Prices, Inflation/Deflation, Interest Rates & The Fed

EndlessGravity

Pelican
Protestant
Last edited:

EndlessGravity

Pelican
Protestant
Umm, did you read the ad?

Even CPI is up. The balance sheet is up, the and S&P is up in direct correlation.

Of course. So who's right, the guy who hasn't looked at any of their earnings reports or the guy who's been following food traffic for years? The guy that thinks sandwiches are $6 or the guy saying look, they're not actually $6?

Anyway my evidence is just as rigorous as all the dumb junk everyone posts in this thread to support non-existent inflation. You guys believe whatever the TV tells you and nothing more.
 

NoMoreTO

Hummingbird
Catholic
The best way to look at inflation without looking at TV is to look at your own personal costs:

New and Used Vehicles are up
Farm Equipment must be up 20-40% in my area since I got into the business in 2020. Fertilizer recently saw a huge bounce.
Gas might be 'down', but it isn't cheap.
I had to rent a little house in my home town, it Costs as much as a downtown Toronto Condo did years back. Rent is up.
Meat is up, Food generally speaking is up. I can see it when I buy. Milk and eggs specifically are up, bacon, butter is $6 CAD
Land values are up, residential homes in Canada are through the roof.
Regarding Fast food, well there are always promotions.

I am having trouble right now thinking of anything that is cheap right now.

I'm open to deflation arguments and scenarios, and I do think we could l see serious deflation at some point when fear enters the picture and the economy tightens up, but I'm just not seeing it at the current moment.
 

chance vought

Woodpecker
Protestant
The best way to look at inflation without looking at TV is to look at your own personal costs:

New and Used Vehicles are up
Farm Equipment must be up 20-40% in my area since I got into the business in 2020. Fertilizer recently saw a huge bounce.
Gas might be 'down', but it isn't cheap.
I had to rent a little house in my home town, it Costs as much as a downtown Toronto Condo did years back. Rent is up.
Meat is up, Food generally speaking is up. I can see it when I buy. Milk and eggs specifically are up, bacon, butter is $6 CAD
Land values are up, residential homes in Canada are through the roof.
Regarding Fast food, well there are always promotions.

I am having trouble right now thinking of anything that is cheap right now.

I'm open to deflation arguments and scenarios, and I do think we could l see serious deflation at some point when fear enters the picture and the economy tightens up, but I'm just not seeing it at the current moment.
Deflation is everywhere, but the money supply is increasing faster. When Bitcoin starts de-monetizing stocks, real estate, and bonds, that’s when those assets may deflate even in dollar terms. Some people think it will be a whimper, some say a bang.
 

NoMoreTO

Hummingbird
Catholic
Deflation is everywhere, but the money supply is increasing faster. When Bitcoin starts de-monetizing stocks, real estate, and bonds, that’s when those assets may deflate even in dollar terms. Some people think it will be a whimper, some say a bang.
Can you explain this a little more?

I can understand bitcoin being a store of value or perhaps people will fly into it as the money supply continues to increase (inflate). But how does Bitcoin demonetize stocks, bonds, and real estate?
 

chance vought

Woodpecker
Protestant
Can you explain this a little more?

I can understand bitcoin being a store of value or perhaps people will fly into it as the money supply continues to increase (inflate). But how does Bitcoin demonetize stocks, bonds, and real estate?
These are the most over financialized assets in the modern world. For example: real estate. Most people don't buy real estate because they like being a landlord, paying taxes, and maintaining properties. It does not generate value for society...owning a rental property for example, does not generate any economic value - it is actually slightly parasitic and value destroying. Here's how:

Buying a bunch of rental property drives up the price. Now someone who might have afforded to buy that property cannot. Now you pay more in taxes to the government, (higher than true value) who wastes that money. And the taxes are even higher, because an owner occupant could get a large homestead exemption on property tax. Now you pass those higher taxes on to the renter. The renter makes less effort to maintain the property, since they have no skin in the game, meaning you have to pay more to maintain it than an owner would.

How about owning a house. People tend to buy much larger, more extravagant houses than they actually need, why? Because why not, when the money supply is inflating at 10% a year, and you can get a mortgage at 3%. The bank is making money on the spread, and generating zero economic value in return...they are simply rent-seeking, and also close to the money printer getting money at 0%. There's no free lunch though, since you pay most of the interest up front, the real rate is more like 10-15% if you are in your house less than 20 years. People do this because houses tend to hold their value more than dollars, yen, or euros. And far better than yuan, which is why the Chinese were flying to Canada or Australia with gold bars to buy housing.

Stocks: remember 30 years ago when the advice was to own municipal bonds in retirement, which would yield a risk free 8-12% return? You could live quite comfortably on 100k/yr with 1 million in muni bonds, with no draw on your principle. Now if you are 100% in equities, that is your return, 8-12%...with a substantially higher risk. Any year could have a 40% collapse in your principle, and that's just in nominal terms. In real terms, the stock market has not reached the highs that it did in 2007. At best, in 100% equities your purchasing power was halved in 2010, and is back to almost what it was in 2007. Now if you cherry pick the Nasdaq, that has actually increased in value since 2007, in real terms, because it has generated real value. The S&P however, is worse than what a savings account used to be.

Why are all these other companies not generating real economic value? (starkly reflected in the loss of purchasing power you would have by being invested in the S&P 500.) Every working individual is throwing money at them, buying shares, because that is the only way to keep from drowning from the money printing. If you had held cash in 2008, instead of buying stocks, you have lost half of your real buying power. Now these companies are over valued by 10x, barely making a real profit, they issue more shares and raise cash to stay competitive (at 10x what they are really worth). It is malinvestment. The flood of money is going anywhere it can, instead of to only companies that deserve it. Most of the middle class is taking a 40% risk for a 0% real return. Its insane.

What is the real purpose of money (aside from trade efficiency)? Lets say you start an olive orchard when you are 20 years old, and retire at 60. You produced 10 million excess gallons of olive oil that you don't need to sell to meet your daily expenses on your farm during your working life. You can't just store that olive oil for 40 years, it will be rancid and worthless. Money is what is supposed to store that value so you can consume your excess labor in the future. If the money you sold your olive oil for 40 years ago can only buy 1/10th of what it could back then, you've worked 10 hours for every 1 hour of labor that you can now demand from someone else, because there is now 10 times as much money in the world. That is a fiat money world.

Now imagine the same olive farmer using a money with fixed supply. 40 years after he started farming, olive trees are more productive, harvesters are better, olive presses can extract more oil from each pound of olives. If he worked for 1 hour to produce 10 gallons of oil -- 40 years ago, now when he is retired, a young farmer can produce 20 gallons per hour. In the fiat world, he would have been better off just saving the oil (assuming he could without it spoiling) because it would have more purchasing power than the dollars he sold it for. In the hard money world, he is better off selling immediately and saving the money, because now he can re-buy 20 gallons of oil with the money he made selling 10 gallons of oil 40 years ago (same 1 hour of labor). That is what deflation and hard money look like. The oil costs half as much, but the young farmer makes the same amount of money that the old farmer did, because he can produce twice as much per hour.

You don't need all this "stuff" that holds value, the money holds value. There is far less need of "financial instruments" and far less waste of resources in the economy.

In real terms, I'd say 3/4 of the so called assets in the world have a negative REAL yield. Of course bonds, 90% of stocks, and real estate, which has maintenance, taxes, insurance. 300 TRILLION in negative yielding assets that are over priced and yet still losing buying power, because paper money is so much worse. ALL of that will flow into Bitcoin...maybe not in my lifetime but eventually. At a 300T market cap, one Bitcoin will have 15 million dollars of buying power in TODAY'S money. By the time that happens in 30 or 50 years, as money printer go brrrr, the actual dollars per bitcoin could be 150 million, 1 billion, who knows.
 
Last edited:

paternos

Sparrow
Catholic
These are the most over financialized assets in the modern world. For example: real estate. Most people don't buy real estate because they like being a landlord, paying taxes, and maintaining properties. It does not generate value for society...owning a rental property for example, does not generate any societal value - it is actually slightly parasitic and value destroying. Here's how:

Buying a bunch of rental property drives up the price. Now someone who might have afforded to buy that property cannot. Now you pay more in taxes to the government, (higher than true value) who wastes that money. And the taxes are even higher, because an owner occupant could get a large homestead exemption on property tax. Now you pass those higher taxes on to the renter. The renter makes less effort to maintain the property, since they have no skin in the game, meaning you have to pay more to maintain it than an owner would.

How about owning a house. People tend to buy much larger, more extravagant houses than they actually need, why? Because why not, when the money supply is inflating at 10% a year, and you can get a mortgage at 3%. There's no free lunch though, since you pay most of the interest up front, the real rate is more like 10-15% if you are in your house less than 20 years. People do this because houses tend to hold their value more than dollars, yen, or euros. And far better than yuan, which is why the Chinese were flying to Canada or Australia with gold bars to buy housing.

Stocks: remember 30 years ago when the advice was to own municipal bonds in retirement, which would yield a risk free 8-12% return? You could live quite comfortably on 100k/yr with 1 million in muni bonds, with no draw on your principle. Now if you are 100% in equities, that is your return, 8-12%...with a substantially higher risk. Any year could have a 40% collapse in your principle, and that's just in nominal terms. In real terms, the stock market has not reached the highs that it did in 2007. At best, in 100% equities your purchasing power was halved in 2010, and is back to almost what it was in 2007. Now if you cherry pick the Nasdaq, that has actually increased in value since 2007, in real terms, because it has generated real value. The S&P however, is worse than what a savings account used to be.

Why are all these other companies not generating real economic value? (starkly reflected in the loss of purchasing power you would have by being invested in the S&P 500.) Every working individual is throwing money at them, buying shares, because that is the only way to keep from drowning from the money printing. If you had held cash in 2008, instead of buying stocks, you have lost half of your real buying power. Now these companies are over valued by 10x, barely making a real profit, they issue more shares and raise cash to stay competitive (at 10x what they are really worth). It is malinvestment. The flood of money is going anywhere it can, instead of to only companies that deserve it. Most of the middle class is taking a 40% risk for a 0% real return. Its insane.

If there were a fixed supply of money, you wouldn't need to take any risk at all. Lets say you start an olive orchard when you are 20 years old, and retire at 60. You produced 10 million excess gallons of olive oil that you don't need to sell to meet your daily expenses on your farm during your working life. You can't just store that olive oil for 40 years, it will be rancid and worthless. Money is what is supposed to store that value so you can consume your excess labor in the future. If the money you sold your olive oil for 40 years ago can only buy 1/10th of what it could back then, you've worked 10 hours for every 1 hour of labor that you can now demand from someone else, because there is now 10 times as much money in the world. That is a fiat money world.

Now imagine the same olive farmer using a money with fixed supply. 40 years after he started farming, olive trees are more productive, harvesters are better, olive presses can extract more oil from each pound of olives. If he worked for 1 hour to produce 10 gallons of oil -- 40 years ago, now when he is retired, a young farmer can produce 20 gallons per hour. In the fiat world, he would have been better off just saving the oil (assuming he could without it spoiling) because it would have more purchasing power than the dollars he sold it for. In the hard money world, he is better off selling immediately and saving the money, because now he can re-buy 20 gallons of oil with the money he made selling 10 gallons of oil 40 years ago (same 1 hour of labor). That is what deflation and hard money look like.

You don't need all this "stuff" that holds value, the money holds value. There is far less need of "financial instruments" and far less waste of resources in the economy.
Well explained!

In such an economy there is an incentive to work hard. What you produce today you can consume tomorrow. (Money keeps purchasing power)

In the current economy there is no incentive to work hard. Whatever you overproduce is taxed for 50% and what's over is worth half in 5 years. It can even be lucrative to produce nothing, because you get free health care, child support, housing and welfare. Friends I know made more money on the appreciation of their house and their huge loans than on their labor.

Slowly we start to see the system collapsing. Health care. Shipping. Production.

As some old fashioned economists said, wealth is the sum of all goods we produce and services we do for eachother. It's as simple as that.
 

chance vought

Woodpecker
Protestant
Well explained!

In such an economy there is an incentive to work hard. What you produce today you can consume tomorrow. (Money keeps purchasing power)

In the current economy there is no incentive to work hard. Whatever you overproduce is taxed for 50% and what's over is worth half in 5 years. It can even be lucrative to produce nothing, because you get free health care, child support, housing and welfare. Friends I know made more money on the appreciation of their house and their huge loans than on their labor.

Slowly we start to see the system collapsing. Health care. Shipping. Production.
Thank you. Now follow this new world in its logical direction. We don't need as many banks, financial institutions, government regulators, lawyers, accountants...all of these "jobs" are purely parasitic and add no value to the economy. They are leeches and mosquitoes sucking the life out of the host, and spreading disease occasionally.

Without as much government, taxes, and and friction in the economy, Giuseppe can now produce 40 gallons of olive oil per hour. Deflation accelerates. Things get cheaper every year. We buy less and use less, because next year we will be able to buy even more with less money. We consume less fuel, less resources from the planet. No government "green new deal" is necessary...it is done automatically by every person because that is the incentive.

The world needs less olive oil because people need less stuff. Guisseppe only needs to work 1/4 as much to generate as much economic value as his grandfather. Instead of a 12 hour day, he works 3 hours, and has the same buying power as his grandfather. He makes 1/4 as much money, but he can buy just as much stuff and live just as well as his grandfather did, working only 3 hours a day.

Today it is the complete opposite: we are incentivized to consume, to buy as much as possible, because next year our money and our time will buy less than it will today.
 
Last edited:

EndlessGravity

Pelican
Protestant
The best way to look at inflation without looking at TV is to look at your own personal costs:

New and Used Vehicles are up
Farm Equipment must be up 20-40% in my area since I got into the business in 2020. Fertilizer recently saw a huge bounce.
Gas might be 'down', but it isn't cheap.
I had to rent a little house in my home town, it Costs as much as a downtown Toronto Condo did years back. Rent is up.
Meat is up, Food generally speaking is up. I can see it when I buy. Milk and eggs specifically are up, bacon, butter is $6 CAD
Land values are up, residential homes in Canada are through the roof.
Regarding Fast food, well there are always promotions.

I am having trouble right now thinking of anything that is cheap right now.

I'm open to deflation arguments and scenarios, and I do think we could l see serious deflation at some point when fear enters the picture and the economy tightens up, but I'm just not seeing it at the current moment.

How can you guys NOT see you're being pump n' dumped? They're wringing you out exactly like they've did in 1999 and 2006.

For Christ's sake, the IMF is scrambling at this very moment to re-structure massive loans which can't be paid. How can none of you imagine price increases as anything other than what the Fed tells you? Why can't you put these prices into context?
 

NoMoreTO

Hummingbird
Catholic
Yes. The FIRE economy ("Financials , Insurance, Real Estate") certainly isn't productive and is not a way to manage a nation.

While I like many of the points and appreciate the explanation, I don't agree with @chance vought 's theory on bitcoin having $15 million of buying power, it's just too massive a leap. If the currency devalues at such a rapid pace it would become useless in terms of carrying out transactions, we have seen this with developers not wanting to sell homes until they are completed and all the costs are understood in full. I think we will see a flight to safety as we are today, bitcoin will be part of it but the other part will be real estate, metals, and hard goods. When things get really bad, wealth will be hard to shelter, real estate will see surging property taxes, rent controls will be the norm, crypto and precious metals ownership may become illegal.

I would see them attempting to "reset" the financial system to a CBDC at some point, tightening their grip on the economy and allowing for negative interest rates to continue to spur the economy. This combined with the programmable nature of their new money would give them massive influence to keep their usurious scheme going. I'd like to think many in society would opt out, but how many today really own bitcoin or crypto, perhaps 5% of the population and that would be pretty generous. Like the masks, the majority of the population will go with the flow. Overturning the entire monetary system is not easy.
 

chance vought

Woodpecker
Protestant
Yes. The FIRE economy ("Financials , Insurance, Real Estate") certainly isn't productive and is not a way to manage a nation.

While I like many of the points and appreciate the explanation, I don't agree with @chance vought 's theory on bitcoin having $15 million of buying power, it's just too massive a leap. If the currency devalues at such a rapid pace it would become useless in terms of carrying out transactions, we have seen this with developers not wanting to sell homes until they are completed and all the costs are understood in full. I think we will see a flight to safety as we are today, bitcoin will be part of it but the other part will be real estate, metals, and hard goods. When things get really bad, wealth will be hard to shelter, real estate will see surging property taxes, rent controls will be the norm, crypto and precious metals ownership may become illegal.

I would see them attempting to "reset" the financial system to a CBDC at some point, tightening their grip on the economy and allowing for negative interest rates to continue to spur the economy. This combined with the programmable nature of their new money would give them massive influence to keep their usurious scheme going. I'd like to think many in society would opt out, but how many today really own bitcoin or crypto, perhaps 5% of the population and that would be pretty generous. Like the masks, the majority of the population will go with the flow. Overturning the entire monetary system is not easy.
Gold is being demonetized right before our eyes. Hard assets are hard only compared to our very soft fiat money. As you said, real-estate is only a hard asset so long as there is prosperity and stability. What happens to your real estate when it is taxed as cap gains when it goes to your heirs, or you go to the Gulag for re education because you were a roosh forum member?

Bitcoin is the only property you can own. It cannot be taken by force. You could bring a suitcase nuke to Microstrategy HQ and demand 100,000 BTC from Saylor himself, and you still cannot get it.
I can make a time lock multi-sig wallet that donates to my favorite organization for 100 years after my death. Any other tangible asset must be defended with walls, guards, lawyers.... all draining your wealth. Bitcoin is defended by the subsidy and fees, but eventually by fees alone. A microscopic fraction of the amount of wealth that is the most well protected asset in the world.

Game theory says there will be universal adoption... Why hold an asset that costs wealth to own, protect, and is constantly at risk from your neighbor, and your government? Those that cling to the old paradigm will lose wealth over time, which will flow to those that understand the new paradigm.

It will take decades. If it happened in 10 years it would be too much of a shock, possibly billions dead from starvation, nuclear war, it would be utterly catastrophic to hyperinflate the dollar and end up on bitcoin in 10 years. 50 or 100 years would be the best outcome.
 
Last edited:

NoMoreTO

Hummingbird
Catholic
Gold is being demonetized right before our eyes. Hard assets are hard only compared to our very soft fiat money. As you said, real-estate is only a hard asset so long as there is prosperity and stability. What happens to your real estate when it is taxed as cap gains when it goes to your heirs, or you go to the Gulag for re education because you were a roosh forum member?

Bitcoin is the only property you can own. It cannot be taken by force. You could bring a suitcase nuke to Microstrategy HQ and demand 100,000 BTC from Saylor himself, and you still cannot get it.

How is gold being demonetized? The price today is very "average" compared to Bitcoin yes.
 

paternos

Sparrow
Catholic
@NoMoreTO - I think you are spot on.

I also don't believe in bitcoin. It is a dream for those in power.

Just think, the richest people in the world own the media. If the media is positive on bitcoin, it means the richest people want the plebs to be investing in it.

I think what happens is that the middle class is putting money in an electronic token with no inherent value.
Forbidding it they won't do, it will call the anger of the people. But they will crush it.

And I think they will play it this way. Slowly stories will pop up in media of people that have been robbed of their bitcoin.

"A few masked men came at the door threatened a sympathetic tech enterpreneur with a gun, he transferred the bitcoin in 1 second to a new account, the robbeers switched it to Monero in another second and it's gone. The robbers made 20 million dollar."

The governement will say. There is no insurance to bitcoin theft, so government protection, and they will tell us they will change the system to keep us safe and protect us of these robbers.
This combined with the programmable nature of their new money would give them massive influence to keep their usurious scheme going.
This is it. Those in power (those with the money and assets) will do anything to keep the power.

These people are shapeshifters. Today they are pumping up this unprofitable Tech but they will be out when the big regulations will come in. It's a matter of time, the government globally will start attacking Tech. The moment the public starts to demand and go on the streets to stop big tech, they are already out.

They did this with the steel industry, with the car industry (those were the major companies in the 70) The richest families are government protected class.

The moment governments starts cracking down on an industry they are out.

The billionaires are big in the green economy, pumping it up, supported by their media, the moment we all find out it was all a scam, they will be out in the new thing.

They game is rigged. It's a long term pump and dump scheme. Using the people as their cattle.

They will always support internationalism and free trade, they pump a scheme and they get out when the government starts cracking down.

They make us belief it's about morality.

but it's usurious slavery. The game is rigged.
 
Last edited:

chance vought

Woodpecker
Protestant
#1) The supply is elastic...if gold increases in price, the inflation rate of gold also increases, driving the price back down. Not nearly as elastic as a commodity, like oil or copper, because gold is rarer, and never consumed, unlike commodities. So the supply of gold is ever growing, but the rate it can be extracted doesn't increase relative to its supply. Yes, maybe 10 times as much gold is mined per year than 1000 years ago, but there is also 10 times more gold in circulation, so the rate of supply growth remains constant (stock to flow). However, it is imperfect because the rate of extraction can change if there is a large enough price move, and the fact that it is inflationary is sub optimal in an economy.

#2) Gold is almost never used as a bearer asset. Maybe 1 in a million people transact using physical gold. It is stored in highly centralized places, which are not only vulnerable to political instability, but also to market dilution due to derivatives. There is far more paper gold than actual gold. If the price of gold goes up a lot, more paper gold will be created. There is just not an efficient way to verify who owns what gold, so it is rehypothecated, and highly diluted, vs if only physical gold had value. More people and institutions are realizing that gold is better than cash, but still a melting ice cube...its just an ice cube melting inside a beer cooler, instead of an ice cube melting on the sidewalk (fiat).
 

chance vought

Woodpecker
Protestant
@NoMoreTO - I think you are spot on.

I also don't believe in bitcoin. It is a dream for those in power.

Just think, the richest people in the world own the media. If the media is positive on bitcoin, it means the richest people want the plebs to be investing in it.

I think what happens is that the middle class is putting money in an electronic token with no inherent value.
Forbidding it they won't do, it will call the anger of the people. But they will crush it.
What gives anything value? Tell me something that has "inherent value" and why? What gives the "Federal Reserve Note" in your pocket value?
Why would they need to crush Bitcoin if it has no value?
And I think they will play it this way. Slowly stories will pop up in media of people that have been robbed of their bitcoin.

"A few masked men came at the door threatened a sympathetic tech enterpreneur with a gun, he transferred the bitcoin in 1 second to a new account, the robbeers switched it to Monero in another second and it's gone. The robbers made 20 million dollar."
If the Tech entrepreneur had a Ferrari, they don't have to threaten him or negotiate, they just pull the trigger and drive away. They don't know how much Bitcoin he has, he could have 1 Bitcoin or 10,000. Maybe that 10,000 Bitcoin is in a time-locked multi sig wallet where the Bitcoin can't be spent for 5 years...Does he tell the robbers to come back in 5 years so he can send them the Bitcoin?

I agree, some people will be forever depended on the government, regulations, and banks, because they can't be responsible for themselves. Civilization has fostered and created this dependent, farm animal mindset. For them it is riskier to "be their own bank". They are more likely to lose their money to carelessness than to government, banks, or other peoples carelessness.

Other people will have much lower risk by keeping their own assets, rather than putting them at risk for someone else to hold.

I really enjoy these discussions because once I understood the implications of this, I could not un-see it. I want some debate, some pushback on why Bitcoin won't succeed, because I've never been more certain that it will, and certainty is foolish. I want to hear every doubt and attack vector so I can refine my thinking.
 
Last edited:

paternos

Sparrow
Catholic
What gives anything value? Tell me something that has "inherent value" and why? What gives the "Federal Reserve Note" in your pocket value?
Why would they need to crush Bitcoin if it has no value?

The ruler decides what is the currency.

The rulers today have so much power over the people, that the people accepted scraps of paper, or digital paper now, as currency. Fiat money. The rulers couldn't get away with that centuries ago.

The rulers today are more powerful than ever, so I can't see why they would exchange fiat for something they can't control (bitcoin) that would be the same as going back to the gold standard.

The ruler is quite open on his plan. He wants a CBDC. Which is fiat on steroids.

Inherent value is something that had value over ages, like gold, in every society people liked this metal called gold as Jewellery. (the popularity might change, but if we look 100 years in the future, i would rather have 1 gram of gold in my pocket, than a 2021 50 dollar paper bill. I'm btw no goldbug.

I think they will crush bitcoin, the moment they introduce their CBDC, when fiat is fully broken, they will say it is like bitcoin, but safer and more equal and protecting the environment

I think this might be 2 years down the road. They wil have the press plan.
- Bitcoin is not environmental
- Bitcoin is unsafe and not protected by insurance
- Criminals use bitcoin

I would love to be in a non usurious society with bitcoin/gold, for above reason I won't my money there. In time I would love to be part of a Christian non-usurious community.

If the Tech entrepreneur had a Ferrari, they don't have to threaten him or negotiate, they just pull the trigger and drive away. They don't know how much Bitcoin he has, he could have 1 Bitcoin or 10,000. Maybe that 10,000 Bitcoin is in a time-locked multi sig wallet where the Bitcoin can't be spent for 5 years...Does he tell the robbers to come back in 5 years so he can send them the Bitcoin?
It doesn't have to be true. I think you might be even right. But putting the story in media will create a fear in the population. They will make you fearful, with articles like: "Did you tell anyone on your bitcoin?" "Bitcoin robberies are increasing - Yesterday a kid in school who told some friends he has a bitcoin was stabbed with a knife to get his bitcoin" "Parental advice - Don't let your kids fall victim to this new wave or bitcoin crime"

In propaganda, strong fear can make people change opinion or direction in weeks.

Just as with the flu, within weeks the population was screaming for more government control and experimental injections. For me personally this flu is an enormous eye opener on the control they have over the population. Small businesses are now asking for more free money, more governmental control, while they were always more anti-government. Just a little flu, some propaganda, made them change behaviour.

To simplify, the problem is that rulers will never accept a money supply they can't control.

The only scenario I can think of is some countries in the world will accept bitcoin as their main currency to attract a talented population. The Western world will never I think.

Anyhow just my thoughts, I don't have crystal ball.
I really enjoy these discussions because once I understood the implications of this, I could not un-see it. I want some debate, some pushback on why Bitcoin won't succeed, because I've never been more certain that it will, and certainty is foolish. I want to hear every doubt and attack vector so I can refine my thinking.

And likewise, I enjoy disagreement as well. And I know from my experience as well in finance, I need to be very aware when I feel certainty, or well I feel fomo. Like I state before we are being played, the stock exchange has a few real big market makers, if you look at the shareholders of many public companies you will see maybe 20 investors own 50% of stocks. It's just good to be aware.
 
Last edited:

NoMoreTO

Hummingbird
Catholic
How can you guys NOT see you're being pump n' dumped? They're wringing you out exactly like they've did in 1999 and 2006.

For Christ's sake, the IMF is scrambling at this very moment to re-structure massive loans which can't be paid. How can none of you imagine price increases as anything other than what the Fed tells you? Why can't you put these prices into context?

No reason to get upset.

OK. So if we are being pumped at the moment, then we currently have inflation... and the dumping (deflation) is coming down the pipe? I think in my comment I didn't in any way rule this out.

Context of the prices:
-my hourly rate is the same as it was prior to 2020.
- the fed didn't tell me there were price inceases, I noticed prices going up, specifically on property values and farm equipment.

If your typical citizen can't see or feel deflation, how is it occuring? Your comment seems to lead to the idea that the machinations of the loans will lead to deflation, but this has not yet happened.

Bubbles eventually pop, but a growing bubble, as you say we are in one, is by definition inflating. Bubbles inflate. :)
 

chance vought

Woodpecker
Protestant
The ruler decides what is the currency.

The rulers today have so much power over the people, that the people accepted scraps of paper, or digital paper now, as currency. Fiat money. The rulers couldn't get away with that centuries ago.
Paper money was a function of the centralization of gold, which has to do with its high cost of transportability and vulnerability to theft. The Chinese had the same business cycles we have now, 2000 years ago, because they had widespread derivative assets substituting for bearer assets. Completely un-backed fiat money is somewhat novel, but it functions the same.
The rulers today are more powerful than ever, so I can't see why they would exchange fiat for something they can't control (bitcoin) that would be the same as going back to the gold standard.
Yes, the only rulers who would willingly embrace Bitcoin are the ones that would gain more than they lose. The United States has a lot to lose, and so does most of the West and China. South America and Africa are so broken as it is, and have been pillaged by the IMF and World Bank, they have a lot to gain.
What is power though -- the ability to use violence.
In Feudal Europe, peasants who were once self sufficient farmers ended up as serfs working land they didn't own. How did this happen? A wealthy enough person could buy a suit of armor and a war horse, and raid peasants with impunity. 100 peasants with pitchforks had no chance to defend their property from 1 man who chose to steal instead of work. Peasants had to pay the knight to protect them from other knights, who ended up using the money to buy their land, becoming a lord, and renting the land back to the peasants. Millions of people ended up as slaves to a few, because they did not have enough wealth to buy the weapons they needed to protect what little wealth they owned. This is the birth of the modern nation state. Centuries later gunpowder and the crossbow (much cheaper weapons) neutralized the knight. Lords were forced to negotiate better terms with their subjects. The Magna Carta, and eventually more republics emerged.

In the modern age, yes, government is seizing more power. But Bitcoin is the property they can't take. They can ban it, spread lies in the media, it doesn't matter to the people who own it. There is no weapon they can deploy to change that calculation. Yes, governments will fight it, but it will be self immolation. They will be hitting water with a sledgehammer: the water will just flow wherever there is least resistance.
The ruler is quite open on his plan. He wants a CBDC. Which is fiat on steroids.

Inherent value is something that had value over ages, like gold, in every society people liked this metal called gold as Jewellery. (the popularity might change, but if we look 100 years in the future, i would rather have 1 gram of gold in my pocket, than a 2021 50 dollar paper bill. I'm btw no goldbug.
Why does gold have value over ages? Why did disconnected people all around the world independently choose gold? Because government said to? If people liked it as Jewelry, why is 99% of it made into rectangular bricks and stored in a dark warehouse?
I think they will crush bitcoin, the moment they introduce their CBDC, when fiat is fully broken, they will say it is like bitcoin, but safer and more equal and protecting the environment

I think this might be 2 years down the road. They wil have the press plan.
- Bitcoin is not environmental
- Bitcoin is unsafe and not protected by insurance
- Criminals use bitcoin
The only reason they would need to crush Bitcoin is if it DOES have intrinsic value...the act of trying to crush it proves that logically.
I agree that the most logical attack vector is media and social pressure...lets say it succeeds in the USA...the media campaign says only white supremacists and pedophiles use Bitcoin. 90% of Americans reject Bitcoin. We get a less functional, censored CBDC. Meanwhile, the rest of the world has a freely traded and more desirable currency, and a booming economy. What happens to the CBDC? I think it dies. That's why any store in Zimbabwe will accept a US dollar, but the inverse is not true, you can't buy a pack of gum with your 100 Trillion Zimbabwe dollars at the 7-11. One is accepted everywhere and has value everywhere, and one is nearly useless.

Would Venezuela rather receive Bitcoin for its oil, or Fedcoin? Would Russia rather get Bitcoin for its Natural gas, or Eurocoin?

Just as with the flu, within weeks the population was screaming for more government control and experimental injections. For me personnaly this flu is an enormous eye opener on the control they have over the population.
Agreed, but it is also opening a lot of eyes that were closed.
To simplify, the problem is that rulers will never accept a money supply they can't control.
They have no choice. It is happening and will continue to happen. Argentina, Venezuela, dozens more currencies will fall.
The only scenario I can think of is some countries in the world will accept bitcoin as their main currency to attract a talented population. The Western world will never I think.
Eventually the West will, once they start falling behind, but yes. Bitcoin enables jurisdictional arbitrage. People are already moving from California to Texas, and from New York to Florida. Soon they will be moving from the US to El Salvador, or Panama, wherever they are treated best.
Anyhow just my thoughts, I don't have crystal ball.


And likewise, I enjoy disagreement as well. And I know from my experience as well in finance, I need to be very aware when I feel certainty, or well I feel fomo. Like I state before we are being played, the stock exchange has a few real big market makers, if you look at the shareholders of many public companies you will see maybe 20 investors own 50% of stocks. It's just good to be aware.
You are correct about the pump and dump in 2008...one sector was inflated, some wealthy people and institutions saw that, waited for the bubble to pop, and bought from the panicked sellers. This time I believe is different, in that EVERY sector is inflated. Allowing all those bubbles to pop at once would be so catastrophic, there would be chaos. I believe central banks will print to infinity to prevent such a deleveraging.
 
Last edited:

paternos

Sparrow
Catholic
Paper money was a function of the centralization of gold, which has to do with its high cost of transportability and vulnerability to theft. The Chinese had the same business cycles we have now, 2000 years ago, because they had widespread derivative assets substituting for bearer assets. Completely un-backed fiat money is somewhat novel, but it functions the same.
Actually the rulers already rigged the game. From the introduction of the gold standard around 1700 the ruler only kept part in their reserves. So yes you could hypothetically all go to the central bank and claim the gold.

The realism is that the gold wasn't there. Maybe 20% of the paper notes, and maybe a years later 10%. This was already shady.


Yes, governments will fight it, but it will be self immolation. They will be hitting water with a sledgehammer: the water will just flow wherever there is least resistance.
I'm curious then. So keep you bitcoin. Powerful countries around the world won't accept bitcoin. Maybe a few South Americans states will accept it as legal tender.

But how will you buy a loaf of bread and some peanutbutter and pay fro a hotel in the US with bitcoin? Who will change it? Convert the bitcoin to US dollar or the new CBDC?
 
Top