Prices, Inflation/Deflation, Interest Rates & The Fed

Coja Petrus Uscan

Crow
Orthodox Inquirer
Gold Member
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BURNΞR

Pelican
Nope. Still no inflation.


I explained in a previous post that commodities like lumber can be made abundant and cheap. Try doing this with property, land, silicon chips and bitcoin.
 

cosine

Robin
You almost got me until this part. I think I'll enjoy the deflationary sell-off in bitcoin the most, due to the gnashing of teeth.
Could you elaborate?
Either way, lumber was used earlier in the thread as an example of inflation, so...I wonder if everyone here is still feeling as inflation-y as they were a few months ago.
I see inflationary and deflationary forces both at work. I don't think you can boil down the complexity of the world economy into one word.
 
Could you elaborate?

There's nothing special about Bitcoin as an asset or currency. That's not to say that the space generally doesn't have value. However, most cryptos, including Bitcoin, are just scams not unlike the gold ads you see during every re-flationary period.

That aside, this is why you also get the same type of selling pressure during dollar shortages. If I remember correctly, Bitcoin halved during the 2020 stock market tanking. I'd bet the same thing happened during the recent difficulties unwinding in the overnight market in August (I forget which exact morning but it may be worth checking out). During the next dollar shortage, which will be sooner rather than later, there will be much gnashing of teeth for crypto hloders.

I see inflationary and deflationary forces both at work. I don't think you can boil down the complexity of the world economy into one word.

This has been exactly my point during this entire thread. Just about everyone here has touted houses and lumber as signs of hyperinflation.
 

Dissimilarty

Sparrow
Orthodox Inquirer
There's nothing special about Bitcoin as an asset or currency. That's not to say that the space generally doesn't have value. However, most cryptos, including Bitcoin, are just scams not unlike the gold ads you see during every re-flationary period.
BTC is perhaps one of the funniest narrative voodoo's around currently. For instance, what actually is "it" and how is it that you actually "own" "it" when you purchase a BTC. But it looks like the fed's are happy to tax the gains and let the autists build the blockchain tech, at least for now.
 

Dissimilarty

Sparrow
Orthodox Inquirer
Ridiculous that something that’s basis of our entire modern life and we don’t understand shit about it to the point where we argue whether two polarly opposite scenarios are happening

I'd say that's a bit reductionist. A lot of the disagreement comes from using differing definitions, eg of "inflation." It classically means a rise in the general price level and on a technical level a rise in CPI. Then you have others who argue it can only be a monetary phenomenon and so supply and demand dynamics are by definition not inflation. I don't know that anyone would argue the lumber shortage wasn't a supply issue, same with microchips for vehicles, etc. Then you have people that claim financial asset prices are subject to inflation.

But perhaps the biggest unacknowledged source of this disagreement is that these narratives aren't "neutral," they are heavily laden with moral implications. Not that this is necessarily "bad" (economy comes from greek root meaning management of the household), but people think they are divining reality and not using their models and narratives to argue for such and such way of "managing the household."
 
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cosine

Robin
There's nothing special about Bitcoin as an asset or currency. That's not to say that the space generally doesn't have value. However, most cryptos, including Bitcoin, are just scams not unlike the gold ads you see during every re-flationary period.
I see there being an incredible amount of boom and bust in the space. Bitcoin and Ethereum have cornered two areas, but who knows if they are really Googles or Amazons of their spaces; they could still be AOL and Yahoo for all I know. That was my thesis for a while, but at this point I have had to admit that BTC's and ETH's staying power is impressive and I think they are entrenched as leaders.

Crypto, as a whole new world, will continue to grow.

That aside, this is why you also get the same type of selling pressure during dollar shortages. If I remember correctly, Bitcoin halved during the 2020 stock market tanking. I'd bet the same thing happened during the recent difficulties unwinding in the overnight market in August (I forget which exact morning but it may be worth checking out).

During the next dollar shortage, which will be sooner rather than later, there will be much gnashing of teeth for crypto hloders.

This has been exactly my point during this entire thread. Just about everyone here has touted houses and lumber as signs of hyperinflation.

- Amazon has a deflationary force for consumer goods.
- Many argue EV's will deflate car prices
- Automation will/is already deflating various jobs... like drivers.

On the other hand, the money-printing simply isn't ending:
https://www.npr.org/2021/08/09/1026055615/senate-democrats-release-3-5t-budget-framework
 
There's nothing special about Bitcoin as an asset or currency. That's not to say that the space generally doesn't have value. However, most cryptos, including Bitcoin, are just scams not unlike the gold ads you see during every re-flationary period.

That aside, this is why you also get the same type of selling pressure during dollar shortages. If I remember correctly, Bitcoin halved during the 2020 stock market tanking. I'd bet the same thing happened during the recent difficulties unwinding in the overnight market in August (I forget which exact morning but it may be worth checking out). During the next dollar shortage, which will be sooner rather than later, there will be much gnashing of teeth for crypto hloders.



This has been exactly my point during this entire thread. Just about everyone here has touted houses and lumber as signs of hyperinflation.
How do you store your wealth across time? Gold can’t. Fiat paper can’t. Realestate can’t. How do you bring your life’s wealth across a border, if your country becomes hostile? Bitcoin. What happens 10 years from now when bond yields are -5%, and the Fed is printing quadrillions per year to buy its own bonds, because if they don’t, the bond market and with it the entire legacy financial system collapses. The stock market will close, banks close, your 401k is frozen. Your property will be taken. Good luck taking Bitcoin. It’s gradual until it becomes sudden.

there may be a dollar shortage in the next few years because of a mild deleveraging, but that will just cause more printing, because if the dollar strengthens, it will cause worldwide economic damage.. The value of a good trends towards its marginal cost to produce. Dollars are produced by hitting the 0 key on the Fed computer, which is also how much it costs to make a dollar.
 
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BTC is perhaps one of the funniest narrative voodoo's around currently. For instance, what actually is "it" and how is it that you actually "own" "it" when you purchase a BTC. But it looks like the fed's are happy to tax the gains and let the autists build the blockchain tech, at least for now.
You have a cryptographic key that allows you to “move” (spend) it to someone else. Without that key, you can’t spend it, thus ownership. That key can be recovered via a passphrase that you can memorize. If faced with a hostile government, you could liquidate your assets into BTC, leave for a friendlier jurisdiction with just the clothes on your back and a phrase in your head, and start over with your life savings intact and untouchable. This is the most liberating technology for humanity since the printing press. Jurisdictional arbitrage.
 

NoMoreTO

Hummingbird
When is your rough estimate on when it breaks from its doldrums?

1 year ago I was more bullish, but it seems there is no accounting for taste. The last cogent point I heard was that people think we are heading for a recovery, so metals are down on that basis. I'm a contrarian on the recovery I suppose so time will tell. I own physical, and what I am liking about it is that it is in some ways it's like a house, you can't think of selling it everyday so you just sort of forget about it. At least that's how I am.

I like that it is preserved wealth outside of the system, unattached

How do you store your wealth across time? Gold can’t.

Well, you will have the same amount of gold as you have today. So your wealth is preserved in Gold. It comes down to the question, what is wealth? If it means that the gold will preserve it's value in the same proportion vs. all other assets, then that is a tough call. Obviously, other items might do better, perhaps bitcoin, perhaps real estate, perhaps art.
 
Gold will cost you 1%/yr in storage, the supply increases 2%/yr. In 35 years it will lose half of its purchasing power, if you don’t lose 100% due to counterparty risk. What if your great grandfather left you $1mm in gold, 100 years ago. What city did he custody it in? Berlin, Peking, Paris, Moscow, Tokyo…and it’s gone. If you are lucky and pick the right place, New York, London, or Zurich, then it’s still there, but you can’t predict a communist takeover or regime change. Oh wait, it would be gone if he left it in New York, because in 1933 private ownership of gold was outlawed in the US, so they could debase the currency.
 

grenade001

Woodpecker
Gold will cost you 1%/yr in storage, the supply increases 2%/yr. In 35 years it will lose half of its purchasing power, if you don’t lose 100% due to counterparty risk. What if your great grandfather left you $1mm in gold, 100 years ago. What city did he custody it in? Berlin, Peking, Paris, Moscow, Tokyo…and it’s gone. If you are lucky and pick the right place, New York, London, or Zurich, then it’s still there, but you can’t predict a communist takeover or regime change. Oh wait, it would be gone if he left it in New York, because in 1933 private ownership of gold was outlawed in the US, so they could debase the currency.

The primary take away point that I get from this post is: SKILLS SKILLS SKILLS!

If one develops sufficient competency; and a skillset in an evergreen, in demand field, it would afford you the opportunity to start over in a new jurisdiction. Not only to survive, but also thrive.

Secondary to that would be to ensure that such a skillset, and worldview is inherited by your descendants through proper coaching and mentorship. Impress onto them that they are custodians of a multi-generation inheritance, not sole owners.

I also would make the point that there is extremely limited scope to create and implement a plan over a 100 year time frame. Even a plan for the next 50 years would be subject to significant variance, due to the numerous variables. Example the periods of 1900-1950; 1920-1970; or 1971-2021.

There is a reason why the general advice is time in the market, contrasted with timing the market.
 

NoMoreTO

Hummingbird
Gold will cost you 1%/yr in storage, the supply increases 2%/yr. In 35 years it will lose half of its purchasing power, if you don’t lose 100% due to counterparty risk. What if your great grandfather left you $1mm in gold, 100 years ago. What city did he custody it in? Berlin, Peking, Paris, Moscow, Tokyo…and it’s gone. If you are lucky and pick the right place, New York, London, or Zurich, then it’s still there, but you can’t predict a communist takeover or regime change. Oh wait, it would be gone if he left it in New York, because in 1933 private ownership of gold was outlawed in the US, so they could debase the currency.
Well youre giving me a dollar figure on gold, my point is maybe he left me 50oz. Not bad. I recently realized that I actually made a similar amount in gold per day in 2000 as I do today. Pretty crazy. I store my own gold, so counterparty risk Is gone, but yeah, I could get robbed . Maybe I should dig a hole. Yes there might be more gold, but there will be alot more paper money , and Bitcoin could be better, but it lacks the history to be a true savings. Also, Americans in this time turned their gold in for the good of the nation, sad story , but no one's gold was actually confiscated physically as I understand it.
 

Dissimilarty

Sparrow
Orthodox Inquirer
You have a cryptographic key that allows you to “move” (spend) it to someone else. Without that key, you can’t spend it, thus ownership. That key can be recovered via a passphrase that you can memorize. If faced with a hostile government, you could liquidate your assets into BTC, leave for a friendlier jurisdiction with just the clothes on your back and a phrase in your head, and start over with your life savings intact and untouchable. This is the most liberating technology for humanity since the printing press. Jurisdictional arbitrage.

So there exists an account on the blockchain that requires a certain key in order to legitimate entries of an accounting unit called a BTC and these entries must then be submitted for validation across the network of computers running the blockchain, correct?

So what is "it" that you "own"?

This is the most liberating technology for humanity since the printing press. Jurisdictional arbitrage.

Ah, yes. Humanity's impulse to rebellion and claimed "liberation" from "tyranny." I'm sure this time it'll work out.
 
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