China Bans Cryptocurrency Transactions

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Kbg
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Re: China Bans Cryptocurrency Transactions

Post by Kbg » Thu Oct 07, 2021 1:54 pm

vincent_c wrote:
Thu Oct 07, 2021 1:32 pm
I don't think this is true, at least not a single government.
So as BTC rightly pointed out I had a pretty big caveat, but if you don't think what I said isn't true, then find one that did. To be completely accurate I did forget to add wars where the ruling political structure was destroyed. Whether fiat money or BTC, it's only as "valuable" as human's have faith in it. If someone wants to buy something high in faith, then gold is the undisputed several millennium champ.
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Re: China Bans Cryptocurrency Transactions

Post by bitcoininthevp » Thu Oct 07, 2021 2:25 pm

Kbg wrote:
Thu Oct 07, 2021 1:27 pm
You do see the irony here, right? BTC is completely reliant on government acceptance (as is everything). For the majority of people in China, unless the have access to external finance markets, BTC's value is now zero in terms of goods and services. Given it is a financial asset, it has no inherent worth in and of itself, like a bond, or a swap, or an option or a paper dollar.
While I do think countries banning Bitcoin can negatively affect adoption and price, neither Bitcoins operation nor it price is reliant (let alone "completely" reliant) on government acceptance. The largest country in the world just banned it and its price is up 20% and it continues to process transactions regularly.

The game theory is also such that while some countries ban it, that incentivizes others to become even more accepting of it. This is as simple as the US and countries surrounding China beefing up their bitcoin mining after China booted miners out a few months ago. But it could also take the form of countries holding BTC in strategic reserves.
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Re: China Bans Cryptocurrency Transactions

Post by Kbg » Thu Oct 07, 2021 4:03 pm

BTC,

If a G20 country starts putting BTC in their official reserves that would be a game changer in terms of my current opinion. If you happen to see that please post.
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Re: China Bans Cryptocurrency Transactions

Post by bitcoininthevp » Fri Oct 08, 2021 9:25 am

Kbg wrote:
Thu Oct 07, 2021 4:03 pm
BTC,

If a G20 country starts putting BTC in their official reserves that would be a game changer in terms of my current opinion. If you happen to see that please post.
If that happens, Im sure youll hear about it!

Curious, but given Bitcoin's trajectory over the last 10 years, doesn’t such an event seem inevitable? Maybe this is the coolaid talking, but... from dorks mining it on their computers when it had zero value, to small investment funds then buying it, to companies putting it in their treasury, then to small countries considering it legal tender/buying&hodling it/distributing it to citizens, now US senators advocating for it, ETF potentially being approved, to.... whats next? I suppose an about face is possible and we stop the adoption curve here and reverse, but that almost seems less feasible at this point. Strong coolaid?

Also, what would you think if a US state, say Texas, announced BTC as part of their own strategic reserves?
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Re: China Bans Cryptocurrency Transactions

Post by Kbg » Fri Oct 08, 2021 10:00 pm

vincent_c wrote:
Thu Oct 07, 2021 6:43 pm
Wasn’t gold ownership banned in the US but kept its value and had a market price in other countries?
Yes
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Re: China Bans Cryptocurrency Transactions

Post by Kbg » Fri Oct 08, 2021 10:11 pm

bitcoininthevp wrote:
Fri Oct 08, 2021 9:25 am
Kbg wrote:
Thu Oct 07, 2021 4:03 pm
BTC,

If a G20 country starts putting BTC in their official reserves that would be a game changer in terms of my current opinion. If you happen to see that please post.
If that happens, Im sure youll hear about it!

Curious, but given Bitcoin's trajectory over the last 10 years, doesn’t such an event seem inevitable? Maybe this is the coolaid talking, but... from dorks mining it on their computers when it had zero value, to small investment funds then buying it, to companies putting it in their treasury, then to small countries considering it legal tender/buying&hodling it/distributing it to citizens, now US senators advocating for it, ETF potentially being approved, to.... whats next? I suppose an about face is possible and we stop the adoption curve here and reverse, but that almost seems less feasible at this point. Strong coolaid?

Also, what would you think if a US state, say Texas, announced BTC as part of their own strategic reserves?
Sorry no credit for a state as it would be pure gimmick. I have no clue about the world BTC scene but the fact the US appears to be heading down the regulatory road implies full government approval. And one can already transact for goods with it. My guess is that the aim here is to force reporting by institutions to peel off the anonymity part of it for criminal and taxing purposes. To me the ultimate test for BTC is when say the US, Japan or Europe rolls out a digital currency. Interestingly, there’s a lot of lobbying to prevent that happening as it gores the ox of many financial firms.
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Re: China Bans Cryptocurrency Transactions

Post by vnatale » Fri Oct 08, 2021 10:12 pm

Kbg wrote:
Fri Oct 08, 2021 10:00 pm

vincent_c wrote:
Thu Oct 07, 2021 6:43 pm

Wasn’t gold ownership banned in the US but kept its value and had a market price in other countries?


Yes


Reading here....

When Owning Gold Was Illegal in America: And Why It Could Be Again

https://www.huffpost.com/entry/when-own ... b_10708196

"Then, in the 1970s, the U.S. government removed the last remaining restraint on federal government deficits.

Nixon Ends The Gold Standard

At that time, foreign countries could exchange dollars they received through international trade for gold held by the American government, at $32 per ounce. In 1971, gold started to pour out of the U.S. government's stockpile due to large deficits in both the federal budget and the trade balance. At 9 PM on August 15, 1971, President Richard Nixon gave a televised speech to the nation, announcing that he was taking the dollar off the "Gold Standard." This move enabled the dollar to float freely against other currencies, and removed the final obstacle to ballooning federal deficits and trade imbalances."

So while it may have had a market price in other countries when it came to converting it to dollars, the world currency, then it was a fixed price with no market adjustment?
Above provided by: Vinny, who always says: "I only regret that I have but one lap to give to my cats." AND "I'm a more-is-more person."
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Re: China Bans Cryptocurrency Transactions

Post by gaddyslapper007 » Tue Oct 12, 2021 2:35 pm

Fiat brain washed! “tHeRe iS nO OtHeR WaY, ….HelP mE CenTRal BaNkERs, hELp me GOverNMenT, SaVe Us!” <— the very fallacy’s Harry Browne warned us about in regards to “experts” thinking a galaxy brain can predict the actions of individuals and pull monetary strings to make it “all better”

rules ….not rulers!
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Re: China Bans Cryptocurrency Transactions

Post by Jack Jones » Wed Oct 13, 2021 10:40 am

bitcoininthevp wrote:
Thu Oct 07, 2021 8:46 am
I suppose all we need is those non-corrupt good guy governments (central banks) that stay good indefinitely and then the money would be good?
https://markets.businessinsider.com/new ... 21-09?op=1
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Re: China Bans Cryptocurrency Transactions

Post by Kbg » Thu Oct 14, 2021 9:11 am

bitcoininthevp wrote:
Thu Oct 07, 2021 8:42 am
Two reasons come to mind why inflation might be bad:
1. If money is being debased, no one saves in the money. It pushes people to, instead of saving in money, to speculate in stocks, real estate, etc.

2. The new (inflated) money needs to appear somewhere, thus you get the Cantillon Effect and all the bad that results from politically connected government cronies getting new money.

"the fact the EVERY country on the planet has a fiat system should tell you that you are flat wrong" - I'm not sure the conclusion follows logically from the premise here. I think that governments that are able to siphon the most from their economies have ended up as stronger and fiat partly enables such a scheme. (aside: I believe in The Sovereign Individual they outline that this is why capitalism "won" over communism in the cold war period, capitalism allowed for more government more access to the populations income to fund itself)

I think part of the discussion here is a difference between what is best for an "individual now" vs a "society in the future". To me its clear the benefits of Bitcoin to the individual now. Im not so sure about a utopian bitcoin standard for society in the future to be honest. I think many people gloss over the transition to such a standard as well as how different life might be on such a standard. But as the stoics say, focus on what you can control.
Excessive inflation is bad, and particularly for those on fixed income sources. My argument is not and never has been that high inflation is good. My argument is mild inflation is a nothing burger and a non-fixed system is overall more economically sound and productive than a fixed system. Additionally, fixed systems have an in-built/organic economic death cycle which was jettisoned decades ago once it was understood.

Most people do not understand how macro money works. It's not easy to understand and it is, I think, kinda weird. Most people take their individual experience with money, debt and savings and extend it to the broader world. However, extending an individual's monetary economy to a nation state's is a completely wrong paradigm.

But here's something simple everyone can understand.

More printed money != inflation. We all just witnessed that for 13 straight years. Japan is going on 30+ years of big printing presses and no inflation.

Inflation = any amount of money + real scarcity. We are having inflation because it appears COVID jacked up every supply chain known to man.

Finally, inflation can be fixed in less than a year. Whether it will be is another matter all together. Time will tell if in fact it is "transitory." My guess is the Fed believes it is transitory because they are betting on the supply chain issue working itself out...and when it does, poof, serious inflation will go a way.

P.S. Enjoyed the link, thanks for posting.
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Re: China Bans Cryptocurrency Transactions

Post by glennds » Sun Oct 17, 2021 3:20 pm

Kbg wrote:
Thu Oct 14, 2021 9:11 am


More printed money != inflation. We all just witnessed that for 13 straight years. Japan is going on 30+ years of big printing presses and no inflation.
Is it possible that Japan has plenty of inflation, but you and I can't see it because it's being canceled out by the persisting deflation that was present in their economy?
Deflation being the reason for inducing the inflation in the first place?
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Re: China Bans Cryptocurrency Transactions

Post by boglerdude » Sun Oct 17, 2021 10:06 pm

The Japanese dont riot. And have less property zoning. Check gold priced in Yen.
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Re: China Bans Cryptocurrency Transactions

Post by glennds » Sun Oct 17, 2021 10:37 pm

vincent_c wrote:
Sun Oct 17, 2021 8:36 pm
Printing money is the definition of inflation for whatever money in question.

Whether the printing of money affects how much it costs to purchase some other thing is a different story. If KBG means printing money != CPI inflation then I agree.
Right, but if you have an economy that is suffering from deflation, due to a shock or an asset bubble collapse, and the central bank creates inflation by printing money to counteract the deflation, is it necessarily a bad thing?

In 1929 when no such central bank action was taken, we know what happened; a devastating deflationary depression.
So if a central bank today induces inflation in order to stave off a deflationary depression, it may be a sound defensive measure. In such a case we may not actually see or feel the inflation, because it is being netted against the deflationary forces.
I don't claim to know enough about macroeconomics to say with certainty this is happening, but I'm putting forth the thesis.

They say in 2008 this is exactly the crusade that Bernanke led. I was among those that believed they had created an inflation monster that would get out of control, so I invested heavily in gold and convinced myself why there would not be a bull market in equities. Well the money printing inflation never came, and they successfully tapered off the action. In thinking about it, I concluded what I describe above is the reason why. The same may be the reason why Japan has not collapsed into hyperinflation from its even more aggressive action. Maybe we're in an age of central bank balancing that may have some merit so long as they do it right.

Note, I'm not talking about the "normal" historical 2-3%/year CPI inflation, I'm talking about excess inflation.
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Re: China Bans Cryptocurrency Transactions

Post by glennds » Mon Oct 18, 2021 8:24 am

vincent_c wrote:
Mon Oct 18, 2021 1:16 am
I personally feel like if everyone is allowed to act in their best interests in an economy that isn't manipulated then things will work itself out, maybe harsh for some but who's to say what system is fair.
I agree with you, but only up to some type of circuit breaker threshold.
Beyond that level, self interest can lead to bad outcomes. My example would be the years leading up to 2008. Alan Greenspan, being a student of Ayn Rand, was a huge believer in the invisible hand.
Then when the mortgage lenders, borrowers, Wall Street banks, appraisers, and every other invested party took their self interest into recklessness, we both know what happened.

OTOH, when the government is too involved, it's usually not a good thing either. The answers are never binary.

I'm not against some type of regulation of the crypto market. Here is a market that is big enough to be big, but not too big to be manipulated by whales, hedge funds, other bad actors. If that kind of manipulation happens and little guys get hurt, then the regulation that does eventually show up will be punitive and not the kind we had hoped for.
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Re: China Bans Cryptocurrency Transactions

Post by bitcoininthevp » Mon Oct 18, 2021 8:43 am

glennds wrote:
Mon Oct 18, 2021 8:24 am
Beyond that level, self interest can lead to bad outcomes. My example would be the years leading up to 2008. Alan Greenspan, being a student of Ayn Rand, was a huge believer in the invisible hand.
Then when the mortgage lenders, borrowers, Wall Street banks, appraisers, and every other invested party took their self interest into recklessness, we both know what happened.
There are of course many considerations to 2008. But to bring up Greenspan (the Fed) in the 2008 context and not see how the Fed controlling interest rates lower and the price of the money during a real estate bubble is a bit misleading.

What had more impact in that market: the Fed, a state constructed monopoly, controlling the price of money and thus the price of all good and services in the market, or some subtle <unnamed-in-this-thread> laissez-faire regulation?
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Re: China Bans Cryptocurrency Transactions

Post by Kbg » Tue Oct 19, 2021 9:40 am

Stable no change money guys...make the case why a Snickers bar, a gallon of gas or whatever should perpetually stay the same price? What is wonderful about that? If grandma's bread loaf goes up 10% and if her SS check goes up 10%, in real terms grandma just has to be able to deal with larger numbers...the real effect is zero.

Side note: Printing money most definitely is not the definition of inflation. As I've said a ton of times on this board, more money does not equal inflation. Two other factors are involved. The most important is scarcity, the second is the velocity of money.

"The velocity of money is the frequency at which one unit of currency is used to purchase domestically- produced goods and services within a given time period. In other words, it is the number of times one dollar is spent to buy goods and services per unit of time. If the velocity of money is increasing, then more transactions are occurring between individuals in an economy. The frequency of currency exchange can be used to determine the velocity of a given component of the money supply, providing some insight into whether consumers and businesses are saving or spending their money. There are several components of the money supply,: M1, M2, and MZM (M3 is no longer tracked by the Federal Reserve); these components are arranged on a spectrum of narrowest to broadest. Consider M1, the narrowest component. M1 is the money supply of currency in circulation (notes and coins, traveler's checks [non-bank issuers], demand deposits, and checkable deposits). A decreasing velocity of M1 might indicate fewer short- term consumption transactions are taking place. We can think of shorter- term transactions as consumption we might make on an everyday basis."

https://fred.stlouisfed.org/series/M2V

https://fred.stlouisfed.org/series/M2SL

Made simple...money printed and not spent means no inflation.

Again, the Japanese are printing up a veritable money storm and they can't force inflation no matter how hard they try (and oh my how they've tried). Their problem is they have a declining population base which means there is less demand for real goods and they are simply printing money that isn't used.

If you can't explain why Japan isn't having hyperinflation, then you need to admit you're just flat wrong. (and you are)
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Re: China Bans Cryptocurrency Transactions

Post by Xan » Tue Oct 19, 2021 10:04 am

Kbg wrote:
Tue Oct 19, 2021 9:40 am
Stable no change money guys...make the case why a Snickers bar, a gallon of gas or whatever should perpetually stay the same price? What is wonderful about that? If grandma's bread loaf goes up 10% and if her SS check goes up 10%, in real terms grandma just has to be able to deal with larger numbers...the real effect is zero.
This is a tangential point, but it's relevant I think: we all pay taxes on our nominal earnings, not our real earnings. So inflation makes everyone's taxes go up.
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Re: China Bans Cryptocurrency Transactions

Post by Xan » Tue Oct 19, 2021 1:34 pm

vincent_c wrote:
Tue Oct 19, 2021 1:33 pm
People can debate forever on how to measure inflation.

Look, I understand what KBG is saying and arguably it is the most practical way to look at it. But the reason inflation is so confusing is because the same word is used to describe so many different things. Sometimes theoretical, sometimes technical, sometimes practical, sometimes subjective.

I agree with KBG if inflation means "making things more expensive to buy in nominal dollars".
I thought the technical definition of inflation was expansion of the money supply. But that might not be the most useful definition.
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Re: China Bans Cryptocurrency Transactions

Post by Jack Jones » Tue Oct 19, 2021 2:22 pm

glennds wrote:
Mon Oct 18, 2021 8:24 am
Beyond that level, self interest can lead to bad outcomes. My example would be the years leading up to 2008. Alan Greenspan, being a student of Ayn Rand, was a huge believer in the invisible hand.
Then when the mortgage lenders, borrowers, Wall Street banks, appraisers, and every other invested party took their self interest into recklessness, we both know what happened.
I believe Bitcoin was created in response to these events.
The Times 03/Jan/2009 Chancellor on brink of second bailout for banks[1]
The issue wasn't self-interest. It was cronyism.
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Re: China Bans Cryptocurrency Transactions

Post by glennds » Tue Oct 19, 2021 11:33 pm

Desert wrote:
Tue Oct 19, 2021 5:13 pm

And CPI is the most accepted measure of inflation. Indeed, when we calculate inflation-adjusted returns, we adjust them using CPI, not a measure of money supply.
As I understand it, CPI is a measure of the change in price over time of a market basket of consumer goods and services.
So what about assets and asset price inflation?
CPI does not measure the change in prices over time of assets such as stocks, bonds, real estate, commodities and other assets.

If we ignore the recent supply chain related disruption to consumer goods and services, I would say we have seen a period of significant asset price inflation, but not a lot of CPI type inflation.
So is it fair to say the two types of inflation are disconnected?

Which one of the two would be most affected by money supply change, demand change, scarcity of goods, money velocity or interest rate manipulation?
IMO consumer prices would be most affected by scarcity of goods and changes in consumer demand, both of which we have right now, ostensibly as a result of the pandemic supply chain disruptions.

However asset prices may be more affected by money supply, money velocity and interest rate manipulation, which we have experienced in varying escalated degrees since 2009 and in the Greenspan years before that. Created money is chasing yield, and zero/near zero interest rates are forcing savers into risk assets but more importantly influencing cap rates which in turn influence valuations. I have had firsthand experience where the latter has had an undeniable and significant impact on commercial real estate valuations.

So when we look at a case study like Japan and say they've had no or little inflation, are we talking about CPI type inflation, or asset price inflation, or both?
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Re: China Bans Cryptocurrency Transactions

Post by boglerdude » Wed Oct 20, 2021 12:47 am

Wars and casedemics are much harder to pull off if they are financed by taxes instead of inflation.

https://wolfstreet.com/2020/03/23/what- ... -and-spvs/
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Re: China Bans Cryptocurrency Transactions

Post by Jack Jones » Wed Oct 20, 2021 8:27 am

Old head, gold bug, sound money advocate, Ron Paul supporter, Larry Lepard discusses gold, bitcoin, and the deflationary utopia that awaits.

https://talesfromthecrypt.libsyn.com/27 ... rry-lepard
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Re: China Bans Cryptocurrency Transactions

Post by gaddyslapper007 » Wed Oct 20, 2021 10:44 am

back to the point of this thread........you've just seen what happens when a Government comes down hard on Bitcoin. Money / Wealth is liquidus and flows to path of least resistance...free nations! Who won?...Bitcoin did. (money / wealth goes where its treated best.) Nothing is as powerful as Bitcoin! Please understand what is about to transpire here worldwide.

-Gold vs. BTC - which side will you choose?
- Government Bonds vs BTC - which side will you choose? (competing against negative / lows rates!?..really?...(EASY choice))
- Real Estate vs BTC - which side will you choose? (Historically wealth has been preserved in land / real estate. Values perpetuated by tax breaks, low money down financing, tax free gains via cash-out re-fi's, etc, ...all the while feeding the cancerous / irresponsible State through property taxes. (Which requires higher & higher housing pricing to increase revenue, to pay off old debt, yada yada, ...and we come full circle back to why the Fed / Government will do every kind of manipulation possible and tax / lending incentives to maintain and increase real estate / housing value.) (the Achilles heel of US economy is real estate (contraction in the money supply).... 2008 anyone?)...

Back to money / wealth being liquidus......since MOST real estate pricing is propped up by lending / speculation, and with 70% of US wealth tied into real estate....i ask you.... As an investor / wealth preserver.. Would you rather own Bitcoin or Real Estate? (which is less labor intensive? which is more fungible?, Which is less subjective in value? Which is taxed yearly at appraised value? ) you know the answer....can you admit it?

Bitcoin will be the savior of Fiat - instead of a fiat Hyperinflation collapse, BTC will consume it and bail it out at the same time.....be on the right side of history for your loved ones and heirs.
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Re: China Bans Cryptocurrency Transactions

Post by I Shrugged » Wed Oct 20, 2021 11:09 am

Jack Jones wrote:
Wed Oct 20, 2021 8:27 am
Old head, gold bug, sound money advocate, Ron Paul supporter, Larry Lepard discusses gold, bitcoin, and the deflationary utopia that awaits.

https://talesfromthecrypt.libsyn.com/27 ... rry-lepard
I wish podcasts had transcripts available. I am pretty sure I could skim a transcript of this 83 minute podcast in 10 minutes and get the gist of it.

So, why is gold demonetized?
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Re: China Bans Cryptocurrency Transactions

Post by I Shrugged » Wed Oct 20, 2021 11:10 am

gaddyslapper007 wrote:
Wed Oct 20, 2021 10:44 am
back to the point of this thread........you've just seen what happens when a Government comes down hard on Bitcoin. Money / Wealth is liquidus and flows to path of least resistance...free nations! Who won?...Bitcoin did. (money / wealth goes where its treated best.) Nothing is as powerful as Bitcoin! ....
Bitcoin won a battle. The war is not over.
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