Mexican billionaire Salinas says his banking business may embrace Bitcoin(reuters.com)
reuters.com
Mexican billionaire Salinas says his banking business may embrace Bitcoin
https://www.reuters.com/business/finance/mexican-billionaire-salinas-says-his-banking-business-may-embrace-bitcoin-2021-06-28/
156 comments
As a billionaire I am not sure he really needs to pump bitcoin to make a return. If you watch the interview with him he makes his case for holding bitcoin and it is a reasonable one. He says when he started his career the Mexican peso was 20:1 to the US dollar, now it is 20,000:1.
Many in developed countries don't understand the challenges of a devaluing currency with unlimited supply or the difficulty of being unbanked.
Many in developed countries don't understand the challenges of a devaluing currency with unlimited supply or the difficulty of being unbanked.
The norm in this type of countries is to keep USD, EUR and property. Bitcoin is the way to get rich, at least the mental model is based on that.
The inflation in these countries is not because of the way their economy is structured but because lack of structure and integrity. Things are not good in these countries, people don't seek to preserve the current wealth(and fail because of their currency) but they seek to get out of poverty and those who are not in poverty seek to explode their wealth so that the can buy a mansion and a Ferrari. The richer ones seek ways to hide their wealth out of the reach of the politics because in this type of countries the political situation is usually unstable and those who get very rich are cronies. When the crown falls the cronies need to have an exit strategy(sometimes they can adopt but sometimes the new crown comes with its own people) and that usually is buying property or companies overseas. Now they have the BTC option.
Therefore, in such countries people don't really keep local currency long term already(when they do, they will do it to get interest rates that at least match the inflation). The inflation rate is relevant only when doing business deals, financing projects or purchases and adjusting employee salaries. No one is losing their wealth to inflation.
The inflation in these countries is not because of the way their economy is structured but because lack of structure and integrity. Things are not good in these countries, people don't seek to preserve the current wealth(and fail because of their currency) but they seek to get out of poverty and those who are not in poverty seek to explode their wealth so that the can buy a mansion and a Ferrari. The richer ones seek ways to hide their wealth out of the reach of the politics because in this type of countries the political situation is usually unstable and those who get very rich are cronies. When the crown falls the cronies need to have an exit strategy(sometimes they can adopt but sometimes the new crown comes with its own people) and that usually is buying property or companies overseas. Now they have the BTC option.
Therefore, in such countries people don't really keep local currency long term already(when they do, they will do it to get interest rates that at least match the inflation). The inflation rate is relevant only when doing business deals, financing projects or purchases and adjusting employee salaries. No one is losing their wealth to inflation.
> The norm in this type of countries is to keep USD, EUR and property. Bitcoin is the way to get rich, at least the mental model is based on that.
Property is hard to buy and sell (takes time), and there were a lot of new printed dollars and euros recently.
Property is hard to buy and sell (takes time), and there were a lot of new printed dollars and euros recently.
> Property is hard to buy and sell (takes time), and there were a lot of new printed dollars and euros recently.
Supply is only half the equation. Velocity matters. [1] The new supply was added due to a drop in velocity, and they plan to remove it from circulation once (if) velocity returns to normal. This is SOP - and a huge advantage of centrally managed currencies. There's no doubt in my mind we'd have seen a massive deflationary spiral otherwise.
Let me ask you, why do you think this new supply was added and what was its impact?
[1] https://www.stlouisfed.org/on-the-economy/2014/september/wha...
Supply is only half the equation. Velocity matters. [1] The new supply was added due to a drop in velocity, and they plan to remove it from circulation once (if) velocity returns to normal. This is SOP - and a huge advantage of centrally managed currencies. There's no doubt in my mind we'd have seen a massive deflationary spiral otherwise.
Let me ask you, why do you think this new supply was added and what was its impact?
[1] https://www.stlouisfed.org/on-the-economy/2014/september/wha...
You're confused.
(M2 * M2V) / GDP = 1[0]
That's the formula to calculate M2V.
New supply is not created due to the drop in velocity, velocity drops when new supply is added. When M2 rises and GDP stays the same, M2V drops.
As you can see from your own chart, when the economy came back to normal in 2015, they did not remove it from circulation. And yet velocity, when the economy was booming, was still dropping. M2 is constantly rising. This is forced because we have trade deficits that force us to accept debt equal to those deficits.
The impact was rising asset prices. The value of goods was not touched at all. Money is not neutral.
[0]: https://fred.stlouisfed.org/graph/?g=F3kb
(M2 * M2V) / GDP = 1[0]
That's the formula to calculate M2V.
New supply is not created due to the drop in velocity, velocity drops when new supply is added. When M2 rises and GDP stays the same, M2V drops.
As you can see from your own chart, when the economy came back to normal in 2015, they did not remove it from circulation. And yet velocity, when the economy was booming, was still dropping. M2 is constantly rising. This is forced because we have trade deficits that force us to accept debt equal to those deficits.
The impact was rising asset prices. The value of goods was not touched at all. Money is not neutral.
[0]: https://fred.stlouisfed.org/graph/?g=F3kb
I'm not sure I see it that way but open to being wrong.
Velocity does not by necessity drop when new supply is added. Velocity is how quickly money changes hands in an economy - an increase in economic activity is an increase in velocity. GDP is calculated from supply and velocity, not the other way around, yeah? [1] Adding supply by decreasing interest rates can stimulate economic activity, increasing both the supply and velocity commensurately.
The economy slowed down, money stopped changing hands as people were locked inside, and the Fed lowered interest rates and allowed the supply to rise to incentivize economic activity.
The pandemic scared people into saving. The new money is in fact to your point invested, which has led to an increase in certain asset prices, but at a rate that far outpaces inflation (i.e. the same quantity of Apple shares will today buy you a lot more bread than a few years back). [2]
As for 2015, the supply was actually contracted in that the fed began unwinding its balance sheet. It was doing so at a good clip. As you can see here [3] the balance sheet dropped from 4.5T to 3.75T before the pandemic. However, to the extent inflation remained well controlled, it shouldn't be particularly critical to do so.
[1] https://www.investopedia.com/articles/investing/051415/how-c...
[2] https://fred.stlouisfed.org/series/PSAVERT
[3] https://www.federalreserve.gov/monetarypolicy/bst_recenttren...
Velocity does not by necessity drop when new supply is added. Velocity is how quickly money changes hands in an economy - an increase in economic activity is an increase in velocity. GDP is calculated from supply and velocity, not the other way around, yeah? [1] Adding supply by decreasing interest rates can stimulate economic activity, increasing both the supply and velocity commensurately.
The economy slowed down, money stopped changing hands as people were locked inside, and the Fed lowered interest rates and allowed the supply to rise to incentivize economic activity.
The pandemic scared people into saving. The new money is in fact to your point invested, which has led to an increase in certain asset prices, but at a rate that far outpaces inflation (i.e. the same quantity of Apple shares will today buy you a lot more bread than a few years back). [2]
As for 2015, the supply was actually contracted in that the fed began unwinding its balance sheet. It was doing so at a good clip. As you can see here [3] the balance sheet dropped from 4.5T to 3.75T before the pandemic. However, to the extent inflation remained well controlled, it shouldn't be particularly critical to do so.
[1] https://www.investopedia.com/articles/investing/051415/how-c...
[2] https://fred.stlouisfed.org/series/PSAVERT
[3] https://www.federalreserve.gov/monetarypolicy/bst_recenttren...
> GDP is calculated from supply and velocity, not the other way around, yeah?
No.
Your graph shows that the Fed only starting to unwind their balance sheets in 2018. Why was the Velocity of Money dropping during a boom phase? It's because it's calculated like I said.
Our trade deficits force us to take our greater and greater amounts of debt. During recessions - where people and companies are unable to take out the debt - the government is forced to back us.
The growth of GDP has been constantly dropping because our economy has been keeping alive more and more zombie companies. Many of these companies are taking out debt, and funneling that debt directly back into their stock through buybacks. These buybacks increase the demand of their stock and reduce the supply, which raises prices, which raises their market cap, which allows them to take out more debt! Since their market cap has risen, Vanguard and Blackrock and all of the other index funds are now forced to buy more, which pushes even more demand to these stocks.
With the growth of debt, the Fed can now unwind their balance sheets. The cycle continues...
No.
Your graph shows that the Fed only starting to unwind their balance sheets in 2018. Why was the Velocity of Money dropping during a boom phase? It's because it's calculated like I said.
Our trade deficits force us to take our greater and greater amounts of debt. During recessions - where people and companies are unable to take out the debt - the government is forced to back us.
The growth of GDP has been constantly dropping because our economy has been keeping alive more and more zombie companies. Many of these companies are taking out debt, and funneling that debt directly back into their stock through buybacks. These buybacks increase the demand of their stock and reduce the supply, which raises prices, which raises their market cap, which allows them to take out more debt! Since their market cap has risen, Vanguard and Blackrock and all of the other index funds are now forced to buy more, which pushes even more demand to these stocks.
With the growth of debt, the Fed can now unwind their balance sheets. The cycle continues...
The inflation is still very low and practically 0 in short term and buying/selling property doesn't take that long actually. People don't buy and sell all the time when they need money, they use financial instruments(property ownership unlocks lots of great financial instruments). Nobody is buying BTC against inflation, it's simply too volatile. You can't know when Musk will tweet what, central banks and property laws and taxes on the other hand are slow moving and predictable.
Property is not hard to buy or sell in a developing country. What makes you think it is hard?
Probably not universal, but it does seem developing countries do not have reliavle title searches or title insurance.
Source: tried to buy property for many months in 2 different foreign countries. Havent been able to do so yet mostly due to challenges around title and very poor broker listings / knowledge
Source: tried to buy property for many months in 2 different foreign countries. Havent been able to do so yet mostly due to challenges around title and very poor broker listings / knowledge
Just because it works differently than you're used to doesn't make it "hard", though. It might be "risky", which is what it sounds like you're talking about.
But in many ways it is easier than in the west, since you don't need to deal with: inspections, appraisals, mortgage contingency, closing periods, CCRs, escrow, etc.
I own two pieces of property in a developing country and in both cases it took about a day. I gave them cash and they handed over the title.
But in many ways it is easier than in the west, since you don't need to deal with: inspections, appraisals, mortgage contingency, closing periods, CCRs, escrow, etc.
I own two pieces of property in a developing country and in both cases it took about a day. I gave them cash and they handed over the title.
Neither buying or selling can be done overnight, but usually takes at minumum weeks, probably months to do fully. Bitcoins take seconds.
Buying in a developing country can absolutely be done same day. I've done it and know several others who have done it as well.
It definitely doesn't take months.
It definitely doesn't take months.
You're measuring the transaction time, and I agree that can be very fast. I've also experienced it myself. But if you measure from the time when the property goes on the market to when the seller has cash in hand, that can take a long time, anywhere. What I mean is, you can put a "for sale" sign up on the door, that doesn't mean buyers are going to show up.
Property is easy for the government to seize. Bitcoin, not so much.
Governments seized a lot of BTC in the past. As soon as they have physical access to the owner, it is seizable.
Bulgaria seizing 213K BTC: https://www.coininsider.com/bulgarian-government-owns-3-bill...
The US seizing 73K BTC: https://www.bbc.co.uk/news/technology-54833130
are prime examples.
More recently, US getting back some of the ransom paid: https://www.fastcompany.com/90644461/stolen-bitcoin-is-hard-...
In fact, seizing property can have many complications and be very hard(ownership structures, occupant protection laws, debts and obligations etc).
Bulgaria seizing 213K BTC: https://www.coininsider.com/bulgarian-government-owns-3-bill...
The US seizing 73K BTC: https://www.bbc.co.uk/news/technology-54833130
are prime examples.
More recently, US getting back some of the ransom paid: https://www.fastcompany.com/90644461/stolen-bitcoin-is-hard-...
In fact, seizing property can have many complications and be very hard(ownership structures, occupant protection laws, debts and obligations etc).
But with a bank account they don't need physical access to the owner.
https://www.theguardian.com/business/2019/aug/25/british-cit...
https://www.theguardian.com/business/2019/aug/25/british-cit...
Re th last link, it is possible that they recovered the fee paid to the affiliate of the ransomware gang that installed the ransomware. This is possibly because the affiliate was an informant for the FBI. So it wasn't really seizing it, more like returning it.
> As soon as they have physical access to the owner, it is seizable.
This is incorrect. If the owner doesn't reveal the private key, the government cannot seize the bitcoin.
This is incorrect. If the owner doesn't reveal the private key, the government cannot seize the bitcoin.
Sure it's seizable, but it can be much harder (impossible?) to seize if the owner knows what they are doing.
The world's #2 biggest holder of Bitcoin is the Bulgarian FBI. The #4 biggest holder of Bitcoin is the US FBI.
Never underestimate the cryptanalytic power of whacking someone with a rubber hose until they give you their keys.
Never underestimate the cryptanalytic power of whacking someone with a rubber hose until they give you their keys.
> The world's #2 biggest holder of Bitcoin is the Bulgarian FBI. The #4 biggest holder of Bitcoin is the US FBI.
Source?
>Never underestimate the cryptanalytic power of whacking someone with a rubber hose until they give you their keys.
No forms of wealth is safe against torture, and I don't think people expect bitcoin to be any different. It's still vastly more secure than a bank account (which only requires a phone call to seize) and is trivially linked to your identity (as opposed to pseudonymous bitcoin addresses)
Source?
>Never underestimate the cryptanalytic power of whacking someone with a rubber hose until they give you their keys.
No forms of wealth is safe against torture, and I don't think people expect bitcoin to be any different. It's still vastly more secure than a bank account (which only requires a phone call to seize) and is trivially linked to your identity (as opposed to pseudonymous bitcoin addresses)
Bulgaria seized 200,000 BTC in an organized crime crackdown in 2017 [1]. The FBI seized 144,000 BTC in the Silk Road crackdown in 2013, though have since auctioned some of that off. [2]
I believe there are only 4 addresses with more than 100,00BTC each. Satoshi is 1. I believe Bitfinex is 3.
[1] https://www.coindesk.com/bulgarian-government-sitting-3-bill...
[2] https://www.forbes.com/sites/andygreenberg/2013/10/25/fbi-sa...
I believe there are only 4 addresses with more than 100,00BTC each. Satoshi is 1. I believe Bitfinex is 3.
[1] https://www.coindesk.com/bulgarian-government-sitting-3-bill...
[2] https://www.forbes.com/sites/andygreenberg/2013/10/25/fbi-sa...
>I believe there are only 4 addresses with more than 100,00BTC each. Satoshi is 1. I believe Bitfinex is 3.
The flaw in your analysis is that you assume that there's a one to one relationship between an address and a person. This is not the case because a typical bitcoin wallet has hundreds of addresses and address reuse is discouraged. Therefore your conclusion that bulgaria is the nth largest bitcoin holder in the world because there are are only n addresses with balances larger than it is incorrect.
The flaw in your analysis is that you assume that there's a one to one relationship between an address and a person. This is not the case because a typical bitcoin wallet has hundreds of addresses and address reuse is discouraged. Therefore your conclusion that bulgaria is the nth largest bitcoin holder in the world because there are are only n addresses with balances larger than it is incorrect.
Sorry, I was also quoting a number of other sources. They may have done the analysis the same way of course. [1] You certainly do raise a good point however, I'm open to retracting that since to your point it's probably not possible to know for a fact. My bad!
[1] https://medium.com/cryptocurrencies-ups-and-down/top-ten-bit...
[1] https://medium.com/cryptocurrencies-ups-and-down/top-ten-bit...
Your body is easy to seize
,, The norm in this type of countries is to keep USD, EUR and property''
It was while people had at least some hope to buy a property. But nowdays the yearly increase in a property price is more than the median yearly salary of a person in the poorer countries (this may soon be true for western countries as well).
In Eastern Europe people immigrate to west for higher salaries so that they can buy an apartment in their home country, but if they don't use a loan to buy it, they are losing a lot of time to be able to buy a good place that they planned to.
Still, as you wrote, in Europe people are still thinking very conservatively.
It was while people had at least some hope to buy a property. But nowdays the yearly increase in a property price is more than the median yearly salary of a person in the poorer countries (this may soon be true for western countries as well).
In Eastern Europe people immigrate to west for higher salaries so that they can buy an apartment in their home country, but if they don't use a loan to buy it, they are losing a lot of time to be able to buy a good place that they planned to.
Still, as you wrote, in Europe people are still thinking very conservatively.
> the yearly increase in a property price is more than the median yearly salary of a person in the poorer countries
This is not a limiting factor for billionaires looking to protect their wealth from expropriation, the use case the parent post contemplates.
This is not a limiting factor for billionaires looking to protect their wealth from expropriation, the use case the parent post contemplates.
>The inflation in these countries is not because of the way their economy is structured but because lack of structure and integrity.
Hyperinflation is a monetary phenomenon. If the government prints a bunch of money, the purchasing power of people holding the currency will go down. If the money supply was fixed, there couldn't be such inflation (if it was completely fixed, this could cause other issues, but not hyperinflation).
Hyperinflation is a monetary phenomenon. If the government prints a bunch of money, the purchasing power of people holding the currency will go down. If the money supply was fixed, there couldn't be such inflation (if it was completely fixed, this could cause other issues, but not hyperinflation).
> If the money supply was fixed, there couldn't be such inflation
Historically inaccurate. If the economic base vanishes, inflation—even hyperinflation—will manifest. Fixed quantity is no panacea.
What matters is the ratio between money supply and the economy. This is why, when the industrial revolution switched humanity from stable state/near-zero growth to positive-growth mode, we matured past the gold standard, first to bimetallism and finally to fiat.
Historically inaccurate. If the economic base vanishes, inflation—even hyperinflation—will manifest. Fixed quantity is no panacea.
What matters is the ratio between money supply and the economy. This is why, when the industrial revolution switched humanity from stable state/near-zero growth to positive-growth mode, we matured past the gold standard, first to bimetallism and finally to fiat.
Lol infinite growth as mature. Tell me another.
You're neglecting the impact of velocity of money. Supply is only half the equation. [1]
[1] https://www.stlouisfed.org/on-the-economy/2014/september/wha...
[1] https://www.stlouisfed.org/on-the-economy/2014/september/wha...
> As a billionaire I am not sure he really needs to pump bitcoin to make a return.
What makes you think that billionaires are somehow altruistic actors no longer looking for an ROI? Especially an easy one? [edit] Or that they're immune to speculative manias?
What makes you think that billionaires are somehow altruistic actors no longer looking for an ROI? Especially an easy one? [edit] Or that they're immune to speculative manias?
Anecdotal, but I recently wrote a book that had a quote from a prominent, successful person at the opening of each chapter. Part of my process was reaching out to the originators of these quotes and asking permission to include them.
The result was fascinating. With exactly one exception (from a university professor) all the people I was able to contact were incredibly gracious and encouraging. Based on that experience I now believe that to have significant success really does require a reflexive attitude of generosity and gratitude. I don't think successful people are paragons by any means, but when I compare how they responded to how the average person would respond to a stranger asking a favour, I have to say - I'd definitely trust a random billionaire over a random member of my own social class.
The result was fascinating. With exactly one exception (from a university professor) all the people I was able to contact were incredibly gracious and encouraging. Based on that experience I now believe that to have significant success really does require a reflexive attitude of generosity and gratitude. I don't think successful people are paragons by any means, but when I compare how they responded to how the average person would respond to a stranger asking a favour, I have to say - I'd definitely trust a random billionaire over a random member of my own social class.
I used to work for many extremely wealthy individuals when I was at a firm, and I wouldn't trust any of my clients farther than I could throw them.
I would absolutely trust a random homeless drug addict over the random self-made billionaire. You don't acquire a billion dollars by playing nice, fair, or by the rules, and the norm is for them to treat people as exploitable resources. Being nice is the exception, and generally something only done when it provides some sort of benefit to them to further their exploitative capabilities.
I would absolutely trust a random homeless drug addict over the random self-made billionaire. You don't acquire a billion dollars by playing nice, fair, or by the rules, and the norm is for them to treat people as exploitable resources. Being nice is the exception, and generally something only done when it provides some sort of benefit to them to further their exploitative capabilities.
I don't know that it's really indicative of grace if you phone someone and ask "hey, I'm including quotes from prominent, successful people in a book, do you mind if I add you to it?" and they say yes. You haven't really asked them for a favour, really you're doing them a favour by improving their reputation.
yes, but 'best of luck with the project', or 'sorry I don't have time to read an advance copy' goes beyond what's expected with that kind of power differential. I do think most average people would have felt much more entitled to someone admiring their thoughts.
[deleted]
Billionaires routinely conspire with politicians and law makers to prevent workers from earning a few dollars more per hour, but somehow they would would be too ethical to pump and dump Bitcoin?
Billionaires, just like everyone else, love making money.
Most people want to do honest work. If they didn't, everyone would be a parasite and the system would collapse.
The reality is that 95% of the world population is doing shitty work and they would love becoming a parasite to escape their current live.
Billionaires buying up all the real estate to ride the price wave is not "honest work"
[deleted]
How is it 20,000:1? Google's conversion calculator has it around 20:1 right now.
Its 20,000:1 based on the old peso, because in 1993 the peso did what was in effect a 1,000:1 reverse split where 1,000 old pesos (1,000 MXP) were exchanged for 1 new peso (1 MXN).
if you see a 40 year period, inflation is 200k%? (wow)
https://www.inflationtool.com/mexican-peso/1980-to-present-v...
https://www.inflationtool.com/mexican-peso/1980-to-present-v...
From what I have heard was happening in my home country as well during hyperinflation, usually you don't have access to the foreign currencies, only the politically connected people to. Then they dump the forex into the black currency market at ridiculously inflated prices
It's a lot easier for a poor person to find someone that will give them a dollar for their pesos than some satoshis...
Dont worry, they will soon. All developed countries have been bailing out banks etc by printint trillions. It will catch up to them.
Good on him. Good on Mexico. Preserving the wealth of the middle class and giving access to the poor and unbanked is tye way forward for a more egalitarian society.
Good on him. Good on Mexico. Preserving the wealth of the middle class and giving access to the poor and unbanked is tye way forward for a more egalitarian society.
> Good on Mexico. Preserving the wealth of the middle class and giving access to the poor and unbanked is tye way forward for a more egalitarian society.
Genuine question - how is this going to help the "poor and unbanked" to get access to an economy that's somehow insulated from what you say is the inflation surrounding them? And in what concrete way is it leading to a more "egalitarian society"?
As far as I can see, this only gives an opportunity to the already wealthy (and especially the super-wealthy) to increase their wealth at the cost of newcomers to the system. But I'm genuinely curious about the part that I'm missing, where the poorest in society are reaping the benefits of their Bitcoin holdings?
Genuine question - how is this going to help the "poor and unbanked" to get access to an economy that's somehow insulated from what you say is the inflation surrounding them? And in what concrete way is it leading to a more "egalitarian society"?
As far as I can see, this only gives an opportunity to the already wealthy (and especially the super-wealthy) to increase their wealth at the cost of newcomers to the system. But I'm genuinely curious about the part that I'm missing, where the poorest in society are reaping the benefits of their Bitcoin holdings?
> As a billionaire I am not sure he really needs to pump bitcoin to make a return.
It's not about making a return, or about having 'enough'.
It's about keeping score, and the person with the highest number "wins".
It's not about making a return, or about having 'enough'.
It's about keeping score, and the person with the highest number "wins".
I'm pretty sure a billionaire does not need to worry about being unbanked even in Mexico. There are many other types of assets he could hold that would bring as much inflation protection as bitcoins with a fraction of the volatility. Now obviously in his particular case he's done pretty well with his hodlings because the price went up so much, but that is not guaranteed to happen again in the future and may in fact reverse. As long as it stays so incredibly volatile, holding bitcoin should be regarded as speculation first and an inflation hedge second.
Name one asset (class) that does as well as Bitcoin.
Gold? No, it's only back at its 2012 peak now.
Bonds? I'm laughing.... or crying...
Stocks ... Could be, but very risky... because if QE stops tomorrow the stock market will correct -60% or more...
Gold? No, it's only back at its 2012 peak now.
Bonds? I'm laughing.... or crying...
Stocks ... Could be, but very risky... because if QE stops tomorrow the stock market will correct -60% or more...
Doge. You know, the joke currency.
Just wait till you see what happens to the price of crypto when Tether QE ends and 65% of all trading volume just pops out of existence.
Gotta ask why are you worried that the stock market might correct 60% when Bitcoin did correct 65% this past month (65K to 28K peak to trough)?
Just wait till you see what happens to the price of crypto when Tether QE ends and 65% of all trading volume just pops out of existence.
Gotta ask why are you worried that the stock market might correct 60% when Bitcoin did correct 65% this past month (65K to 28K peak to trough)?
Going to need you to thoroughly substantiate Tether doing QE. I've looked into this and see nothing other than circumstantial evidence.
That said, I fully expect Tether to implode in the next year or so.
That said, I fully expect Tether to implode in the next year or so.
Tether themselves said the coin is 3% backed by dollars, so it's 97% QE. The burden of proof isn't on me, it's on Tether. Extraordinary claims require extraordinary proof - they claim to have $60B of assets and to be the 7th largest player in the global commercial paper space, right behind Vanguard. They refuse to substantiate their claims with an audit. Not to mention they're 11 people on various non-extradition-treaty islands nobody in the commercial paper space has ever heard of. And Paolo appears to be doing interviews from his mom's basement.
Do you think USDC is also a fraud? They're eating into USDT's market share at an alarming rate... If USDT is really insolvent, the collapse should happen pretty soon.
Personally, I have always held USDC in high regard. Their attestations (not audits, which they have also never done) are now roughly 3 months late and they have recently changed their wording from being 1:1 backed by dollars to being backed by various approved investments. [1] It was right at the time they made these changes that growth went parabolic.
I'm also suspicious that right as the crypto downturn hit they suddenly went out to raise $440M - something I wouldn't expect a stablecoin with billions in the bank to need to do. [2] However, personally I would assign them a risk score of 3/10 ("Hmmm") as compared to Tether's 11/10 ("Oh sweet mercy") - a sentiment echoed by the Fed [3].
IMO there's a few things propping up USDT, including multi-stablecoin liquidity pools doing automatic arbitrage against other stablecoins.
[1] https://www.centre.io/usdc-transparency
[2] https://www.coindesk.com/usdc-builder-circle-raises-440m
[3] https://www.coindesk.com/us-fed-official-calls-tether-a-chal...
I'm also suspicious that right as the crypto downturn hit they suddenly went out to raise $440M - something I wouldn't expect a stablecoin with billions in the bank to need to do. [2] However, personally I would assign them a risk score of 3/10 ("Hmmm") as compared to Tether's 11/10 ("Oh sweet mercy") - a sentiment echoed by the Fed [3].
IMO there's a few things propping up USDT, including multi-stablecoin liquidity pools doing automatic arbitrage against other stablecoins.
[1] https://www.centre.io/usdc-transparency
[2] https://www.coindesk.com/usdc-builder-circle-raises-440m
[3] https://www.coindesk.com/us-fed-official-calls-tether-a-chal...
They have also been avoiding audits.
Hah, love the delusion.
Any mention of interest rate hikes and Bitcoin takes a dive too, because as far as I understand it, there's many borrowing cheap money (i.e. with low interest rate) to "invest" hoping to profit off the ponzi scheme.
Any mention of interest rate hikes and Bitcoin takes a dive too, because as far as I understand it, there's many borrowing cheap money (i.e. with low interest rate) to "invest" hoping to profit off the ponzi scheme.
Exactly how long does something have to hold its value for it to not be a "ponzi scheme?" Because I've been reading snide remarks about Ponzi schemes and tulip bubbles on HN since bitcoin was in the single figures.
Madoff started his business in the early 60s and it operated until 2008. How long do you think something should hold its value til we can, with certainty, say that it is not a Ponzi scheme?
We can say with certainty that Bitcoin is not a Ponzi scheme because a Ponzi scheme requires fraud i.e wilful deception. Bitcoin is not perpetuating any deception, anybody can on the basis of freely available information learn about its risks and decide whether they want to buy it or not.
> We can say with certainty that Bitcoin is not a Ponzi scheme because a Ponzi scheme requires fraud i.e wilful deception.
I agree with you but we can also say with certainty that economics of Bitcoin are identical to a Ponzi scheme. Earlier investors are payed with funds from more recent investors.
I agree with you but we can also say with certainty that economics of Bitcoin are identical to a Ponzi scheme. Earlier investors are payed with funds from more recent investors.
No they're not. Earlier investors can benefit from the growth in price of their bitcoin holdings due to increased buying and price rises from new investors, who themselves hold exactly the bitcoin they bought with the risks fully known to anyone willing to do a minor bit of research.
At any time, all owners of bitcoin actually have their own bitcoin and theoretically could sell their coins because they actually have them. (unless we're talking about cases like specific companies or exchanges in which clients are being fooled into thinking they own bitcoins that they don't actually own. However, even in this case, the fraud is with certain BTC ecosystem players, not BTC itself as a thing.)
A ponzi scheme on the other hand literally transfers funds from new members to previous members in order to maintain an illusion of high returns, until the house of cards collapses as new members stop paying in at a rate that can sustain the illusion of returns through dishonest fund transfers.
These are all very basic and easy to grasp distinctions. It's tiresome to see the parroting of "BTC is a ponzi scheme" by so many supposedly non-stupid people on HN. Opposition to a thing shouldn't justify obviously, idiotically sloppy reasoning.
At any time, all owners of bitcoin actually have their own bitcoin and theoretically could sell their coins because they actually have them. (unless we're talking about cases like specific companies or exchanges in which clients are being fooled into thinking they own bitcoins that they don't actually own. However, even in this case, the fraud is with certain BTC ecosystem players, not BTC itself as a thing.)
A ponzi scheme on the other hand literally transfers funds from new members to previous members in order to maintain an illusion of high returns, until the house of cards collapses as new members stop paying in at a rate that can sustain the illusion of returns through dishonest fund transfers.
These are all very basic and easy to grasp distinctions. It's tiresome to see the parroting of "BTC is a ponzi scheme" by so many supposedly non-stupid people on HN. Opposition to a thing shouldn't justify obviously, idiotically sloppy reasoning.
> Earlier investors can benefit from the growth in price of their bitcoin holdings due to increased buying and price rises from new investors, who themselves hold exactly the bitcoin they bought with the risks fully known to anyone willing to do a minor bit of research.
So what you are saying is that earlier investors investments only grow with influx of new investors. How is that different than a Ponzi scheme?
> At any time, all owners of bitcoin actually have their own bitcoin and theoretically could sell their coins because they actually have them.
Here you are describing a Ponzi scheme. Literally. You are just repeating what I wrote in the previous post: "Earlier investors are payed[paid] with funds from more recent investors.".
> A ponzi scheme on the other hand literally transfers funds from new members to previous members in order to maintain an illusion of high returns, until the house of cards collapses as new members stop paying in at a rate that can sustain the illusion of returns through dishonest fund transfers.
That is how bitcoin works. Are you trolling me? If I buy a bitcoin and later sell it that is literally a transfer of funds from a new member to me, a previous member.
> These are all very basic and easy to grasp distinctions.
You listed no distinctions.
So what you are saying is that earlier investors investments only grow with influx of new investors. How is that different than a Ponzi scheme?
> At any time, all owners of bitcoin actually have their own bitcoin and theoretically could sell their coins because they actually have them.
Here you are describing a Ponzi scheme. Literally. You are just repeating what I wrote in the previous post: "Earlier investors are payed[paid] with funds from more recent investors.".
> A ponzi scheme on the other hand literally transfers funds from new members to previous members in order to maintain an illusion of high returns, until the house of cards collapses as new members stop paying in at a rate that can sustain the illusion of returns through dishonest fund transfers.
That is how bitcoin works. Are you trolling me? If I buy a bitcoin and later sell it that is literally a transfer of funds from a new member to me, a previous member.
> These are all very basic and easy to grasp distinctions.
You listed no distinctions.
My comment clearly explains the distinctions, and if you fail to notice them you're either being willfully stubborn or just don't understand basic reasoning.
One more time but even simpler: Bitcoin's structure is not designed with willful deception in mind. There is risk and some organizations working in the ecosystem are indeed fraudulent but the BTC blockchain itself is not. That alone makes it very different from a ponzi scheme.
Secondly: Earlier investors investments may grow or shrink in value depending on a number of factors. They're not dependent on new investors by default, and no transfer is taking place. Previous investors hold their same bitcoin and new investors hold their own, with their respective returns depending on market price of their assets subsequent to purchase, not literal transfers of cash/assets from new investors to previous ones to maintain a fraudulent picture of high returns. This latter process is how a ponzi scheme works, and The difference between these two things is obvious.
By your absurd definition of bitcoin as a ponzi scheme, much of the stock market and especially many high performing stocks with market caps way in excess of their book value could also be called ponzi schemes.
One more time but even simpler: Bitcoin's structure is not designed with willful deception in mind. There is risk and some organizations working in the ecosystem are indeed fraudulent but the BTC blockchain itself is not. That alone makes it very different from a ponzi scheme.
Secondly: Earlier investors investments may grow or shrink in value depending on a number of factors. They're not dependent on new investors by default, and no transfer is taking place. Previous investors hold their same bitcoin and new investors hold their own, with their respective returns depending on market price of their assets subsequent to purchase, not literal transfers of cash/assets from new investors to previous ones to maintain a fraudulent picture of high returns. This latter process is how a ponzi scheme works, and The difference between these two things is obvious.
By your absurd definition of bitcoin as a ponzi scheme, much of the stock market and especially many high performing stocks with market caps way in excess of their book value could also be called ponzi schemes.
Do you have any sources for that?
Cartel drug money.
(Until Mexico gets a slight handle on systemic corruption in every aspect of that country; I have a hard time believing anything they claim about anything.)
(Until Mexico gets a slight handle on systemic corruption in every aspect of that country; I have a hard time believing anything they claim about anything.)
> Many in developed countries don't understand the challenges of a devaluing currency with unlimited supply or the difficulty of being unbanked.
I have to admit, being in a developed country, that I genuinely don't understand why someone would switch away from a local currency that is failing at the task of being a currency to a cryptocurrency like bitcoin that is also failing at being a currency.
I have to admit, being in a developed country, that I genuinely don't understand why someone would switch away from a local currency that is failing at the task of being a currency to a cryptocurrency like bitcoin that is also failing at being a currency.
Purchasing power of bitcoin over the last decade has increased, the purchasing power of the Mexican peso has consistently fallen.
https://www.macrotrends.net/2559/us-dollar-mexican-peso-exch...
The Venezuelan Bolivar is even worse.
https://tradingeconomics.com/venezuela/currency
If you saw this happening to a close neighbour then you would also be worried about your own currency.
Not saying that bitcoin is the salve they need, just that perhaps given that context you can understand why it appears like an attractive alternative to the local currency. Also USD and EUR may be better options but I dont think having accounts denominated in these currencies is easily available to many people in Venezuela or Mexico. I have only (last 3 years or so) been able to hold EUR or USD denominated accounts (relatively easily) and I am in the UK. I'm sure it was possible to do for longer than that but it required hoops to be jumped through that are not always the easiest.
The Venezuelan Bolivar is even worse.
https://tradingeconomics.com/venezuela/currency
If you saw this happening to a close neighbour then you would also be worried about your own currency.
Not saying that bitcoin is the salve they need, just that perhaps given that context you can understand why it appears like an attractive alternative to the local currency. Also USD and EUR may be better options but I dont think having accounts denominated in these currencies is easily available to many people in Venezuela or Mexico. I have only (last 3 years or so) been able to hold EUR or USD denominated accounts (relatively easily) and I am in the UK. I'm sure it was possible to do for longer than that but it required hoops to be jumped through that are not always the easiest.
Which makes Bitcoin a better investment, but it still a shit currency.
Currency is the thing you retain from earnings or cash investments out into to cover near-term spending needs.
The things important for currency are low-volatility and universal acceptance. Among the things that don’t matter much for it are “does it tend, on average, to gain value”.
Currency is the thing you retain from earnings or cash investments out into to cover near-term spending needs.
The things important for currency are low-volatility and universal acceptance. Among the things that don’t matter much for it are “does it tend, on average, to gain value”.
In fact a currency gaining value over time, especially at a high rate, is terrible for a monetary system in which you want to encourage monetary velocity instead of just stashing and saving.
If I have a need to pay someone, I use Venmo or Zelle. Bitcoin is slow and expensive and volatile.
If I have a need to pay someone, I use Venmo or Zelle. Bitcoin is slow and expensive and volatile.
EUR/USD accounts certainly has been available in the UK for much longer, but with many of the same problems as for people in developing countries (so I agree with the thrust of your comment):
They've often required either a business account, a "premium"/high net-worth account of some sort, or dealing with an international banking team most normal customers either will never know exists or not have easy access to.
They've often required either a business account, a "premium"/high net-worth account of some sort, or dealing with an international banking team most normal customers either will never know exists or not have easy access to.
I agree that the Mexican peso and the Venezuelan Bolivar are not doing well, certainly you wouldn't want to use them as currency, if you can avoid it.
I can also totally see people using bitcoin as a speculative investment. That's also not an argument in favour of bitcoin as a currency.
> Also USD and EUR may be better options but I dont think having accounts denominated in these currencies is easily available to many people in Venezuela or Mexico.
So bitcoin is used not because it's a good currency but because it's better than the available alternatives. I guess that makes sense.
I can also totally see people using bitcoin as a speculative investment. That's also not an argument in favour of bitcoin as a currency.
> Also USD and EUR may be better options but I dont think having accounts denominated in these currencies is easily available to many people in Venezuela or Mexico.
So bitcoin is used not because it's a good currency but because it's better than the available alternatives. I guess that makes sense.
They are using Bitcoin as an asset much like property, bonds, gold, etc, not as a currency. In this respect you can think of people in this situation as treating foreign currency as an asset as well, as a way to park wealth to hedge against domestic inflation and devaluation.
In extremes like Venezuela or Zimbabwe they do fail at being currencies as well, but the Peso is a perfectly functional currency. It's just not a reliable store of wealth. In developed countries we think of our currencies as both, but they're two distinct functions.
In extremes like Venezuela or Zimbabwe they do fail at being currencies as well, but the Peso is a perfectly functional currency. It's just not a reliable store of wealth. In developed countries we think of our currencies as both, but they're two distinct functions.
All that matters to Mexicans is their local purchasing power though.
Inflation in Mexico hasn't been that insane for the last 10 years. You have to look at wage growth and investment returns to really make a judgement
Inflation in Mexico hasn't been that insane for the last 10 years. You have to look at wage growth and investment returns to really make a judgement
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He can still leverage the bitcoin, he may be holding and not selling but that doesn't mean he isn't borrowing against the bitcoin and using the borrowed cash to make growth investments.
Oh this so much. So many people are envious and think being a billionaire is a zero sum game.
10% is far too much of his net worth for a pump-and-dump. A much more reasonable use case for holding ~1B worth of BTC for a man like RSP (Ricardo Salinas Pliego) is as insurance against having assets frozen or nationalized.
A man like him is sufficiently diversified in asset holdings that he doesn't really care about the fluctuations of any one (property, businesses, fx), but he very much cares about the government deciding to freeze his accounts.
It's an enormous irony (if a predictable one) that the biggest buyers of a "control your money!" story are not your wacky libertarians living in the forest, but the ultra, ultra rich, especially those who obtained their fortunes in marginal ways.
A man like him is sufficiently diversified in asset holdings that he doesn't really care about the fluctuations of any one (property, businesses, fx), but he very much cares about the government deciding to freeze his accounts.
It's an enormous irony (if a predictable one) that the biggest buyers of a "control your money!" story are not your wacky libertarians living in the forest, but the ultra, ultra rich, especially those who obtained their fortunes in marginal ways.
Not good. Salinas is one of the worst oligarchs in Mexico. A text book narcissist.
"Billionaire banker sees potential to do more money laundering"
He is smart. Unlike Musk, he is buying Bitcoin when it's down.
Musk receives billions of dollars in government handouts. Tesla and Space X could not exist without the government pouring our tax dollars on them. I don’t think it’s too far of a leap to suggest Musk’s role in destabilizing BTC came at the request of his patrons in the government.
Or he’s just incredibly stupid. Maybe a bit if both.
Or he’s just incredibly stupid. Maybe a bit if both.
That does seem like too far of a leap, unless you have some strong evidence to support it. Did the government ask him to tweet about Gamestop, too?
So you think he’s just incredibly stupid? I would believe that but he does have billions of dollars of incentives to do the bidding of the US gov.
I could also see him tweeting GameStop as an anti crypto move. He basically has done nothing but inject fraud and FUD into the “internet investing” space that Bitcoin is a huge part of. How many people sold BTC to buy GME or otherwise shifted money there away from crypto?
I could also see him tweeting GameStop as an anti crypto move. He basically has done nothing but inject fraud and FUD into the “internet investing” space that Bitcoin is a huge part of. How many people sold BTC to buy GME or otherwise shifted money there away from crypto?
*Looks like someone may have bought into the hype at just the wrong time*
Well Musk both created the hype and bought into it at the wrong time, definitely worth taking a look at his motives for making such an aggressively destructive move.
If you’re suggesting I bought in at the wrong time, I didn’t. I would never listen to Elon Musk.
If you’re suggesting I bought in at the wrong time, I didn’t. I would never listen to Elon Musk.
I honestly wouldn't be shocked if South America embraced bitcoin while North America banned it.
Mexico is in North America
Maybe "latin america" instead? In terms of "north america" mexico is definitely the odd one out.
Sure, but no one blinked and eye until you pointed it out. Everyone knows that North America really means Anglo America.
You are not correct on this matter.
90% of the time when people say South America they're referring to the poor Spanish speaking countries.
Let me ask you this... do you include Greenland in your definition of North America.
Let me ask you this... do you include Greenland in your definition of North America.
They certainly have a larger incentive to figure it out.
This is bad for Bitcoin.
Embrace. Extend. Extinguish.
Not your keys, not your coins.
Embrace. Extend. Extinguish.
Not your keys, not your coins.
magsnus(6)
I just hope BTC becomes the global alternative to the USD being set as a reference for value
That would make the global financial system dramatically less stable.
On the contrary, the Bitcoin based global financial system would be robust, reliable, dependable, non-inflationary, neutral, and apolitical.
Note after hyperbitcoinization the volatility would be much lower than it is today, simply because it would take so much more to affect the price.
Note after hyperbitcoinization the volatility would be much lower than it is today, simply because it would take so much more to affect the price.
"Non-inflationary" in supply terms only, of course, but that's just half the picture. You can easily have inflation in an economy with a fixed monetary supply if velocity increases disproportionately. [1]
Worse, without a central monetary authority to adjust the supply boom and bust cycles are greatly exaggerated just as they used to be with the gold standard. There's no mechanism to address a deflationary spiral or runaway inflation (again that can happen with fixed supply). That makes it less reliable and less dependable.
There's no such thing as neutral and apolitical money, certainly not at the point of use.
This is broadly speaking wishful thinking and voodoo economics.
Currencies need to be fungible, predictable, cheap to transact and hold their value as long as required to invest or spend on basic needs. Bitcoin is absolutely none of these things, making it crap money.
Worse, it's the grey goo of energy usage.
[1] https://www.stlouisfed.org/on-the-economy/2014/september/wha...
Worse, without a central monetary authority to adjust the supply boom and bust cycles are greatly exaggerated just as they used to be with the gold standard. There's no mechanism to address a deflationary spiral or runaway inflation (again that can happen with fixed supply). That makes it less reliable and less dependable.
There's no such thing as neutral and apolitical money, certainly not at the point of use.
This is broadly speaking wishful thinking and voodoo economics.
Currencies need to be fungible, predictable, cheap to transact and hold their value as long as required to invest or spend on basic needs. Bitcoin is absolutely none of these things, making it crap money.
Worse, it's the grey goo of energy usage.
[1] https://www.stlouisfed.org/on-the-economy/2014/september/wha...
Keynesian vs Austrian once again - lets agree to disagree.
Re: Keynesian v. Austrian let me ask you this.
As the money supply increased 25% last year why isn't everything 25% more expensive? As the M2 supply increased 15X since 1970 why are things only 7X more expensive?
The idea inflation is supply side only is trivially falsifiable is it not?
If the treasury minted a trillion dollar coin and gave it to me, then I threw it into a vault and never touched it the supply went up but prices stayed flat. Supply alone isn't a complete picture, obviously - what people do with that supply matters too. So what am I missing?
The idea inflation is supply side only is trivially falsifiable is it not?
If the treasury minted a trillion dollar coin and gave it to me, then I threw it into a vault and never touched it the supply went up but prices stayed flat. Supply alone isn't a complete picture, obviously - what people do with that supply matters too. So what am I missing?
Oh, interesting. I was the guy correcting you on M2V from earlier. We actually agree with like 95% on our stances.
Bitcoin is bad because it is a deflationary currency, you just made that point so we can move on.
With the Federal Reserve setting artificially low interest rates that causes M2 to expand(which causes M2V to drop). That M2 has to go somewhere, and as money is not neutral, it goes based on the utility of the person who owns that money. You just mentioned neutrality, so we're in agreement here. That money causes the value of _something_ to rise, it has to. Whether the thing that rises is consumption items that affect the CPI or in stocks is up to the people who have the new money.
This devalues the existing cash, and anyone who keeps cash is being feeling those effects. Anyone who pulled money out in 1971 and hid it under their mattress has been wiped out. The only alternative that these people have is putting it in other assets. The two main asset classes to pick from is housing and stocks. I hope I don't have to explain why housing is also a deflationary asset, and the only sustainable future we have there is a Land Value Tax.
So let's look at stocks. The bulk of the money creation is coming in the form of corporate bonds, which the Fed is artificially holding up. They take those loans and buyback their own stock. We can see that the Stock Issuance vs Stock Buybacks has been negative for the past decade[0]. That's right, over the last decade the amount of stocks - the core value holding of the World Economy - is not only not growing, it is shrinking. Stocks are also deflationary.
This explains the winners and the losers. This explains why prices are flat. Why buy more than you need when the utility provided in the future by buying stocks will keep getting greater and greater over time? This explains why GDP is rising only very slowly. There is no returns in actually taking a risk in creating value. Why work when you can just sit on your stockpile?
[0, Figure 7]: https://www.yardeni.com/pub/fofusequity.pdf
Bitcoin is bad because it is a deflationary currency, you just made that point so we can move on.
With the Federal Reserve setting artificially low interest rates that causes M2 to expand(which causes M2V to drop). That M2 has to go somewhere, and as money is not neutral, it goes based on the utility of the person who owns that money. You just mentioned neutrality, so we're in agreement here. That money causes the value of _something_ to rise, it has to. Whether the thing that rises is consumption items that affect the CPI or in stocks is up to the people who have the new money.
This devalues the existing cash, and anyone who keeps cash is being feeling those effects. Anyone who pulled money out in 1971 and hid it under their mattress has been wiped out. The only alternative that these people have is putting it in other assets. The two main asset classes to pick from is housing and stocks. I hope I don't have to explain why housing is also a deflationary asset, and the only sustainable future we have there is a Land Value Tax.
So let's look at stocks. The bulk of the money creation is coming in the form of corporate bonds, which the Fed is artificially holding up. They take those loans and buyback their own stock. We can see that the Stock Issuance vs Stock Buybacks has been negative for the past decade[0]. That's right, over the last decade the amount of stocks - the core value holding of the World Economy - is not only not growing, it is shrinking. Stocks are also deflationary.
This explains the winners and the losers. This explains why prices are flat. Why buy more than you need when the utility provided in the future by buying stocks will keep getting greater and greater over time? This explains why GDP is rising only very slowly. There is no returns in actually taking a risk in creating value. Why work when you can just sit on your stockpile?
[0, Figure 7]: https://www.yardeni.com/pub/fofusequity.pdf
Btw, I was going to reply to the other one to say that I think we do agree on like 95% of our stances haha.
Thanks for your thoughts! Interesting read - both here and the other thread!
Re: housing, btw, it's a bit more complicated. On average, on an inflation-adjusted $/sqft basis, housing in America costs exactly what it did in 1973. [1] However, a few things have changed - mostly zoning related.
In rural areas, houses are now twice as big, and the average family is smaller. This is likely attributable to zoning: minimum size, setback, etc.
In urban areas, city councils refused to permit construction to meet demand - to the benefit of existing landowners. San Francisco added half as much new housing stock as necessary to meet the demand in the area over the last few decades. [2]
Japan is a great counter-example, where housing has remained incredibly affordable - even in Tokyo. Likely attributable once again to zoning rules. They have national zoning rules which permit housing in every zone. [3]
IMO housing is not deflationary because you can always build up, so while each square foot of ground space may appreciate, the price of usable square footage in aggregate doesn't have to.
[1] https://fee.org/articles/new-homes-today-have-twice-the-squa...
[2] https://en.wikipedia.org/wiki/San_Francisco_housing_shortage
[3] https://marketurbanism.com/2019/03/19/why-is-japanese-zoning...
Thanks for your thoughts! Interesting read - both here and the other thread!
Re: housing, btw, it's a bit more complicated. On average, on an inflation-adjusted $/sqft basis, housing in America costs exactly what it did in 1973. [1] However, a few things have changed - mostly zoning related.
In rural areas, houses are now twice as big, and the average family is smaller. This is likely attributable to zoning: minimum size, setback, etc.
In urban areas, city councils refused to permit construction to meet demand - to the benefit of existing landowners. San Francisco added half as much new housing stock as necessary to meet the demand in the area over the last few decades. [2]
Japan is a great counter-example, where housing has remained incredibly affordable - even in Tokyo. Likely attributable once again to zoning rules. They have national zoning rules which permit housing in every zone. [3]
IMO housing is not deflationary because you can always build up, so while each square foot of ground space may appreciate, the price of usable square footage in aggregate doesn't have to.
[1] https://fee.org/articles/new-homes-today-have-twice-the-squa...
[2] https://en.wikipedia.org/wiki/San_Francisco_housing_shortage
[3] https://marketurbanism.com/2019/03/19/why-is-japanese-zoning...
Nice catch, I agree. I should have said land is deflationary.
There's surely a few more nuances where it isn't.
There's surely a few more nuances where it isn't.
For the best these people are victims of the blub paradox, but for financial systems.
Blub paradox: (programming) The situation where a programmer (financial participant) sees less powerful programming languages (finacial sustems) than those he/she knows as lacking in important features, but more powerful ones as having bizarre or unnecessary features
Blub paradox: (programming) The situation where a programmer (financial participant) sees less powerful programming languages (finacial sustems) than those he/she knows as lacking in important features, but more powerful ones as having bizarre or unnecessary features
> non-inflationary
You have a pretty warped definition of inflation if you think Bitcoin is non-inflationary despite undergoing 70+% inflation over the last few months.
You have a pretty warped definition of inflation if you think Bitcoin is non-inflationary despite undergoing 70+% inflation over the last few months.
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Banks create and take financial assets and discount them into their own liabilities, which can be in any denomination they feel capable of supporting.
Since there is paper gold, it would be amazing if paper bitcoins didn't show up at some point.
Since there is paper gold, it would be amazing if paper bitcoins didn't show up at some point.
Seems like bitcoin is a the driver for influencers to earn a little money.
Without those influencers bitcoin wouldn't be followed by the 99.9% wannabee influencers and worth nothing.
Influencers don't really shill Bitcoin, ironically because it isn't volatile enough. They shill what are known as 'shitcoins' for PnDs
Billionaire buys BTC. Billionaire pumps the price of BTC. Billionaire profits. There's at least one other billionaire who plays this game.