We have a GDP that is largely fraudulent... with as much as half of it directed, controlled or be-muddled by government, rendering it unfit for human consumption.
Bill's intriguing remarks make me wonder about wealth.
I've always contended wealth is something that must be made by man using scarce resources; capitalism is the name for the process, and money conveys the value for whatever was produced and sold.
Wither crypto? No scarce resources are required to make a crypto; just some key strokes and a cute name. Its initial value is declared by its creator and it on-going value determined by demand. There's no there there, but it's all the rage.
The only way I can rationalize crypto is treating it as a form of volatile currency storage: with money, you buy crypto whose value fluctuates sometimes wildly and, at some point in the future, you use it to acquire wealth
Gold will be here in 1,000 years, crypto won’t. In the meantime, crypto takes electricity to create, and maintain. So it’s not something from nothing, but arguably worse: it’s nothing from something!
That said, I still think it’s worth owning a little - 1% as the BPR team suggests - for the novelty of it. As I’ve mentioned before, one novel feature is that you can wash ashore, naked and penniless, almost anywhere in the world, and still have total access and control over potentially millions of dollars, with nothing more than a memorized password. No banks needed. Hope I never need that, but I’m here for the spectacle if I do!
In Australia we have Bitcoin "ATMs"in shopping malls, I assume it's the same elsewhere. Have a look at one. You can put cash in but you can't take it out. Says it all in my opinion. And ATM is very much a misnomer.
"Bitcoin ATMs are a way to get immediate access to cash using your bitcoins. Bitcoin ATMs do not operate like traditional ATMs. In order to make a cash withdrawal and sell your Bitcoin from the ATM, the machine provides a QR code to which you send your Bitcoin. You simply wait a couple of minutes and receive your cash."
Coming from a mathematician's perspective I agree 100% with Bill's team's analysis but I've been thinking and acting along this line of reasoning for 30 years and I feel almost completely alone. Now I'm not complaining about my performance financially: I have 3 homes plenty of spending money while retired. I suppose that's why I like the reasoning behind valuations based upon gold i.e. it makes mathematical sense to me. BUT I've been waiting for 25 years for all this credit to collapse, for reality in money. That's a damn long time to wait for everyone else to come around to my thinking. That's a damn long time for all these economic geniuses to arrive at my and Bill's logic. Kinda makes me wonder if I'm correct.
They will never come around to your way of thinking. They don’t think like you do and never will. The progressive idea was that there are no permanent things, that the world, a better world, can be architected by man, in his image, and those who insist on fixed principles are simply relics of the past(at best). They are obtuse, and, in the modern world, irrelevant. The current embrace, nearly universal, of Modern Monetary Theory, is perhaps the apotheosis of the progressive idea, at least from a financial perspective. Will The Great Collapse bring them around? Not likely. There will be plenty of talking heads and pundits to spread the blame around. Some people would rather be right than saved.
I tend to agree with you. They can create anythiing they want, just like men can be women or they can have safe zones where you can't say something that will hurt someone else's feelings. You can also create fake money and it will supposedly have the same effect as real money or earned money.
It is also seems to be syncronized with AI. Create what the lefties want with AI. Who can argue with the prevalent intelligence i.e. AI which could become their defining intelligence. That's exactly what AI programmers are doing. Just another part of MSM prgramming what they decide the rest of society must accept.
I thought I'd add that I have almost completely invested in fixed income very little in stocks over the years but I have also never lost money in any of the big drops and I have no way to accurately measure but it I suspect I've done as well as your average index investor due primarily to not having any big loss.
Bill, does it matter whether its a crypto worth nothing, or our dollar bill worth nothing.Neither should be able to buy products and services, an illusion of value traded for real value(products and services).
All True Sir Bonner with a few caveats others have noted. While Crypto was invented by vaporware, it is being used to buy Real Goods and Services. If those Goods and Services ultimately generate real GDP, are the Goods and Services. fake?
As far as Mr. Trump is concerned, those of you who remember the 80's will recall his passion for making "Leveraging" a household term. His absolute goal in life was and still is using other people's money to accomplish his own goals and leveraging the hell out of every dollar invested. In this way he was able to purchase airlines, casinos, hotels etc. which were purchased with "fake" money. I would say that as a free capitalist society we failed at letting the government and the Trumps of the world get away with squandering credit, while the lowly homeowner was forced to accept the usual 20% down in real cash just to buy a home. You saw what happened when that standard was removed. So why aren't the folks with supposed real wealth held to stronger standards? Easy, because they support and elect the corrupt officials that bend to their demands.
There is a funny story I heard from friends in China which went something like this. While Mr. Trump was visiting China and looking for venture Capital (he didn't have), he was invited to a round of golf. The Chinese host said, "Donald, you are rich guy, why not bet me on the next hole, say $10k?" Donald brushed him off jokingly saying I didn't bring that sort of cash with me. That was enough for the Chinese investors to call his bluff and realize he is full of BS but short on cash.
The moral of the story. If all of this new found wealth is fake, we'd better take that wealth and turn it all into gold before it evaporates. I dare say though, my local grocery store is not yet accepting bullion for tomatoes. I have also not noticed everyone fleeing the US for places unknown and worse off then we are, albeit corruptly so.
Anything we can do to push this country into a strong recession would help swing the pendulum back towards center.
The U.S. Treasury might as well have issued ice cubes instead of greenbacks. That way we’d have an evidence in hand to see the purportedly potent bucks melting and evaporating away. Any wonder that the (petrol) dollar is being rejected in the oil trade.
"As far as we can tell it costs little or nothing to create a billion new units of an entirely new crypto. "
Bill, I love your thinking and your writing, but you have got to get past your dogmatism on Bitcoin. As an analogy, it costs little or nothing to create a new game, but that doesn't threaten chess's position as the game of kings. Your criticism of "crypto" may be valid, but please, stop lumping Bitcoin in with crypto. Honestly, you haven't learned enough about it to cogently criticize it.
YES. BITCOIN IS UNIQUE AMONG CRYPTOS. IT IS THE ONLY ONE I OWN. IT IS FINITE IN NUMBER, AND HAS NO CENTRAL ISSUER. NICK GIAMBRUNO A T CASEY'S INTERNATIONAL MAN AND LAU VEGYS AT CASEY'S TAKE ARE GOOD BASIC PRIMERS ON BITCOIN. BOTH ARE FREE
Philosophically, what is the difference between infinitely large and infinitely small? So the number of bitcoins is finite but they are infinitely divisible. This is the problem I haven’t been able to get my head around.
FOR A PRACTICAL SOLUTION, JUST SUBSTITUTE VERY FOR INFINITELY IN FRONT OF SMALL AND LARGE. PHILOSOPHICAL DEBATES COULD RAGE ON FOREVER. FEW OF US HAVE THAT MUCH TIME ON OUR HANDS.
ON BUTCOIN, I CITE YOU AGAIN TO THE TWO MEN NAMED IN MY PREVIOUS REPLY. LAU VEGYS WROTE HIS ARTICLE ABOUT A MONTH AGO. AT THAT TIME, I WROTE HIM MY COMPLIMENTS FOR THE BEST BRIEF PRIMER I HAVE EVER SEEN ON BITCOIN, WHIC I HAVE BEEN FOLLOWING SINCE 2014.
I SUSPECT THAT ALL THINGS ARE INFINITELY DIVISIBLE ON PAPER BY SIMPLY ADDING MORE INTEGERS AFTER THE DECIMAL PO[NT. BUT CHECK WITH A MATH MAJOR FOR AN AUTHORITATIVE ANSWER. THAT, I AM NOT.
If you have $100, you have $100. If you have 10,000 pennies, you still have $100.
Bitcoin is divisible into smaller units just like dollars. And BTW, they are not infinitely divisible. Each bitcoin is 100 M satoshis. So there is a finite number of satoshis. It’s all about value, just like my example of dollars and cents above. Nothing new here.
You need to invest time and energy to create Bitcoin and only 21 million will ever exist: thus proof of work as in mining gold, limited supply, and no counterparty risk. Those in the West need to look at Bitcoin globally as there is greater acceptance in the third world where the fiat currency melts in your pocket like an ice cube. People there who want to avoid confiscation, Usury, and losses to inflation immediately convert their money to Bitcoin silver or gold. By the way, you can't destroy the Blockchain because the lights go out unless the entire earth is bombed into the Stone Age. None of this is true for Crypto.
As long as the internet is up, I can take my wealth in Bitcoin anywhere in the world, by memorizing a 12 to 24 word phrase. As long as gold is considered valuable (which I think it is and always will be), I can carry my wealth anywhere in the world.....I don't think I will be questioned by the country I'm trying to leave, or trying to enter, with my physical (gold) wealth on me? I own both.
A house is valued by the currency the seller accepts. So, If he accepts 195 oz. of gold, 6.5 BTC, or $450,000 USA fiat, he has agreed to the house's value at that time. All the currencies equal the value of the house. So, no matter what, the amount of currency accepted must equal the value necessary to make the exchange. Speculators, on the other hand, must take the risk associated with a failed model. Governments that spend more than they receive for delivered services must speculate, and all of us who have watched over the years have come to realize the government is a disgustingly bad speculator. So, they cover their bad bets by borrowing from a bank they created to fund their bad bets with spook fiat. That infiltrates the daily value exchanges by adding the new spook value to the currently accepted value, and lo and behold, that house now requires 257 oz.s of gold, 8.657 BTC, or $600,000 USA fit. Of course, the government and its political elites, et al., find many other ways to intrude on the simple one-on-one exchange between us, but you get the point. Don't forget to vote!
Bill's intriguing remarks make me wonder about wealth.
I've always contended wealth is something that must be made by man using scarce resources; capitalism is the name for the process, and money conveys the value for whatever was produced and sold.
Wither crypto? No scarce resources are required to make a crypto; just some key strokes and a cute name. Its initial value is declared by its creator and it on-going value determined by demand. There's no there there, but it's all the rage.
The only way I can rationalize crypto is treating it as a form of volatile currency storage: with money, you buy crypto whose value fluctuates sometimes wildly and, at some point in the future, you use it to acquire wealth
Given a choice, I'll take gold over crypto
I do not need to comment, You have done it for Me .Thanks And thanks to Bill.
Gold will be here in 1,000 years, crypto won’t. In the meantime, crypto takes electricity to create, and maintain. So it’s not something from nothing, but arguably worse: it’s nothing from something!
That said, I still think it’s worth owning a little - 1% as the BPR team suggests - for the novelty of it. As I’ve mentioned before, one novel feature is that you can wash ashore, naked and penniless, almost anywhere in the world, and still have total access and control over potentially millions of dollars, with nothing more than a memorized password. No banks needed. Hope I never need that, but I’m here for the spectacle if I do!
In Australia we have Bitcoin "ATMs"in shopping malls, I assume it's the same elsewhere. Have a look at one. You can put cash in but you can't take it out. Says it all in my opinion. And ATM is very much a misnomer.
"Bitcoin ATMs are a way to get immediate access to cash using your bitcoins. Bitcoin ATMs do not operate like traditional ATMs. In order to make a cash withdrawal and sell your Bitcoin from the ATM, the machine provides a QR code to which you send your Bitcoin. You simply wait a couple of minutes and receive your cash."
Coming from a mathematician's perspective I agree 100% with Bill's team's analysis but I've been thinking and acting along this line of reasoning for 30 years and I feel almost completely alone. Now I'm not complaining about my performance financially: I have 3 homes plenty of spending money while retired. I suppose that's why I like the reasoning behind valuations based upon gold i.e. it makes mathematical sense to me. BUT I've been waiting for 25 years for all this credit to collapse, for reality in money. That's a damn long time to wait for everyone else to come around to my thinking. That's a damn long time for all these economic geniuses to arrive at my and Bill's logic. Kinda makes me wonder if I'm correct.
They will never come around to your way of thinking. They don’t think like you do and never will. The progressive idea was that there are no permanent things, that the world, a better world, can be architected by man, in his image, and those who insist on fixed principles are simply relics of the past(at best). They are obtuse, and, in the modern world, irrelevant. The current embrace, nearly universal, of Modern Monetary Theory, is perhaps the apotheosis of the progressive idea, at least from a financial perspective. Will The Great Collapse bring them around? Not likely. There will be plenty of talking heads and pundits to spread the blame around. Some people would rather be right than saved.
I tend to agree with you. They can create anythiing they want, just like men can be women or they can have safe zones where you can't say something that will hurt someone else's feelings. You can also create fake money and it will supposedly have the same effect as real money or earned money.
It is also seems to be syncronized with AI. Create what the lefties want with AI. Who can argue with the prevalent intelligence i.e. AI which could become their defining intelligence. That's exactly what AI programmers are doing. Just another part of MSM prgramming what they decide the rest of society must accept.
I thought I'd add that I have almost completely invested in fixed income very little in stocks over the years but I have also never lost money in any of the big drops and I have no way to accurately measure but it I suspect I've done as well as your average index investor due primarily to not having any big loss.
A building here a building there, that's nothing. Again the Chinese have beaten us, they have entire cities that are ghosts, backed by our T bills
Crypto is good for one thing. Turning gain into gold.
Bill, does it matter whether its a crypto worth nothing, or our dollar bill worth nothing.Neither should be able to buy products and services, an illusion of value traded for real value(products and services).
All True Sir Bonner with a few caveats others have noted. While Crypto was invented by vaporware, it is being used to buy Real Goods and Services. If those Goods and Services ultimately generate real GDP, are the Goods and Services. fake?
As far as Mr. Trump is concerned, those of you who remember the 80's will recall his passion for making "Leveraging" a household term. His absolute goal in life was and still is using other people's money to accomplish his own goals and leveraging the hell out of every dollar invested. In this way he was able to purchase airlines, casinos, hotels etc. which were purchased with "fake" money. I would say that as a free capitalist society we failed at letting the government and the Trumps of the world get away with squandering credit, while the lowly homeowner was forced to accept the usual 20% down in real cash just to buy a home. You saw what happened when that standard was removed. So why aren't the folks with supposed real wealth held to stronger standards? Easy, because they support and elect the corrupt officials that bend to their demands.
There is a funny story I heard from friends in China which went something like this. While Mr. Trump was visiting China and looking for venture Capital (he didn't have), he was invited to a round of golf. The Chinese host said, "Donald, you are rich guy, why not bet me on the next hole, say $10k?" Donald brushed him off jokingly saying I didn't bring that sort of cash with me. That was enough for the Chinese investors to call his bluff and realize he is full of BS but short on cash.
The moral of the story. If all of this new found wealth is fake, we'd better take that wealth and turn it all into gold before it evaporates. I dare say though, my local grocery store is not yet accepting bullion for tomatoes. I have also not noticed everyone fleeing the US for places unknown and worse off then we are, albeit corruptly so.
Anything we can do to push this country into a strong recession would help swing the pendulum back towards center.
Purchasing Power of the U.S. Dollar 1872 to 2024 - https://tinyurl.com/ac9hv2xy
Spoiler Alert: 0.04¢ …mighty powerful cents…
The U.S. Treasury might as well have issued ice cubes instead of greenbacks. That way we’d have an evidence in hand to see the purportedly potent bucks melting and evaporating away. Any wonder that the (petrol) dollar is being rejected in the oil trade.
What is the mouth going to do? “…we’re going to see what happens when the mouth realizes that the hand is empty.” 😎
"As far as we can tell it costs little or nothing to create a billion new units of an entirely new crypto. "
Bill, I love your thinking and your writing, but you have got to get past your dogmatism on Bitcoin. As an analogy, it costs little or nothing to create a new game, but that doesn't threaten chess's position as the game of kings. Your criticism of "crypto" may be valid, but please, stop lumping Bitcoin in with crypto. Honestly, you haven't learned enough about it to cogently criticize it.
YES. BITCOIN IS UNIQUE AMONG CRYPTOS. IT IS THE ONLY ONE I OWN. IT IS FINITE IN NUMBER, AND HAS NO CENTRAL ISSUER. NICK GIAMBRUNO A T CASEY'S INTERNATIONAL MAN AND LAU VEGYS AT CASEY'S TAKE ARE GOOD BASIC PRIMERS ON BITCOIN. BOTH ARE FREE
LIAM
Philosophically, what is the difference between infinitely large and infinitely small? So the number of bitcoins is finite but they are infinitely divisible. This is the problem I haven’t been able to get my head around.
FOR A PRACTICAL SOLUTION, JUST SUBSTITUTE VERY FOR INFINITELY IN FRONT OF SMALL AND LARGE. PHILOSOPHICAL DEBATES COULD RAGE ON FOREVER. FEW OF US HAVE THAT MUCH TIME ON OUR HANDS.
ON BUTCOIN, I CITE YOU AGAIN TO THE TWO MEN NAMED IN MY PREVIOUS REPLY. LAU VEGYS WROTE HIS ARTICLE ABOUT A MONTH AGO. AT THAT TIME, I WROTE HIM MY COMPLIMENTS FOR THE BEST BRIEF PRIMER I HAVE EVER SEEN ON BITCOIN, WHIC I HAVE BEEN FOLLOWING SINCE 2014.
I SUSPECT THAT ALL THINGS ARE INFINITELY DIVISIBLE ON PAPER BY SIMPLY ADDING MORE INTEGERS AFTER THE DECIMAL PO[NT. BUT CHECK WITH A MATH MAJOR FOR AN AUTHORITATIVE ANSWER. THAT, I AM NOT.
SINCERELY,
LIAM
If you have $100, you have $100. If you have 10,000 pennies, you still have $100.
Bitcoin is divisible into smaller units just like dollars. And BTW, they are not infinitely divisible. Each bitcoin is 100 M satoshis. So there is a finite number of satoshis. It’s all about value, just like my example of dollars and cents above. Nothing new here.
You need to invest time and energy to create Bitcoin and only 21 million will ever exist: thus proof of work as in mining gold, limited supply, and no counterparty risk. Those in the West need to look at Bitcoin globally as there is greater acceptance in the third world where the fiat currency melts in your pocket like an ice cube. People there who want to avoid confiscation, Usury, and losses to inflation immediately convert their money to Bitcoin silver or gold. By the way, you can't destroy the Blockchain because the lights go out unless the entire earth is bombed into the Stone Age. None of this is true for Crypto.
As long as the internet is up, I can take my wealth in Bitcoin anywhere in the world, by memorizing a 12 to 24 word phrase. As long as gold is considered valuable (which I think it is and always will be), I can carry my wealth anywhere in the world.....I don't think I will be questioned by the country I'm trying to leave, or trying to enter, with my physical (gold) wealth on me? I own both.
A house is valued by the currency the seller accepts. So, If he accepts 195 oz. of gold, 6.5 BTC, or $450,000 USA fiat, he has agreed to the house's value at that time. All the currencies equal the value of the house. So, no matter what, the amount of currency accepted must equal the value necessary to make the exchange. Speculators, on the other hand, must take the risk associated with a failed model. Governments that spend more than they receive for delivered services must speculate, and all of us who have watched over the years have come to realize the government is a disgustingly bad speculator. So, they cover their bad bets by borrowing from a bank they created to fund their bad bets with spook fiat. That infiltrates the daily value exchanges by adding the new spook value to the currently accepted value, and lo and behold, that house now requires 257 oz.s of gold, 8.657 BTC, or $600,000 USA fit. Of course, the government and its political elites, et al., find many other ways to intrude on the simple one-on-one exchange between us, but you get the point. Don't forget to vote!
Thanks you Bill, for the wonderful insights re " wealth".
Isn’t crypto kind of like a piece of art, or a restored car, or signed football, or Dorothy’s ruby red slippers…all unusually valuable?
Geez, I was just kidding…
But that is genius. It’s theoretically hack proof. That took someone, or some people lots of time and brain power. You call that worthless?
If crypto is worth zero, and I totally agree, why do you advise subscribers to invest 1% of their hard earned savings into the stuff?
Just in case...
Couldn’t agree more on the subject of cryptos … my thoughts at Conic Tonic Substack