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Erza
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Re: Bitcoin or gold?
June 21, 2015, 06:05:55 AM
#697
Quote from: 1986 on June 21, 2015, 04:41:13 AM
I used to love the idea of holding gold as an investment or alternative store of wealth.... that is until bitcoin came along. Gold may still have its uses as a physical thing and precious metal and I will continue to hold the gold I have but wont be buying more. Bitcoin is far superior as a currency and I also see far greater potential for profit over the years and the value today should hopefully be minute in comparison to what it could be worth in 3/4/5+ years time.

I guess bitcoin wont be currency at all because nothing can control the movement of its price and the price is too volatile to be currency, may be it will

be after it is stable. Greater potential for profit? Actually it depends on yourselves whether you can get a big profit or not but mostly people will lose

because of the volatile price
1986
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Activity: 165
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Re: Bitcoin or gold?
June 21, 2015, 04:41:13 AM
#696
I used to love the idea of holding gold as an investment or alternative store of wealth.... that is until bitcoin came along. Gold may still have its uses as a physical thing and precious metal and I will continue to hold the gold I have but wont be buying more. Bitcoin is far superior as a currency and I also see far greater potential for profit over the years and the value today should hopefully be minute in comparison to what it could be worth in 3/4/5+ years time.
deisik
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Re: Bitcoin or gold?
June 21, 2015, 03:32:42 AM
#695
Quote from: RealBitcoin on June 20, 2015, 06:49:32 PM
Quote from: deisik on June 20, 2015, 06:16:11 PM
What are you talking about now? At first you were talking about the stock market crash of 1929 and the reason behind it being "out-of-thin-air" loans issued by private banks that had pumped up the stock market back then. My point is that the stock market crash of 1929 had nothing to do with such loans, since stocks had been bought with real dollars, the point which you confirmed yourself (most likely not even fully understanding this)...

And now you seem to be switching to a different issue

And you seem to forget that the "real dollar" was never a real dollar. The only real part in it was the 30% gold that it can be redeemed to, the rest of it was just a promissory note.

Where did you get this? You are confusing actual dollars (then the United States notes) emitted by the United States with the Federal Reserve notes emitted by the Federal Reserve (which were denominated in US dollars and redeemed "to the Treasury in gold or lawful money"). The former had been guaranteed in gold as per Gold Standard Act of 1900, which fixed the value of the dollar in gold (20.67$ an ounce), while the latter could be expanded or contracted in amount to cover the need for more cash. Besides, Federal Reserve had to maintain a percentage of gold (dollar) cover for its notes ("in gold not less than 40 per centum against its Federal Reserve notes in actual circulation"), but this has nothing to do with the US dollar ("lawful money") backed up by gold in full till 1933...
RealBitcoin
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Re: Bitcoin or gold?
June 20, 2015, 06:49:32 PM
#694
Quote from: deisik on June 20, 2015, 06:16:11 PM
Quote from: ?? on ??
Quote from: deisik on June 20, 2015, 05:58:10 PM
Quote from: ?? on ??
A bank could swap their printed $ for real $ from another bank. Or from the mint, hey i`m not a banker i dont know their exact methodology of getting liquidity back then.

They used to transfer money with carriages guarded by soldiers, that money could come from another bank, or from the mint ok.

Then your whole story doesn't hold and falls to pieces. You started with making claims that banks made unsecured loans with which the stock market got pumped up. But if these loans were immediately converted to real dollars (backed up by gold, if you didn't forget), then your assumption is false, and the stock market was actually pumped by real dollars, as it had been the case...

You still dont understand, stock market is less capitalized in $ than the money supply, did you forgot that you can have more $ in circulation than the market cap of the stock market (even in a bubble)??

What are you talking about now? At first you were talking about the stock market crash of 1929 and the reason behind it being "out-of-thin-air" loans issued by private banks that had pumped up the stock market back then. My point is that the stock market crash of 1929 had nothing to do with such loans, since stocks had been bought with real dollars, the point which you confirmed yourself (most likely not even fully understanding this)...

And now you seem to be switching to a different issue

And you seem to forget that the "real dollar" was never a real dollar. The only real part in it was the 30% gold that it can be redeemed to, the rest of it was just a promissory note.
deisik
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Re: Bitcoin or gold?
June 20, 2015, 06:16:11 PM
#693
Quote from: ?? on ??
Quote from: deisik on June 20, 2015, 05:58:10 PM
Quote from: ?? on ??
A bank could swap their printed $ for real $ from another bank. Or from the mint, hey i`m not a banker i dont know their exact methodology of getting liquidity back then.

They used to transfer money with carriages guarded by soldiers, that money could come from another bank, or from the mint ok.

Then your whole story doesn't hold and falls to pieces. You started with making claims that banks made unsecured loans with which the stock market got pumped up. But if these loans were immediately converted to real dollars (backed up by gold, if you didn't forget), then your assumption is false, and the stock market was actually pumped by real dollars, as it had been the case...

You still dont understand, stock market is less capitalized in $ than the money supply, did you forgot that you can have more $ in circulation than the market cap of the stock market (even in a bubble)??

What are you talking about now? At first you were talking about the stock market crash of 1929 and the reason behind it being "out-of-thin-air" loans issued by private banks that had pumped up the stock market back then. My point is that the stock market crash of 1929 had nothing to do with such loans, since stocks had been bought with real dollars, the point which you confirmed yourself (most likely not even fully understanding this)...

And now you seem to be switching to a different issue
deisik
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Re: Bitcoin or gold?
June 20, 2015, 05:58:10 PM
#692
Quote from: ?? on ??
Quote from: deisik on June 20, 2015, 05:48:30 PM
Quote from: RealBitcoin on June 20, 2015, 05:44:33 PM
Quote from: deisik on June 20, 2015, 05:40:11 PM

You didn't answer my question. I'm not asking about investment banks. I'm asking what was "simply a loan" back then, as you named it. Was it real X dollars or just a sheet of paper claiming to X dollars?

How should I know? I`m not familiar with the exact methodology banks use to facilitate loans, it could be a check, a promissory note or any other form of exchange. It could have been just a simple account ledger transfer , they already used ledger updates manually (the predecessor of wire transfer) back then.

You don't know but nevertheless insist (that's what your point boils down to) that with that paper you could buy stocks at the New York Stock Exchange without redeeming it at once (since otherwise your story of pumping up the stocks doesn't make sense)?

A bank could swap their printed $ for real $ from another bank. Or from the mint, hey i`m not a banker i dont know their exact methodology of getting liquidity back then.

They used to transfer money with carriages guarded by soldiers, that money could come from another bank, or from the mint ok.

Then your whole story doesn't hold and falls to pieces. You started with making claims that banks made unsecured loans with which the stock market got pumped up. But if these loans were immediately redeemed for real dollars (backed up by gold, if you didn't forget), then your assertion is false, and the stock market was actually pumped by real dollars (as the case had been)...
minerbit hill
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Re: Bitcoin or gold?
June 20, 2015, 05:56:19 PM
#691
Bitcoins are valuable in their own way.  IMHO Bitcoins are undervalued right now. my choose is Bitcoins
deisik
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Re: Bitcoin or gold?
June 20, 2015, 05:48:30 PM
#690
Quote from: RealBitcoin on June 20, 2015, 05:44:33 PM
Quote from: deisik on June 20, 2015, 05:40:11 PM

You didn't answer my question. I'm not asking about investment banks. I'm asking what was "simply a loan" back then, as you named it. Was it real X dollars or just a sheet of paper claiming to X dollars?

How should I know? I`m not familiar with the exact methodology banks use to facilitate loans, it could be a check, a promissory note or any other form of exchange. It could have been just a simple account ledger transfer , they already used ledger updates manually (the predecessor of wire transfer) back then.

You don't know but nevertheless insist (that's what your point boils down to) that with that paper you could buy stocks at the New York Stock Exchange without instantaneously redeeming it for real dollars (since otherwise your story of pumping up the stocks with loans doesn't make sense)?
RealBitcoin
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Re: Bitcoin or gold?
June 20, 2015, 05:44:33 PM
#689
Quote from: deisik on June 20, 2015, 05:40:11 PM

You didn't answer my question. I'm not asking about investment banks. I'm asking what was "simply a loan" back then, as you named it. Was it real X dollars or just a sheet of paper claiming to X dollars?

How should I know? I`m not familiar with the exact methodology banks use to facilitate loans, it could be a check, a promissory note or any other form of exchange. It could have been just a simple account ledger transfer , they already used ledger updates manually (the predecessor of wire transfer) back then.

 
dHe_zHiq
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I'm Just Try
Re: Bitcoin or gold?
June 20, 2015, 05:42:12 PM
#688
Quote from: ?? on ??
Quote from: deisik on June 20, 2015, 04:49:52 PM
Quote from: ?? on ??
Looks like i do a terrible job of explaining myself, but lets try again.

Banks dont keep 100% reserve => they can lend out money they dont have => other institutions can buy stocks with that money and until the stock market returns are bigger than the interest they have to paid, the scheme can work => if the bubble bursts eventually then the inflation created by the debt enters into the economy and moves prices up.

Stocks could only be bought with real dollars. If you still disagree with that, I would be happy to see some authoritative source claiming otherwise (and no, you are not the one). Namely, that the US stock market was pumped up in the 1920s with the paper notes emitted by private banks...

It's not emitted, nothing was minted there, it was simply a loan. Banks giving out loans from money they dont have, that is what it's happening.

http://www.econlib.org/library/Enc/FederalReserveSystem.html

They had 35-50% reserve rates in the 1920. So yes they could print up more than that,for 10$ of money, you have to buy 3$ worth of gold but you can print up other 7$ from air basically.

And that 7$ worth of printed money went directly into loans channeled into the stock market. Perhaps real estate, though it wasnt that big than it is now.

I just know if the money in the bank does not have a 100% guarantee, maybe that's why the exchange rate of a currency increasingly weakened ..
may need new policies or new innovations better
deisik
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Re: Bitcoin or gold?
June 20, 2015, 05:40:11 PM
#687
Quote from: RealBitcoin on June 20, 2015, 05:29:19 PM
Quote from: deisik on June 20, 2015, 05:15:55 PM
Quote from: ?? on ??
Quote from: deisik on June 20, 2015, 04:49:52 PM
Stocks could only be bought with real dollars. If you still disagree with that, I would be happy to see some authoritative source claiming otherwise (and no, you are not the one). Namely, that the US stock market was pumped up in the 1920s with the paper notes emitted by private banks...

It's not emitted, nothing was minted there, it was simply a loan. Banks giving out loans from money they dont have, that is what it's happening.

What is "simply a loan"? It is not something that you can get away with by just stating that. How could people buy stocks with such a loan back then?

Investment banks are allowed to buy anything from a loan. Thats the whole point of their existance, they do arbitrage between interest rate and asset returns.

You didn't answer my question. I'm not asking about investment banks. I'm asking what was "simply a loan" back then, as you named it, with which it was allegedly possible to buy stocks. Was it real X dollars or just a sheet of paper claiming to be X dollars, something like a promissory note to pay X dollars to some obscure bank?
RealBitcoin
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Re: Bitcoin or gold?
June 20, 2015, 05:29:19 PM
#686
Quote from: deisik on June 20, 2015, 05:15:55 PM
Quote from: ?? on ??
Quote from: deisik on June 20, 2015, 04:49:52 PM
Quote from: ?? on ??
Looks like i do a terrible job of explaining myself, but lets try again.

Banks dont keep 100% reserve => they can lend out money they dont have => other institutions can buy stocks with that money and until the stock market returns are bigger than the interest they have to paid, the scheme can work => if the bubble bursts eventually then the inflation created by the debt enters into the economy and moves prices up.

Stocks could only be bought with real dollars. If you still disagree with that, I would be happy to see some authoritative source claiming otherwise (and no, you are not the one). Namely, that the US stock market was pumped up in the 1920s with the paper notes emitted by private banks...

It's not emitted, nothing was minted there, it was simply a loan. Banks giving out loans from money they dont have, that is what it's happening.

What is "simply a loan"? It is not something that you can get away with by just stating that. How could people buy stocks with such a loan back then?

Investment banks are allowed to buy anything from a loan. Thats the whole point of their existance, they do arbitrage between interest rate and asset returns.

But back then it was way more profitable, thats why they call it old money, since back then there was a real industry, real manufacturing, now phony debt based economy, atleast not in the sense as it is now. And stock market made bigger returns now just from the pump but from real wealth being created.

Interest rates have contracted in the 1900's but it was between 3-4% between the 20's and 30's, they just borrowed that money and invested in stocks which made massive returns, now the 29 crash was obviously pumped back up quick:

http://www.macrotrends.net/1319/dow-jones-100-year-historical-chart
http://www.ritholtz.com/blog/wp-content/uploads/2013/01/Long-Term-Rates.png

And also you can see right after the 29 crash the interest rates dropped to help pump the bubble back. It's obvious!
deisik
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Re: Bitcoin or gold?
June 20, 2015, 05:15:55 PM
#685
Quote from: ?? on ??
Quote from: deisik on June 20, 2015, 04:49:52 PM
Quote from: ?? on ??
Looks like i do a terrible job of explaining myself, but lets try again.

Banks dont keep 100% reserve => they can lend out money they dont have => other institutions can buy stocks with that money and until the stock market returns are bigger than the interest they have to paid, the scheme can work => if the bubble bursts eventually then the inflation created by the debt enters into the economy and moves prices up.

Stocks could only be bought with real dollars. If you still disagree with that, I would be happy to see some authoritative source claiming otherwise (and no, you are not the one). Namely, that the US stock market was pumped up in the 1920s with the paper notes emitted by private banks...

It's not emitted, nothing was minted there, it was simply a loan. Banks giving out loans from money they dont have, that is what it's happening.

What is "simply a loan"? It is not something that you can get away with by just stating that. How could people buy stocks with such a "loan" back then? Do you really think that the New York Stock Exchange accepted some sheet of paper claiming to be X dollars instead of real X dollars as a means of payment?
deisik
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Re: Bitcoin or gold?
June 20, 2015, 04:49:52 PM
#684
Quote from: ?? on ??
Looks like i do a terrible job of explaining myself, but lets try again.

Banks dont keep 100% reserve => they can lend out money they dont have => other institutions can buy stocks with that money and until the stock market returns are bigger than the interest they have to paid, the scheme can work => if the bubble bursts eventually then the inflation created by the debt enters into the economy and moves prices up.

Stocks could only be bought with real dollars (which were 100% backed by gold till 1933). If you still disagree with that, I would be happy to see some authoritative source claiming otherwise (and no, you are not the one). Namely, that the US stock market was pumped up in the 1920s with the worthless paper notes emitted by private banks...
deisik
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Re: Bitcoin or gold?
June 20, 2015, 03:41:39 PM
#683
Quote from: ?? on ??
The individual banks don't "print" money, they just dont keep a 100% reserve, which also creates money out of air.

Okay, they didn't print money (though this is not what you were claiming previously), so how exactly did private banks "print money [whatever you mean by this] and pump up the stock market", and what does fractional reserve banking have to do with pumping up the stock market?

Quote from: ?? on ??
Both the 1929 crash and the German hyperinflation were connected. The crash was the result of money printing, when the bubble bursted, the money got out of the box and started raising prices.

As I said before, there was neither hyperinflation nor just inflation in the US after the Great Depression had started in 1929. The processes that went in the Weimar Republic in the early 1920s had nothing in common with those happening in the US in 1929 and thereafter. In fact, they were fundamentally antipodal...

Quote from: ?? on ??
Sorry i said too many snippets that were incoherent at first look, and the picture wasnt clear for you, now do you understand what I`m trying to explain?

I see that you are desperately trying to make the best of a bad bargain
deisik
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Re: Bitcoin or gold?
June 20, 2015, 03:06:49 PM
#682
Quote from: ?? on ??
Quote from: deisik on June 20, 2015, 02:02:30 PM
The stock market crash of 1929 was not because the US government had been printing money and pumping up the stock market with the newly printed money. Where did you get this idea from?

Who said anything here about the government, it was the individual private banks that were on fractional reserve since their inception in the 1600s.

And these individual private banks had been printing the US dollars that their clients pumped up the stock market with? Are you sure?

Quote from: ?? on ??
Quote from: deisik on June 20, 2015, 02:02:30 PM
I see that you are bitterly confusing some historical events. Back in the 1930s not only was there no hyperinflation but just inflation was not present. The CPI (Consumer Price Index) was at a level of 17.3 in September of 1929, and by March of 1933 it had fallen to a level of 12.6. This amounts to a deflation rate of 27% and an increase of 37% in the purchasing power of the US dollar...

I`m talking about the hyperinflation in Germany.

You said that "printing money and pumping up the stock market" was the reason behind the stock market crash of 1929. Later you said that "the stock market crash was the result of money printing, because otherwise it would have not created a hyperinflation". Now you pretend that you were talking about the hyperinflation in Germany, which had happened in the early 1920s (before the issuance of the Rentenmark in 1923)... How come?
TinEye
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Re: Bitcoin or gold?
June 20, 2015, 02:29:30 PM
#681
Quote from: MarkMJ on June 20, 2015, 01:54:09 PM
LoL
Both are important
I make more money via gold
BTC is also important but the problem is that I lose a lots in these days.

they are both pretty stable for now, you should not lose too much on both if you are trading with those asset, but i think with bitcoin it's more easy to lose yourself in all the scam, lending and everything about this, instead in gold there is only its trading aspect
deisik
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Re: Bitcoin or gold?
June 20, 2015, 02:02:30 PM
#680
Quote from: ?? on ??
Quote from: deisik on June 20, 2015, 09:50:58 AM
It was not me who raised the topic of the 1929 crash, but I can assure you the 1929 crash was not because of "money printing and pumping up the stock market" with the newly printed money. In fact, if government did actually print money (as you pretend it did), the consequences of the stock market crash wouldn't have been so dramatic and catastrophic...

The stock market crash of 1929 was just a trigger

Really? So you are saying print money to pump up the stock market and don't let it crash eh? It will crash in the next century but not this one...

The stock market crash of 1929 was not because the US government had been printing money and pumping up the stock market with the newly printed money. Where did you get this idea from?

Quote from: ?? on ??
The stock market crash was the result of money printing, because otherwise it would have not created a hyperinflation. Money doesnt evaporate, it only changes hands, if the a bubble burts the inflation flows back into the economy.

I see that you are bitterly confusing some historical events. Back in the 1930s not only was there no hyperinflation but just inflation was not present. The CPI (Consumer Price Index) was at a level of 17.3 in September of 1929, and by March of 1933 it had fallen to a level of 12.6. This amounts to a deflation rate of 27% and an increase of 37% in the purchasing power of the US dollar...
MarkMJ
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one for one and 1 2 3
Re: Bitcoin or gold?
June 20, 2015, 01:54:09 PM
#679
LoL
Both are important
I make more money via gold
BTC is also important but the problem is that I lose a lots in these days.
deisik
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Re: Bitcoin or gold?
June 20, 2015, 09:50:58 AM
#678
Quote from: ?? on ??
Quote from: deisik on June 20, 2015, 08:00:46 AM
Do you know the primary reason why the gold standard was almost universally abandoned? The same flaw behind gold standard failure will inexorably plague Bitcoin in the end, if it ever happens to get into mainstream...

Fundamentally, Bitcoin is not much better than gold

Hold on a second there wasnt a gold standard back then, it was 30%-50% gold , depending on country, or so, it wasnt 100%. So you could still print money and pump up the stock market, that was the reason behind the 1929 crash.

It was not me who raised the topic of the 1929 crash, but I can assure you the 1929 crash was not because of "money printing and pumping up the stock market" with the newly printed money. In fact, if government did actually print money (as you pretend it did), the consequences of the stock market crash wouldn't have been so dramatic and catastrophic...

The stock market crash of 1929 was just a trigger
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