Bitcoin rises above $1,000

Nov 27, 2013
A pile of Bitcoin slugs sit in a box ready to be minted on April 26, 2013 in Sandy, Utah, United States.

The virtual currency bitcoin Wednesday broke above $1,000 per unit, quintupling in a month, according to Mt. Gox, which manages trading in bitcoin.

Launched in 2009 as the invention of a mysterious computer guru who goes by the pseudonym Satoshi Nakamoto, bitcoins can be exchanged online for real money or used to buy goods and services on the Internet. The currency is not regulated by any government.

Bitcoin reached $1,073 at 1640 GMT. At 1746 GMT, the currency was trading at $1,055, according to Mt. Gox.

The currency traded at just $205 on October 28 and is known for its volatility.

Still, bitcoin has gotten momentum in recent weeks after US regulators, including Federal Reserve Chairman Ben Bernanke, took a more positive view of the currency than many analysts had expected at a congressional hearing earlier this month.

Regulators have also discussed stepping up oversight in light of concerns that it could be used for and other illicit purposes.

Bitcoins recently made headlines when the US Federal Bureau of Investigation closed the Silk Road website where illegal drugs, forged documents, hacker tools and even the services of hitmen were hawked. The FBI seized 26,000 worth $3.6 million at the time.

Explore further: Bitcoin supporters defend cyber currency at US Senate

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kochevnik
1.6 / 5 (13) Nov 27, 2013
But how will USA fund all it's wars without a 3rd party zionist ponzi scheme? Laughably the FED has almost banned bitoin transactions in security state USA with their attack on MtGox and others but worldwide it is exploding as the US dollar is imploding and China returns all it's bucks to New York City for a refund in gold. Gold is the real worldwide currency and by the FED making gold so cheap China had acquired 400 tonnes of gold and jobs while America has acquired cheap, disposable crap and EBD cards
Eikka
1.6 / 5 (7) Nov 28, 2013
How does bitcoin deal with lost keys?

As with the recent example of a man who accidentally dumped a hard drive with the cryptographic keys to a quarter million worth of BTC, how does the system deal with coins that are simply "lost" and never traded?
ryggesogn2
1.5 / 5 (8) Nov 28, 2013
Any free market currency will not be allowed to exist by the nation states who must have monopoly power over their Monopoly money.
Eikka
1.5 / 5 (10) Nov 28, 2013
the nation states who must have monopoly power over their Monopoly money.


The difference is that the issuer of national currency must accept it back. A bank that issues dollars has to accept dollars as payment, even if they were worthless, precisely so that they couldn't just print more money and use it to pay for stuff without actually giving anything in return. Without such promise, the money would indeed be just play money and you'd have to be an idiot to accept it.

Bitcoins have no such promise, so the only way to cash them in is to find a different person to exchange with. In esssence, the people who originally "issued" it and made millions of BTC out of thin air before it became difficult never have to accept it back as payment for anything, so the people who paid them proper money for the coins are reduced to trying to pass them on to some other idiot, ad infinitum.

It has all the hallmarks of the Dutch tulip mania of 1637.
ryggesogn2
1.9 / 5 (9) Nov 28, 2013
precisely so that they couldn't just print more money and use it to pay for stuff without actually giving anything in return.


That is what the US Federal Reserve is doing.

Eikka
1 / 5 (8) Nov 28, 2013

That is what the US Federal Reserve is doing.


The Fed doesn't get anything in return for the money. They don't purchase any goods with it, they simply hand it to the government and the government writes them an IOU note.

What do you think would happen if the government actually paid the money they borrowed back to the Fed?

Since the Fed don't have anything but government IOUs in the vaults, the money they created would actually cease to exist as money. The government would get their IOU note back and shred it, and then nobody would have to accept the money as payments for anything. Then it would really become play money. if it was paid in dollar bills, they'd have to burn them because the bank balances would show that they don't exist.

What pundits don't often mention is that when commercial loans are paid back, the money actually dissapears because the original loan creates a negative balance.
kochevnik
1.5 / 5 (8) Nov 28, 2013
the nation states who must have monopoly power over their Monopoly money.
Bitcoins have no such promise, so the only way to cash them in is to find a different person to exchange with. In esssence
If you had gone to college and attended economics for one week, you would learn that scarcity is the requirement for something to retain value. Bitcoin is mathematically designed to be scarce, unlike your Dutch tulips. Your post is complete drivel
I have given and accepted bitcoins, and liquidity was never an issue. Indeed now it is much more liquid
The Fed doesn't get anything in return for the money. They don't purchase any goods with it, they simply hand it to the government and the government writes them an IOU note.
False. The FED gets complete control of the government, as by controlling the currency they control the government. Who the fuck do you think interest payments are made to? They can crash the economy. They control or oversee every transaction
javjav
1 / 5 (2) Nov 28, 2013
Bitcoin is mathematically designed to be scarce

"Scarce" is not enough. Tiger shit is also scarce, but nobody want it.
I have given and accepted bitcoins, and liquidity was never an issue.

Not for many time. This is obviously the typical bubble. Price is rising because more and more people want to speculate with it (as in all bubbles), until no more people come to the system and the panic appears. At that time everybody will want to sell it at the same time (including you, my dear expert), and no government or federal reserve will buy the excess of it to maintain its price as it happens with real currencies (the key difference is not when there is demand for it, but when it is not). Then Plop! ... the bubble has exploded, and your virtual money has magically evaporated. The difference with other bubbles is that this time there is nobody to be sued, no guilty names, just anonymous speculators like you.
kochevnik
1 / 5 (7) Nov 28, 2013
Bitcoin is mathematically designed to be scarce
"Scarce" is not enough. Tiger shit is also scarce, but nobody want it.
Wrong. Because of scarcity the value of tiger shit is easily grown. Currencies have been made out of sticks and scratches in wax. Tiger shit is worth the cost of acquiring it, at minimum
I have given and accepted bitcoins, and liquidity was never an issue.
Not for many time. This is obviously the typical bubble.
That's what detractors as you said when BTC fell from $180 to $49. How many times does being wrong confirm your error? The value of BTC is due to the illegitimacy of three-party fiat currencies backed by nothing but the worthless words of some money addicts. Would you accept an IOU from a junkie? Moreover you're the kind who will buy at $10,000 in the exuberance and lose everything. Nothing wrong with that, but you should probably do something where you have an edge
ryggesogn2
1.5 / 5 (8) Nov 28, 2013
The Fed doesn't get anything in return for the money. They don't purchase any goods with it, they simply hand it to the government and the government writes them an IOU note.


The Federal Reserve is the govt. and what it gets for 'the money' is power.
VendicarE
4.2 / 5 (5) Nov 28, 2013
"The Federal Reserve is the govt" - RyggTard

According to the Board of Governors, the Federal Reserve System "is considered an independent central bank because its monetary policy decisions do not have to be approved by the President or anyone else in the executive or legislative branches of government, it does not receive funding appropriated by the Congress, and the terms of the members of the Board of Governors span multiple presidential and congressional terms.

Poor RyggTard. He doesn't even know that the FED operates independently of his own Government.

What a Moron.....

ryggesogn2
1.4 / 5 (9) Nov 28, 2013
Real money has intrinsic value and is accepted as a means of exchange.
With no recognized state, Somalis used Somali money. They only accepted one denominated note (I think it was 1000) but the important part is the value of the money is the cost of printing the note. Therefore there was no point for anyone to print counterfeit notes. Anyone who wanted to print the appropriate currency created the value in that currency by creating the note.
Metals like gold and silver were and are used as money as they have intrinsic value and the value of gold or silver coin is the cost of mining, processing, minting and handling the coin. Any additional value is its demand in the market.
Govts today can't tolerate the limits on their power by allowing free market money.
Fiat currencies allow govts to increase taxes by inflating the value of the currency.
VendicarE
4 / 5 (4) Nov 28, 2013
"what it (the fed) gets for 'the money' is power" - RyggTard

All profits gained by the FED are returned to the treasury.

Poor RyggTard... When he actually writes his own words, they are nothing but nonsense and proclamations of profound ignorance.

VendicarE
4.2 / 5 (5) Nov 28, 2013
"Real money has intrinsic value and is accepted as a means of exchange." - RyggTard

All money is "real" money, TardieBoy.

What you choose to call unreal money in your ConservaTard fantasy universe has no impact here in the real world.

VendicarE
3 / 5 (4) Nov 28, 2013
Since there is a limited number of bitcoins, demand can only drive up the price.

This means that they will become an increasingly useless mechanism of exchange, since like the Ningy, you will never be able to purchase a loaf of bread or a cup of tea with a bitcoin.

Real money suffers from the effects of inflation, some of which are positive, like improvements in the utility of exchange as "dollars" are devaluated, making them a better instrument to purchase cups of tea and loaves of bread.

kochevnik
1.5 / 5 (8) Nov 28, 2013
Since there is a limited number of bitcoins, demand can only drive up the price.

This means that they will become an increasingly useless mechanism of exchange, since like the Ningy, you will never be able to purchase a loaf of bread or a cup of tea with a bitcoin.

Not quite. If there are opportunities that permit a greater ROI than hoarding, investment will yield a bigger return than hoarding. At the moment even a cat can trade BTC and become rich This is not due to the value of bitcoin, but the imploding fiat currencies, especially the dollar. People are tired of the NSA/FED/state terrorism/American exceptionalism complex that mandates spying into every facet of private life. People want their economic lives privatized

USA economy cannot exist without quantitative easing, or money printing. People will lose faith and wealth. Either by deflation or inflation. Either way you're broke. Either you will have many worthless bucks, or you will have no bucks
Eikka
1 / 5 (6) Nov 28, 2013
If you had gone to college and attended economics for one week, you would learn that scarcity is the requirement for something to retain value. Bitcoin is mathematically designed to be scarce, unlike your Dutch tulips. Your post is complete drivel


Only demand creates value. That's what crashed the Tulip market; the prices got so high that nobody wanted to risk it anymore and people stopped buying, so the prices started falling, so people made a run to the bank in fears of losing their investments, which caused them to lose their investment.

Same thing with BTC. The people who started the whole racket have already sold their coins for other currencies, and the people who bought the bitcoin are trying to sell them to yet other people to get their investment back and then some, and they in turn try to repeat the trick, so the prices go up up up until everyone starts to think it's a bit too risky and stop buying, and the idiot who bought the coins last loses all.

VendicarE
3.7 / 5 (3) Nov 28, 2013
"That is what the US Federal Reserve is doing." - RyggTard

Wrong again Fool. The FED can not print money without the express order of the government.

The government issues the order, the FED then places a negative value in it's ledger and then makes a positive amount of cash available to banks to loan out.

Contrary to your idiot assertion, the FED is legally blocked from creating new money on it's own authority.

VendicarE
2.3 / 5 (3) Nov 28, 2013
"USA economy cannot exist without quantitative easing, or money printing." - Kochevnik

Correct.

The U.S. economy became habituated on borrowed money during the Borrow ans Spend Conservative fiscal mismanagement of the Reagan Administration.

"Borrowing a trillion dollars plus (2 trillion in current dollars), was the greatest thing we ever did " - Reagan Budget Adviser.
Eikka
1.6 / 5 (7) Nov 28, 2013
The BTC system has many parallels to the tulip market in terms of scarcity. The whole tulip mania happened over the winter when tulips don't grow, so the industry couldn't answer to increased demand and the prices started going up. That in turn started a wave of speculation of future prices where people started paying money just for the contracts to buy tulip bulbs, and they traded the papers around for ever-increasing sums of money without actually ever seeing a single tulip. At some point someone realized that the papers were selling higher than the tulips ever would, and that's where it turned ugly.

See, it's inevitable that the sort of speculative bubble happens once it starts, because once the investors realize they got something that has only imaginary speculative value, they have to get rid of it. There's no way out but to sell it to someone even stupider than you were, and the conclusion is that someone eventually gets the ugly end of it.

ryggesogn2
1.6 / 5 (7) Nov 28, 2013
Only demand creates value. That's what crashed the Tulip market;

Tulips were never considered money.
If demand for fiat currencies or bit coins rises, all that needs to be done to keep the value constant is to instantly create more. If the govt wants more money it only needs to print more.
For govts, market forces, not free market forces, still enter in with the trading of currencies of other countries to facilitate trade.
A microcosm of this exists in the MA Berkshires. They print Berkshire bucks that sell at a discount to the $. One Berkshire buck costs ~$.95, but only accepted by local merchants. Berkshire merchants can print more BBs but they will sit in storage only replacing worn bills or those that leave the area.
Unlike a state, Berkshire merchants can't force anyone to use BB.
Govts, like Rome, inflated the value of their coins by shaving off the edges to create more coins. Romans had to accept the face value of a coin, not its intrinsic value.
ryggesogn2
1.6 / 5 (7) Nov 28, 2013
The only reason the US economy hasn't imploded is that the rest of the world is not much better.
The ROW still trusts the USD to maintain value compared to other world currencies.
""Safety of personal wealth" is probably the main motivation. The story I have been hearing is this: these folks emigrate to other places and invest in real estate in other places as a form of "political insurance". Too many of these rich folks got their wealth because of their connections with officials, probably bribery and corruptions, and they don't see their assets in China being "safe" in a sense that if they get caught, they will have nothing left. So it makes some sense for them to flee before it is too late. "
http://www.alsosp...ing.html
But some in the US are beginning to leave the USA for the same reason, fear of losing their wealth and socialism keeps creeping in.
Zephir_fan
Nov 28, 2013
This comment has been removed by a moderator.
ryggesogn2
1 / 5 (7) Nov 28, 2013
"Thompson argued that popular interpretations of tulipmania have failed to distinguish between options and futures. Tulipmania was only a contractual artifact. There was no "mania" at all.

It is easy to claim that bubbles are irrational. They seem to represent a deviation of prices from fundamental values—and they contradict basic economic theory. But there has been little attempt to understand how speculation actually works. The example of tulipmania shows the importance of doing that—rather than relying on lazy quips about "animal spirits" or irrationality. "
http://www.econom...-history

Eikka
1 / 5 (6) Nov 28, 2013
The government issues the order, the FED then places a negative value in it's ledger and then makes a positive amount of cash available to banks to loan out.


Actually, the US government issues a security or a bond (basically an IOU) and sells it on the market, and the FED buys them with money they create by writing a check to themselves (negative ledger). That way new money enters the market. The FED can also sell the government bonds back to the market in which case money is removed from the market and essentially destroyed because of the negative balance of the internal bookkeeping.

The government issued bonds is what ultimately creates the money. The FED cannot create any money if there's no securities they can buy. Eventually the government has to pay the bonds as they expire, so if they stop making new ones the amount of money in the market would eventually dwindle down to nothing.

Eikka
1.6 / 5 (7) Nov 28, 2013
Tulips were never considered money.


Neither were bitcoins *zing*

If demand for fiat currencies or bit coins rises, all that needs to be done to keep the value constant is to instantly create more.


Fiat money, yes. Bitcoins, no. Bitcoins are limited in number by design and they can only reduce in numbers as people lose the cryptographic keys to their wallets. Bitcoins are inherently deflationary.

The example of tulipmania shows the importance of doing that—rather than relying on lazy quips about "animal spirits" or irrationality. "


The tulip mania wasn't an irrational bubble. It was a rational response to a racket where some people sold contracts for more than they were worth to people who didn't know their worth, and that caused a market bubble as the people who got duped started tossing the hot potato around, increasing the price every time.

It's like they say, when your taxi driver starts giving you financial advice, it's time to pull out.
kochevnik
1 / 5 (7) Nov 28, 2013
Tulips were never considered money.


Neither were bitcoins *zing*
Governments consider it money when it is useful to their agenda, as in the case of Mt Gox. Essentially there will be noise as the aristocratic bankster elite are replaced with technology. They are obsoleted

Fiat money, yes. Bitcoins, no. Bitcoins are limited in number by design and they can only reduce in numbers as people lose the cryptographic keys to their wallets. Bitcoins are inherently deflationary.
People who lose their keys only INCREASE the value of other bitcoins. Zionist quantitative easing is deflationary, as it drives interest rates NEGATIVE and pays people to hoard. US banks are now beginning to charge for deposits, as they claim they make no $ from $. Moreover insurance industry depends upon positive interest rates. With zionist banking property cannot be insured, which is the basis of the economy. You have your economics exactly backward!
Eikka
1 / 5 (6) Nov 28, 2013
People who lose their keys only INCREASE the value of other bitcoins.


That's what deflation means.

Reducing the money pool concentrates whatever value it has on the remaining amount, which means the unit value goes up. Hoarding the money has the same effect, but only as long as the money is being held back.

as it drives interest rates NEGATIVE and pays people to hoard.


A negative interest rate means you lose more money the longer you hold on to it. It has the exact opposite effect.
Eikka
1 / 5 (6) Nov 28, 2013
You have your economics exactly backward!


You have your terms exactly backwards and extremely confused.
ryggesogn2
1 / 5 (6) Nov 28, 2013
The FED cannot create any money if there's no securities they can buy.

The Federal Reserve IS a part of the govt. If not there would be no need for the govt to appoint members to the board.
Regardless of the mechanism used to create money, the federal govt still creates it and controls the economy.
The government issued bonds is what ultimately creates the money.

And BHO wants no limit on the value of the bonds.
Trouble begins when no one buys the bonds, except for the Fed, which it is doing now, monetizing the debt, and when the govt can't plunder more in taxes to pay interest on the current debt. But since the govt controls the value of the currency it really controls the value of the debt held by investors around the world.
Bit coins could be money if enough people decide it can be.
kochevnik
1 / 5 (7) Nov 28, 2013
People who lose their keys only INCREASE the value of other bitcoins.
That's what deflation means.
No, that's what "commodity speculation" means
Reducing the money pool concentrates whatever value it has on the remaining amount, which means the unit value goes up. Hoarding the money has the same effect, but only as long as the money is being held back.
Hoarding does "hold back" the money or good, but the hoarder suffers the opportunity cost of investing. This imposes a "invisible hand" cap on the asset just as it does with gold and precious metals
You have your economics exactly backward!
You have your terms exactly backwards and extremely confused.
Not what my economics professor said. That's why I made the money and you're left to watch the Hunger Games LOL
ryggesogn2
1 / 5 (7) Nov 28, 2013
Deflation only hurts the govts that create fiat currency.
With free market money, money will have value and be traded keeping its value consistent.
Free market deflation is a good thing and we experience it when the price of goods fall and the quality of those goods rise.
Computer memory has been 'deflationary' in that the cost per TB has dropped significantly.
If the value of money is increasing, sure, they will hang on to it, maybe even lending it for others to invest.
One of the advantages of e-gold was (is) that gold can be effectively traded down to very small amounts, even micrograms.
I see no reason bit coins or an equivalent could not be used in the same way.
One US cent used to be able to buy quite a lot of products. Now, most countries no longer have a .01 coin and the US wants to stop minting the penny and stop printing paper dollars. This is all because of govt induced inflation.
Eikka
1 / 5 (5) Nov 28, 2013
This imposes a "invisible hand" cap on the asset just as it does with gold and precious metals


That depends on how fast the value is changing. The faster, the more profitable it is to hoard, which changes it faster.

Deflation only hurts the govts that create fiat currency.


Deflation hurts anyone who's trying to do business using the currency. It means the prices are falling continuously, so that contracts made yesterday cost more to pay today.

Free market deflation is a good thing and we experience it when the price of goods fall and the quality of those goods rise.


It also means that all debt increases in value all the time and becomes more and more difficult to pay off. All wages for example must be cut at the same rate as the prices drop, or your business is soon bankcrupt - good luck negotiating that with your workers.

Computer memory has been 'deflationary' in that the cost per TB has dropped significantly.


That's not at all the same thing
Eikka
1 / 5 (5) Nov 28, 2013
Not what my economics professor said. That's why I made the money and you're left to watch the Hunger Games LOL


Maybe we have slighty different motivations. If your intent is to game the system in order to gain wealth to yourself at the expense of others, then working the economy backwards is the right way.

No, that's what "commodity speculation" means


In this context, ryggesogn2 confused deflation with inflation by apparently thinking that deflation means decrease in value of a currency.
Eikka
1 / 5 (5) Nov 28, 2013
Bit coins could be money if enough people decide it can be.


Bit coins could be money if they could actually remain stable.

So far it's just one big poker game where the winners are the players who cash out early and the losers are left to play with an ever-diminishing pot.

The losers can only gain their money back if they invite a new player and then win them, so one wins and another one loses, and the stakes keep getting higher because nobody leaves before they get more than they came in with.

VendicarE
5 / 5 (1) Nov 28, 2013
"Deflation only hurts the govts that create fiat currency." - RyggTard

TardieBoy's Libertarian/Randite view of economics is perfectly wrong, as usual.

Deflation acts to reduce economic activity since money is worth more in the future.

Since with deflation, money is worth more tomorrow than it is today, it makes economic sense to put off a purchase today because tomorrow it will cost less than it does today due to the increase in the value of the money in your bank account.

So deflation reduces economic activity and economic output, and thus in the current economic system, the welfare of society in general.

RyggTard fails, every time he tries to think for himself. This is why he spends so much of his time free-thinking quotes from other people.

VendicarE
3 / 5 (2) Nov 28, 2013
"With free market money, money will have value and be traded keeping its value consistent." - RyggTard

Quite impossible, since changes in population and changes in the velocity of money transfer will alter the demand on the availability of money and hence alter it's value.

If I need a bitcoin to buy a loaf of bread and there are no bitcoins around how am I to purchase bread?

Further if there are only 1 million bitcoins in circulation, how do they get distributed among 9 billion people?

Finally, if bitcoins have a fixed value, then what happens when they are lost to entropy?

There are no coins to replace them. As a result there will be an ever decreasing supply of them, and eventually they will become useless as a medium of exchange.

Fixed values, and finite amounts appeal to RyggTard because, as a Libertarian/Randite he has a tiny mind, that is incapable of more complex thoughts.

He might do very well living in the 1700's, but he is out of place in the modern world.
CONT...
Eikka
1 / 5 (5) Nov 28, 2013
with deflation, money is worth more tomorrow than it is today, it makes economic sense to put off a purchase today because tomorrow it will cost less than it does today


That is actually a self-amplifying process because less spending today is seen on the market as a decrease in demand, which is countered with lowering prices, which drives more deflation.

It is only countered by the need to purchase goods, such as food and energy, using the currency. Since nobody uses bitcoin to pay their rent, there's nothing stopping bitcoin from bursting into a delfatory spiral and a subsequent hyperinflation, or commonly known as a boom-bust cycle.

And as long as bitcoin is susceptible to such cycles, nobody wants to use them as a real medium of exchange.
VendicarE
5 / 5 (1) Nov 28, 2013
cont...

Perhaps this is why he demands that the U.S. return to the good oll days of America, long past, and why he opposes the real world as it is exposed by modern science.
VendicarE
5 / 5 (1) Nov 28, 2013
"One US cent used to be able to buy quite a lot of products. Now, most countries no longer have a .01 coin and the US wants to stop minting the penny and stop printing paper dollars." - RyggTard

In 1800, the U.S. had a population of around 5 million people. Today it is 70 times higher and thus requires at least 70 times as much money to be in circulation, presuming the velocity of money is the same now as it was then.

However the velocity has increased by several orders of magnitude, making the amount of money required much higher than the factor of 70 increase required by population expansion alone.

Once again, RyggTard, goes off the rails as soon as he beings to try and think for himself.

Pathetic, Libertarian/Randite, Fool.

VendicarE
5 / 5 (1) Nov 28, 2013
"And BHO wants no limit on the value of the bonds." - RyggTard

Meaningless drivel.

The "value" of bonds is determined by supply and demand. Bonds are issued in an open marketplace, and if there is no demand they have no value.

Period.

Try and get at least one bit right TardieBoy. So far you have exactly everything wrong.

What's wrong with you?
VendicarE
5 / 5 (1) Nov 28, 2013
"That is actually a self-amplifying process because less spending today is seen on the market as a decrease in demand, which is countered with lowering prices, which drives more deflation." - Eikka

Correct.

RyggTard's "Austrian Economics", is nothing but pure ignorance.

This is why it has been such a spectacular failure every time any portion of it has been tried in America.

Libertarian/Randite Alan Greenspan has written a whole book about the failure of his Ideology and why it lead him to push the U.S. economy to the brink of a decades long economic depression.

Eikka
1 / 5 (5) Nov 28, 2013
However the velocity has increased by several orders of magnitude, making the amount of money required much higher than the factor of 70 increase required by population expansion alone.


Still, if the money supply had been perfectly managed, 1 US cent would still buy the same amount of goods today, assuming the cost of production for those particular goods hadn't gone up in the mean while. Arguably it has, since it's a lot easier to grow food for 5 million people than for 300 million.

But, creating more money than needed is still a form wealth redistribution in favor of the party that gets to spend the money first. That cannot be avoided because new money represents a proportional part of the entire economic power of the market, and whoever has the new money wields that power.
kochevnik
1.5 / 5 (8) Nov 28, 2013
Bit coins could be money if they could actually remain stable.
You mean like the US dollar, which has lost 40% of it's value?
Since nobody uses bitcoin to pay their rent
Rentalutions' recent decision to accept rental payments in Bitcoin, a digital currency that dating site OkCupid has embraced.

A simple google would correct most of your fallacious assertions
VendicarE
not rated yet Nov 29, 2013
"But, creating more money than needed is still a form wealth redistribution in favor of the party that gets to spend the money first." - Eikka

I generally think that is correct. Republican borrow and spending has tended to favor the wealthiest 1 percent of the U.S. population while borrowing under Democrats has tended to favor the rest of the nation.

Personally I think that budgets should be balanced on average. But in America the economy has become so habituated on borrowed money that stopping "cold turkey" would be absolutely ruinous.

The final chance for America to save itself came and went with the supreme court appointment of George Bush Jr. as president. His disastrous economic policies have pushed America past the point where it can recover.

VendicarE
not rated yet Nov 29, 2013

"Still, if the money supply had been perfectly managed, 1 US cent would still buy the same amount of goods today" - Eikka

Maintaining the purchasing power of the dollar was never the goal and would be impossible to achieve in practice as it would require not only the printing of money but the controlled un-printing of it as well.

I'm not sure how the treasury would un-print dollars.

Feel free to tell us how.
ryggesogn2
1 / 5 (4) Nov 29, 2013
Deflation hurts anyone who's trying to do business using the currency.

It only hurts the state if the currency is fiat.
Mike_Massen
1 / 5 (4) Nov 29, 2013
The comments are amusing & entertaining in a sardonic way, depth needed.

It should be noted that study of economics is by essence a study of psychology in terms
of medium for exchange & must be a dynamic & not just of any primary type, there are
secondary & tertiary aspects.

An appropriate (personal) analogy would be in respect of the secondary & tertiary extensions of
basic "Operant conditioning" where positive reinforcement is a payment vs the negative
reinforcement as expense.

This of course is the extension of natures energy exchange in respect of "eat & be eaten".
Human monetary economics is therefore nothing much more than nature's basic extension & is so closely linked but, not accepted by most re the fundamentals.

The exchange rate of energy = money is posted all over most cities on placards.

An education of the distinct essentials of intrinsic vs extrinsic value is of supreme
use in allowing us to assess relative effort level for differential of desire vs contentment.
Eikka
1 / 5 (2) Dec 02, 2013
Rentalutions' recent decision to accept rental payments in Bitcoin


"Use" is a different word from "accept". Nobody uses bitcoin to pay their rent - that was what I said, and broadly speaking it is true.

You mean like the US dollar, which has lost 40% of it's value?


Over many decades. Bitcoin changes 1000% in value in months. It would be a real bummer to take a loan or settle to pay a wage in bitcoins only to find out that it cost you a hundred times more the next month.

I'm not sure how the treasury would un-print dollars.

Feel free to tell us how.


As it is my understanding, the FED holds treasury bonds as reserve currency, and as these bonds mature the treasury pays them back and removes the bond, thus removing reserve from the FED who has to cut on lending money to the banks, and cash in existing loans before creating new ones, thus diminishing the overall money supply.

Buying and selling bonds by the FED also controls the amount of money in use.
ryggesogn2
1 / 5 (2) Dec 09, 2013
"Whether you decide to accept payment in gold, silver, warehouse receipts, stock ownership, IOUs or chicken wings is up to you. The government has no role to play in setting the terms of the exchange. There is no justification for a policeman to be looking over your shoulder, fingering the trigger of his gun, while you are deciding what you want to accept in payment for what you are offering"
" no government policy regarding money is a recommendation. All of it is backed up by the police power of the state. Violate the government's interventions, and you will be fined and/or jailed. That's force. That's what keeps the fiat money system going. That's what has caused the dollar to lose over 98% of its value, in terms of gold, over the last 100 years. "
http://www.forbes...economy/
ryggesogn2
1 / 5 (1) Dec 10, 2013
"the "Keynesian Conceit," a term coined by writers from F.A. Hayek to David Stockman, is actually killing working Americans. The socialist majority on the Federal Open Market Committee led by Janet Yellen pretend that keeping interest rates at zero and expanding the US money supply some 300% since the start of the subprime crisis in 2007 is somehow helpful to stimulating jobs and economic activity. "
"The ultimate question is whether the US can navigate the transition from decades of spending the future without destroying the rule of law. "
http://www.breitb...of-Money