Posted on 03/01/2014 7:33:41 AM PST by Kaslin
Well there it is, all bark and no bite. Go away little doggie! LOL
Kudlow would be ok if he would get the sick out of his butt.
You bank account most definitely does not have the same “value” it did last week.
It may have the same amount but the value has gone down.
That is far more effort than what it takes to create FRNs. I don't mean to imply that bitcoins are as good as gold but at least they have some value. If anything they represent the value of the infrastructure. FRNs have negative worth!
Why do you say that? In what way has the value gone down?
None of the groceries I bought this week were priced any higher than they were last week, that i noticed.
Gas prices have dropped a penny around here.
My electric and natural gas and water all costs the same, my cable and phone are the same price, my mortgage isn’t changed, and my health insurance is the same price it has been since January 1st.
Yes, inflation would slowly change the value of my bank account, especially in this environment where my checking account earns virtually no interest (I do have savings earning 2%, nominally at “inflation”).
Meanwhile, bitcoin dropped below 568 a while ago, but then went back up to 568.02. Which I guess makes this a good day for BC, since it didn’t move 10% or more.
I have little interest in gold as a currency either, so being “good as gold” would just make it another investment in my mind. I realize that gold has been around a long time and people have irrationally treated it as a valuable and transferable asset.
I have some of that. It states, quite prominently...
Then your balance must be ZERO!
Amen!
(That’s the ONLY way it can go; now!
Unless it’s swollen!
I'll volunteer, even though it's a dirty job; Someone has to do it.
Money merely is a place holder for time.
Some folks time is more valuable that others.
During that period the Fed dumped at least $4 billion into the money in circulation(that they admit to), the economy didn’t grow and the debt of the US went up. Those things all mean your “value” was diluted. I am surprised you claim gas went down since oil spiked in the same period according to AAA. Have you checked the size of the container your groceries come in? Many have been downsized to hold the traditional price.
http://fuelgaugereport.aaa.com/?redirectto=http://fuelgaugereport.opisnet.com/index.asp
???????
A 6,000+ year history around the globe across all major civilizations is not irrationality. If you want to find irrationality you should look in a mirror.
Uh no.
That's deflation, a rise in the value of the currency. Your previous rant is way way off the mark. The digital economy of the future is going to have a digital currency like bitcoin. It is pointless to compare it to prices in the real world economy and claim that it fluctuates too much mainly because it is not used in the real economy.
In the digital economy bitcoin prices are fairly stable. People offer to do very small amounts of work for very small amounts of bitcoin. Productivity is soaring and bitcoin is the reason. The typical white collar "knowledge worker" is about to go the way of the dinosaur. Instead of a juicy salary to sit around and piddle on a computer for days on end, a digital economy worker will produce a specific product in a specific time and move onto the next project. Some will take seconds.
Eventually posts like yours will go to dinosaur land too. Inaccuracies like not knowing the difference between inflation and deflation will not get the microreward and you will end up paying to post. You need to read up, understand, and embrace the new reality.
There are basically two types of people who don't like bitcoin, those who don't understand how it will revolutionize the digital economy and those who hate the idea because they like the dinosaur digital economy we have now.
You were incorrect. The PRICES went up on the items they were selling, because the cost of a bitcoin dropped relative to the dollar. So where the previous hour one bitcoin would purchase $571 worth of goods, the next hour it would only purchase $568 worth of goods.
This of course could have meant that the dollar went up in value, rather than the bitcoin going down in value.
But you have also pointed out the problem with bitcoin if it is RISING in value — because a currency rising in value is deflation. And in a deflationary environment, people stop buying things because they expect that if they wait a day, they’ll get the same item cheaper.
Which means the economy grinds to a halt.
Rationality is not defined by what people do, no matter how long they do it. For 10s of thousands of years, people lived their lives based on the fact that the sun revolved around the earth. That doesn’t make the idea any less rational.
Why is gold a valuable medium to transfer work? Mostly, it is the “fact” that we know people will value it as a medium.
In the past, gold was chosen for a host of irrational reasons. It was fairly rare, so those in power could control the supply. It was shiny, and was easy to work, so people in power could convince others that they wanted it (much like we’ve somehow convinced people they need diamonds, and thus propped up an irrational value for those stones). It was easy to divide up, which made it useful over things like rare rocks, which would take a lot of work to use as payment “here, let’s wait an hour while we try to chip off just the right amount of crystal”.
Does gold have an intrinsic value? Yes. There are things today that require gold. But gold for useful purposes consumes about 1/4th to 1/2 of the supply each year. So if Gold was not loved simply for having gold, supply would greatly outstrip demand, and the price would plummet.
And today, we don’t have the need for easily manipulated metal — we easily work with composite materials, and can make beautiful shiny things without an ounce of precious metals.
About the only thing that gold still has is that you can’t just create it out of thin air. There is a limited supply. At some point, that limited supply was growing at about the rate that seemed useful for a growing economy, but that was also rather random and coincidental.
Suppose that tomorrow, someone discovered a new mine with as much gold as currently exists in the world, thereby doubling our supply. What would happen to the price of gold?
If it did not change, that would show that the price of gold is irrationally derived by emotional reactions. If it dropped in half, it would be rational but belie the concept of gold as a “currency”.
You can’t eat gold. You can’t drink it, you can’t wear it. It won’t help your crops grow, you’d be hard-pressed to use it to build a shelter. As a metal, it is pretty useless, won’t stop a bullet, can’t be used to form a wagon, or a wheel.
We made it into coins. The coins had value because the government promised it would have value.
In my lifetime, the price of gold has changed as much as the price of beanie babies.
When the stock market hits ridiculous heights, we speak of “irrational exuberance”. “irrational exuberance” is slang for “the value that the world has put on stocks, based on their own emotions, detached from any real-world value”.
Well, Gold’s price is pretty much detached from it’s real-world value, and has been for most of the history of the world. Things irrationally priced still have real value, and you can actually make tons of money as people irrationally drive the price up.
If you want to argue that the price of gold is rational. OK, I’m looking at the one-year chart for gold. One year ago, gold was about $1600. Was that a rational value, or was it a value that was inflated by irrational pricing?
IF you said “rational”, then in June GOld was about $1200. Was THAT rational pricing, or was that an irrational devaluation by people who got scared?
It is very hard to look at this chart and find any rational basis for the movement of gold. I know people try to “explain” it, usually with a conspiracy theory of people destroying gold stocks or artificially selling gold they don’t have to drive down the cost. The explanations seem irrational as well.
I’m not telling anybody NOT to buy gold. I am saying that the price is irrational, and that there is no rational reason why tomorrow, the world could not wake up, say “hey, you know, what we all really need is FOOD”, and sell off all their gold to get food, and drop the price of gold by a factor of 4.
Just as one day, people woke up and said “we really don’t want beanie babies”.
Last week the gas station price was $1.23.9. Today it was $1.23.9. Other gas stations had different prices.
I have not noticed any boxes that were smaller this week than last week.
I was not talking about 1-year changes here, just 1-week changes.
If instead of putting my money in U.S. dollars in the bank, I had put my money in GOLD last march, then here a year later, I’d have lost 15% of my value. I’m pretty sure inflation has not eaten up 15% of my purchasing price in the past year. The TV I bought last year is now on sale for half the price I paid. THe camera my daughter bought last year is selling for $200 less.
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