Topic: Japanese Economy Collapsing - effect on MtGox (Read 1858 times)

Agreement that we disagree based on having different conclusions to similar observations is the spice of life, good sir. My blue sky may not actually appear the same as yours. As long as we can agree on the undeniable scientific facts that govern the viewing of and the color of the sky, it is perfectly acceptable to have our agreement end there

/highjack

By "far term" you mean the Keynesian "long term" in which we are all dead.  

I know where you are coming from but I don't agree with it.  Feel free to tell me you disagree and we can stop hijacking the thread.

Lol. Don't even sweat it, big guy... I looked at your post history. You are a very active trader and a firm believer in and student of "traditional" market movement and economic thought. That's okay, you don't have to buy into or understand any of the underlying libertarian fundamentals. We need your kind too, if for nothing other than to add liquidity.

This also means that you can be quite profitable with Japanese ETFs for a good while. In the far term you may be surprised what happens, but I bet you'll have caught on before then. This just caught me off guard by popping up in the "economics" board.

No it doesn't.  The UK and US have been printing money for years and inflation is lower than the bond rate.  Take a moment to read up on what happens to large economies when they hit the zero lower bound as most G7 economies have over the last few years.

This must be one of the funniest things I have ever read on a Bitcoin forum. I read this three times to make sure I didn't hallucinate or miss some sarcasm somewhere.

Printing money causes inflation. In the US the Fed targets a +2% inflation rate. Until the new Japanese administration under Abe-san, the JPY had held a pretty constant -2 or even -3% "inflation" rate, also known as deflation. Deflationary currencies mean that if you put the money under your mattress, when you pull it back out, it will have a greater purchasing power than when you placed it there. The USD has been inflationary, deliberately and opaquely so, for a very long time now, tweaked all over the board to maintain the illusion of stability. This and similar behavior in other countries is what led to the creation of our beloved Bitcoin.

Abe-san's first action was to implement a policy based on the US one, and print money in order to peg the rate to a +2% rate of inflation. The argument can be made that this benefits the economy by enabling companies and large traders of exported manufactured goods, and that it doesn't hurt individuals because prices are all relative for them. I do not believe it is this simple; I have a theory that there is a cultural rot that sets in with a system of incentivized spending and disincentivized saving that ultimately enables credit abuse and a demand for nothing less than instantaneous gratification, which has not yet invaded Japanese culture in the slightest. They are a pragmatic, frugal, and patient nation, culturally. This is demonstrated by just about every aspect of their society. Time will tell whether this change will have cultural effects.

One of the most basic principles of Bitcoin is that it is deflationary by design, and predictably so mathematically. Why are you even here?

+1

I'm invested in a Japanese ETF (based in US dollars so not yen inflated) and it has done tremendously during the past several months. Check out ticker symbol EWJ

Japan is finally leaving its daft policies behind and printing money to defeat inflation.  Of all the global economies, the Japanese is one of the safest right now.

I commented about this with the same though elsewhere, but Inflation in Japan, makes MtGox an asset as it brings in USD and the BTC price will increase faster than Japan inflation, so it would be a strategic asset.

So it would be in the governments best interest to keep it alive as Japans exports suffer, exporting BTC for USD is a net benefit to the Japanese economy.

Indeed the current "currency" exchange-value of the Bitcoin funded credit swap "money" is halfway between the value of the Euro and the USD at the x100 multiple. It will likely stabilize here until all the S really HTF (in 10 minutes, tomorrow, next week or in the next few months).

Then it would be most economical for the sake of liquidity-throughput on exchanges to move up to the x1000 multiple, as/while everybody is rushing for the exits.  This forecast presumes a more modest (liberal) single decimal point inflation/devaluation of Euro/USD in the face of a global bond collapse, but a more "austere", conservative double decimal point hyperinflation/hyperdevaluation could be more like what's really in the more-like "Weimar Republic" offing here...

Remember everybody, the last thing you want to be is a "seller" of anything (that's non-essential) in a depression.

Highly disagree.  The only thing that makes bitcoin worth anything right now is how easy it can be converted to fiat.  I would definitely not be involved if the exchange system wasn't so relatively easy.  The better it gets, the more valuable bitcoin becomes. 

The day when bitcoin isn't valued in USD will come eventually, but now isn't the time.

I don't think that MtGox financial performance is related to Japanese economy performance. It's related only to a degree of what percent of their customers are from Japan.

Think of IKEA. They're from Sweden, but only tiny percent of their sales comes from Sweden. Would Swedish economy collapse have much impact on IKEA? It wouldn't do much harm to them, as most of their customers and most of their suppliers are from abroad. It's the same with MtGox.

The only reason MtGox dying would have a lasting negative impact on BTC is that the other exchanges couldn't handle the trade (I'm looking at YOU BTCe). They'd be keeping people waiting days for inter-exchange transactions which should take an hour.

We need a new, robust exchange funded perhaps by the Bitcoin elite. We need redundancy, NYSE-strength DDoS protection, staffed by professionals with important announcements made on a more serious platform than Facebook and with customer service staff who speak the major languages well.

Summer project anyone?

Is your evidence that the Japanese economy is truly collapsing from the same source of evidence that states the US economy is booming by virtue of the resurgence of subprime lending and the DOW hitting 15K?

...or phrased differently, [citation needed]

People rely on MT.GOX too much, time to start getting serious about adopting Bitcoins like the Germans are

Everytime MTGox goes down for more then 10 minutes we have panic selling and people jumping out of windows.  If they went away permanently because they failed somehow?  Yea that would put a dent in things.

thinking the same thing. we'll hurt for a bit but surely something will come along (maybe those guys working on a decentralized exchange will start coming out of the woodwork).

Actually it might be the best thing for cryptocoins. People might actually start using them to buy and sell stuff with, without needing to give a rat's ass how many fiat tokens they can be exchanged for.

It is scary to think that if Mt.Gox falls, it all comes tumbling down.

I was thinking about the effects of macroeconomics to MtGox, and its impact in bitcoins considering that it is still the only reference for its value in fiat currency.