Bitcoin, or Bitcon

The point of my post was not to highlight the words of Roubini (economists are wrong in their predictions far more often than not) but rather to point to the opinions of the G20 heads. If they think Bitcoin is a problem then it is. They will take substantive steps to kill it and the other cryptocurrencies because it threatens their, and their patrons (sovereign states), hold on power.

Economics is, IMO, a weak kind of history that is made weaker by attempts to apply mathematics, derived from or based on past economic events, in making predictions. Mathiness is a term that has been used recently to describe the inappropriate use of mathematics as a mechanism of bamboozling the ignorant and I think it apt to describe predictions in economics.

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There's three things that affect speculative trading values and predictions. One thing is the cutely-named (by an economist, no less), "irrational exuberance".
That, simply, is people piling on the bandwagon when they see others making a motza, without any real effort. Money for jam, essentially.

The second thing is unforeseen and totally unpredicted events appearing suddenly out of left field - that have a major impact on the speculative trading.
There are many of these "left-field" events in the history of speculative trading, that have caught hundreds of millions of "smart investors", by total surprise.

The third thing is "profit taking". That is, when "investors" see an investment falling in value, they sell out, grab their remnant money, and bolt for the door.
Many of these people are quite likely selling at a moderate loss. They see that as a better option than a total loss.
Two of these events (irrational exuberance and profit taking) are currently in train with Bitcoin, and the second one is in action, right now - and it can only accelerate.

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Don't these boil down to the "bigger fool" theory of investing?

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Originally Posted by woodpixel

not yet... You avoided being pushed under a train! - https://xe.com/currencycharts/?from=xbt&to=usd&view=1m

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lol!

Oh, Dear! Now the Banks have suddenly woken up to the following facts, with regard to crypto-currencies ...

1. People are using their credit cards to buy crypto-currencies. Someone with a few working brain cells inside a Bank, has obviously pointed out, that if the crypto-currency purchased with a CC goes into free-fall, the CC owner has a high likelihood of becoming insolvent.
As CC's are a high-risk, unsecured line of credit, Banks could very likely get their collective bums burnt - Big Time. So the Banks have started to crack down on using CC's to buy crypto-currencies.
The message is simple - "Use your money to gamble with crypto-currencies, not ours!!"

The big four banks aren't planning a bitcoin crackdown ... yet - ABC News (Australian Broadcasting Corporation)

2. The potential for fraud and criminality when dealing in crypto-currencies is huge. We've just seen the huge cryptocurrency hack and theft in Japan. Every crypto-currency supporter keeps on about the security of Blockchain - but this is computers and servers and hard drives, we're talking about here, isn't it? - and no-one has ever hacked into them, destroyed them, diverted transactions, or held computer owners to ransom, have they?? :sad1:

Funny how those Banks keep bringing up that awkward word again, too, about crypto-currencies - unregulated .... :sad1:

Who, ever, buys an investment on their credit card.

Since when have the banks ever worried for a single second about their clients making a loss on a purchase?

Are they protecting their customers interests, or their own?

It feels to me that "the banks" have had a word from the RBA and told to shut it down. This will be a cosmic level battle that will leave scorched earth and rubble in its wake.

Fiat currencies are in for the very last gasping fight for their existence. Governments will do anything to support them - for without freely created fiat debt (currency) the whole ponzi scheme collapses.

American Express,Bank of America using blockchain ripple net
Trading in flat and crypto currency
Anyone know much about 'ripple'?...MM

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Since when have the banks ever worried for a single second about their clients making a loss on a purchase?

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When it appears the Banks may end up wearing the loss. :D

Despite one thinking that Banks never lose - they do, and more frequently than one would imagine. It's just that they make the rest of us mugs pay for their losses and bad judgement.

Remember the old saying? "You owe the banks $1M, and can't pay them - you've got a problem. You owe the banks $100M, and can't pay them - they've got a problem".

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Originally Posted by woodPixel

Who, ever, buys an investment on their credit card.

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Well, practically everybody in the plutocrat stratum does. Not credit cards per se but rather by using debt financing.

It was debt financing in the housing market that helped precipitate our 2007/8 market crash. This is happening again, residential property in our area has been valuating at ~10% per year for the past few years. I understand that certain Australian housing markets are doing similar crazy things.

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Originally Posted by rob streeper

Mathiness is a term that has been used recently to describe the inappropriate use of mathematics as a mechanism of bamboozling the ignorant and I think it apt to describe predictions in economics.

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love it !

Credit Cards and Bitcoin

Look at it this way, somebody with nothing uses their Master Card or Visa to buy Bitcoin.

Bitcoin tanks as we've seen recently.

Somebody with nothing is now in panic mode to pay the credit card bill.

Somebody with nothing defaults on the credit card payment.

The bank tries to get their money back but because somebody with nothing has nothing and Bitcoin tanked, the banks have nothing to attach or seize. Somebody who has nothing declares bankruptcy. All debts are rescinded, somebody with nothing has zero credit for 10 years before bankruptcy is erased in the credit files.

In effect, the bank has been speculating in Bitcoin, which is something that banks do not want to do. All banks care about is their money.

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Originally Posted by rrich

All banks care about is their money.

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Not sure exactly how it works, but banks use fractional reserve banking, and effectively 'create' money out of thin air to loan out.

The credit card debt of a customer/client is then on sold to another entity - the result is that the bank is not at risk.

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Originally Posted by rob streeper

Economics is, IMO, a weak kind of history that is made weaker by attempts to apply mathematics, derived from or based on past economic events, in making predictions. Mathiness is a term that has been used recently to describe the inappropriate use of mathematics as a mechanism of bamboozling the ignorant and I think it apt to describe predictions in economics.

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Timely: https://aeon.co/ideas/few-things-are...h-physics-envy

It's way too volatile for me to want to actually invest in it, however I bought some bitcoin over a year ago just to learn how it works and understand it better ... forgot about it, logged in a year later and had earned $600 ... which I cashed out immediately!

As a side issue, I was listening to ABC radio yesterday when the usual market/gold/finance news comes on - you know the one that comes on after the news every hour.

And the Bitcoin price was stated - it appears that Bitcoin is becoming a tad more mainstream than naysayers believe.

There are plenty of things working against BitCoin becoming an accepted mainstream currency. Here are just some of them -

1. Quote from Quora - "Bitcoin is not being bought as a store of value or a currency by most people; for most people, Bitcoin is a speculative investment, hoping to make a fortune on something they really don’t know much about."

2. While hackers can get into my computer, and other computers, and try to harness the power of unwitting computer owners to mine BitCoins, there won't be much future for it as a mainstream currency.

3. While there are still substantial BitCoin transaction charges (up to $20 a transaction) for making BitCoin transactions, there won't be any future for it as a mainstream currency.

4. While there is still no regulatory control or other trusted authority in charge of BitCoin, there won't be any future for it as a mainstream currency.

5. While the pure electrical costs associated with mining BitCoin are still huge, there won't be any future for it as a mainstream currency.

6. While there is still modest computing power ability, BitCoin may survive. The advent of Quantum Computing will change the mining rate of BitCoin so much, it will become useless.

https://techcrunch.com/2018/03/05/go...tum-supremacy/

7. There is a limited number of BitCoins - 20999999.9769 BitCoins, to be precise. Every politician and economist worth his salt knows that the only thing that makes fiat currencies worthwhile, is the ability to inflate the amount of currency available.

The ability to print fiat currencies at whim, is what gives Govts and Politicians of all persuasions, the power and control over people (and economies) that they crave.

The days of restricting the amount of currency in circulation to only the value of gold or silver held in store, is long gone.
It ended when Tricky Dicky floated the U.S. Dollar, on 15th Aug 1971 - and he did it off his own back, without any agreement or authorisation by anyone else in his Govt, who may have stopped him.