Topic: USD inflation affect on BTC? (Read 6930 times)

Bullets will be the next currency! Metro 2033!

Gotta stay ahead of the curve:
http://www.ammonow.com/

Oh lord, what have I started...

Does anyone know a good chart for tracking bullet prices? Interested to see if the Mayan calendar crap has been priced in yet. Might be a good time to buy.

Which would also mean that the gold will buy less bullets, just like I said before.

Depending on the nature of the apocalypse, gold may be readily available.

After the apocalypse, your bullets would buy more gold, most likely. (As was pointed out to me, above.)

Perhaps you could say your bullets will buy less gold?

I would like to see how that bet could be settled without the internet to provide proof-of-contract.

And you can't eat gold... Chocolate might well buy more bullets than a Krugerrand, but you get my point.

That is not exactly true. When the apocalypse hits, the supply of bullets will go down and the demand will go up, so your gold will buy less bullets.

And making a political point. A hat trick.

 

that guys is getting people to sort coins for him and buying them at a bargain

genius!

...Sell? Why would I want to do that?

tsk, tsk... you're fixated on price. price ≠ value.
I counter that image with this one:

I do believe there is something of a bubble in gold right now. Possibly an opportunity will be around the corner. Expect to hear a lot of wailing. Though it's quite possible that any bubble will get caught up by the decreasing value of the dollar and never burst.

your probably holding the physical gold your self.
were do you go to sell that?
drive 30mins to a shop, and get Spot-5%  

gold is stable?

really?

Indeed, if you're buying gold to speculate, that's pretty much the plan. If, like me you're buying gold as a store of value, there's less to worry about. Gold's value is pretty much stable. Everyone knows how much it's worth, and a Krugerrand is going to buy the same number of bullets today as it is after the apocalypse.

As for Bitcoin, This pretty much says it all. Bitcoin (or failing that, it's successors) is bound to increase in value, for the simple reason that it's a better system.

scary story!

This.  and i ask you, who else besides me have you heard talking about deflation?  literally everyone, and i mean everyone, thinks inflation is inevitable. 

in other words, when everyone's already bought, who else is there to buy?

Deflation could really fuck shit up.
if it starts to happen no doubt the government will step in and start printing dollars like fucking crazy to promote lending / spending.
long term effects of this YOYO game they are playing can't be good...
people are going lose their homes and shortly after prices for food and EVERYTHING will rocket  


I believe in BTC because its not imaginary like the USD

<- only now starting to understand....

very, very good.

i have a hard time believing that...
to me gold created a "fear inflation" bubble
selling gold at the top, and then having deflation rise the value of your $, is too good an offer to pass up.

Bitcoin on the other hand ( with the market so new, there is still room for Massive growth ) will continue to rise.

Bitcoin was never about protecting your money, its been about replacing the broken system, with honest money. a powerful mission, sure to gain support as the $ goes nuts.

Can you give an estimate of how long this period would be?

i won't argue with that.  but i think Bitcoin has a good chance to go up thru this period of deflation.  that's whats so intriguing...

Gold (and to a lesser extent, silver - more volatile market) will retain value even as the price drops.

Close, I live off the island.

I thought dude lived in Montreal....

http://www.cbc.ca/news/canada/british-columbia/story/2012/09/20/bc-housing-bubble-garth-turner.html

wrong:  http://www.theprovince.com/business/Vancouver+buyer+market+home+sales+prices+fall/7557885/story.html#axzz2CVJgE9XA

nope, but i did hear housing prices in my area are sure to go up in the next few years.

have u heard what's happening to Vancouver real estate?

LOL!  are u kidding me?  ALL countries have done this with the most notable problem child being Spain.

there'a at least 182 pages of my gold thread where i voice my opinion on this. 

the US went ape shit crazy and gave away mortgages to anyone, ( all thanks to the golden boy? )

Canada didn't do this.

I'm sure most countries are fine, and mortgages are not in a bubble ...

Ok so think about this...

gold and silver has been betting the USD would go continue to go down and recently have been scaring people into buying gold and silver , saying the USD would drop to 0  .

what will happen to gold and silver if deflation sets in?  

Housing is still way over-priced in my opinion. Perhaps not dangerously so any more but enough, potentially, to cause some problems down the road.

Ben is pissing into an actively flushing toilet of destructing debt.  he'll never fill up the bowl.  plus, he's just a little wimp/pimp with a small bladder and appendage anyways.  how anybody thinks he owns a White Horse is beyond me.

so why do i think Bitcoin rises in this scenario?  wouldn't i think it would drop as well since i think gold and silver drops?  no.  its b/c we need a better system and Bitcoin offers that.  its also born of the Internet which is a big reason why all this is happening in the first place.  Bitcoin is just a baby at this point and is destined to become Godzilla.

6.5 million is nothing, no effect?

its one huge pyramid scheme originating with the USD.  being the world's reserve currency, USD's form the base and reserves of every countries individual fiat currency.  most foreign debt is denominated in USD's.  we're one big interconnected economy.  no such thing as decoupling.  Triffin's Dilemma.

Alas, Bitcoin doesn't appear to be among their payment options.

some of it has but the majority has been shifted to the Fed being bought by the $2.8B of fresh FRN's printed by the Fed.  problem is, total private debt in this country totals north of $52T, that's TRILLION:  http://en.wikipedia.org/wiki/Economy_of_the_United_States

this debt is now an obligation of the taxpayer.  this dynamic has played out all over the world esp. in Europe.  no wonder the Greeks can't pay.

So what effect do you think these guys will have:
http://rollingjubilee.org/

Given that they're buying up debt and then destroying it?

k but wouldn't Greeks defaults effect the EUR not USD

why do u think the ECB and Fed are so desperately trying to prevent Greece and subprime borrowers from defaulting?  why do u think dead beat homeowners are being allowed to stay in their homes at NO COST.  b/c the banks don't want to write off the mortgages aka debt destruction of the asset side of their balance sheets aka known as negative equity or BK.  the Greeks and subprime borrowers know how to play the game.

and you think we'll see more defaults pushing the USD up, but hasn't the mortgage bubble popped already?

absolutely

when people default on their mortgage, it destroys depth, and reduces the money supply?

i remember selling a condo for $845K that we lived in for 2 yr from 2002-4 while we were remodeling our home.  i bought it for $525K using leverage of course.  at that time it was fashionable to get an appraisal as a seller to prove to a buyer how much the home, or condo in this case, was worth.  my bank came back with an appraised value of $750K iirc based on comps.  i promptly called my bank rep and complained that it should be re-appraised for my $850K asking price.  i said that there were several other condos around me listing for around $850K and that given recent price trajectories that was a very reasonable price.  i don't think it hurt that i threw in a comment about how a depositor of my caliber ought to be treated more nicely.  within 6h i had my new appraisal.  

point being, everyone involved in the game had a vested interest to inflate prices to the maximum possible.  even if it did stretch the rules.  its my contention that we have reached the peak of that game and that everything is going to reverse.  the USD has been dropping for 100 yrs, perhaps it can rise now for several years?

not one of you has mentioned the importance of debt.  i'm not sure if it's a generational thing or what with you guys.  perhaps its b/c none of you have ever bought real estate?  i don't know but having gone thru the process a half dozen times or so really makes one realize its importance.

you have to understand the enormity of the mortgage industry machine that existed for over 4 decades in this country.  the banksters made it so easy to qualify for just about anyone.  you could buy and flip a property in about a month if you knew what you were doing and you could make great money doing it.  the last property i flipped for a $45K profit was a condo in 2007 approximately.    all i did was change out all the doorknobs, toilets, and paint.  and i was probably one of the last to get in on that party.  prices were rising so fast you just knew it was going to all blow up but it was so easy to think the party would continue as it had for the previous several decades.  afterall, Ben said it was sustainable right?

i think that condo cost me around $645K and i sold it for $695K, maybe $5K in fees.  i could've paid cash for it but i didn't.  why?  b/c it was fashionable, and economically prudent to leverage those buys.  the thinking went that for a mere $20K or whatever, you could get a loan for the rest and get control of the property.  thus, if you had say $100K in cash you could do this 5x with 5 different condos thus magnifying the gains.  $45K x 5 = $225K in profits.  there were whole books written on this process.  now to say i could've paid cash put me in a distinct minority.  MOST flippers were secretaries or garbage men flipping on the side.  they had to borrow to make this happen.  stories abounded about secretaries who made themselves into millionaires (ignoring the fact that they had millions in debt too) using the "magic" of leverage.  it is mind boggling how much residential and commercial debt was built up worldwide.  and it still exists.  this is why any good definition of the money supply has to include not just the $2.8B in FRN's but the total amount of debt.

and then there was all the leverage that pyramided off the mortgage industry; mortgage derivatives, ARS's, CDS's, PIK's, ABS's.  other investors used the easy loans to buy stocks, bonds, commodities, GOLD, SILVER, etc.  i remember at the peak in 2007 reading about private equity firms making buyout deals almost daily involving billions in borrowed money.  new 3 letter acronyms of fancy new debt instruments were popping up everywhere as Wall St kept inventing new investment schemes for hyped up bulltard speculators leveraging up to grab every asset they could get their hands on as it was common wisdom that the USD was doomed to keep going down from all this debt money issuance.  and then it popped.

i went short stocks in Sept 2007 most notably in New Century Financial on a tip from Marc Faber's newsletter.  i thought i made a killing on that short when it went from $37 to $23 when i covered.  i could not believe how much and how fast it fell.  it promptly went to $0 and i almost kicked my door down.  i went uber crazy shorting a boatload of mortgage exposed companies like Countrywide, Wachovia, Downey Savings and Loan, Bear Stearns, Lehman, and Merrill.  2007-2009 was an extraordinary time of severe debt destruction.  during which the USD and UST's skyrocketed.

and then Ben stepped in with QE and the market turned at the bottom of the 4yr cycle.  let's not forget all the extraordinary measures he tried for the previous 2 yrs to try and prevent what was inevitable.  it is my contention that Ben and Obama got lucky; they just happened to be around to catch the bottom of that cycle.  certainly the money printing of QE has helped us reflate but that ability to stimulate has run out.  we never cleared all the bad debt and it fact have made it worse.  the debt destruction is outpacing the money printing and that is why the USD is rising.  and it will get worse.  we are on the verge of either Greece or Germany pulling out of the union.  the subprime borrowers of US real estate have been replaced by the subprime borrowers of sovereign nations.  they will default.  and when they do the debt destruction will domino just like it did here in the US forcing up the value of the remaining USD's in circulation.

yeah, i was travelling. 

admit it; it just rolls off your tongue.

*golf clap*

I thought they had their own currency already -- EBT.

Oh SNAP.

Isn't Walmart considering thier own currency? The mart?

It's been that way for a long time. It's one of the more pernicious examples of statist doublespeak.

lol. it has glitter scattered on them... oh its legit now

the only people that i personaly know that see the value of btc are the people who understand the fraud thats going on. the value will increase as more people understand and learn the world we live in.

I'd like to see mickey mouse snort a line of glitter!

Well, that and the glitter, instead of cocaine.

Well not exactly.  The FED expansion or contraction of the money supply can be completely independent of the deficit of the govt.

When the Federal govt has an imbalance (receipts < projected outlays) it issues debt just like any company or person does.  People, companies and countries purchase the bonds and pay for them in Federal Reserve Notes such that Federal Receipts + Funds from Debt Sales = Current Outlays.

The US govt can issue all the debt it wants (or issue no debt at all) and it doesn't require changing the money supply a single penny.  The Federal reserve is a private cartel of banks who changes the money supply for the stated goal of "controlling inflation" and "maximizing economic output".  Those goal (IMHO) are dubious but they exist and the FED will expand or tighten as needed regardless of what the federal govt does.

TL/DR: The federal reserve is a private cartel of corporations and just about as federal as federal express. The only difference between federal reserve notes and disney dollars if the former is issued by corporations who has the forsight to get the Congress to bestow it wil rights as legal tender.

next year: "We managed to push the 4th derivative of government debt below zero!!! debt''''(t_now) < 0 !"

Actually it could. Suppose the theoretical case where the fiscal cliff result in a balanced, if not positive, budget. Then the FED could stop printing.
But yeah, not going to happen. There might be some tax increase/cut spending, but not as much as people think.

Fair point, and I agree with you that when Bitcoin's value does finally converge, it will be much higher than it is now.

There's no reason for the FED to stop, or even slow printing of new dollars, "fiscal cliff" or no, though, so I think we can count on it's price in fiat continuing rise, too.

Thanks D&T, you got my point.

And regarding BTC value, yep I think it'll go up (and I know the difference between price and value).

At the moment, most people don't know about BTC, so to them we could say that the value they attach to BTC is null. Still a lot of people don't understand it, thus they think it's a bad idea, and that their value is also null. With time (hopefully), more and more people will discover BTC and understand it, find it valuable, thus to them, the value they attach to it will increase.
Now imagine a kind of "global" value, ie the market value. This is the one which is reflected in the price. This is a function of the opinion of every actor in "The Market". This is not a constant, and it's increasing.

The fact that gold's value appear to be nearly constant just mean that it had time to converge (ie roughly everybody knows it, and their opinion on it's value is kinda constant). But "nearly constant" is an overreach. For example, gold's price went up 5 folds in the last 10 years. Fortunately it doesn't mean that USD value went down 80% in the same timeperiod. Everything is not about the dollar. It's about the value of everything compared to the value of everything else.

I love how "cut" has been redefined to mean "reduced increase."

His point was the fiscal cliff involves tax increases and spending cuts.  There is nothing in the "fiscal cliff" which would result in increased printing.  The FED may (continue to) increase printing but that has nothing to do with the fiscal cliff.

The value of BTC will stay roughly equal. Just like Gold. Back in the day, a gold coin would get you a nice toga, some sandals, and a high-quality bag to put your stuff in. Nowadays, selling a gold piece will net you enough cash for a nice suit, quality shoes, and a briefcase. Don't confuse the number after the $ for a value. It's a price. As the supply of the dollar skyrockets, the price of BTC, denominated in dollars will necessarily rise.

As has been noted, the only way for BTC value to rise is if there's greater demand.

Not saying the FED will stop printing anytime soon, but are you implying that since the US gov will increase tax revenue, they'll have to borrow more ? Sound logical to you ?
And yes, there's some (inverse) correlation between USD and BTC, but clearly USD value won't be the reason why BTC will go to the moon (ultimately)

-10 minutes. Ben got into bitcoin

How long do you think it will take to see this effect? How far will bitcoin price trail inflation?

It's just a supply and demand thing. If the supply of USD rises, then their price (in bitcoins) falls.

Ceteris paribus, the more USD available, the higher the BTC price.

He's travelling and likely hasn't seen the thread yet.

Weird. At this point usually cypherdoc jumps in and posts something about the daaash for digital caaash.

If 1 bitcoin will buy 1 gram of weed (on silk road), it does not matter what the price of USD is. If they print a bunch of USD, but the supply and demand of bitcoins and weed remain steady, then 1 bitcoin will still but one gram of weed, but that bitcoin will buy more dollars than before. So the USD inflation does not have any afect on BTC, but the USD/BTC rate will go up.

Taking a different view, if the USD starts going into faster inflation, then more people will start looking for places to put their money that are not subject to the inflation, so more people will want to put their savings into bitcoins. This will raise the value of bitcoins (maybe 1 bitcoin will then buy 2 grams of weed, or 10 grams of weed).

you have to believe that ONE DAY, this retarded system is going to be replaced.... i mean its build in such a way that make its doom inevitable. the rich know this... they are buying up assets, and banking on gold and silver (why do you think they have been shooting up for the past 10 years, why do you think china built ghost cities and bought 1 bazillion pounds of copper  )

gold and silver wont pan out as well as they planed... why? Because Bitcoin  

Aside from the fact that he probably never actually said that, You're dead right. Whether he said it or not, it's certainly the way things work.

Except every other central bank is trying to do the same thing.  I mean it is zero sum.   Manipulating currency doesn't generate wealth.  Increased productivity produces wealth.  All these central bank games do is rearrange the slices of the pie, usually to the benefit of the ultra rich (forget 1% more like 0.0001%) at the expense of the entire rest of the planet.   Parasitic class for the win.  Remember "money" is simply an accounting system.  If inflation is causing you to "lose" (harder to make ends meet, erodes your savings, etc) then it is causing someone else to "win".

"Give me control of a nation's money and I care not who makes the laws."
- Mayer Amschel Rothschild

So the strategy is to have USD inflation happen slower than the other currencies, so that purchasing USD seems like a good idea, then print that money and leverage the demand to try to keep a stable value? I guess when you are running from a lion, you only have to worry about staying ahead of the slowest companion.

I just heard on CapitalAccount that the FED hasn't expanded it's balance sheet for the last 2 months (despite deciding QE3). Is that true?

If US inflates 5% and the EU central bank inflates 5% then everything else being equal the exchange rate shouldn't change.
If the US hyperinflates 50% and the EU central bank hyperinflates 50% then everything else being equal the exchange rate shouldn't change.

However you can't (at least yet) hyperinflate the gold supply (or the corn supply, or the oil supply, etc) so when failing central banks try to out compete each other in "inflation wars" the effect will be seen in the prices of commodities not in inter-currency exchange rates.

My extremely amateur short term forecast for BTC is UP.
This is based slightly on the topic at hand, but also on the 8/18 EMAs crossing on the 12-hour chart (whatever THAT means)

exactly. the fiat currencies of the west are fighting each other on a sinking ship.

Holding everything else equal, inflation in traditional currencies should directly increase the value of BTC.  A secondary effect of increased BTC demand will also lead to a more favorable exchange rate from BTC to traditional currencies.  That is, if more people who perceive that bitcoins  retain value better want in on the action, then they will compete with each other to get BTC, which drives up the exchange premium.

I agree, but it does indicate relative strength of various fiat currencies, which was the topic we were discussing.  As always, thanks for your contribution smoothie .

DXY is based on other fiat. Horrible indicator as far as strength of a medium of exchange when all central banks are printing to infinity.

that's why!
i just look at CAD/USD....
and it looked like the USD was recovering, but your saying CAD is being inflated as well 


thanks.

Indeed.  DXY is above 80 and climbing.  Dollar supply may be inflating, but nominal value (measured in other currencies) is gaining because everyone else is inflating their money supply too.

lol

i think for ever point the USD goes down bitcoin gains 2 points  

it should be noted that the USD is still holding up pretty damn good despite QE3

So if the US economy has to print more $$$ to deal with this fiscal cliff I've been reading about in the news will the inflation of the USD cause an increase in BTC price? Or are BTCs relatively pegged to USD?