Search content
Sort by
Showing 20 of 123 results by malditonuke
Well on this thread you're the one banging on the pulpit.
I never said I wasn't, it's myrkul who needs to defend this absurd claim that the rest of 'you' and 'Austrians' broadly are not operating out of a moralistic framework that rationalizes usury by defining the lender as morally virtuous and the borrower as morally flawed.
Economics is value-free. Borrowers are not "bad" and savers are not "good". If you want to argue about "usury", do it in the religious section.
Anyone claiming that their ideology is value free is either ignorant or ashamed of the values it actually carries. Nothing made by man is free of value judgments, especially economics. You would have to be the most blindly obtuse person ever born to think that Marx-vs-Adam Smith or hard-vs-soft money or the Keynes-vs-Hayek debates are value-free, it is saturated with value judgments. These are indeed some of the most pivotal value debates that have existed in the last century.
Economics is not an ideology; it is a science. Like other sciences, to properly study economics you must be able to remove your ideological hats. I know that it's hard and that many people fail.
Well on this thread you're the one banging on the pulpit.
I never said I wasn't, it's myrkul who needs to defend this absurd claim that the rest of 'you' and 'Austrians' broadly are not operating out of a moralistic framework that rationalizes usury by defining the lender as morally virtuous and the borrower as morally flawed.
Economics is value-free. Borrowers are not "bad" and savers are not "good". If you want to argue about "usury", do it in the religious section.
Politics would be another appropriate area for debating usury. Most of the Austrians that he refers to are probably also libertarians, which would justify his confusion.
I could totally see libertarians arguing that saving is good (especially when the discussion involves government).
Well on this thread you're the one banging on the pulpit.
I never said I wasn't, it's myrkul who needs to defend this absurd claim that the rest of 'you' and 'Austrians' broadly are not operating out of a moralistic framework that rationalizes usury by defining the lender as morally virtuous and the borrower as morally flawed.
Economics is value-free. Borrowers are not "bad" and savers are not "good". If you want to argue about "usury", do it in the religious section.
Their is an unabashed moralistic tone on these forums that praise savings as virtuous and noble and thus entitled to great personal gain, the only distinction is most of BTCs windfall is deflationary rather then from interest. But the same general tone is present when ever I've discussed interest. Naturally such moralizing dose not appear in dry academic papers that constitute the academic Austrian school core (or at least its subtle), but no one can seriously deny that this belief is rampant amongst the wider non academic Austrian populous.
Well on this thread you're the one banging on the pulpit.
The question is If bitcoin is the only currency in the world (as most of you expect), How the Economy will grow if the interest rate is not stable and is very high?
For the record, I personally don't believe that bitcoin (or any other crypto-currency) will be the only currency in the world. I suspect that most bitcoin supporters believe it will become a world currency but not the only world currency.
For the purpose of discussing bitcoin interest rates, I am also ignoring interest rate manipulation by central banks.
If the economy is growing, one bitcoin has bigger buying power, then why do not the bitcoin owner hoard the money rather than send it to the bank? You can say the bank will pay for the interest. So the lending cost will be the interest + economic growth rate.
How can economy grow? By investing and developing new things/methods to satisfy human needs. No lending, no investing and as a result, no economic growth (even there is economic growth, this kinds of growth will centralize bitcoin to big monopoly enterprises). The ROI(return on investment) must be bigger than the lending cost. Which means the ROIs must exceed the economic growth rate.
How can economy grow? By investing and developing new things/methods to satisfy human needs. No lending, no investing and as a result, no economic growth (even there is economic growth, this kinds of growth will centralize bitcoin to big monopoly enterprises). The ROI(return on investment) must be bigger than the lending cost. Which means the ROIs must exceed the economic growth rate.
Well, I would wager that some form of banking will persist. Regular people may use banks to safely store their bitcoin and for easy lending. Plus banks may offer some other bitcoin-centric services.
But even if the traditional bank went the way of the dodo, lending could continue. Using the internet, it's actually much easier to find borrowers today then it was 10 years ago, and it will probably become easier still. I mean, using the internet these days I can loan money to farmers in Africa if I wanted.
Let's assume there is only one project for the whole world with an ROI 10%. Then if the project can be done by its own money, the ROI of the world will be 10% and so the economy growth will be 10%. So where is the interest?
If there are two projects for the whole world with the same size and ROI 15% 5% each. then the economy growth rate will be 10%. People will expect the 5% project can not pay back the interest and will stop investing in it. as a result, the economy growth rate will be 15%/2=7.5%.
If people are expecting economic growth too high, the required ROI will be too high and few projects can achieve that, which will lead to a frozen in the lending market. A frozen market will lead to the withdraw of industry and is harmful to the society.
If there are two projects for the whole world with the same size and ROI 15% 5% each. then the economy growth rate will be 10%. People will expect the 5% project can not pay back the interest and will stop investing in it. as a result, the economy growth rate will be 15%/2=7.5%.
If people are expecting economic growth too high, the required ROI will be too high and few projects can achieve that, which will lead to a frozen in the lending market. A frozen market will lead to the withdraw of industry and is harmful to the society.
If people are expecting higher economic growth, other things being equal, then they will probably want to save (invest) in order to buy more goods for less money. In fact, one of the arguments against a fixed money supply is that the value of the money goes up so quickly that nobody wants to spend. I say that it's unlikely but not impossible.
If phenomenal growth is already locked in and businesses don't want any more investors (0% interest rates), then people will either hold on to their money (because they are perfectly content) or spend some money on things that they want now.
There is nothing inherently wrong with slowing investment when growth is high. When people don't want any more investment, more investment is bad. It sounds like you are worried that lending will stop when it is too high. Of course!
Credit is a hard concept in the Bitcoin economy. That being said, lending isn't that terrible. Go back to the basics -
If a bank uses only Bitcoin, then this is how it will make money: through a spread between savers and lenders. That's how traditional banks are supposed to make money too. People deposit their Bitcoins in the bank for safekeeping and they get some rate of interest. If you're borrowing Bitcoin from the bank to start a business, say, then you need to pay back a higher number of Bitcoins. The bank keeps the difference for taking that risk. Same concept as traditional economy.
Remember currency is just the medium of exchange. The total wealth of the world can keep increasing irrespective of the currency.
You did not understand the problem. If deflation is 20% a year you cannot lend from bank for anything under 20% in real terms. Such high interest would cause demand for credit to be very small and without demand there is now way bank can profit from lending.If a bank uses only Bitcoin, then this is how it will make money: through a spread between savers and lenders. That's how traditional banks are supposed to make money too. People deposit their Bitcoins in the bank for safekeeping and they get some rate of interest. If you're borrowing Bitcoin from the bank to start a business, say, then you need to pay back a higher number of Bitcoins. The bank keeps the difference for taking that risk. Same concept as traditional economy.
Remember currency is just the medium of exchange. The total wealth of the world can keep increasing irrespective of the currency.
It was a good answer to the original poster's question: 'How do banks pay their lenders?' The OP seemed to be under the mistaken impression that a specific business (a bank) needs to increase the stock of money to to pay the interest off loans. The truth is that profit can pay the interest.
Also, if the currency is increasing in value 20% per year, think about why that is. It's because of economic growth. If you can't have economic growth with the currency appreciating that much, then the growth slows, and the currency increases in value at a lower rate.
... [bitcoin] was never meant to be a real currency.
Stampbit was never meant to be taken seriously.
Credit is a hard concept in the Bitcoin economy. That being said, lending isn't that terrible. Go back to the basics -
If a bank uses only Bitcoin, then this is how it will make money: through a spread between savers and lenders. That's how traditional banks are supposed to make money too. People deposit their Bitcoins in the bank for safekeeping and they get some rate of interest. If you're borrowing Bitcoin from the bank to start a business, say, then you need to pay back a higher number of Bitcoins. The bank keeps the difference for taking that risk. Same concept as traditional economy.
Remember currency is just the medium of exchange. The total wealth of the world can keep increasing irrespective of the currency.
If a bank uses only Bitcoin, then this is how it will make money: through a spread between savers and lenders. That's how traditional banks are supposed to make money too. People deposit their Bitcoins in the bank for safekeeping and they get some rate of interest. If you're borrowing Bitcoin from the bank to start a business, say, then you need to pay back a higher number of Bitcoins. The bank keeps the difference for taking that risk. Same concept as traditional economy.
Remember currency is just the medium of exchange. The total wealth of the world can keep increasing irrespective of the currency.
Also the banks can become more profitable through expansion, which may justify borrowing on the part of the bank.
Re: defending ahead the p2p nature of bitcoin - blending hashcash & scrypt
I am anti-fork as bad for mindshare, confidence and dilutive of bitcoin and crypto currency value aggregate.
Awwww man
Seriously though, with all due respect (and with admittance of my conflict of interest here) - alt-coins (or rather, truly innovative alt-coins as opposed to one-two tweak clones) are useful.
They prevent monoculture.
If anything, we need more altcoins pursuing different niches (I feel that there are market niches which BTC, contrary to popular belief, fills imperfectly, allowing for an alt to take that niche without affecting mainstream btc adoption - but that's a long and boring story)
1. Alt-coins
2. Crypto-currency exchange
3. Currency basket
A user can hold bitcoin, litecoin and whatever-coin using any ratio that they deem fit.
Of the businesses listed on GLBSE that actually report financials, nearly all report in terms of BTCs.
So it probably will depend on what currency the business' debt or dividends will be paid in. If the business owes BTCs, that is who will be reading the financials and thus they'll want BTCs. If the business has BTCs investment and pays dividends in BTCs, then those investors will be the ones reading the financials and thus they'll want to see BTCs for earnings and dividends.
Now for tax purposes, most likely every revenue and expense denominated in BTCs will need to be recorded in in its fiat equivalent at the time.
So there will be two sets of books, one used for reporting taxes and one for a different audience.
Do you know where one can get a count of those those that report in BTCs?
Examples:
1) You are doing your budget. You list all your income and all your expenses.
Do you list your income and expenses in bitcoin or in dollars/etc?
2) If you run a bitcoin business, do your records still list all your assets, sales, liabilities, etc. in dollars, or in bitcoin?
This is a poll of how many people who use bitcoin also use it for economic calculation.
1) You are doing your budget. You list all your income and all your expenses.
Do you list your income and expenses in bitcoin or in dollars/etc?
2) If you run a bitcoin business, do your records still list all your assets, sales, liabilities, etc. in dollars, or in bitcoin?
This is a poll of how many people who use bitcoin also use it for economic calculation.
For accounting purposes. I'll adjust the poll.
For which set of books?
If you use bitcoin, do you still convert back to your local currency when deciding whether a price is high or low, or whether you are profitable or not?
For which set of books?
Several banks offer various cards and keyfobs, none of them free. The only time I've actually been given such a device free of charge was when I needed it to log into my employer's VPN...
I'm in the UK. My bank provides a little electronic gizmo you stick your bank card in and it gives (different) authentication codes for each time you use online banking. That was free of charge.
some banks in the US do that; some don't. Citibank did that for me when i opened a business account with them a few years back. i just opened a Chase business account a couple months ago, and they didn't provide one.
from beverly hills ninja:
http://www.youtube.com/watch?v=REjzRk3clNM (sorry, couldn't find the english version)
translation:
Haru: I would like to rent one of your lodgings, is the cost great?
Desk Manager: Compared to what? A hut and a rice patty? Sir, we are a five star hotel, with 600 rooms, booked 6 months in advance.
Haru: I have money.
Desk Manager: I'm sure you do, but unfortunately, we don't take Wompum.
Haru: Do you perhaps - take Gold?
[pours out about 15 pieces of gold]
Desk Manager: [rings bell] Front!
Desk Manager: Perhaps I shall send Dom Perignon to your room?
Haru: I prefer to be alone tonight, perhaps later I will meet your friend Don.
http://www.youtube.com/watch?v=REjzRk3clNM (sorry, couldn't find the english version)
translation:
Haru: I would like to rent one of your lodgings, is the cost great?
Desk Manager: Compared to what? A hut and a rice patty? Sir, we are a five star hotel, with 600 rooms, booked 6 months in advance.
Haru: I have money.
Desk Manager: I'm sure you do, but unfortunately, we don't take Wompum.
Haru: Do you perhaps - take Gold?
[pours out about 15 pieces of gold]
Desk Manager: [rings bell] Front!
Desk Manager: Perhaps I shall send Dom Perignon to your room?
Haru: I prefer to be alone tonight, perhaps later I will meet your friend Don.
This fantasy that Bitcoins will bring governments' to their knees as they find themselves unable to tax people is just that: a fantasy. The following xckd (it keeps appearing in these forums) sums the essence of the flaw in this kind of thinking quite nicely: http://xkcd.com/538/.
don't overlook how dependent governments are on inflation. there's a good reason they were so keen on abandoning the gold standard.
however, even with a gold standard there were still taxes. but they were so obvious, even a caveman could see them.
TAKEN FROM ANOTHER DISCUSSION ON THIS FORUM. NONE OF THE CONTENT IS MINE. BUT I LIKE IT 
"The money comes from the effort of their mining and the value in the blocks they've mined. It's the same as when someone mine's gold -- the value comes from the effort of their mining and the rarity of gold. BitCoins don't need to be backed because they're scarce. You only need to back something that's not scarce. (That's why gold itself doesn't need to be backed.)" [Quoted]
My poo is scarce. There is a limited supply of it produced over time. Therefore my poo is a valuable currency that need not be backed by anything.
Realistically, Bitcoins have value not because they are scarce, but because there is demand for them.
This demand is created because Bitcoins are cool, and you can have fun buying things with them, and playing with all the Bitcoin-related Web charts and the open source software and the crypto.
You could fork Bitcoin right now, and have your own identical system, and the coins in it would be just as rare and difficult to produce as Bitcoins are. They would also be worthless, unless you could make them cool, and make it possible for people to have fun doing things with them.
Bitcoins, like stocks, are a "psychological market." When stock is issued, the company gets its money from the initial sale, and no matter what happens to the stock value, the company never has to give the money back.
You can't do anything with the company, unless you have control, so for the average stock owner having less than 51%, the stock trades in its own little world, supported only by the belief that its value bears some relationship to the value of the company whose name is printed on the financial statement.
Bitcoins are like that. Should people ever become bored with Bitcoins, or not be able to do things with them they find satisfying, like thumb their nose at the government while buying Alpaca Socks, they will quickly become worthless.
"The money comes from the effort of their mining and the value in the blocks they've mined. It's the same as when someone mine's gold -- the value comes from the effort of their mining and the rarity of gold. BitCoins don't need to be backed because they're scarce. You only need to back something that's not scarce. (That's why gold itself doesn't need to be backed.)" [Quoted]
My poo is scarce. There is a limited supply of it produced over time. Therefore my poo is a valuable currency that need not be backed by anything.
Realistically, Bitcoins have value not because they are scarce, but because there is demand for them.
This demand is created because Bitcoins are cool, and you can have fun buying things with them, and playing with all the Bitcoin-related Web charts and the open source software and the crypto.
You could fork Bitcoin right now, and have your own identical system, and the coins in it would be just as rare and difficult to produce as Bitcoins are. They would also be worthless, unless you could make them cool, and make it possible for people to have fun doing things with them.
Bitcoins, like stocks, are a "psychological market." When stock is issued, the company gets its money from the initial sale, and no matter what happens to the stock value, the company never has to give the money back.
You can't do anything with the company, unless you have control, so for the average stock owner having less than 51%, the stock trades in its own little world, supported only by the belief that its value bears some relationship to the value of the company whose name is printed on the financial statement.
Bitcoins are like that. Should people ever become bored with Bitcoins, or not be able to do things with them they find satisfying, like thumb their nose at the government while buying Alpaca Socks, they will quickly become worthless.
it's true that the value of bitcoin (and everything else for that matter) is due to demand. no demand = no value.
however, supply (scarcity) is no bit player.
and "poo" actually does have value, but that's over-thinking it.
But if they mine just to get rid of BTC i/of using them, where is the value ?
the other bitcoins would still exist and be able to be traded. if the "giants" don't spend the coins they generated, that would put upward pressure on the value of the old coins.
And really, yes, I did speak with the FSA. If Mark has complied with all applicable laws, then everything will be fine. But I assure you, they will be investigating.
I have no financial interest in this game. I just thought I'd let you all know.
Anyhow, nice speaking with you all, but I have things that need my attention.
I have no financial interest in this game. I just thought I'd let you all know.
Anyhow, nice speaking with you all, but I have things that need my attention.
Thanks, Mom. See you in hell.
Because Keynes supports state intervention in matters of money, and states like to intervene in matters of money?
That could be one of the explanations why states like Keynesian theory, but it doesn't explain why most economists do.
Because it turns the dismal science into alchemy.