Bitcoin
Posted by: Kevin Richardson on 06 August 2017
I'm selling all my material possessions, equities and bonds. So... I'll be back in 5 years once I have my Statement system up and running. Until then, thanks for all the good advice.
dave marshall posted:Kevin Richardson posted:winkyincanada posted:dave marshall posted:"if you lose the remaining stake, it is your loss, just as if you had lost your initial stake. You will perhaps feel better than if it was your original stake, but the money is lost to you just the same".
'Fraid we just seem to see things differently, as I don't see the remaining risk free balance as being "mine", since it's not as if it resulted from any "work" on my part.
I simply took a gamble which paid off. The "day at the races" philosophy I mentioned earlier works fine for me, so a loss of the remaining balance would only be "my" loss if I were to allow it to assume that role.
No, we agree that it is just a difference in how we "see" things. If I lose $100, then I have lost $100 regardless of whether I just found it, won it, or whether I worked for it. I'll feel differently perhaps, but there's no getting around that $100 is $100, regardless of what I "feel" that particular $100 is worth. (Unlike cryptos which are certainly only worth what the market "feels" they are worth.)
Good piece by Kevin O'Leary today who asserted that until counterparties accepted BTC without requiring insurance to cover price risk during prior to settlement (which is of course, conversion back to fiat or delivery of actual goods and services), they couldn't be considered a "currency". I'll add that until I'm paid, and happy to be paid in BTC, I won't consider it a currency.
Dave will never lose anything. He has acquired x VTC with a basis of $0.00. The number of VTC he owns will never decrease. He may lose some potential USD in the short term but VTC is likely to appreciate rapidly over the next two years. So the relevant number is not how many USD are at risk but how many VTC he owns.
He started with x $ and now has x $ + y VTC. Pretty smart move as he will be able to buy VTC again if it ever has a "price correction."
The probability of VTC going to $0.00 approaches 0%. The probability of VTC going to $17 in next year is better than 50%. The EV of holding VTC is > 1.
"Dave will never lose anything. He has acquired x VTC with a basis of $0.00. The number of VTC he owns will never decrease."
Nicely put, thank you.
I have no idea what either of you are talking about,
Yes, asset prices collapsed, but it was probably a case of the dollar being "the worst currency, except for all the others." Central banks and their bankrupt government sponsors (or is it the other way around?) fear deflation more than anything because it will crush them with carrying cost.
The Fed, ECB, and BoJ, in particular, have gone on a "money printing" spree, buying up assets and exploding their balance sheets.
Yeah, the Fed has done a wonderful job maintaining the value of the dollar:
And the Fed's balance sheet since 2000
The problem is, they emptied their guns for the last crisis, so they are not going to be able to have the same policies work. That is why they are cranking up the "war on cash" because the zero interest rate boundary keeps them from stealing more from the populace at large to cover up their mistakes. Of course, they sell this as "only drug dealers and terrorists use cash", which will be the same argument they will use on cryptos.
I think things that are seen as stores of value will increase. Gold, probably cryptos. Real assets like quality businesses that produce things people need. Lots of people are going to lose jobs. As I have said here before, all that borrowed money (which is all they have done since 2008 GFC) is going to bite the borrowers and lenders both. The bond market is going to really be where the crisis gets rolling.
I am literally about to head out the door for some fairly serious vascular surgery (second in as many weeks) so all this may be moot to me in a few hours (hoping the surgeon is having a good day), but I will find a video that I saw recently that did an outstanding job of covering what is coming - just exactly when no one can pin down. I will try to post it here later. These central bankers are unethical a-holes, but they are exceptional at keeping the party going longer than anyone could imagine.
DrMark posted:Yes, asset prices collapsed, but it was probably a case of the dollar being "the worst currency, except for all the others." Central banks and their bankrupt government sponsors (or is it the other way around?) fear deflation more than anything because it will crush them with carrying cost.
The Fed, ECB, and BoJ, in particular, have gone on a "money printing" spree, buying up assets and exploding their balance sheets.
Yeah, the Fed has done a wonderful job maintaining the value of the dollar:
And the Fed's balance sheet since 2000
The problem is, they emptied their guns for the last crisis, so they are not going to be able to have the same policies work. That is why they are cranking up the "war on cash" because the zero interest rate boundary keeps them from stealing more from the populace at large to cover up their mistakes. Of course, they sell this as "only drug dealers and terrorists use cash", which will be the same argument they will use on cryptos.
I think things that are seen as stores of value will increase. Gold, probably cryptos. Real assets like quality businesses that produce things people need. Lots of people are going to lose jobs. As I have said here before, all that borrowed money (which is all they have done since 2008 GFC) is going to bite the borrowers and lenders both. The bond market is going to really be where the crisis gets rolling.
I am literally about to head out the door for some fairly serious vascular surgery (second in as many weeks) so all this may be moot to me in a few hours (hoping the surgeon is having a good day), but I will find a video that I saw recently that did an outstanding job of covering what is coming - just exactly when no one can pin down. I will try to post it here later. These central bankers are unethical a-holes, but they are exceptional at keeping the party going longer than anyone could imagine.
If I kept my dollars stuffed in my mattress for a hundred years, I guess I'd be bothered. I don't really see what you're going on about. Has there been inflation? Sure. Steady at a bit less than 2% per year for decades. Annual loss of dollar value is higher at 3.2% per year for the hundred years of you graph. Meh. Holding T-bills would have you more-or-less square. Holding equities, you'd be well ahead. And that's kind of the point. Does the government have inflationary policy? of course. The alternative is pretty confusing, and arguably dysfunctional. I simply don't feel like the government has stolen anything from me by their enacting of monetary policy.
Do you think that value of the dollar is about to collapse (rampant Zimbabwean-style inflation), or that asset prices will collapse in USD terms (i.e. the dollar will become more valuable). Which apocalypse do you fear? If it's predictable, why aren't the FX traders making the bet (either way)?
To be fair, I'm not in the US, and hold no US currency whatsoever. Actually I hold no significant currency of any kind (I'm short some CAD). Currency isn't a store of value, nor a means of speculation for me. It's a just means of transaction. Get paid, then spend or invest in actual things (not digital fantasies). That the nominal price of currency changes over time is of no consequence to me (within reason). Example. If the price of my house doubled/tripled or if it halved (or worse), it still has exactly the same utility to me as a place to live. What an estate agent believes it would sell for really makes no significant difference.
winkyincanada posted:DrMark posted:Yes, asset prices collapsed, but it was probably a case of the dollar being "the worst currency, except for all the others." Central banks and their bankrupt government sponsors (or is it the other way around?) fear deflation more than anything because it will crush them with carrying cost.
The Fed, ECB, and BoJ, in particular, have gone on a "money printing" spree, buying up assets and exploding their balance sheets.
Yeah, the Fed has done a wonderful job maintaining the value of the dollar:
And the Fed's balance sheet since 2000
The problem is, they emptied their guns for the last crisis, so they are not going to be able to have the same policies work. That is why they are cranking up the "war on cash" because the zero interest rate boundary keeps them from stealing more from the populace at large to cover up their mistakes. Of course, they sell this as "only drug dealers and terrorists use cash", which will be the same argument they will use on cryptos.
I think things that are seen as stores of value will increase. Gold, probably cryptos. Real assets like quality businesses that produce things people need. Lots of people are going to lose jobs. As I have said here before, all that borrowed money (which is all they have done since 2008 GFC) is going to bite the borrowers and lenders both. The bond market is going to really be where the crisis gets rolling.
I am literally about to head out the door for some fairly serious vascular surgery (second in as many weeks) so all this may be moot to me in a few hours (hoping the surgeon is having a good day), but I will find a video that I saw recently that did an outstanding job of covering what is coming - just exactly when no one can pin down. I will try to post it here later. These central bankers are unethical a-holes, but they are exceptional at keeping the party going longer than anyone could imagine.
II simply don't feel like the government has stolen anything from me by their enacting of monetary policy.
Actually I hold no significant currency of any kind (I'm short some CAD). Currency isn't a store of value, nor a means of speculation for me. It's a just means of transaction. Get paid, then spend or invest in actual things (not digital fantasies). That the nominal price of currency changes over time is of no consequence to me (within reason).
In the USA capital gains are taxed without taking into consideration inflation over the time period a person owned the asset.
Kevin Richardson posted:winkyincanada posted:DrMark posted:Yes, asset prices collapsed, but it was probably a case of the dollar being "the worst currency, except for all the others." Central banks and their bankrupt government sponsors (or is it the other way around?) fear deflation more than anything because it will crush them with carrying cost.
The Fed, ECB, and BoJ, in particular, have gone on a "money printing" spree, buying up assets and exploding their balance sheets.
Yeah, the Fed has done a wonderful job maintaining the value of the dollar:
And the Fed's balance sheet since 2000
The problem is, they emptied their guns for the last crisis, so they are not going to be able to have the same policies work. That is why they are cranking up the "war on cash" because the zero interest rate boundary keeps them from stealing more from the populace at large to cover up their mistakes. Of course, they sell this as "only drug dealers and terrorists use cash", which will be the same argument they will use on cryptos.
I think things that are seen as stores of value will increase. Gold, probably cryptos. Real assets like quality businesses that produce things people need. Lots of people are going to lose jobs. As I have said here before, all that borrowed money (which is all they have done since 2008 GFC) is going to bite the borrowers and lenders both. The bond market is going to really be where the crisis gets rolling.
I am literally about to head out the door for some fairly serious vascular surgery (second in as many weeks) so all this may be moot to me in a few hours (hoping the surgeon is having a good day), but I will find a video that I saw recently that did an outstanding job of covering what is coming - just exactly when no one can pin down. I will try to post it here later. These central bankers are unethical a-holes, but they are exceptional at keeping the party going longer than anyone could imagine.
II simply don't feel like the government has stolen anything from me by their enacting of monetary policy.
Actually I hold no significant currency of any kind (I'm short some CAD). Currency isn't a store of value, nor a means of speculation for me. It's a just means of transaction. Get paid, then spend or invest in actual things (not digital fantasies). That the nominal price of currency changes over time is of no consequence to me (within reason).
In the USA capital gains are taxed without taking into consideration inflation over the time period a person owned the asset.
I did not know that. It is the same here in Canada.
"I simply don't feel like the government has stolen anything from me by their enacting of monetary policy."
No one can tell you what to feel, but data would suggest otherwise.
The current situation is absolutely unsustainable. And Janet Yellen is a typical pure academician fool economist who has never held a real job. A Yale-educated moron. At yesterday's Fed meeting she was asked to grade her tenure at the Fed, This is a quite right out of Bloomberg (emphasis added):
"Look, at the moment, the U.S. economy is performing well," Yellen said. "The growth that we are seeing, it's not based on, for example, an unsustainable buildup of debt, as we had in the run-up to the financial crisis."
How she can say that with a straight face is a monument to stupidity, dishonesty, or both.
I agree currency is simply a means of transacting business. That is all it was ever meant to be. And I feel the same about my house as you do - it is a place where I live, not an investment. I bought it in April of 2013, and I could probably sell it for about 33% more than I paid for it...but then where would I live? I couldn't get a 2 bedroom apartment in this town for anywhere close to as low as my mortgage payment on my house.
Something IS going to trigger a huge crisis. And maybe as long as it doesn't seriously affect you, you don't really care. But a LOT of people are going to be destroyed, and I dare say none or almost none of those will come from the 1%, because the Central Banks and government will take care of them...that's what has happened since 2008. Artificially low interest rates have precipitated the biggest wealth transfer from the masses to the 1% in history. They gambled, lost, and took out the credit card and are sending the tax-payers the bill...taxpayers that haven't even been born yet. And that stupid woman sits in her ivory tower and spouts the BS above with a straight face. The entire faux-recovery (and make no mistake, it is almost all faux) is built on a mountain of debt.
But she is not alone; Draghi and Kuroda are working from the same playbook. Of course, they would; they're in the same cabal.
Again, it will be the bond markets. What will light the match and precisely when? Who knows. Could be US student loan or consumer debt, a lot of corporate debt, Italian banks, Canadian real-estate; no shortage of bubbles. But once they start popping, and all that debt that "isn't a problem" starts not getting paid back, watch out.
DrMark posted:"I simply don't feel like the government has stolen anything from me by their enacting of monetary policy."
No one can tell you what to feel, but data would suggest otherwise.
The current situation is absolutely unsustainable. And Janet Yellen is a typical pure academician fool economist who has never held a real job. A Yale-educated moron. At yesterday's Fed meeting she was asked to grade her tenure at the Fed, This is a quite right out of Bloomberg (emphasis added):
"Look, at the moment, the U.S. economy is performing well," Yellen said. "The growth that we are seeing, it's not based on, for example, an unsustainable buildup of debt, as we had in the run-up to the financial crisis."
How she can say that with a straight face is a monument to stupidity, dishonesty, or both.
I agree currency is simply a means of transacting business. That is all it was ever meant to be. And I feel the same about my house as you do - it is a place where I live, not an investment. I bought it in April of 2013, and I could probably sell it for about 33% more than I paid for it...but then where would I live? I couldn't get a 2 bedroom apartment in this town for anywhere close to as low as my mortgage payment on my house.
Something IS going to trigger a huge crisis. And maybe as long as it doesn't seriously affect you, you don't really care. But a LOT of people are going to be destroyed, and I dare say none or almost none of those will come from the 1%, because the Central Banks and government will take care of them...that's what has happened since 2008. Artificially low interest rates have precipitated the biggest wealth transfer from the masses to the 1% in history. They gambled, lost, and took out the credit card and are sending the tax-payers the bill...taxpayers that haven't even been born yet. And that stupid woman sits in her ivory tower and spouts the BS above with a straight face. The entire faux-recovery (and make no mistake, it is almost all faux) is built on a mountain of debt.
But she is not alone; Draghi and Kuroda are working from the same playbook. Of course, they would; they're in the same cabal.
Again, it will be the bond markets. What will light the match and precisely when? Who knows. Could be US student loan or consumer debt, a lot of corporate debt, Italian banks, Canadian real-estate; no shortage of bubbles. But once they start popping, and all that debt that "isn't a problem" starts not getting paid back, watch out.
I guess I've been on the right side of it. My earnings, and the price of my investments (in nominal terms) has followed a steeper trajectory than inflation over time. The interest rates on my debt (held only as mortgages on real estate) have more-or-less been correlated with inflation, so in real terms, the rates have been around 1%-2% for the last 30 year (3%-4% in nominal terms less 2% inflation). The rate of appreciation of the price of the underlying asset has been equal or higher (even after CGT).
I don't deny that a huge transfer of wealth to the richest (relatively, in terms of % of total wealth held, at least) has occurred. Maybe I'm just (very slightly) on the right side of it. I've just been a wage earner my whole life, but don't really feel that the deck has been stacked against me.
We do hold Canadian real estate in the frothy Vancouver market. We are very lightly geared and it would take very significant, completely unprecedented drop in price (from current levels) to put our mortgage under water. The price is not otherwise a concern as we have no plans of selling. I guess if we ever downsize, it would be great for the market to be high, so we can pocket some cash. If we wanted to upsize a market crash would, of course, help us.
In terms of rent Vs buy, you need to consider the opportunity cost of investing the equity you have in your unit as well, as well as all costs of ownership, that renting would exempt you from - for many properties, they are significant. In theory, the market should correctly price renting with consideration of the prices of real estate. I've seen both circumstances where rents seem unreasonably high, versus circumstances where they seem cheap. Not really sure of the underlying mechanics. It is likely related to timing, as supply of real estate can be slow to respond to demand, particularly in some markets.