Topic: Economic Devastation - page 45. (Read 504811 times)

What happens when you service your mortgage through payments? Your saying that its not paying anything off at all? Are you not removing money from circulation?

21 inc microchips into smartphones, ultra marketing advantage for mobile phone companies, they will adopt it fast.

Then mainstream people will mine bitcoins on their phones, not much a few satoshis maybe, however this increases demand for bitcoin because it exposes it's rarity to the mainstream.

Then price will skyrocket, 100-1000 satsohis that were minable by mainstream people will quickly be worth a fully time salary.

Then bitcoin becomes the de facto global reserve currency.

What is that?

Imagine we've entered the Knowledge Age and the rate of innovation is so exponentially more rapid due to freeing up the individual creativity (as I have explained exhaustively in the Economic Devastation thread due to the shift from fixed capital investment for economies-of-scale in physical manufacturing to empowerment of the individual, e.g. localized manufacturing with 3D printers or programming as a vocation, etc.), meaning that the stored money is worth much less in terms of opportunity cost (yet while still gaining purchasing power assuming debasement rate is small, 0, or negative[1]) thus if banks can't charge very high interest rates then their share of the economy is mathematically always shrinking. Yet if they charge very high interest rates, eventually no one can pay them because the money supply isn't expanded compounded at that rate.

So the only mathematical way for banks to remain viable in the Knowledge Age that I envision is taking form now, is for banks to issue their own debased unit of currency and charge very high interest rates. But they can't do this and have it denominated in a crypto-coin unit they don't control the debasement of, without going bankrupt during busts (bank runs), because their central bank can't print money to bail them out.

Therefor, banks must be able to control the money supply in the Knowledge Age else they are going extinct.

The Industrial Age system is reverting to totalitarianism trying to avoid its inevitable extinction. Find a way to stand clear of the scorched earth the old will burn down with it as it goes away. Unfortunately the common poeple are caught up in the old and even cheering it on similar to the Luddites (e.g. those who think Big T is not a false flag and who want to hang on to their Babylon creations such as the "EU to end all wars"). Hopefully someone will find a way to get crypto-currency working in micro-transactions to billions of users pronto, so the Industrial Age will just crumble away like the Berlin wall.


[1] Negative debasement is very likely with crypto-currencies such as Bitcoin which target a constant money supply since users lose their passwords and there is no way for the system to know this (unless coins are forfeited if not spent or if instead the money supply is kept constant relative to money velocity and in the latter case you wouldn't need to reward the debasement to miners necessary and could instead pay it to every coin address in the UTXO).

(2):




PS: Soon...

Fun facts:
1. Debt kills more people each year than ISIS, cancer, and the so-called ''natural causes" combined.
2. Fiat money is debt. Debt (fiat "money") is printed out of thin air.

I wish it were so, but no! The amount of work done does not do anything to extinguish debt! Debt (in a fiat economy) is a mathematical construction that is unsustainable because the amount of work done, does not add the medium of extinguishing debt to the economy. In fact nothing adds to the medium, in an even bigger fact such a medium does not even exist! 

In a resource-based economy with for instance gold as the accepted payment medium, work could add to the quantity of gold in existence, so there was some connect between debt and real world.

In practice debt is always unsustainable, the main mechanism being that the most productive members don't use it, for which reason others are lured to thinking they can service the debt as they don't understand their productivity is not high enough. Debt is also a main tool for enslavement and control in many levels (personal, government, everything in between).

Debt is destroyed when real work is translated into payment of that debt, the problem is that debt is being created faster than real work is being done, it only will work if work atleast equals creation of debt, as anything else is not sustainable.

Yes thats correct some middle east related banks work around credit and interest by guaranteeing to buy back your holding of Palladium for example at a higher worth then you deposited it with them.   I guess that works though Palladium is related to car exhausts and so subject to industrial demand and speculation, Im sure the price can fall but maybe its assumed over long term its a superior form of asset holding.  Certainly vs sub prime debt as tier 1 core holding the banks failed spectacularly in comparsion and I think alot of Asian banks also did well to opt out of this Washington DC influenced thinking - sub prime was of course largely subject to USA politics and government schemes even while traded abroad


Credit from capital works by default when any bank has fractional reserves.    Its a form of monetary creation in an economy (also destruction with default and bankruptcy so I guess this is the key to its balance?).   I agree its far beyond that when the central bank just 'invents' money based on their relationship to government and sole licensing of national currency.  In that case it seems like fraud, a failure to account properly but it works if nobody calls back their capital I guess; any gap can be met with leverage

CoinCube, you should recognize clearly that the solution to your enumerated list is a crypto-currency which is distributed in minute amounts to all citizens of the world. And which is not obtained through exchanges.

Once that is circulating and used in a myriad of popular activities on the internet, the elite can no longer stop it.

And this is precisely what I am preparing to launch.

Never let a good crisis go to waste.

Jamie Diamon (JPMorgan chairman) says that bitcoin will be stopped and Axel Weber (UBS chairman) says Bitcoin has no future.
http://www.financemagnates.com/cryptocurrency/news/jpmorgans-jamie-dimon-bitcoin-will-be-stopped/
http://www.cityam.com/228544/bitcoin-has-no-future-says-ubs-chairman-axel-weber-at-bank-of-englands-open-forum

What this means is that the banking elite have decided that cryptocurrency is a threat and that they will use their control of government to suppress that threat. It is no coincidence that you suddenly see talks of a crackdown less then a month after powerful bankers make public denunciations.

Bitcoin will be corralled and the exchanges increasingly brought under regulation and control. This will allow systemic de-anonymization. Virtual currencies resistant to de-anonymization will be outlawed entirely and their use made illegal. Tax laws will be harshly enforced and excess regulatory requirements created making transactions in cryptocurrencies more costly than fiat. The pressure will be deliberately and continuously ratcheted up depressing both growth and adoption of crypto. The near term future will be dominated by electronic centralized fiat probably SDRs and all competitors can expect to be actively suppressed.

All of this is to be expected. Expectations Bitcoin rising exponentially are in my opinion optimistic. Although very large short term gains are possible and even likely between now and when government pressure is applied in earnest a crackdown is inevitable. The interesting question is what happens after the crackdown. Worldwide SDR fiat will buy time maybe even a generation or two of kicking the can but it will eventually fail for the very reasons our current nation-state fiat system is failing.

For bitcoin to reach the lofty heights so many here dream of I believe the following conditions must be met.

1) Bitcoin must maintain enough decentralization over time to avoid outright government seizure. The more centralized bitcoin becomes the more vulnerable it becomes to an attack by centralized interest. In the immediate future governments will likely settle for suppression via de-anonymization, costly regulations, and taxation. Should bitcoin become centralized enough to allow the network to be taken over by a few court orders and a handful of police you can be confident that those court orders will materialize.

2) Everyone buying or mining bitcoins right now must die of old age. The volatility inherent in having massive sums of bitcoin in the hands of a so few gives bitcoin aspects of a pyriamid structure. This structure has been useful in motivating individuals to spread bitcoin and is in fact instrumental in bitcoins success. However, it is also a determent to confidence and long term investment. As early investors and their descendants die off the pyramid structure will progressively fade away. As coins become increasingly distributed over time the problem will fade.  

3) Bitcoin must maintain technological relevance. Powerful competitors to bitcoin will arise. Such competitors will not only need to overcome bitcoin's network effects but they will also need to maintain decentralization over time. Probably the biggest advantage of the current bitcoin distribution is the huge amounts of bitcoins that have been mined by a technologically savvy and very libertarian leaning population. This gives the community an inherent resistance to centralization that is likely to be far stronger than that of any future competitor.

I have seen many argue that bitcoin will either going to "the moon" or going to zero over the next few years. Personally I expect a very different outcome. I believe we are in for a short (few years) of bull run followed by a prolonged and sustained multi decade stagnate market as bitcoin is actively and successfully suppressed. Only as the yet to be born worldwide SDR fiat regime starts to crumble will bitcoin have a chance to reach "the moon".  

European Union countries plan a crackdown on virtual currencies and anonymous payments made online and via pre-paid cards in a bid to tackle terrorism financing after the Paris attacks, a draft document seen by Reuters said.

EU interior and justice ministers will gather in Brussels on Friday for a crisis meeting called after the Paris carnage of last weekend.

They will urge the European Commission, the EU executive arm, to propose measures to "strengthen controls of non-banking payment methods such as electronic/anonymous payments and virtual currencies and transfers of gold, precious metals, by pre-paid cards," draft conclusions of the meeting said.

Bitcoin is the most common virtual currency and is used as a vehicle for moving money around the world quickly and anonymously via the web without the need for third-party verification.

Electronic anonymous payments can be made also with pre-paid debit cards purchased in stores as gift cards.

EU ministers also plan "to curb more effectively the illicit trade in cultural goods," the draft document said.

(Reporting by Francesco Guarascio)

http://www.reuters.com/article/2015/11/19/us-france-shoooting-eu-terrorism-funding-idUSKCN0T81BW20151119

On another topic, I suggest to Armstrong that instead of reforming the Central Banks, let's eliminate them entirely with decentralized money emphasizing money that rapidly loses value if not constantly recycled, rather than money that sits and earns a fixed ROI (usury and NAV computations on fixed capital investment). Backstopping bank failures was critically important during the high fixed capital infrastructure Agricultural and Industrial (but not in the tribal Stone) Ages because the economy was hinged on power law driven centralization of capital. As I have explained exhaustively in this thread, I expect the fledgling Knowledge Age changes the model of the economy from fixed capital (and thus usury) to a bottom-up knowledge generation capital structure.

http://www.armstrongeconomics.com/archives/39342


If energy becomes many orders-of-magnitude less expensive, this would further reduce the value of storing monetary representations of capital because the knowledge generation capital would be increasing (circulating) too fast:

http://www.armstrongeconomics.com/archives/39461

price tanked to 100$s don't spank me daddy pls

Hmm this is your "666" th  post on the forum, it symbolizes the situation very well

This is devil economics, and negative rates are not an option, they are an inevitability.

And in the US, Yellen says negative rates are an option if things worsen. Globally, Joe Public is going to pay for everything one way or the other.

Idk i kinda have mixed feelings about this. I dont like overtaxation, however in this case I have to admit Russia did a good job.

Why? It's because the elite are "socialists", they want to redistribute your wealth, but not their own, they will just hide their money and not pay a single % tax.

http://www.armstrongeconomics.com/archives/38849

I have no idea how they work.

I am pro credit, dont get me wrong, but only credit from capital.

But i`m anti printed money credit, which is an euphemism of population robbery. Because you steal from the population via inflation , and then loan that back at an interest to them, its an obvious theft.

Perhaps not a good example, but don't Islamic banks run on a non-fractional system?

Anyway, again I disagree with you- credit and loans have always existed (at least where allowed and not held back by religious dogma) Credit is part of the free market. It just needs to be divorced from parasitical fascist entities like the state and corporations.