]

Having embarked on the same practice (as Zimbabwe) themselves through QE, it is most inconceivable that the US, ECB, UK and Japan...

You persist in comparing Mugabe's hyperinflationary printing of money to fund his expenditure with the monetization of long term assets which has had no inflationary impact and which is largely judged to have been relatively successful in stabilising the world monetary system. It would be a rabbit hole for me to attempt to correct your misunderstanding of the profound differences here.

They are doing what they believe is in their best interests, for sure. It does not mean they will succeed in resucitating the monetary system to anything near a transparent, robust, functioning system. I honestly wish them well, but it is my view that everything they are doing is short-term plastering. Long-term, if prevailing economic theory surrounding money printing is anyway accurate, serious damage is being wilfully imposed on global economic affairs by our trusted but 'frail' financial institutions.

We're in the realms of speculation here. Despite your "honest wish" for the system to work out well you seem certain that it will all crash and burn. I share that honest wish, but am more confident that things will not turn out nearly as bad as you believe. But even if I was of your conviction there is no way that I would see salvation in bitcoin - maybe Gold.

Anyway, to address OP directly, if I was a bitcoin cultist I would be feeling very frustrated at the moment. With everything apparently in alignment for a Global Zimbabwe Moment, I can only set my sights on €10k when it was nearly twice that a couple of years ago.

 

[WolfeTone]

Ok, I will desist in using Zimbabwe as a reference for comparing the imposition of economic sanctions and the consequences of money printing on one regime against the non-imposition of direct sanctions on other regimes that print money to inflate assets prices and the balance sheets of insolvent banks as futile.

the monetization of long term assets which has had no inflationary impact and which is largely judged to have been relatively successful in stabilising the world monetary system.

When it comes general prices across the economy you are correct, alternatively what occurred was to stop the deflationary effect of the 2008 crash? One person's inflation is another's deflation, perhaps?
There is more than one way to ski*n a cat.

The overall point, which ever way you look at things, everything that the prevailing economic ideology of free-market enterprise, risk and reward, were thrown out the window following the 2008 crash.
The rules that underpin the system are bankrupt.
In 2010, when countries on the 'periphery' of the eurozone went bankrupt they were bailed out subject to the imposition of austere policies imposed - a form of economic sanction.
In 2020, when the whole global economy is tanking, we are borrowing 30bn from the same collapsing global economy!
When the pillars of EU and Eurozone are also feeling the heat, a bailout for all countries - no austere policies here now, just a large dollop of solidarity between us all is apparently all we need.

I'm not arguing the rights and wrongs of it, simply expressing the view that the ideology upon which the rules are made are bankrupt. We are now in the realm of make-it-up-as-you-go-along, and for me that is not a recipe for a sustainable, functioning system. It becomes harder to value anything, this is not sustainable.

I appreciate that there are a lot of outlandish predictions about bitcoin. You are not short of incorrectly associating me with such predictions also, despite it pointed out to you that I have made no such predictions.

In fact, on plenty of occasions I have said bitcoin could return to zero. I have said, I have no idea what price it will go to.
I have a small amount of bitcoin, reflecting my reservations that it is anything like claims you incorrectly associate me with.

I do think it has value, I do think it offers anyone with an Internet connection an opportunity to preserve some of their wealth against the decaying monetary system and its institutions. Currently that value is priced in the market at near €10,000 per bitcoin. And given the increasing prevalence of viewpoints pertaining to the fragility of the monetary system, I'd expect it to go a lot higher.

 

[tecate]

This is the dream scenario of the cultists, what they always warned us would happen.

So long as you maintain this emotive (and inaccurate) 'cultist' narrative, you'll never be able to look at this objectively.

And yet bitcoin is only about half its previous high.

You're cherry picking to support a specific narrative. Bitcoin has put in higher lows in practically every year since its existence. If you want to use price and nothing else as a metric of its success or otherwise, then I would say that's a more equitable starting point.

It has been commented in this parish before that there is something of a generational imbalance in society. I agree and very low interest rates is helping to correct that imbalance IMHO.

It's not just a generational imbalance. It's also determined by place/position. The Quantitative Easing/'money printer go 'brrrr' monetary policy that you are in favour of brings about greater inequality. That was shown with its use immediately after the last financial crisis. It's been shown again right now. The Cantillon Effect demonstrates that those closest to that free money faucet benefit disproportionately by comparison with the rest of us.
As regards low interest rates, they've been shown to be part of the problem - contributing towards greater inequality. As covid has played out, 45 million Americans lost their jobs whilst within the same time-frame, that country's billionaires made an additional $575 billion.

I note that it only took 4 posts for the Tecate Principle* to demonstrate itself.
* Tecate Principle: the longer a thread on bitcoin proceeds the probability of Zimbabwe being mentioned approaches 1.

It doesn't surprise me that this triggers you given that it destroys the notion that you put forward i.e. that central banks and governments are infallible. By the way, Zimbabwe is but just one example. The most recent example has been Lebanon where people have had their wealth vapourised before their eyes through central bank mismanagement.
When debating the merits of bitcoin (with its pre-programmed and totally transparent monetary policy baked in) vs. the ongoing tinkering of central banks, it would make for a totally incomplete consideration of the subject to exclude instances of central bank/government mismanagement. The fact is that central banks can make mistakes - they do all the time. Governments time and time again interfere with the work of a central bank for their own selfish reasons.

Your use of the word "corruption" inclined me not to take your OP seriously. Humans are frail, that is our condition, the Economist podcast highlights this by covering economic developments over the last century.

So with that 'fraility', you're effectively saying that people inherently can't be trusted. That's front and centre to the entire debate. Bitcoin as a financial technology has been criticised here - on the basis that there's not much to it technologically. That're quite right to say that. It's just a ledger. Yet despite that, it does something fundamental. It facilitates transparency and it has been designed to be trustless in nature. There's an assumed lack of trust. With that, its monetary policy is pre-programmed and baked in from the get go. Everyone is aware of how it has been pre-programmed. Everyone is aware that no one entity controls it and that it can't be tampered with. Nobody can 'print' more of it, nobody can change interest rates relative to it.

My sense is that at least in the West the powers that be are doing their best to address these unprecedented developments - this is not Zimbabwe.

And this right here is a fundamental mistake on your part. You've got myopic Dougal 'far away' syndrome on this. Zimbabwe is just one example. At any given time there is a list of countries who have mismanaged their sovereign currencies. Lebanon is the most recent example and it's not the banana republic that Zimbabwe is (and nor were there sanctions implicated).
It's foolish to think that central bankers closer to home can't make mistakes and get it wrong. We have had examples - with the Greeks/Cypriots having had to take a haircut on their savings not so many years ago. We've had the Euro come close to collapse around that time and we have speculation that it could be similarly challenged over the next few years.

I was of the view that the ordinary punter is safe from negative interest rates because she can hoard hard cash.

The examples given in Wolfie's links refer to the application of negative interest rates relative to pension funds. Those guys are not going to keep money under the mattress. So...whomever is party to those pension funds is already paying the price for negative interest rates.

On the main point of OP it is clear that there could hardly be a more uncertain set of circumstances for the current financial system. No wonder Gold is on a roll. Bitcoin is on a bit of a roll too

Other way round...gold is on 'a bit of a roll' (up 30% since the start of the year) whereas bitcoin is on a roll (up 55% since the beginning of the year).

because for many the whole rationale for bitcoin is the potential collapse of the financial system - unlikely in my view, but with such unprecedented interventions certainly enough ammunition for the doomsayers.

You are clinging on to this ideology - that things are just black or white - that it's a zero sum game. I'm sure there are a minority of people that want to tear down the current system in its entirety and throw it out completely. However, nobody has presented here with that argument and it's not the majority view in crypto circles - far from it.
Both can find a place in the world - and in actual fact, any sane person should want cryptocurrencies to be there as a plan b for any country's citizens. Who said that one entity should have a monopoly on money? We know that monopolies are bad for society. If both corporate and decentralised digital currencies develop further, they could very well act as a counter-balance to fraud or populist decision making leading to sovereign currency mismanagement. If Governments/CBs know that people could simply switch if they blatantly mismanage, they may make a better fist of managing the national currency.

The surprise is, as I said, that bitcoin is still only about half of what it was 2 years ago. Hard to see it making the €1m mark predicted by the more enthusiastic cultists.

Cherry picking one pricing snapshot to meet your own narrative. Everyone agreed that the market had overheated and gotten ahead of itself (at that particular point in time) in late 2017. It's not something that's specific to bitcoin/crypto. I'm still the wrong side (price wise) of a house purchase 15 years later - but you wouldn't go round telling people that it's foolish for anyone to buy property on the back of that, would you?

And the cultist thing - sure, I'll call you out on it once more. The only thing that's clear from your postings on this topic here is that you are the 'cultist'. You have never once acknowledged one single positive characteristic of decentralised digital currency. That's in no way credible (whatever someone's overall assessment is of crypto) and it makes you the cultist here.
On that subject, you called the Head of Equities at a leading global Investment Bank a 'cultist' for advising his clients to buy some gold/bitcoin a couple of months ago. Earlier this week, Ari Wald of investment bank Oppenheimer ($230 billion assets under management) made a similar recommendation for gold/bitcoin. He comes from a conservative investment bank and there's little in the way of commentary from him on Bitcoin prior to 2020. Does his recommendation make him a cultist too?

My central projection would be that over the next 10 years we will indeed see inflation of about 2% p.a. but that the huge interventions will have been slowly unwound - the system will have survived.

What is 'your central projection' based on? Hopium? I mean, it may work out that way but we have no earthly way of knowing that. We are in uncharted territory - we've never seen this level of money printing - it's unprecedented. The US has printed off more $ in the month of June than in the first two centuries of the existence of the country.
You speak of 'interventions being slowly unwound'. How can you have that expectation when they never unwound those interventions from the last financial crisis in 2008 (Q.E. and low interest rates)??

That would leave the price of Gold largely untouched but would herald the drop to zero of bitcoin.

That's such nonsense and it betrays a complete lack of pragmatism in your weighing up of bitcoin (ergo, the real cultist here is you). People are bailing in en-masse to gold over the past 6 months as a hedge. Of course, it won't be 'untouched' if economies return to something nearing normality.
The drop to zero of bitcoin is something that you dream of - rather than it being a likely outcome. Yours is the politicised 'cultist' view here.

Bitcoin's status as digital gold is not based on its inflation hedge but on a belief by the cultists that the mainstream financial system will crash and burn and bitcoin will rise phoenix like form its ashes. For bitcoin cultists now is the time they have been waiting for - if it doesn't happen now it won't happen.

This now or never mantra is nonsense. The current economic backdrop is particularly prescient in the context of bitcoin right now. It's good that people are beginning to question 'what is money' and can we just print it off at will. You speak of unwinding - how does this - US Debt Clock - get unwound?

Bitcoin is here to stay. You can ignore Gresham's Law, Amara's Law and the Lindy Effect all you want but that would be and is a mistake.

 

[Duke of Marmalade]

Currently that value is priced in the market at near €10,000 per bitcoin. And given the increasing prevalence of viewpoints pertaining to the fragility of the monetary system, I'd expect it to go a lot higher.

There is an argument that bitcoin is letting down its proponents, at least any that bought near $20k. Here they are brimful of "I told you so's" - money is being printed for fiscal purposes, government debt is being monetized, even GS has a contrarian view that the US dollar is dead meat. This should be Chucky ar La for bitcoiners and yet they haven't even seen €10k yet.

Interesting comment about "making-it-up-as-we-go-along". It does look that way, but as the podcast explains it has been like that for 100 years. Maybe that is economics for you - it makes itself up as you go along. 100 years ago two completely opposite socio economic models were vying for global supremacy. The planned version failed spectacularly and the "make-it-up-as-we-go-along" version has come out on top.
We see in the podcast diametrically opposing views on the role of negative interest rates. The fact that economics is so inconclusive is why chancers like David McWilliams can get away with "swallow the disinfectant" silver bullet panaceas.

Also what about the dog that isn't barking? As your OP indicates there are certainly big questions over the direction of fiscal/monetary policy and yet I do not hear of any mainstream economists jumping on the good ship bitcoin.

 

[tecate]

if I was a bitcoin cultist I would be feeling very frustrated at the moment. With everything apparently in alignment for a Global Zimbabwe Moment, I can only set my sights on €10k when it was nearly twice that a couple of years ago.

If you are a bitcoin proponent right now, you will have seen further in-roads being made by bitcoin and the broader digital assets space week on week. Its current market price represents a 57% gain for me - I don't think I'd classify myself as 'frustrated'.

There is an argument that bitcoin is letting down its proponents, at least any that bought near $20k.

There is an argument that you're talking through your prejudiced backside. Why cherrypick an at the peak price and then pick on bitcoin exclusively? What about Celtic Tiger property? What about Oil this year? What about the markets in March? Time and time again, I've heard them rattling on - on CNBC saying that the conventional markets are no more predictable than crypto.
We are all grown adults. We make decisions and we take responsibility for them. If you decide to speculate on bitcoin, stonks, gold, property, FX - that's on you. But to single out bitcoin is disingenuous.
And yet despite what you say, bitcoin remains the best investment of the past decade, of 2019 and thus far in 2020. You can scream bloody blue murder and it doesn't change that fact.

Here they are brimful of "I told you so's" - money is being printed for fiscal purposes, government debt is being monetized, even GS has a contrarian view that the US dollar is dead meat. This should be Chucky ar La for bitcoiners and yet they haven't even seen €10k yet.

And bitcoin being up 55% in 2020 isn't enough for you? Yeah, I'm sure they're very very unhappy!
There were a lot of short positions that got liquidated in the past week though - i'm sure that must hurt.

Also what about the dog that isn't barking? As your OP indicates there are certainly big questions over the direction of fiscal/monetary policy and yet I do not hear of any mainstream economists jumping on the good ship bitcoin.

You might need to escape the echo chamber you currently find yourself in to start with. There are plenty of economists that are either onboard or coming round with regard to the proposition that bitcoin offers. However, from previous discussions, it seems that you narrow that consideration to Keynesian economists so there's unlikely to be any awakening anytime soon.
You remember those big BTC numbers you've alluded to - who do you think will be bailing in to BTC at that stage some years from now? Have a look round the room.

 

[WolfeTone]

There is an argument that bitcoin is letting down its proponents, at least any that bought near $20k

Yes, of course. No different to any other investment thst is worth less than the price paid for.
I don't really get this point. I was of the impression that you considered bitcoin to have no, or very little value. This comment seems to suggest that you think it does have some value, just nowhere near its historic $20k price tag. Maybe I'm misconstruing your point?

Maybe that is economics for you - it makes itself up as you go along.

Yeh, to an extent... but allow some latitude between considered and scholarly argument that have developed over the generations and the type of off-the-cuff 'whatever it takes' application of economic policy.
I mean, if Paschal had rocked up to Dáil before COVID and said he was going to borrow €30bn, not to spend but to hold in reserve as a buffer against an economic collapse, then I don't he would have made it past the loony asylum. He could have argued that in the event of global meltdown, every other country in the world would be looking to borrow and according to the prevailing economic theory, if countries are facing deep recession and looking to borrow, interest rates would go sky high as the risk of repayment increases.
Of course as we can see, that hasn't happened. Because there is no risk anymore. There is as much money available to every country now, as much as their respective central banks think needs to be printed.

I'm sorry, but I missed the part when this became the prevailing economic theory of our governments? I was under the impression that there are housing shortages because its too expensive to build, or waiting lists in health because of cost?

The planned version failed spectacularly and the "make-it-up-as-we-go-along" version has come out on top.

For who?
For the accountants and financiers who can point to a piece of paper they says the books are balanced, we made a profit?
Or for Joe soap citizen, who increasingly can smell the bull.
COVID is exposing the facade behind the economic and political theory that promotes artificial industries like finance for their real inherent value... which going by stock prices of a lot of financial institutions, is not an awful lot.

I do not hear of any mainstream economists jumping on the good ship bitcoin.

Nor will you, not until after it becomes mainstream. Economists hold little value in determining future events. They are best to analyse how past events occurred.

 

[Duke of Marmalade]

Well we want to avoid diving down old rabbit holes so I will only address new clarifications or points directly related to OP.

It doesn't surprise me that this triggers you given that it destroys the notion that you put forward i.e. that central banks and governments are infallible.

I do not at all think CBs are infallible, they have admitted to many mistakes. But I do believe that they are the experts and that in the West they are generally on my side. I hope they get it broadly right. Do you?

It facilitates transparency and it has been designed to be trustless in nature. There's an assumed lack of trust. With that, its monetary policy is pre-programmed and baked in from the get go. Everyone is aware of how it has been pre-programmed. Everyone is aware that no one entity controls it and that it can't be tampered with. Nobody can 'print' more of it, nobody can change interest rates relative to it.

It relies on one big trust - that some people will continue to value it despite it having no tangible link to something of inherent value. You never seem to think that a problem. If bitcoin was linked to something, anything even copper, I'd be filling my boots with it.

It's foolish to think that central bankers closer to home can't make mistakes and get it wrong.

I certainly don't think that and (see above) they have admitted to their mistakes. But so long as their heart in in the right place (my interests) I have to trust them to get it broadly right. Inflation is the guy I fear and he has been put in his box for quite a while now. I still fear him - but a crypto currency linked to hot air will not assuage that fear.

The examples given in Wolfie's links refer to the application of negative interest rates relative to pension funds. Those guys are not going to keep money under the mattress. So...whomever is party to those pension funds is already paying the price for negative interest rates.

Absolutely.

Other way round...gold is on 'a bit of a roll' (up 30% since the start of the year) whereas bitcoin is on a roll (up 55% since the beginning of the year).

I am not sure on this point but is Gold on a long time high against the dollar? Bitcoin certainly isn't. Bitcoin is so volatile it will always have extreme movements.

You are clinging on to this ideology - that things are just black or white - that it's a zero sum game. I'm sure there are a minority of people that want to tear down the current system in its entirety and throw it out completely.

Yes that's what I mean by the cultists. I am not sure that AAM is cultist immune. One sees extreme leftie world views often cited by those defending crypto. Not accusing you.

You have never once acknowledged one single positive characteristic of decentralised digital currency.

Your not watching my lips. If bitcoin had a link to some intrinsic value it would at once be a very beneficial thing and a very dangerous thing. I would certainly be having a piece of it in current times.

What is 'your central projection' based on? Hopium?

A bit of that and also a bit of Trustium. Economic/monetary management in the West hasn't done bad by me so far - I hope and trust they will continue to serve my interests.

 

[Duke of Marmalade]

Yes, of course. No different to any other investment thst is worth less than the price paid for.
I don't really get this point. I was of the impression that you considered bitcoin to have no, or very little value.

Semantics I think. Bitcoin has a price. That is an incontrovertible fact. Let's just say that I believe that it has no worth or intrinsic value and that will decide its ultimate price/value.
Now some folk do think it has "value", that's why it has a price. The justifications that I have seen put forward for that value/price seem far more valid (don't agree with them) now, basically that Fiat and indeed our whole economic order is a house of cards, has never seen a more favourable backdrop. And yet bitcoin can hardly recover 50% of its "price/value" of just 2 years ago.

 

[tecate]

I do not at all think CBs are infallible, they have admitted to many mistakes. But I do believe that they are the experts and that in the West they are generally on my side. I hope they get it broadly right. Do you?

Indeed I do - but the fact remains that bitcoin would never have even been conceived if they (and governments) were getting it right consistently. I believe in giving them one excellent incentive not to screw it up or steal from people - competition. This notion that only one entity can issue money has to go.

It relies on one big trust - that some people will continue to value it despite it having no tangible link to something of inherent value. You never seem to think that a problem. If bitcoin was linked to something, anything even copper, I'd be filling my boots with it.

What you don't seem to understand and/or acknowledge is that the confidence in it comes in the fact that it can't be tampered with. It's pre-programmed and it's transparent in terms of how its set out eg. fixed supply, issuance, etc. That's where it gets its credibility and power.
Other than that, it takes a shed load of energy to mint bitcoin. It's the energy standard that Henry Ford first floated back in the day.

If bitcoin was 'backed' by gold, etc. - it would be centralised. That would completely destroy the proposition. Satoshi built on the work of others. This is effectively what happened to e-gold - the government came and confiscated the gold - and it was toast. However, if that's what floats your boat, I can point you in the right direction. There are cryptocurrencies backed by gold if you say that's what you see as progress.

But so long as their heart in in the right place (my interests) I have to trust them to get it broadly right. Inflation is the guy I fear and he has been put in his box for quite a while now. I still fear him - but a crypto currency linked to hot air will not assuage that fear.

You misunderstand the proposition on hand if you continue with the 'hot air' jibe. At best it's double standards as you are quite happy with FIAT which is backed by nothing.

I am not sure on this point but is Gold on a long time high against the dollar? Bitcoin certainly isn't. Bitcoin is so volatile it will always have extreme movements.

Bitcoin is up 55% year to date vs. gold's 30%. I think that's pretty clear. As regards volatility - it's been done to death but you know I've provided proof here previously that bitcoin is already going through a process of reduced volatility year-on-year. It's a process that will continue over many years to come.
The irony is that you are accepting of gold in this context yet in the 70s gold was just as volatile as bitcoin.

Yes that's what I mean by the cultists. I am not sure that AAM is cultist immune. One sees extreme leftie world views often cited by those defending crypto. Not accusing you.

You can accuse away - at the end of the day, this is someone's opinion - and everyone is entitled to one. If you are saying that sort of stance has been taken here on AAM - i'm not aware of it.
On the leftie notion, that's interesting. Zoom out - and look at crypto globally and you'll see that 'lefties' are rarely associated with crypto - quite the opposite. As Brendan mentioned to you one time on this subject, if they were lefties - they'd be looking for more regulation - not less. Just so that we're quite clear - there is one thing in terms of regulation that I DO want torn down - and that's this KYC/AML sham.

Your not watching my lips. If bitcoin had a link to some intrinsic value it would at once be a very beneficial thing and a very dangerous thing. I would certainly be having a piece of it in current times.

You've got that far once before - but I still maintain that you have never acknowledged any of its positive characteristics. If you believe there are positive characteristics to it, what are they?
As for the backing, I can point you towards a crypto with gold backing - but understand that the minute you do something like that, it changes many other characteristics of that digital currency.

A bit of that and also a bit of Trustium. Economic/monetary management in the West hasn't done bad by me so far - I hope and trust they will continue to serve my interests.

I'm quite happy to acknowledge that by and large sovereign money has served society well. However, in one of your posts previously you alluded to the evolution of money. Bitcoin is very much part of that evolution.
Other than that, you and I have been more fortunate than others. Bitcoin is not to be assessed just through Irish eyes. There are 10s of millions of people living in countries who have had their wealth stolen from them via deliberate sovereign currency fraudulence and mismanagement.

 

[tecate]

Semantics I think. Bitcoin has a price. That is an incontrovertible fact. Let's just say that I believe that it has no worth or intrinsic value and that will decide its ultimate price/value.

The industrial use of gold makes up 10%. The other 90% is as a store of value use case. It's not much different - especially as we are moving to utility that the bitcoin network is starting to provide (dApps being built on top of it; other blockchains being secured by it, etc.).
If the price of gold has little correlation to its actual physical use, why don't you present with the very same issue in relation to it as you do with bitcoin? Why is fiat money acceptable to you on the same basis?

And yet bitcoin can hardly recover 50% of its "price/value" of just 2 years ago.

You're fixated on the December 2017 peak. Why? And if it reached $20,000 tomorrow, I suppose you'd say that its volatile? It's far, far harder to figure it out this year than any other, but thus far, the build up in price on bitcoin is pretty organic....not some hyped up pump.

Also, this conventional monetary experiment that we are living through - that can play out in different ways (inflation, deflation, etc. - or both at different points). The debt that's been amassed can play out over a longer period. The 'stimulus' can play out over longer periods. What are we to expect to happen in the short term if they're doling out free money?

I think it's unreasonable to judge this from this point right here - in the same way as on the 'digital gold' thread, it was premature to discount bitcoin (and it still is).

 

[WolfeTone]

And yet bitcoin can hardly recover 50% of its "price/value" of just 2 years ago.

So no chance of bitcoin price experiencing irrational exuberance back then?
As tectate points out, you can pick any random point of price change to suit the narrative.
Here's another one, bitcoin is nearly 400% higher than it was 3yrs ago, or 1,000% higher than it was 3.5yrs ago.

None of that matters, or "past performance is not indicative of future returns" ....or something like that.
This thread reflects an increasing acceptance amongst mainstream economic thought that all is not well within the prevailing monetary system. That interest rates are the preserve of an institution, for them to adjust in accordance with their economic and political doctrine exposes a fundamental flaw. Interest rates are an economic force, determined by prevailing economic conditions, not by an over-arching centralised command institution.

That bitcoin offers an option to put wealth outside of that system is my view. I accept others don't see it that way.

 

[WolfeTone]

Bitcoin is at €10,015.69.
Anyone fancy shorting it?