Bitcoin - New money Free exchange The Economist

MicroStrategy's $425M BTC investment thesis - "buy something that can either get cut in half or 10x"

Amidst all of the DeFi volatility, drama and excitement, Bitcoin has started to seem rather boring. Its price is more or less flat to where it was a year ago and you can’t even farm Yams with it.
While some have started to view Bitcoin as a useless digital rock, someone did find an interesting use case for it. This week, more details surfaced around how MicroStrategy CEO Michael Saylor convinced the board of a publicly traded company to allocate nearly all of the company’s $500M cash position to bitcoin.
Michael Saylor
Saylor graduated from MIT in 1987 and founded Microstrategy at the age of 24. MicroStrategy is a “Business Intelligence” company, which basically creates software that allows companies to use their own data to drive decision making.
Interesting side note - Saylor, like any good 90’s internet entrepreneur, also bought a bunch of internet domains and was the guy who ultimately sold Voice.com to Block.One (EOS) for $30M.
MicroStrategy’s’ $500M Problem
To most people, having $500 million in cash doesn’t sound like a problem. Up until recently, it wasn’t for large corporations either. There was a time before the ‘08 financial crisis when the risk free rate of return on cash was 5% a year. This means a company could sit on $500M, earn $25M a year for doing nothing, and have cash on hand for a rainy day.
Fast forward to today, when the risk free rate of return has plummeted to 0.69% due to loose fiscal policies (money printer go BRRRR) alongside inflating asset prices, and it’s a different story. In Saylor’s own words, “we just had the awful realization that we were sitting on top of a $500 million ice cube that’s melting.”
Cash is Trash
So what’s a corporation to do with a $500M melting ice cube? It turns out it’s not that easy to unload half a billion dollars in a short amount of time.
You could buy back half a billion of your own company’s shares. For a company like MSTR, Saylor estimated that would take 4 years. Time MiscroStrategy didn’t have.
You could buy real estate. However, commercial real estate prices have collapsed post COVID while property owners still believe their assets are worth what they were in January. In other words, good luck getting a fair market price.
You could buy blue chip equities. Amazon, Apple, Google, Facebook. However, your risk is symmetric. They can each fall 50% just as easily as they can go up 50%.
That left Saylor with silver, gold, Bitcoin, and other alternative assets. A move the company announced it was exploring on a July earnings call.
A Bold Purchase
Saylor ultimately wanted something that could either get cut in half, or go up by a factor of 10. An investment akin to what buying Amazon or Apple in 2012 was. In other words, asymmetric risk.
As a student of technological history, Saylor observed that the winning strategy over the last ten years has been to find some kind of “digitally dominant network” that dematerializes something fundamental to society. Apple dematerialized mobile communications. Amazon dematerialized commerce. Google dematerialized the process of gathering information.
Something Saylor noted was common to all recent 10X opportunities is buying when they’ve achieved $100B+ marketcaps and are ten times the size of their next biggest competitor. As Bitcoin is the dominant digital network dematerializing money that’s 10x the size of any cryptocurrency competing to be a store-of-value (not counting ETH here), it fit the bill.
Making the purchase
With the thesis in place, the next thing Saylor had to do was get everyone at MicroStrategy to sign-off on the unorthodox decision. To do this, he simply made everyone go down the same Bitcoin rabbithole that most people in the industry have gone down.
He made everyone at the company watch Andreas Antonopoulous videos, read The Bitcoin Standard, watch Eric Vorhees debate Peter Schiff and listen to Pomp and NLW podcasts. With no strong detractors, MicroStrategy turned to execution. They first put $250M to work purchasing 21,454 BTC in August and another $175M (16,796 BTC) in September for a total $425M and 38,250 BTC.
What’s fascinating is that MicroStrategy was able to open such a large position without really moving the market or anyone even taking notice. This speaks to just how liquid of an asset BTC has become. To acquire the September tranche of BTC, Saylor disclosed that they traded continuously for 74 hours, executing 88,617 trades of .19 BTC every 3 seconds.
One for the history books
Skeptics noted that shares of MSTR have been on the downtrend since 2013, as the real reason behind MicroStrategy’s bold move. Regardless, the move has interesting implications for the company’s shareholders. As TBI observed, MicroStrategy is now both a software company and with ⅓ of its marketcap in Bitcoin, a pseudo Bitcoin ETF. At the time of writing, MSTR is up 20% on the week.
Only time will tell if history looks back on this move as a brilliant strategic decision or a massive corporate blunder. In the short term, it scores a massive win for Bitcoin’s digital gold investment thesis.
Billionaire hedge fund manager Paul Tudor Jones is in. A publicly traded corporation has made Bitcoin it’s primary treasury asset. As CFOs and fund managers around the world undoubtedly take notice, one has to wonder, who’s next?
PS - I based a lot of this article on Pomp’s interview with Michael Saylor, which I recommend giving a listen.
Original article
Source
submitted by CryptigoVespucci to Bitcoin [link] [comments]

To print... or not to print? The effects of lost money and effective death taxes.

So, in the perfect economy, all goods would be distributed to every person according to their needs, and all people would have access to resources. However, there is a choice gradient, especially for simple wants, and that is why money, pricing, and markets exist. There is no socialist replacement that encapsulates a weighting of extreme want, vs need. For example, consider the following choice of life for life.
Person aged 79. Has heart disease. Needs a new heart, will probably die in 3 years without a new heart. REALLY REALLY wants to live.
Person aged 17. Has heart disease. Needs a new heart, will die in 2 months without a new heart. Suffers from depression and is suicidal.
Now, who needs the heart more? They are both humans, and both of their lives are important. They *SHOULD* both be saved. But, without artificial hearts, we need to make a choice, and if they both had equal resources, then they could devote their resources towards what was meaningful to them. Now in a society that only cares about absolute life lived, it is a no brainer to sacrifice the old to save the young, despite the older person having more wealth, and caring more about life, and having less of a need for the transplant. But in our capitalist society, the call will be made to save the one who spends more money. And this is the tyranny of capitalism.
But what about the choice of a woman who wants to homeschool her child vs a man who wants to buy a new car? This is a different choice, and is a choice of wants. Again, markets currently make this choice. Circumstances are everything, and need vs want is really not clear cut. For example, what if the car is needed to provide resources for a family? Or what if the homeschooling needs to be done because the child's life is at risk? These complicate the difference between need and want and turn clear cut decisions into aggregate inputs of demand. Which comes down to markets, pricing, money... and a useful discussion about whether the printing of new money is beneficial or harmful to a society in terms of socialist goals of having everyone fed clothed, and well off.
There are two schools of thought in this. Keynesian and Austrian economics. The Keynesian economic system is the economic system that drives modern capitalism. Under Keynesian theory, the goal is to devalue money at a slow, steady rate. This devaluing of money makes holding money akin to playing with a hot potato. People are penalized for saving, and they are encouraged to take on debt and over leverage themselves to acquire material possessions. This drives the rampant materialism seen so often in capitalist countries, and drives the valuation of material wealth over human life. People are driven to consume, and thus consumer culture arises as a function of devaluing money. The end game of Keynesian economics can be seen in hyper inflation, where the prices of all goods soar above the ability of the people to buy, and wages do not rise to meet the needs of the people.
The alternative is Austrian economics. Under the Austrian economic system, no new money is printed. The money supply is set in stone. When money is lost, it is lost forever, and there is slightly less money circulating in the system. As a consequence, the prices of all goods fall slightly over time to accommodate the lost value, and the appreciation of the base currency. This means that the everyday individual has an effective constant rise to their wages and standard of living if their wage does not change. If you want a very deep dive into Austrian economics, check here: https://en.wikipedia.org/wiki/Austrian_School
Austrian economists tend to be anarchocapitalist in their opinions, and nowhere is this more readily seen than in the bitcoin sphere. However, the implications of a society where no money is printed is extreme. Firstly, minimum wage would never have to be increased. Instead, employers would be fighting tooth and nail to see the minimum wage decrease. Consider a real world example. In 2010, the price of 1 bitcoin was $31.00. Say that congress had ordered that the minimum wage was to be 1 bitcoin. That same value today is $ 11,352. Now, this is obviously extreme, but it illustrates a powerful trend that would empower the working class over time, and dis-empower employers. I wish I had a better example where there was less rampant speculation than bitcoin, but other examples do not exist. Bitcoin is the longest running monetary system in modern times that is backed by a finite resource. Fiat currencies have gone off the gold standard.
This of course does not solve the other fundamental problems of capitalism. But it is a step ahead of the fiat system that dominates the capitalist world, and I believe a system where money was not printed would empower the workers and everyday people of the world.
submitted by Ghostcarapace3 to socialism [link] [comments]

New Lands, or New Eyes? | Monthly FIRE Portfolio Update - April 2020

The real voyage of discovery consists not in seeking new landscapes, but in having new eyes.
- Marcel Proust, Remembrance of Things Past
This is my forty-first portfolio update. I complete this update monthly to check my progress against my goal.
Portfolio goal
My objective is to reach a portfolio of $2 180 000 by 1 July 2021. This would produce a real annual income of about $87 000 (in 2020 dollars).
This portfolio objective is based on an expected average real return of 3.99 per cent, or a nominal return of 6.49 per cent.
Portfolio summary
Vanguard Lifestrategy High Growth Fund – $697 582
Vanguard Lifestrategy Growth Fund – $40 709
Vanguard Lifestrategy Balanced Fund – $76 583
Vanguard Diversified Bonds Fund – $110 563
Vanguard Australian Shares ETF (VAS) – $174 864
Vanguard International Shares ETF (VGS) – $31 505
Betashares Australia 200 ETF (A200) – $215 805
Telstra shares (TLS) – $1 625
Insurance Australia Group shares (IAG) – $7 323
NIB Holdings shares (NHF) – $5 904
Gold ETF (GOLD.ASX) – $119 458
Secured physical gold – $19 269
Ratesetter (P2P lending) – $12 234
Bitcoin – $158 360
Raiz app (Aggressive portfolio) – $16 144
Spaceship Voyager app (Index portfolio) – $2 435
BrickX (P2P rental real estate) – $4 471
Total portfolio value: $1 694 834 (+$127 888 or 8.2%)
Asset allocation
Australian shares – 40.9% (4.1% under)
Global shares – 21.7%
Emerging markets shares – 2.2%
International small companies – 3.0%
Total international shares – 26.9% (3.1% under)
Total shares – 67.8% (7.2% under)
Total property securities – 0.3% (0.3% over)
Australian bonds – 4.5%
International bonds – 9.9%
Total bonds – 14.4% (0.6% under)
Gold – 8.2%
Bitcoin – 9.3%
Gold and alternatives – 17.5% (7.5% over)
Presented visually, below is a high-level view of the current asset allocation of the portfolio.
Comments
This month featured a sharp recovery in the overall portfolio, reducing the size of the large losses experienced over the previous month.
The portfolio increased by over $127 000, representing a growth of 8.2 per cent, which is the largest month-on-month growth on record. This now puts the portfolio value significantly above the levels of a year ago.
[Chart]
The expansion in the value of the portfolio has occurred due to an increase in Australian and global equities markets, as well as substantial increases the price of Bitcoin. This is effectively the mirror image of the simultaneous negative movements last month.
From a nadir of initial pessimism in late March, markets have generally moved upwards as debate continues about the path of a likely economic recession and recovery from Coronavirus impacts over the coming year.
[Chart]
First quarter distributions from the Australian and Global Shares ETFs (A200, VAS and VGS) were received this month. These were too early to fully reflect the sharp economic activity impacts of the Coronavirus and lockdown period on company earnings.
Despite this, they were significantly down on a cents per unit basis on the equivalent distributions last year. Totalling around $2700, these distributions formed part of new contributions to Vanguard's Australian shares ETF (VAS).
The rapid falls in equity have many participants looking forward to a return to normalcy, or at least more open to the pleasing ideas that nerves have been held in a market fall comparable to 2000 or 2008-09, and that markets now represent clear value. As discussed last month, there should be caution and some humility about these questions, if some historical perspective is taken. As an example, the largest global equity market in the world - the United States - remains at valuation levels well above those experienced in previous market lows.
Portfolio alternatives - tracking changes under the surface
A striking feature of the past year or so has been the expansion of the non-traditional or 'alternatives' components of gold and Bitcoin as a proportion of the overall portfolio. Currently, when combined these alternative assets form a greater part of the portfolio than at any point over the past two years.
The chart below shows that since January 2019 the gold and Bitcoin component of the portfolio has lifted from around its long term target level of 10 per cent, to now make up over 17 per cent of the portfolio. In the space of the last four months alone, it has lifted from 13 per cent.
[Chart]
With no purchases of either gold or Bitcoin over the period, the growth in the chart is the result of two reinforcing factors:
A substantial fall in the value of the equity portfolio - reaching nearly $200 000 since the recent February market peak has naturally and mathematically led to a commensurate increase the proportion of other assets.
Increases in the value of gold and Bitcoin - have also played a role with a total appreciation of around $150 000 across the two assets over the past 16 months.
In fact, the value gold holdings alone have increased by over 40 per cent since January last year. Further appreciation of either gold or Bitcoin prices, particularly if any further falls in equity markets occur, could easily place the portfolio in the same position as experienced in January 2018.
At that time these alternative assets made up 1 in every 5 dollars of the portfolio, an unusual, and in that case temporary phenomenon. This represents a different portfolio and risk exposure than that envisaged in my portfolio investment plan.
Yet, equally it is critical to recall what the circumstances would likely be for this to arise. Simultaneously high gold and Bitcoin prices are more likely to occur in a situation of severe capital market dislocation, or falling confidence. On the other hand, should confidence and equity market growth be restored, both of these portfolio components could fall back to lower levels.
It is difficult to tell which state of the world will eventuate, a key reason for diversification across asset types. United States government debt is already at record levels - equivalent in real terms to levels last seen when it emerged out of the Second World War - despite no similar national effort having being undertaken.
Future inflation can potentially partly manage this burden, however, the last sustained episode of persistently high inflation rates during the decade of the 1970s spelt negative real returns. Where investors expect future inflation or financially 'repressive' policies of inflation exceeding interest rates, the economic growth required to 'grow out' of debt can be affected.
At this point, my inclination is to address this circumstance gradually through time by re-balancing of distributions and new contributions, rather than to realise capital gains by selling assets at one, or several, points in time.
Chasing down the lines - falling average spending in lockdown
Since the implementation of lockdown restrictions, average credit card expenditure has fallen by nearly 30 per cent. This has taken credit card expenditure to lower than any similar period in the past six years.
Partly as a result of this - as the chart below shows - a new development is occurring. The previously fairly steady card expenses line (red) is now starting to bend down towards, or 'chase', the rolling average distributions line (in blue).
[Chart]
The declining distributions line is a result of some previous high distributions gradually falling outside of the data 'window' for the rolling three-year comparison of distributions and expenditure.
This intriguing picture will probably change before a cross-over occurs, as lockdown restrictions ease, and as the data feeding into the three year average slowly changes over time.
Progress
Progress against the objective, and the additional measures I have reached is set out below.
Measure Portfolio All Assets
Portfolio objective – $2 180 000 (or $87 000 pa) 77.7% 104.6%
Credit card purchases – $71 000 pa 94.8% 127.6%
Total expenses – $89 000 pa 76.0% 102.3%
Summary
Last month market volatility theoretically took progress down to below most of my financial independence benchmarks on an 'All Assets' (i.e. portfolio and superannuation assets) basis. This position has reversed this month. As markets have recovered and with additional spare time in the lockdown period, I have continued to seek out and think about different perspectives on the history and future of markets.
Yet it must be recognised that there is a natural limit to the utility of these ponderings. The shape of the future is always uncertain, and in this world, confident comparisons and analogies with past events can be perilous. Comparisons with past periods of financial market crises miss the centrality of government action as a causal influence on the path of virus affected economies and markets.
A virus and recovery is not the same as a global financial crisis originating in housing finance markets addressed through monetary and fiscal stimulus. Most developed country governments have quickly applied the same, if not larger versions of responses as applied in the global financial crisis, a distinguishing step that also makes analogies with the great depression era problematic.
Similarly, a pandemic is not hitting and interacting with the shattered economic and health systems of the 1918-19 Spanish flu. Overlaying all of this is the imperfect and partially disconnected relationship between the economy today, and equity markets that discount and focus on the future.
This makes all history's lessons more than usually caveated and conditional. One avenue for managing through these times is to focus on what does not change - the psychological difficulty of accepting alterations in financial circumstances and the capacity of markets movements to cruelly surprise us in both timing and direction.
One of the best texts to read to get a sense of both of these in such times is Benjamin Roth's A Great Depression Diary. This tells of the day-by-day changes observed in everyday urban life and investment markets, from the point of view of an American small retail investor living through the times.
This month also saw the exciting news that Pat the Shuffler and Strong Money Australia are combining efforts to produce a new podcast. Speaking of which, Big ERN's reflections on the current implications of sharemarket market movements for seekers of financial independence have been filled with insight and wisdom.
This interesting piece (video) - the latest in a 'virus' market series - from New York University's Professor of Finance Aswath Damodaran on asset performances through the past few months - is a more technical and detailed discussion of how markets have re-priced businesses and profits. Finally, the recently released Hmmminar interview series provides a more heterodox set of speakers and ideas on current markets, presented by Grant Williams.
Unlike predicting the future, seeking out different perspectives on it is perhaps the easiest it has ever been in history. While it is not always possible to change the course taken, it is possible to look at the same horizon with new eyes.
The post, links and full charts can be seen here.
submitted by thefiexpl to fiaustralia [link] [comments]

Some informative responses from Colin and Andy from the just-concluded Nano AMA at the Atomic Wallet Telegram group

The AMA ran today from 13:00 - 14:20 UTC, with Colin and Andy. I've copied over some of their responses that I found give me better insight into Nano. Their responses are in italics. Responses to different questions are separated by double spaces. Colin's responses are listed first, followed by Andy's. Sorry I couldn't copy over the questions as well. I've added my comments in places.
From Colin:
PoW coins have done a good marketing that the energy expenditure makes your coins more secure but it’s really unnecessory. PoW coins need to continue expending work because if they stop, their security parameter erodes.
Nano has no such problem, once an election for a transaction is complete, it’s confirmed. If it sits there it stays confirmed and it doesn’t need any extra effort. Wow, put that way, Bitcoin seems unsustainable in the long term when there is an alternative like Nano.

Yes the circulating supply is forever like this. The reason it can’t change is because nano transactions can only send your current balance or less to someone else, this means new coins can never be injected in to the system. Interesting design reason new Nano can't be minted.

Volatility is a focus with all cryptocurrencies and it comes from low volume, it’s not intrinsic to cryptocurrency itself. To cure low volume our focus is integrating it in to parts of the economy where it solves a problem, rather than just emulating credit cards etc.
Not having fees in the network puts us in a very good position for buying beer, for example. Typically credit card providers will charge 2-5% for a purchase, maybe even more, and it tight margin businesses that make 2-5% profit anyway, this is huge. A lot of Reddit discussion on crypto adoption considers only user experience and overlooks benefits to merchants.

Nano is purpose built to be the fastest and most decentralized currency around. Our transactions settle in less than 1 second and it’s all done on a network with no fees, and a tiny environmental footprint
Decentralization is an essential focus for us, many other cryptocurrencies can get fast or low cost, but they can’t also maintain decentralization which I think we do very well.
Well the sustainability comes from 2 main parts. We have a laser sharp focus on being the most efficient currency. This means our development stays focused and eventually the amount of things going in to the code base will trend downward; once we’ve achieved the goal we just have to make things more efficient.
The second part of sustainability is our Open Representative Voting which is our replacement for PoW mining. We saw the energy expenditure as something that would come in conflict with any system that would attain high adoption so our goal was to get the same or better decentralization benefits and also have a low energy footprint. We think we achieved that goal as our representatives are all over the world under many different organizations. A healthy decentralized representative set is good for long term sustainability.

And on the simplicity, nano is probably one of the easiest cryptocurrencies to use. There are no fees to calculate, the UX impact of entering a fee is greatly understated. How much should the fee be? Does my grandma know what network load is? What does it mean with respect to fee?
Nano simply has accounts and balances, you send and it lands in their wallet in less than a second, nothing can be simpler.

We’re not looking to expand in to defi right now. I have some reservations about it’s viability. One thing I’ve noticed in my many years of seeing technology evolution is to not try and change 2 things at once. We don’t want to simultaneously change the currency people use and also change how finances are done. First change the currency, then change the finances.
I think Libra suffers from a market mis-assesment. Essentially what they’re claiming is be a multi-currency bank account for every facebook user. Getting users electronic bank accounts isn’t a technology problem, it’s a regulatory and logistics problem. Since Facebook is essentially being a bank for people, they’re going to be required to comply with KYC requirements. Sending/receiving isn’t going to be open as it is in cryptocurrency because of AML requirements. People are not going to have access to the system in remote areas because how do they deposit or more importantly withdraw local currency from their Libra accounts.
I think privacy is a big concern with our transactions and credit card purchases and it’s only getting worse. Letting Facebook/Libra know all your purchase history I think is a huge mistake.
I think it also doesn’t fundamentally solve the central banking problem where they can print more money and inflate the currency supply. I see this behavior as a fundamentally unethical thing that cryptocurrency solves and Libra is taking a huge step back on that.
I don’t see anything compelling about it and I don’t see long term viability.

I think disk usage is going to be a low concern long term. The goal with Nano is to be a widely used commercial grade currency so the representatives will be banks and other financial institutions, universities, and tech companies. Considering how much youtube, instagram, and other social media data is created each day, I don’t think the ledger size will be a long-term limiting factor. Looks like the role of hobbyists in running nodes will diminish with widening adoption.

Nano’s value is being the fastest, most efficient currency around. Entreprenuers make use of natural market incentives / natural efficiencies to make money on a business.
Cryptocurrency has distorted that term a bit with something more closely resembling subsidies. The transaction fees and block rewards are subsidizing the security parameter and processing prioritization. PoW chains need this subsidy because their security parameter costs a lot. Additionally we’ve seen miners work to limit the network’s throughput in order to rent-seek on the limited transaction space. Damn, talk about unaligned incentives between users and miners.
The people we’re looking for are the entreprenuers that know how to make use of a faster, lower cost currency.

Yes, having a fixed supply is an essential component of currency. If people can add more currency to the system, they’re taking value away from everyone else in that process. It’s unfair and unethical.
1 Nano actually can be divided down very small so there’s no risk of not having enough coins.

In this response, Colin is addressing a question about Steem and other dPoS systems. One major difference with Nano consensus is: having more Nano does not get you more Nano, there are no rewards for holding Nano. Holding nano doesn’t give people voting privledges on network changes, or any other centralizing component associated with holding.
Another big difference is voting in nano does not produce blocks, it chooses between conflicting blocks that a user publishes. If you don’t attempt to double-spend, your transactions cannot be voted against.

From Andy:
1. The faucet did indeed seed Nano's amazing international communities, and the contributions from around the world to the project have been unbelievable over that last 2.5 years. Communities are still active, engaged and building 💪
2. The effects of Nano being added to the Atomic Wallet (and other multi-currency wallets) is two fold. It increases the accessibility and convenience of storing Nano alongside other coins and also helps to disperse voting weight across a wider spread of representatives - increasing decentralization!

We certainly feel that Nano possesses far and away the best fundamentals, democratic approach to decentralization, and user experience.
Being fully distributed and operating on a the mainnet since 2015 is also very important, and puts Nano way ahead of many other projects making bold claims about future potential.
Nano is here today, and works as one would expect the digital money would!

Privacy is an attractive proposition to users of digital money for obvious reasons, it can be very important. Our position towards privacy is more conservative as we have seen many more hurdles to mainstream adoption being put in front of privacy-based projects.
With that being said, there are eyes towards the technical implications of introducing privacy, but it is extremely difficult to do this without incurring slowdowns to settlement times.
Throughout 2019 we were able to make significant progress in helping some of the more well-established cryptocurrency services such as exchanges, fiat gateways, payment platforms, and wallets- like Atomic 😄, to understand and integrate Nano. This proliferation of Nano across the space has ensured that it is increasingly more convenient for users and merchants to access and begin using Nano for payments.
submitted by Live_Magnetic_Air to nanocurrency [link] [comments]

An Anarchist Case Against Markets

I originally posted this to DebateAnarchism but thought it would be good for discussion here as well
This post was inspired by a debate I had on this sub with a Market Anarchist, which stopped advancing beyond a certain point due to several impasses that we could never get beyond. It became frustrating for both of us after a while because we kept talking past each other.
I wanted to make this post in an effort to clearly explain the following: 1) What I mean when I say that I am "against markets", 2) Why I am against markets, 3) What mechanisms I think can serve as effective replacements for markets, and 4) Responses to common criticisms.
(Disclaimer: I am only pointing out problems with markets pertinent to the target audience of this sub that supports them - Market Anarchists. There is no need to make criticisms of market features that Market Anarchists do not endorse in the first place. This post is not intended to be a general or all-inclusive criticism of markets, because Market Anarchists are anti-capitalists anyway.)
"Against Markets"
I don't seek to "ban" markets in an anarchist social context (obviously, because I'm an Anarchist), but I seek to make them obsolete. This is what I mean when I say that I am "against markets".
The Problems with Markets (as they pertain to Market Anarchism) (in no particular order)
The authors investigate how worker-owned and capitalist enterprises differ with respect to wages, employment, and capital in Italy, the market economy with the greatest incidence of worker-owned and worker-managed firms. Estimates calculated using a matched employer-worker panel data set for the years 1982–94 largely corroborate the implications of orthodox behavioral models of the two types of enterprise. Co-ops had 14% lower wages than capitalist enterprises, on average; more volatile wages; and less volatile employment. Given the quality of the data set analyzed, the authors argue, these results can be regarded as having broad generality
(Note: Regarding the point about "less volatile employment" in favor of coops...this study was done comparing between capitalist firms and worker coops. The wages were largely reflective of wages for union members because the wages in capitalist firms regardless of whether the workers were union members or not were based on regional collective bargaining by the unions. However, (unlike with the wages) the job security is not reflective of job security for union members. While we can see that union wages are higher than income for workers working in cooperatives, we cannot make a meaningful comparison based on this study between union job security and coop job security.)
If you want an efficient market system for coordinating production and distribution, you need a flexible labor market. Unfortunately, a more flexible ("freer") labor market leads to reduced labor share of income even under worker ownership (Self-Exploitation). On the other hand, workers forming cartels (monopolizing/oligopolizing access the labor in their field) that restrict labor markets is the only way to halt the trend of decreasing labor share of income - this is essentially what the function of labor unions is. So you need labor cartels to prevent Labor self-Exploitation (in the Marxist sense), while these labor cartels will themselves either be impossible to enforce in the absence of authority (because of the equivalent of Scabs) OR even if they can be enforced without authority they will undermine the efficiency of the markets in your society (because cartels screw up the function of prices in a market).
Alternatives
Based on what is written below regarding ECP and HKP, there is no longer a reason (with regard to rational economic calculation or information) to think that decentralized planning and gift economy dynamics would be unable to entirely replace the role of markets.
Answers to Common Criticisms/Objections
I've been told this recently in an argument with a Market Anarchist. However, he never was able to explain specifically how and why these differences would manifest and on what basis one could claim that it would alter my calculus and conclusions above.
In that case you've massively restricted the potential scale and scope in which markets can have a role in the functioning of your economy. I suppose that's fine, but in that case I would ask the question: Why retain them at all? Why not seek to replace them entirely?
To put it simply, ECP just says that you need a mechanism that allows you to compare multiple possible allocation pathways for resources in order to know which allocation pathway is the most efficient use of resources. And HKP basically says that those who do a particular kind of activity in the economy learn the information relevant to that activity as they perform it. Furthermore, this information is disparate and best able to be extracted by lots of people individually doing particular activities that they focus on.
There's nothing inherent about a large firm that prevents this from happening more so than an aggregate of small firms playing the same role in aggregate as the large firm does by itself. Large firms that are run bottom-up and allow their members autonomy (as was the case of with each of the collectives/syndicates in Catalonia, in contrast to large firms in capitalism) can discover and disseminate this information at least as well as an aggregate of small firms playing the same role as the large firm by itself. As support for my claim, I reference The Anarchist Collectives by Sam Dolgoff - a book that contains multiple empirical examples showing that collectivization of multiple separate firms (which had been engaging in exchange transactions with one another to form a supply chain prior to the Anarchist revolution in Spain) into singular firms of operation from start to finish across the entire supply chain, actually improved productivity, innovation within the production process, and distribution of end products. This actually addresses both HKP and ECP. As per Hume's Razor, we can therefore conclude that a reduction in the scope, role, and presence of intermediary exchange transactions/prices between steps in the supply chain neither results in reduced ability to acquire & disseminate information nor results in reduced economic efficiency. Furthermore (as per Hume's Razor), we can conclude that it is not the scope, role, or presence of prices/exchange transactions that enable either rational economic calculation or the acquisition & dissemination of knowledge. This is because (as per Hume's Razor) if it were true that prices/markets are necessary or superior to all other methods for efficient information discovery & dissemination as well as for rational economic calculation, it would not have been the case that we could have seen improvements in productivity, innovation, and distribution of end products in the aforementioned examples after substantially reducing (via collectivization/integration of various intermediary and competing firms) the role, scope, and presence of prices/markets within the economy.
The alternative explanation (one that is more credible after the application of Hume's Razor and keeping the aforementioned empirical examples in mind) is that optimally efficient information discovery & dissemination as well as rational economic calculation, are both possible in a non-market framework when individuals have autonomy and can freely associate/dissociate with others in the pursuit of their goals.
What's written above should be sufficient to address this objection as well. If it is not the scope, role, and presence of prices/exchange transactions that enable either rational economic calculation or the acquisition & dissemination of knowledge...then there is no basis upon which to argue there will necessarily be (from an information or rational economic calculation standpoint) more bureaucracy in aggregate in a society that has replaced markets, than there would be in a society that retains them.
However, there remains the objection that bureaucracy would exist to a larger extent due to the lack of competitive pressures against inefficiency. My response is to point out that empirical evidence from revolutionary Anarchist societies indicate strongly to the contrary. The role and presence of competition was greatly reduced while there was a simultaneous improvement in efficiency. As per Hume's Razor, we can therefore reject the notion that it is competition specifically that inherently prevents bureaucratic buildup in individual firms. It seems, from these empirical examples, that the best way to prevent bureaucracy is not through market competition between several small firms but through Anarchist praxis involving a lack of hierarchy and authority within large firms (recall that I often use the term "firm" to refer to collectives, syndicates, etc. for the purposes of this post), such that there is no ossified system of rank within the large firm. The absence of an ossified system of rank within firms is the true key to preventing the accumulation of bureaucracy within firms.
Note the three types of efficiency in the linked video - Allocative Efficiency, Productive Efficiency, and Dynamic Efficiency.
The evidence from Anarchist Spain during the Spanish Civil War (which I discussed above) indicates that Productive Efficiency and Allocative Efficiency was improved in various industries and communities where Anarchist collectivization took place. This trend only reversed and ended as the State undermined the Anarchists through various measures, such as cutting them off of currency that was needed to acquire resources from outside the Anarchist-controlled regions, using that leverage over currency to take over control of various industries away from the Anarchists, etc... Thus far, the market anarchists I have discussed this issue with have agreed on this point.
Where I have faced disagreement from market anarchists is on the issue of Dynamic Efficiency aka "Innovative Efficiency". Those whom I have discussed this with argue that markets optimize dynamic efficiency better than any other alternative.
My response is as follows... Evidence indeed does not support the commonly held view that (within a market economy) larger firms have greater dynamic efficiency. However, it does show that investment into R&D (especially by small firms) in market settings is substantially impacted by whether or not there are Intellectual Property Rights.
For me, this raises a natural question: In an Anarchist social context where there are no intellectual property rights, would a framework of cooperation/collectivization into larger firms be more dynamically efficient than competition between smaller firms? Let's look at the following...
(1) Evidence shows that, in general, Intellectual Property Rights have a substantial net negative impact on innovative efficiency:
To summarize, although only tentative conclusions can be drawn given the small number of empirical studies, the body of available empirical evidence suggests that patents may substantively hinder both subsequent scientific research and subsequent product development. Across a relatively heterogeneous set of technologies within the life sciences, and examining various forms of intellectual property rights, the available empirical evidence suggests that property rights hinder cumulative innovation—with declines on the order of 30 percent. Clearly much more work is needed in order to examine the extent to which these patterns generalize to other technologies and other forms of intellectual property, but the best available evidence suggests that mechanisms that reward innovation in a way that places the technologies in the public domain—such as patent buyouts—may have substantial benefits in terms of encouraging cumulative innovation, at least in some contexts.
(2) Evidence shows that firms - in the context of a market economy - invest less in R&D without the presence of Intellectual Property Rights of some form.
So to summarize, IP generally has a substantial net negative impact on dynamic efficiency but in the context of a market economy IP is necessary to incentivize firms to invest adequately into R&D.
Based on this we can argue that in an Anarchist social context, a non-market framework (involving decentralized planning and gift economy dynamics) of cooperation/collectivization into larger firms is likely to be more dynamically efficient than a market framework of competition between multiple smaller firms. This means that replacing markets with cooperative/collectivized dynamics will likely improve dynamic efficiency - the opposite of what the market anarchists I have discussed this issue with claim.
I have had a discussion with a market anarchist who argued that certain kinds of tasks will not be adequately completed without monetary incentive - particularly tasks that are unpleasant or those which people do not enjoy.
However, this ignores the historical and contemporary evidence of Anarchists accomplishing these tasks without monetary incentive - see below:
https://theanarchistlibrary.org/library/peter-gelderloos-anarchy-works#toc53
https://theanarchistlibrary.org/library/sam-dolgoff-editor-the-anarchist-collectives#toc57
https://theanarchistlibrary.org/library/peter-gelderloos-anarchy-works#toc24
(A) First, here is the simplified logic behind why I find Marx's Law of Value Compelling as compared to Subjective Value Theory:
(i) The function of markets is to optimize supply and demand so that resources are allocated efficiently. An efficient allocation of resources enables future reproduction and growth of an economy. When the market suddenly undoes the very allocation of supply to fulfill demand that it had previously built up such that the economy subsequently shrinks, the previous build up can be thought of as a market failure. Hence the process by which prices plummet (along with all the subsequent effects) until the market can reorient to start growing the economy again, can be accurately called "correction". Given that prices can be incorrect such that they require "correction", price and value cannot be the same thing.
(ii) A bubble bursts in the economy when previously inflated prices are corrected. (Note that "correction" is not my own term, but a term frequently used to describe such phenomena in economics.)
(iii) The only way to make sense of this is that prices originally (prior to the bubble bursting) deviated from values too much.
(iv) If it is the case that prices can deviate too much from values while prices are derived from the interplay of various actors' marginal utilities, value cannot be subjective. There must be an objective substance of value around which prices can deviate (to an extent).
(v) Therefore, STV is invalid as a theory of value.
(vi) Having accepted this logic, it follows that we require an objective theory of value as opposed to a subjective theory of value. Now the question becomes: What should this objective theory of value be?
(vii) An objective theory of value must express value as being comprised of some definable substance(s).
(viii) Given that we have established value as something objective rather than subjective, it must be possible for commodities to be exchanged in such a way that there is equal Value on both sides of an exchange.
(ix) In order for things to have equal value, the substance of value must be some characteristic that all commodities share but also separates them from non-commodities.
(x) The only such characteristic is that they can all be produced by simple/"unskilled" human labor.
(xi) Therefore, expressing the value of a commodity must be done in units of simple/"unskilled" human labor.
(B) Furthermore, it has come to my attention that some market anarchists find Marx's Law of Value uncompelling as a result of the Transformation Problem. My response is to look into TSSI, which has made it clear that the Transformation Problem is a non-issue.
The reason this is important is that if you agree with Marx's Law of Value, then you necessarily would find worker cooperatives and market socialism of any variety (including market anarchism) highly problematic due to Self-Exploitation.
submitted by PerfectSociety to CapitalismVSocialism [link] [comments]

Wealth Formula Episode 188: Ask Buck Part 2 (Transcript part 2)

So all right next question and we're already going pretty late this is a long question, okay this is a very long question or at least my answer is going to be very long because this is from Eric. He says this is a hypothetical question if you could participate actively and/or passively and only three of the following alternative investment types over the next five to seven years which ones and why. Okay so there's a long, there's a laundry list of different things here which I think it's useful to go over. These are all things I think the reason Eric has them is because they have been the subject of podcasts of mine over a period of time. Let me give you my personal opinion on each, it's not again not investor advice right this is not it advice, this is my opinion but I'm gonna go through each one that's on this laundry list and just give you a short little feedback from my opinion okay and then I'll come back and I'll give you my three favorites. So self storage units okay I like self storage. I like self storage because it's resilient to the cycles, the recessionary cycles etc and the issue like anywhere else though is you got to find the right operator. You can also you know you could probably learn to do this. I have not necessarily you know learned to do this but I think it's a good business, you know especially with the demographic changes, the boomers as they retire and they leave their you know big houses and they move somewhere warm like Florida or something like that then they got to put their stuff places and that makes it great or you can raise rents very quickly in these things. You basically nickel dime people up you know significantly every year the challenge is finding where do you invest and so I'll tell you that you know I'm not a big fan of funds. I know there are some funds out there I'm not a big fan of them because I like to know what's in the portfolio and I know for a fact that some of the funds are basically you know just a bunch of properties that no one wanted to take down an individual asset necessarily and so they all kind of got grouped together. I like self storage but the deal has to be just right. It has to be just the right location etc etc okay and by the way I think again and from an inflationary standpoint it's a great, great place to be too but you gotta find the right deal. I'm sure we'll get hopefully we'll get one this year in Investor Club. Mobile home parks. Mobile home parks now this should be a good place for hedging the economy because of low-income housing right because of the low income housing play right there's always gonna be people who need it. The problem is okay let me back up there are people who own mobile home parks who are doing really well and if you want to get it in into that I mean hey more power to you I mean there's people who are doing well and and they're making decent money but always just look it as a pure cash flow play okay and if you buy it on your own you may get who knows fifteen twenty percent cash on cash and you know you get a you're gonna know how to run these things. I don't know very much about it. I hear it's not necessarily that hard but you know I mean obviously the professional operators are probably gonna do more with it but you can still make their basically cash counts right now. Here's the problem with investing in them as a limited partner though is that most of funds I see they might be giving you nine ten percent and for me for that kind of low-income housing, I mean this is really like you know Class D stuff right, I mean this is below apartment buildings so nine ten percent is just not enough right and the reason why that you're only getting you know eight nine ten percent is because well I mean the operators are taking the other half usually. If you can learn to buy these on your own then it might be worth it but the reality is that in a fund model or a syndicated model there isn't gonna be a lot of upside there, right? I mean think about it. What do we do in the apartment space? We have the ability to raise rents quite a bit and improve these properties. You can even take a property that has you know currently has residents who are you know C plus residents and all of a sudden you know you've got some hipsters in there and also you've opened up a new completely different kind of asset right? You can do that with apartments but in mobile home parks you really can't do that, you can't do that. I mean seriously like how much can you raise the rent on a mobile home park, you know people are living in mobile home parks if they move up too much then they don't live in mobile home parks anymore so the bottom line is the appreciation on there is gonna be limited. The upside is gonna be limited and that means the annualized return will be limited okay because you're not gonna be able to rely very much on appreciation. It's going to be your cash on cash and think of it that's all. So I'm not a big fan. I'm just not a big fan because if you think about it the next thing on the list here, large multifamily 50-plus units. Well for me this is my number one asset class. I mean people gotta live somewhere and unlike mobile home parks you can get significant IRRs annualized returns by value-add through inflation and gentrification all these things that you really are limited in mobile home parks, you know you can't count on all that with mobile home parks and the reality is for investors if you look in you know Investor Club, our yields are just just as good as but the better than what you're seeing in the funds for mobile home parks and they're much higher quality assets in the right hands. In my opinion is even as a limited partner this continues to be the best place for not only capital preservation and growth capital preservation but also growth in the next five ten years. Okay so small multifamily in other words see you don't want to be a limited partner okay, you want to buy ten, 20 units etc. Well I used to do that more. I don't really do that anymore and I did really well right I mean I did really well with that kind of strategy. If you're a good operator then great go for it. The problem is that okay so say you're buying like a you know a million dollar asset you're gonna put in two hundred, two hundred fifty thousand dollars in that one asset to just buy it. The problem is that the risk profile is significant there if you don't know what you're doing right now as opposed to you know spreading your two hundred, two hundred fifty thousand over four deals in a syndicated deal and getting exposure to you know ten times more doors all of a sudden you've got two million dollars you know you've got two hundred two hundred fifty thousand dollars of equity sitting in one deal and his buck stops with you so if you are comfortable with that by all means I was comfortable with it I didn't necessarily like it and so what I would what I would say is if you're the type of person who really wants to get into the real estate game and be a landlord then go for it otherwise don't. Understand that it's very different to have a ten, twenty unit apartment building than it is a two hundred unit apartment building. One you're a landlord, the other one you're managing a small business so just be aware of that. Single-family homes is the next one on the list and I'll just tell you I just don't like them enough for our, not for our demographic, meaning like accredited investors, because you know you have the ability to do something a lot more scalable right, just through syndications and getting lots and lots of exposures. The thing I don't like about single family homes here's the deal, there's not enough scalability, there's too much Capex, okay so one roof and one furnace each unit and everyone I know who owns five or six single-family homes wishes they didn't own five or six in a single family homes they want to sell them. These get to ten and they're like this is terrible and you know I get a hundred dollars per property and then the next thing you know one month I get a five thousand dollar furnace to replace, so I'm not a big fan. So with multifamily if you're gonna do it on your own I would recommend that an award the way I think that most people who are probably not natural-born landlords should do is its consider syndications. When you get more scale and exposure to more doors, things become more stable, cash flow becomes more stable,there's less risk and in reality what we're seeing in our you know in our limited partnership opportunities is that the returns are you know better than probably most people can do on their own. The next one on the list is agriculture. Agriculture followed by CBD, specialty coffee, chocolate, well so let's start with you know some of these things because I know they've been on my podcast before, and just understand that when I have something on a podcast it does not mean I am advocating for it or saying that you should invest in it or that I even like the deal. All right so let's start with some generalities. Agriculture is fine. The stuff that I see some of the stuff that I'm seeing out there in the podcast ecosystem that you're mentioning concerns me okay and one of them is that I don't like foreign investments very much. I've had some experience with them I've realized the implications of those and I won't do them again, certainly with a smaller operator and the reason for that is that if things go wrong there you have very little recourse okay, yeah very little recourse and it's very difficult you know you have to know your operator very well. You have to trust them because if something happens overseas good luck trying to you know get any sort of retribution, ain't gonna happen right so be very careful with that, I know people get excited about it you know they go on some sort of you know they go on some sort of like investment trip and they come back and you know they're excited, they heard about something like this and it's shiny and bright and stuff like that well why what's the point, I just you know the best place to invest is right here in the US okay. The other thing is agriculture in general I would say it's fine, it's gonna be low yield and also I will say that when there's some thing like it doesn't grow three years and won't yield any cash flow for that period of time what seriously you're okay with that? Okay I'm not. And then on top of that when you sign the contract on these things look at the fine print. Look at what your exit is because you should never invest in anything unless you've thoroughly thought about how you're going to get out of it and some of these things have that problem as well. I'm not a big fan personally. Okay now CBD and I've seen that come up in the ecosystems a lot lately I again I CBD again that space is full of charlatans I would just be careful you know I see stuff people like yeah we're gonna go do this in California right well listen I live in California okay and let me tell you right now everybody I know around here knows this to be true. There is a glut of pot in California you know and apart from a selective highly skilled business people who are in the space, everyone else is gonna get killed, they just are there's this is like you know the horse has already left on this one right. People think I'm gonna do CBD in California guess what there's a few people have thought about this before you and if you're coming into this space and you have no previous experience in you know pot in CBD and all this stuff you're gonna be you're way behind. Okay and the last thing is that unless you are a major player like you got serious pockets behind you I would stay away from this because there is there is like so many laws and so many things to dodge in the space. All I can tell you is I have yet to see you know personally you know from anything that I've been you know sent that's in the US in California anything like that I would be comfortable investing in. Okay now I know there's you know startups and things like that and if you want to spend a little bit of money and those from you know people who know what they're talking about I get it but I would definitely look at that as a fairly high risk thing but for heaven's sake you know just don't listen to a Podcast or you know get an email about hey we're gonna start growing pot in California you want in just please think okay. Let's see the next one I'm going to skip oil and gas because I think I have a question coming up about oil and gas here in a moment. Cryptocurrency again listen it's an asymmetric risk type thing shouldn't be your bread and butter thing at all I mean 5-10 percent max in this bucket of asymmetric risk things that could go I mean the reason I do it is a listen, Bitcoin goes up by you know 10x which I honestly personally think it will you know in the five to 10-year horizon I want to be able to to enjoy that. Now it's not something that I would spend a lot more than that on. Personally I only put money in there that you know keeps me from you know it's the money that I would just spend on things that will you know like a fancy car something like that's what I do. Life settlements okay life settlements just as a reminder what are they? Life settlements are when you buy somebody else's life insurance policies, so maybe somebody's you know 80 years old in real bad health they would like money now they don't have any you know they're not worried about their kids don't need any money anymore so you can buy these policies from them. A lot of times that you know 50 60 cents on the dollar which is a much better deal for them than not getting any money or just you know trying to pull out cash value, it's generally going to be more than the cash value so it's an interesting play. We've talked about this before. We actually have a webinar on it at hedgetheeconomy.com if you're interested. So you're investing life settlements, you know you're basically looking and saying I'm a little worried about the economy and maybe I have a self-directed IRA or solo 401k because you know honestly the other thing is that this is not a tax sheltered type investment so you have to think about that as well, you think to yourself I want to hedge I want a small part of my portfolio something that I feel very comfortable is gonna be there. Well out of all the things that are guarantees in life, death is probably the only one that, people used to say death and taxes but you know I mean the president United States paying taxes has no guarantee in life right I mean death is the only guarantee in life so that it might be worth it, check it out for yourself, hedgetheeconomy.com. Now, notes. Notes it's sort of broad. Notes basically being liens on property for the most part, a lot of times that's what it's indicating. It really depends on the operator you know, I would you know look at it as you know if you look at AHP Servicing you know with Jorge’s company I have looked at this in terms of short-term kind of places to put money for liquidity that I can pull out you know if there's a liquid fund like AHP Servicing for example, but I like appreciation and so that's the problem right, so you might get nine, ten percent cash on cash in notes, you might do a little bit better but you know you're not getting any tax advantages. So with multifamily real estate I mean I can still get nine, ten percent cash on cash and then I get twenty percent plus I are ours typically and you know the nine, ten percent I got is tax deductible so it's really the tax equivalent of making like fifteen percent. So you know fortunately if it's me I do equity over any kind of real estate debt and mostly it's because of the tax advantages. Now if you are gonna do it again, look at your qualified money like IRAs, 401ks etc and you know look at a fund. I also think this is one of those things where you really have to look at the operator. I do like Jorge. He's one of the smartest guys I know so AHP Servicing certainly would be something to consider and I so like liquidity the component of this is a nice place to keep it for a period time. And understand it's not without risk either. This is non-performing paper, but again that's where the operator comes in and you know I think Jorge is a really smart guy so I feel fairly comfortable with that. Gold and silver well honestly I don't see the point as I've said earlier, I mean gold and silver are hedge to inflation so this real estate cash flows and frankly I don't believe in the zombie apocalypse narrative that I have heard before you know where you buy that monster box of silver coins which by the way I did because I drank the kool-aid a few years ago and you know there's this idea that you know you're the only thing that's gonna be able to buy anything is a monster box of silver that's the only thing that people are gonna accept. Well I just don't think that's gonna happen so for me why not buy real estate at least you know you know you can force appreciation etc. Now if you're super paranoid on real estate just you know limit your leverage I'm not saying don't own gold a silver I'm just saying think about it before you go and drink the kool-aid on the you know the fear-based stuff there music royalties and we did have a podcast on that honestly I just don't know much about it but you know some people seem to be doing okay with it I wouldn't make this a core holding unless you were in the business and really know what you're doing. I would put this in your high risk profile. Artwork, similar. Listen I like our work is like gold in my view and if you are an art buff and you really know what you're doing then go for it but I'm not. Some people like vintage cars like me to enjoy it and allow it to appreciate. I think art is similar to that right, so it goes into that pile that I've talked about before where it's like if you have an inch you know if you're one of those people who buys stuff you know nice stuff and you know you want nice stuff well art not fine art and vintage cars are fun but they will appreciate so I think art is similar to that. I know we podcast on fractional ownership apart you don't get the same effect because you know get to keep it in your house but you know you do get to they do keep it in a gallery so that's kind of neat however you know what I'm not a big enough art guy to do this so I'm gonna stick to bread-and-butter stuff instead like real estate, websites, online businesses, if you know what you're doing this can be very profitable. The problem is that most people don't know what they're doing and I have looked into these things a little bit on behalf of people and I've been a little suspicious at least if some of the sites they seem like Ponzi schemes to me but I don't know for sure. Okay but if you know what you're doing with this this is a great space I mean you can make a lot you can make a decent money with this. I've done that private lending well private lending you know as opposed to notes I guess you're just lending to flippers and stuff I mean I would suggest that this is not a bad thing to do if you know how to do it. I know if there's some people who do it pretty fairly prolifically in our group here's what I would suggest though if you're worried about the economy or at all and lending the home flippers is probably one of the riskiest thing you can do but how can you mitigate that risk? Well you may just loan at you know fifty percent loan to value right and in that situation if they can't pay you back at least you've got a property that you can take over at 50 percent of the cost right now. I definitely would not be you know doing super high loan-to-value type notes or private loans and then you know obviously there's some stuff like Lending Club and stuff I have not really you know looked into much, but I think some people have where you can do some of that as well but okay so that's the big list of my favorites. Large scale real estate like apartments and self storage and one that you didn't mention on here that we talked about earlier, Wealth Formula Banking. For me that stocks and bonds that's equity and basically a bond a structure for me right and that makes up 90% of my investments right there and then the rest of its you know shiny stuff, asymmetric risk stuff like Bitcoin gives me exposure to something that could explode and make me a lot of money potentially with a small investment, but if I lose it and won't go crying so you know bottom line is that I mean the the moral of this story is keep it simple. I think one of the things that I noticed that a lot of people are doing because of the podcast ecosystem and I'm somewhat to blame for this because they think you know we do put on different types of things but we've really narrowed that down a lot is that my advice would be that what I have noticed in my own investing success track record over the last 10 years is the stuff that makes money tends to be pretty boring right like real estate I mean at least I've done so many things in the last 10 years and you know the thing that keeps paying me is the stuff that's the most boring. So don't go look out look for shiny objects okay don't look for foreign investments don't look for you know crazy stuff when it comes to your bread-and-butter stuff keep it boring right I mean seriously you know you've got a if you're a limited partner you find a with an operator that keeps delivering why are you looking like for 10 different things. Okay I understand there's a need for some diversity but okay maybe two or three different things and maybe similar types of you know you find good operators you stick with them but you don't need like ten of those I mean it's silly right, just pick a few things and if there's some you know stuff like Bitcoin or something like that really interests you and that's kind of fun for you then you want to buy some you know vintage cars or something like that do that, but stay boring. There's an eloquence about boring that I have experienced in the last decade that I can just say from my experience over time it's not as boring when you get those nice payouts. So anyway we still have a bunch of questions and I've been going for almost an hour so I'm going cut it off and there will be therefore a part 3 Ask Buck. But I do want to thank you and for for having all these questions and we will have part three of Ask Buck next time. Thanks for joining Wealth Formula Podcast. This is Buck Joffrey signing off.
submitted by Buck_Joffrey to u/Buck_Joffrey [link] [comments]

Thought experiment: let's say bitcoin is used as everyday currency in the future. Assuming all the problems are worked out with bitcoin and small scale transactions, what would the average grocery store look like.

Just to get this out of the way, we could be talking about any cryptocurrency really, what I am trying to focus on is the pricing of everyday items with highly volatile currencies. So, its 2030, bitcoin is now an alternative currency, there are no fees or tax implications, but bitcoin still is more volatile than the usd. Each item has two electronic prices listed, the dollar amount and the satoshi amount under (or I guess some other form of "satoshi" that is named to be pegged to the usd, ill still call it sats for the sake of this post). Each hour the satoshi price is updated to stay pegged to the usd. So if the price of bitcoin suddenly rises, the sats listed will fall to keep with the standard value. This almost gets rid of the argument, "why would you pay xxx now when its gunna be xxx later". But what about inflation? Will the sats be updated to match the usd inflation over the years, or will it prove to be a cheaper option. Also, what would this look like when it comes to things like treasury bonds? Assuming the government wants you to use dollars, would there be a premium for buying these bonds with bitcoin, will they let you buy them at all if bitcoin becomes a currency? Right now I love bitcoin as a commodity and I think that's what we should be focused on selling it as. But in the future if it is a currency, it will be interesting to see how it plays out with each government.
submitted by Onsyde to Bitcoin [link] [comments]

An Anarchist Case Against Markets

This post was inspired by a debate I had on this sub with a Market Anarchist, which stopped advancing beyond a certain point due to several impasses that we could never get beyond. It became frustrating for both of us after a while because we kept talking past each other.
I wanted to make this post in an effort to clearly explain the following: 1) What I mean when I say that I am "against markets", 2) Why I am against markets, 3) What mechanisms I think can serve as effective replacements for markets, and 4) Responses to common criticisms.
(Disclaimer: I am only pointing out problems with markets pertinent to the target audience of this sub that supports them - Market Anarchists. There is no need to make criticisms of market features that Market Anarchists do not endorse in the first place. This post is not intended to be a general or all-inclusive criticism of markets, because Market Anarchists are anti-capitalists anyway.)
"Against Markets"
I don't seek to "ban" markets in an anarchist social context (obviously, because I'm an Anarchist), but I seek to make them obsolete. This is what I mean when I say that I am "against markets".
The Problems with Markets (as they pertain to Market Anarchism) (in no particular order)
The authors investigate how worker-owned and capitalist enterprises differ with respect to wages, employment, and capital in Italy, the market economy with the greatest incidence of worker-owned and worker-managed firms. Estimates calculated using a matched employer-worker panel data set for the years 1982–94 largely corroborate the implications of orthodox behavioral models of the two types of enterprise. Co-ops had 14% lower wages than capitalist enterprises, on average; more volatile wages; and less volatile employment. Given the quality of the data set analyzed, the authors argue, these results can be regarded as having broad generality
(Note: Regarding the point about "less volatile employment" in favor of coops...this study was done comparing between capitalist firms and worker coops. The wages were largely reflective of wages for union members because the wages in capitalist firms regardless of whether the workers were union members or not were based on regional collective bargaining by the unions. However, (unlike with the wages) the job security is not reflective of job security for union members. While we can see that union wages are higher than income for workers working in cooperatives, we cannot make a meaningful comparison based on this study between union job security and coop job security.)
If you want an efficient market system for coordinating production and distribution, you need a flexible labor market. Unfortunately, a more flexible ("freer") labor market leads to reduced labor share of income even under worker ownership (Self-Exploitation). On the other hand, workers forming cartels (monopolizing/oligopolizing access the labor in their field) that restrict labor markets is the only way to halt the trend of decreasing labor share of income - this is essentially what the function of labor unions is. So you need labor cartels to prevent Labor self-Exploitation (in the Marxist sense), while these labor cartels will themselves either be impossible to enforce in the absence of authority (because of the equivalent of Scabs) OR even if they can be enforced without authority they will undermine the efficiency of the markets in your society (because cartels screw up the function of prices in a market).
Alternatives
Based on what is written below regarding ECP and HKP, there is no longer a reason (with regard to rational economic calculation or information) to think that decentralized planning and gift economy dynamics would be unable to entirely replace the role of markets.
Answers to Common Criticisms/Objections
I've been told this recently in an argument with a Market Anarchist. However, he never was able to explain specifically how and why these differences would manifest and on what basis one could claim that it would alter my calculus and conclusions above.
In that case you've massively restricted the potential scale and scope in which markets can have a role in the functioning of your economy. I suppose that's fine, but in that case I would ask the question: Why retain them at all? Why not seek to replace them entirely?
To put it simply, ECP just says that you need a mechanism that allows you to compare multiple possible allocation pathways for resources in order to know which allocation pathway is the most efficient use of resources. And HKP basically says that those who do a particular kind of activity in the economy learn the information relevant to that activity as they perform it. Furthermore, this information is disparate and best able to be extracted by lots of people individually doing particular activities that they focus on.
There's nothing inherent about a large firm that prevents this from happening more so than an aggregate of small firms playing the same role in aggregate as the large firm does by itself. Large firms that are run bottom-up and allow their members autonomy (as was the case of with each of the collectives/syndicates in Catalonia, in contrast to large firms in capitalism) can discover and disseminate this information at least as well as an aggregate of small firms playing the same role as the large firm by itself. As support for my claim, I reference The Anarchist Collectives by Sam Dolgoff - a book that contains multiple empirical examples showing that collectivization of multiple separate firms (which had been engaging in exchange transactions with one another to form a supply chain prior to the Anarchist revolution in Spain) into singular firms of operation from start to finish across the entire supply chain, actually improved productivity, innovation within the production process, and distribution of end products. This actually addresses both HKP and ECP. As per Hume's Razor, we can therefore conclude that a reduction in the scope, role, and presence of intermediary exchange transactions/prices between steps in the supply chain neither results in reduced ability to acquire & disseminate information nor results in reduced economic efficiency. Furthermore (as per Hume's Razor), we can conclude that it is not the scope, role, or presence of prices/exchange transactions that enable either rational economic calculation or the acquisition & dissemination of knowledge. This is because (as per Hume's Razor) if it were true that prices/markets are necessary or superior to all other methods for efficient information discovery & dissemination as well as for rational economic calculation, it would not have been the case that we could have seen improvements in productivity, innovation, and distribution of end products in the aforementioned examples after substantially reducing (via collectivization/integration of various intermediary and competing firms) the role, scope, and presence of prices/markets within the economy.
The alternative explanation (one that is more credible after the application of Hume's Razor and keeping the aforementioned empirical examples in mind) is that optimally efficient information discovery & dissemination as well as rational economic calculation, are both possible in a non-market framework when individuals have autonomy and can freely associate/dissociate with others in the pursuit of their goals.
What's written above should be sufficient to address this objection as well. If it is not the scope, role, and presence of prices/exchange transactions that enable either rational economic calculation or the acquisition & dissemination of knowledge...then there is no basis upon which to argue there will necessarily be (from an information or rational economic calculation standpoint) more bureaucracy in aggregate in a society that has replaced markets, than there would be in a society that retains them.
However, there remains the objection that bureaucracy would exist to a larger extent due to the lack of competitive pressures against inefficiency. My response is to point out that empirical evidence from revolutionary Anarchist societies indicate strongly to the contrary. The role and presence of competition was greatly reduced while there was a simultaneous improvement in efficiency. As per Hume's Razor, we can therefore reject the notion that it is competition specifically that inherently prevents bureaucratic buildup in individual firms. It seems, from these empirical examples, that the best way to prevent bureaucracy is not through market competition between several small firms but through Anarchist praxis involving a lack of hierarchy and authority within large firms (recall that I often use the term "firm" to refer to collectives, syndicates, etc. for the purposes of this post), such that there is no ossified system of rank within the large firm. The absence of an ossified system of rank within firms is the true key to preventing the accumulation of bureaucracy within firms.
Note the three types of efficiency in the linked video - Allocative Efficiency, Productive Efficiency, and Dynamic Efficiency.
The evidence from Anarchist Spain during the Spanish Civil War (which I discussed above) indicates that Productive Efficiency and Allocative Efficiency was improved in various industries and communities where Anarchist collectivization took place. This trend only reversed and ended as the State undermined the Anarchists through various measures, such as cutting them off of currency that was needed to acquire resources from outside the Anarchist-controlled regions, using that leverage over currency to take over control of various industries away from the Anarchists, etc... Thus far, the market anarchists I have discussed this issue with have agreed on this point.
Where I have faced disagreement from market anarchists is on the issue of Dynamic Efficiency aka "Innovative Efficiency". Those whom I have discussed this with argue that markets optimize dynamic efficiency better than any other alternative.
My response is as follows... Evidence indeed does not support the commonly held view that (within a market economy) larger firms have greater dynamic efficiency. However, it does show that investment into R&D (especially by small firms) in market settings is substantially impacted by whether or not there are Intellectual Property Rights.
For me, this raises a natural question: In an Anarchist social context where there are no intellectual property rights, would a framework of cooperation/collectivization into larger firms be more dynamically efficient than competition between smaller firms? Let's look at the following...
(1) Evidence shows that, in general, Intellectual Property Rights have a substantial net negative impact on innovative efficiency:
To summarize, although only tentative conclusions can be drawn given the small number of empirical studies, the body of available empirical evidence suggests that patents may substantively hinder both subsequent scientific research and subsequent product development. Across a relatively heterogeneous set of technologies within the life sciences, and examining various forms of intellectual property rights, the available empirical evidence suggests that property rights hinder cumulative innovation—with declines on the order of 30 percent. Clearly much more work is needed in order to examine the extent to which these patterns generalize to other technologies and other forms of intellectual property, but the best available evidence suggests that mechanisms that reward innovation in a way that places the technologies in the public domain—such as patent buyouts—may have substantial benefits in terms of encouraging cumulative innovation, at least in some contexts.
(2) Evidence shows that firms - in the context of a market economy - invest less in R&D without the presence of Intellectual Property Rights of some form.
So to summarize, IP generally has a substantial net negative impact on dynamic efficiency but in the context of a market economy IP is necessary to incentivize firms to invest adequately into R&D.
Based on this we can argue that in an Anarchist social context, a non-market framework (involving decentralized planning and gift economy dynamics) of cooperation/collectivization into larger firms is likely to be more dynamically efficient than a market framework of competition between multiple smaller firms. This means that replacing markets with cooperative/collectivized dynamics will likely improve dynamic efficiency - the opposite of what the market anarchists I have discussed this issue with claim.
I have had a discussion with a market anarchist who argued that certain kinds of tasks will not be adequately completed without monetary incentive - particularly tasks that are unpleasant or those which people do not enjoy.
However, this ignores the historical and contemporary evidence of Anarchists accomplishing these tasks without monetary incentive - see below:
https://theanarchistlibrary.org/library/peter-gelderloos-anarchy-works#toc53
https://theanarchistlibrary.org/library/sam-dolgoff-editor-the-anarchist-collectives#toc57
https://theanarchistlibrary.org/library/peter-gelderloos-anarchy-works#toc24
(A) First, here is the simplified logic behind why I find Marx's Law of Value Compelling as compared to Subjective Value Theory:
(i) The function of markets is to optimize supply and demand so that resources are allocated efficiently. An efficient allocation of resources enables future reproduction and growth of an economy. When the market suddenly undoes the very allocation of supply to fulfill demand that it had previously built up such that the economy subsequently shrinks, the previous build up can be thought of as a market failure. Hence the process by which prices plummet (along with all the subsequent effects) until the market can reorient to start growing the economy again, can be accurately called "correction". Given that prices can be incorrect such that they require "correction", price and value cannot be the same thing.
(ii) A bubble bursts in the economy when previously inflated prices are corrected. (Note that "correction" is not my own term, but a term frequently used to describe such phenomena in economics.)
(iii) The only way to make sense of this is that prices originally (prior to the bubble bursting) deviated from values too much.
(iv) If it is the case that prices can deviate too much from values while prices are derived from the interplay of various actors' marginal utilities, value cannot be subjective. There must be an objective substance of value around which prices can deviate (to an extent).
(v) Therefore, STV is invalid as a theory of value.
(vi) Having accepted this logic, it follows that we require an objective theory of value as opposed to a subjective theory of value. Now the question becomes: What should this objective theory of value be?
(vii) An objective theory of value must express value as being comprised of some definable substance(s).
(viii) Given that we have established value as something objective rather than subjective, it must be possible for commodities to be exchanged in such a way that there is equal Value on both sides of an exchange.
(ix) In order for things to have equal value, the substance of value must be some characteristic that all commodities share but also separates them from non-commodities.
(x) The only such characteristic is that they can all be produced by simple/"unskilled" human labor.
(xi) Therefore, expressing the value of a commodity must be done in units of simple/"unskilled" human labor.
(B) Furthermore, it has come to my attention that some market anarchists find Marx's Law of Value uncompelling as a result of the Transformation Problem. My response is to look into TSSI, which has made it clear that the Transformation Problem is a non-issue.
The reason this is important is that if you agree with Marx's Law of Value, then you necessarily would find worker cooperatives and market socialism of any variety (including market anarchism) highly problematic due to Self-Exploitation.
submitted by PerfectSociety to DebateAnarchism [link] [comments]

Blackstone CEO Steve Schwarzman on Hong Kong’s Unrest, the Rise of Bitcoin, and Fundraising as an ‘Out-of-Body Experience’

Blackstone CEO Steve Schwarzman has built one of the largest investment firms in the world, which specializes in private equity, credit, and hedge fund investment strategies. In his new book, What It Takes: Lessons in the Pursuit of Excellence, Schwarzman reveals some of the biggest lessons he’s learned from his 50-year career in business.
“I wanted to lay out my years of experience of doing things right as well as doing things wrong,” he tells _Fortune._“You learn the most when you make a mistake.”
Part memoir, part leadership guide, Schwarzman addresses the highlights (and low lights) of his career including quitting his high-power job to start Blackstone, raising capital as a first-time fund manager, and dealing with the fallout from the unraveling of his presidential CEO business council. (I personally enjoyed the part was when he talks about meeting “Beyoncé and her husband Jay-Z.” He writes: “We talked for a few minutes, reminiscing about her Kennedy Center performance in 2005.”)
Schwarzman was 38 years old when he founded Blackstone in 1985, and he’s been at the helm ever since. Today, the firm boasts $545 billion in assets under management and 2,500 employees. Blackstone recently converted from a publicly traded partnership to a corporation, which makes it easier to own Blackstone stock and allows the firm to be included in more indexes.
I sat down with Schwarzman for a wide-ranging conversation about Blackstone’s dealings in China, the ethical challenges surrounding artificial intelligence, the rise of cryptocurrencies, and whether he sees a looming recession on the horizon.
This Q&A has been edited for clarity and length. FORTUNE: In the book, you discuss some of the personality traits you look for in a candidate before hiring them at Blackstone. What are some of those characteristics?
SCHWARZMAN: I’m undoubtedly better at identifying people who have enormous potential, and it’s actually pretty easy. When someone’s interviewing for a job, you can tell if they’re comfortable in their own skin and whether they’re able to handle anything conversationally. I’m looking for people who can hold the table, who are intelligent, curious, courteous, and they can deal with stressful situations.
Can you give an example of how you determine those things?
You need three to five minutes to figure out if someone’s comfortable.I like to bring up something interesting that has happened in the world that day. Today, I might ask, “What do you think about what’s been going on in Hong Kong?” There’s no right or wrong answer to these things, but it’s a discussion that can show you how someone’s mind works. Once you see how somebody’s mind works, you also get a sense of whether they’re playing within their comfort zone. If you’d like to spend more time with them, then that’s probably a good person to hire.
Speaking of Hong Kong, hasthe current unrestaffected Blackstone’s dealings in China?
Hong Kong’s a real hub for us. It’s our biggest location in Asia, and people like working there. It hasn’t interfered with our office at this point, but longer-term, you can’t have a place where you do business where no one knows if they can get in or out. Ultimately, there has to be a resolution. The business community really wants one, and if you have a core of demonstrators who say on TV that they are prepared to die, that’s not a great benchmark. Right now, it’s looking like a difficult resolution.
What are you investing in, and where do you see growth opportunities?
Growth is certainly going to technology, services, and experiences. You have things like shopping centers. When I grew up, it was like: What could go wrong with a shopping center? And now that thing is called Amazon. Just that technological innovation has changed people’s shopping patterns, changed the delivery mechanism, and it’s led to shopping centers going bankrupt. It’s disrupted a whole chain of things people took for granted. It took 10 years for an entire stable structure to be dismantled.
We saw that in 2011 when we started buying warehouses. We’ve been the largest buyer of warehouses in the world for the last eight years, and we did that because that’s where Amazon and retailers needed to stage their goods before they get delivered. So that area has exploded with growth. If you’re investing now, you have to recognize that almost everything’s about to have its business model changed.
What’s another example of a sector you think will experience Amazon-like growth?
Artificial intelligence. AI will affect the whole healthcare industry, from billing, to admissions, to diagnostics, to the development of drugs, to telemedicine, which will have enormous growth. You look at all of this, and there are a lot of different things that go into what you or I believe is _just_a hospital. AI is going to have a profound impact on our society.
There will also be serious ethical implications that come with that innovation.
That’s why I did this big donation at MIT and Oxford. [Note: Schwarzman donated$350 millionto MIT for computing and AI research and$188 million_to Oxford University for AI ethics research.]_One involves technological innovation, and the other is about making sense of it in society. What are good outcomes and what are not-so-good outcomes? Who makes that determination, and how do you control for not having bad outcomes? That’s a challenge that we have to face.
Are you confident we’ll be able to solve the ethical challenges quickly enough given the pace at which technology is evolving?
Like most things in technology, it’s moving faster than your ability to control and implement things. On the other hand, everybody who’s running a company or is part of the discovery of AI watched the Internet get developed. I haven’t met a mature person yet who was involved in the development of the internet that hasn’t regretted they developed it.
They said, “We just thought this would be really cool. Everyone in the world can connect, and it’ll be a positive sum game.” They weren’t aware that [the internet] would destroy the ability to govern. Everything is so short-term, there’s so much divisiveness, and social media is very destructive. They’ve looked at what they’ve created, and they’ve all said, “If I could have it back, I’d take it back.” I was shocked. So with AI, we have to get right on it so that the technology itself doesn’t overwhelm society.
There’s enormous interest and good will to doing something important in terms of AI ethics. No matter what country you’re in, if you make a huge cut in your workforce, you’ll have social unrest of some type. We already have that in the West. You could even have that in China, although they’re investing so much in the area, they’re actually creating a whole bunch of new jobs too.
Speaking of innovation,a 2007 _Fortune_articlecalled you “the master of the alternative universe” because Blackstone made its name by investing in alternative assets. What do you think about frontier assets like Bitcoin and other cryptocurrencies?
I don’t have much interest in that because it’s hard for me to understand. I was raised in a world where someone needs to control currencies. There’s a reason to want to control currencies, which is why governments all do it. There’s no one who says, “I don’t care.” Part of that is to make sure the economy is as insulated as it can be from excesses. Another part of it is to control bad behavior. So the idea that you can transact without anybody knowing anything, you could have a lot of criminal behavior — dirty money, drug money — running all over the world. It only encourages that kind of activity.
I may be a limited thinker, but that’s a problem. If they could solve that problem and also the problem of controlling the money supply, then it might be OK. That doesn’t mean that the blockchain technology applied to non-tradable currencies is not a good thing. That is clearly a good thing.
And why do you say that?
There’s all kinds of uses you can have from certain executions. [Blockchain technology] is a very good idea, and it will end up being adopted because it’s good technology. Applying it to the creation of money is sort of, for my taste, pretty odd.
So in the future, you do see Blackstone investing in companies that are using blockchain technology?
That would be good because it’s a sound, very interesting technology.
But you’re not going to own any Bitcoin?
That’s an easy one: No.
Capital has become quite abundant these days. Softbank’s Masayoshi Son tells this infamous story about how he raised$45 billion in 45 minutesfor the Vision Fund. Blackstone’s assets under management crossed half a trillion for the first time — to $545 billion. You recently described your fundraising efforts as “an out of body experience.” Why?
When I started in 1985, we had no reputation, and even worse, no experience making investments. In 1986, we went out and started raising money. We got rejected by 16 out of 17 people, some of whom we knew very well. If you’ve ever had the experience of getting rejected by almost everyone you know, it’s very sobering.
We sent out somewhere around 500 offering documents, and we ended up with 32 investors. That’s 468 out of 500 people who are saying, “I don’t trust you, I don’t like you, I don’t think you’re competent, and I don’t like what you’re trying to do.” The only way you interpret that after a while is that they don’t like _you_and they don’t trust your abilities. It was unending. So my experience was so searingly negative that every dollar we raise from anyone now, I regard as precious and that we can’t disappoint them.
Before, I’d fly across the country to see if we could get $5 or $10 million, and now, people just give us a billion dollars. After a while, people develop confidence in you. And part of the art of running a good organization is that you don’t mess it up. It’s been such an ordeal to get here.
I had a conversation this morning where someone [at the firm] said, “If we do this type of structure for this type of activity, these people will give us $2 billion.” I know the people, and I know they’ll give us $2 billion, but I ask, “Do we want to do what they’re interested in or not?” Whenever one of these conversations happens, I think back to spending two days of my life flying around to raise $5 million, and here’s just a casual conversation [about $2 billion]. I take nothing for granted, and I want people at the firm to think like that too. It’s harder when you get bigger, but it still is an out-of-body experience for me.
In the book, you give your rules on identifying market tops and bottoms. Where in the cycle do you think we are today?
We’re getting pretty toppy. The prices of things have gotten high in large part because interest rates have gone down so much but that props up the value of a dollar of earnings, or cash-flow. It’s a bigger yield. That’s driven prices up. There’s quite good liquidity in terms of credit. It’s led to markets that have gone up almost continually for about 10 years. So that doesn’t mean it can’t go on for a while longer, but you’re closer to the top than the middle or the bottom.
Do you see a recession on the horizon?
I don’t. Over 70% of the economy is consumer [spending], and consumers tend to be employees or workers. Their compensation is going up 3 to 4% a year now, significantly outpacing inflation. What we’re doing is we’re loading up consumers because as employees, they didn’t have a good enough experience with financial sufficiency and they were angry because they didn’t have enough money. So society’s going to give them that money, I believe, in the form of higher wages. That’s good for the system because people will have to work to get more money, but they’ll take that money and they’ll spend it. If they’re spending it — and that’s the vast bulk of the American economy — then that’ll be the part that keeps the economy moving forward.
Unless there’s a major geo-political issue that takes away confidence from everyone, I think we’ll continue growing for the next year or two but at a lower rate than we were because manufacturing’s off, global trade is off, and we’re facing some lack of confidence around issues like Brexit, European growth, and China’s real growth rate. All these issues contribute to less optimism, but I don’t see us falling off some kind of cliff.
You don’t think it’ll be comparable to the last recession?
Oh gosh no. No, that takes virtual complete abdication by regulators as well as imprudent behavior by parts of the business community. We haven’t forgotten lessons that quickly. The system has been significantly reformed, so I don’t see _anything_of the type of global financial crisis of 2008. Of all the things to worry about, that’s not one of them.
What’s next for you? Do you see yourself stepping away from Blackstone?
In a year or two, I’ll probably still be sitting at this conference table. I love what I do, but there’s always an evolution. Jon Gray is president of the firm, he’s 49 — I’m not. [Gray is Schwarzman’s likely successor.]
My plan for my life is to stay involved with Blackstone, but I also like doing big impactful things that involve the creation of something new. I don’t know what the next one will be because it has to be something I see in society where I can help provide a unique solution. Both MIT and Oxford involve building new facilities, creating new organizations, and developing knowledge in a way that can be applied for the good of society.
I wish I could tell you exactly what the next chapter is, but one of the things that makes life fun is experiencing new things with developed skills from your past. I’ve loved doing that within Blackstone, I’ve loved doing it in the not-for-profit area, and I’d love to do in the political area if I can help.
**Oh, you have political ambitions?
** No, no. None.
* More Details Here
submitted by acerod1 to Business_Analyst [link] [comments]

Elaborating on Datadash's 50k BTC Prediction: Why We Endorse the Call

As originally published via CoinLive
I am the Co-Founder at CoinLive. Prior to founding Coinlive.io, my area of expertise was inter-market analysis. I came across Datadash 50k BTC prediction this week, and I must take my hats off to what I believe is an excellent interpretation of the inter-connectivity of various markets.
At your own convenience, you can find a sample of Intermarket analysis I've written in the past before immersing myself into cryptos full-time.
Gold inter-market: 'Out of sync' with VIX, takes lead from USD/JPY
USD/JPY inter-market: Watch divergence US-Japan yield spread
EUUSD intermarket: US yields collapse amid supply environment
Inter-market analysis: Risk back in vogue, but for how long?
USD/JPY intermarket: Bulls need higher adj in 10-y US-JP spread
The purpose of this article is to dive deeper into the factors Datadash presents in his video and how they can help us draw certain conclusions about the potential flows of capital into crypto markets and the need that will exist for a BTC ETF.
Before I do so, as a brief explainer, let's touch on what exactly Intermarket analysis refers to:
Intermarket analysis is the global interconnectivity between equities, bonds, currencies, commodities, and any other asset class; Global markets are an ever-evolving discounting and constant valuation mechanism and by studying their interconnectivity, we are much better positioned to explain and elaborate on why certain moves occur, future directions and gain insights on potential misalignments that the market may not have picked up on yet or might be ignoring/manipulating.
While such interconnectivity has proven to be quite limiting when it comes to the value one can extract from analyzing traditional financial assets and the crypto market, Datadash has eloquently been able to build a hypothesis, which as an Intermarket analyst, I consider very valid, and that matches up my own views. Nicolas Merten constructs a scenario which leads him to believe that a Bitcoin ETF is coming. Let's explore this hypothesis.
I will attempt to summarize and provide further clarity on why the current events in traditional asset classes, as described by Datadash, will inevitably result in a Bitcoin ETF. Make no mistake, Datadash's call for Bitcoin at 50k by the end of 2018 will be well justified once a BTC ETF is approved. While the timing is the most challenging part t get right, the end result won't vary.
If one wishes to learn more about my personal views on why a BTC ETF is such a big deal, I encourage you to read my article from late March this year.
Don't Be Misled by Low Liquidity/Volume - Fundamentals Never Stronger
The first point Nicholas Merten makes is that despite depressed volume levels, the fundamentals are very sound. That, I must say, is a point I couldn't agree more. In fact, I recently wrote an article titled The Paradox: Bitcoin Keeps Selling as Intrinsic Value Set to Explode where I state "the latest developments in Bitcoin's technology makes it paradoxically an ever increasingly interesting investment proposition the cheaper it gets."
However, no article better defines where we stand in terms of fundamentals than the one I wrote back on May 15th titled Find Out Why Institutions Will Flood the Bitcoin Market, where I look at the ever-growing list of evidence that shows why a new type of investors, the institutional ones, looks set to enter the market in mass.
Nicholas believes that based on the supply of Bitcoin, the market capitalization can reach about $800b. He makes a case that with the fundamentals in bitcoin much stronger, it wouldn't be that hard to envision the market cap more than double from its most recent all-time high of more than $300b.
Interest Rates Set to Rise Further
First of all, one of the most immediate implications of higher rates is the increased difficulty to bear the costs by borrowers, which leads Nicholas to believe that banks the likes of Deutsche Bank will face a tough environment going forward. The CEO of the giant German lender has actually warned that second-quarter results would reflect a “revenue environment [that] remains challenging."
Nicholas refers to the historical chart of Eurodollar LIBOR rates as illustrated below to strengthen the case that interest rates are set to follow an upward trajectory in the years to come as Central Banks continue to normalize monetary policies after a decade since the global financial crisis. I'd say, that is a correct assumption, although one must take into account the Italian crisis to be aware that a delay in higher European rates is a real possibility now.
![](https://coinlive.io/ckeditor_assets/pictures/947/content_2018-05-30_1100.png)
Let's look at the following combinations: Fed Fund Rate Contract (green), German 2-year bond yields (black) and Italy's 10-year bond yield (blue) to help us clarify what's the outlook for interest rates both in Europe and the United States in the foreseeable future. The chart suggests that while the Federal Reserve remains on track to keep increasing interest rates at a gradual pace, there has been a sudden change in the outlook for European rates in the short-end of the curve.
While the European Central Bank is no longer endorsing proactive policies as part of its long-standing QE narrative, President Mario Draghi is still not ready to communicate an exit strategy to its unconventional stimulus program due to protectionism threats in the euro-area, with Italy the latest nightmare episode.
Until such major step is taken in the form of a formal QE conclusion, interest rates in the European Union will remain depressed; the latest drastic spike in Italy's benchmark bond yield to default levels is pre-emptive of lower rates for longer, an environment that on one hand may benefit the likes of Deutsche Bank on lower borrowing costs, but on the other hand, sets in motion a bigger headache as risk aversion is set to dominate financial markets, which leads to worse financial consequences such as loss of confidence and hence in equity valuations.
![](https://coinlive.io/ckeditor_assets/pictures/948/content_2018-05-30_1113.png)
Deutsche Bank - End of the Road?
Nicholas argues that as part of the re-restructuring process in Deutsche Bank, they will be facing a much more challenging environment as lending becomes more difficult on higher interest rates. At CoinLive, we still believe this to be a logical scenario to expect, even if a delay happens as the ECB tries to deal with the Italian political crisis which once again raises the question of whether or not Italy should be part of the EU. Reference to an article by Zerohedge is given, where it states:
"One day after the WSJ reported that the biggest German bank is set to "decimate" its workforce, firing 10,000 workers or one in ten, this morning Deutsche Bank confirmed plans to cut thousands of jobs as part of new CEO Christian Sewing's restructuring and cost-cutting effort. The German bank said its headcount would fall “well below” 90,000, from just over 97,000. But the biggest gut punch to employee morale is that the bank would reduce headcount in its equities sales and trading business by about 25%."
There is an undeniably ongoing phenomenon of a migration in job positions from traditional financial markets into blockchain, which as we have reported in the past, it appears to be a logical and rational step to be taken, especially in light of the new revenue streams the blockchain sector has to offer. Proof of that is the fact that Binance, a crypto exchange with around 200 employees and less than 1 year of operations has overcome Deutsche Bank, in total profits. What this communicates is that the opportunities to grow an institution’s revenue stream are formidable once they decide to integrate cryptocurrencies into their business models.
One can find an illustration of Deutsche Bank's free-fall in prices below:
![](https://coinlive.io/ckeditor_assets/pictures/946/content_2018-05-30_1052.png)
Nicholas takes notes of a chart in which one can clearly notice a worrying trend for Italian debt. "Just about every other major investor type has become a net seller (to the ECB) or a non-buyer of BTPs over the last couple of years. Said differently, for well over a year, the only marginal buyer of Italian bonds has been the ECB!", the team of Economists at Citi explained. One can find the article via ZeroHedge here.
![](https://coinlive.io/ckeditor_assets/pictures/953/content_2018-05-30_1451.png)
Equities & Housing to Suffer the Consequences
Nicholas notes that trillions of dollars need to exit these artificially-inflated equity markets. He even mentions a legendary investor such as George Soros, who has recently warned that the world could be on the brink of another devastating financial crisis, on lingering debt concerns in Europe and a strengthening US dollar, as a destabilizing factor for both the US's emerging- and developed-market rivals.
Ray Dalio, another legend in the investing world and Founder of Bridgewater Associates, the world’s largest hedge fund, "has ramped up its short positions in European equities in recent weeks, bringing their total value to an estimated $22 billion", MarketWatch reports.
Nicholas extracts a chart by John Del Vecchio at lmtr.com where it illustrates the ratio between stocks and commodities at the lowest in over 50 years.
As the author states:
"I like to look for extremes in the markets. Extremes often pinpoint areas where returns can be higher and risk lower than in other time periods. Take the relationship between commodities and stocks. The chart below shows that commodities haven not been cheaper than stocks in a generation. We often hear this time it is different” to justify what’s going on in the world. But, one thing that never changes is human nature. People push markets to extremes. Then they revert. "
![](https://coinlive.io/ckeditor_assets/pictures/954/content_2018-05-30_1459.png)
Bitcoin ETF the Holy Grail for a Cyclical Multi-Year Bull Run
It is precisely from this last chart above that leads Nicholas to believe we are on the verge of a resurgence in commodity prices. Not only that but amid the need of all this capital to exit stocks and to a certain extent risky bonds (Italian), a new commodity-based digital currency ETF based on Bitcoin will emerge in 2018.
The author of Datadash highlights the consideration to launching a Bitcoin ETF by the SEC. At CoinLive, our reporting of the subject can be found below:
"Back in April, it was reported that the US Securities and Exchange Commission (SEC) has put back on the table two Bitcoin ETF proposals, according to public documents. The agency is under formal proceedings to approve a rule change that would allow NYSE Arca to list two exchange-traded funds (ETFs) proposed by fund provider ProShares. The introduction of an ETF would make Bitcoin available to a much wider share of market participants, with the ability to directly buy the asset at the click of a button, essentially simplifying the current complexity that involves having to deal with all the cumbersome steps currently in place."
Nicholas refers to the support the Bitcoin ETF has been receiving by the Cboe president Chris Concannon, which is a major positive development. CoinLive reported on the story back in late March, noting that "a Bitcoin ETF will without a doubt open the floodgates to an enormous tsunami of fresh capital entering the space, which based on the latest hints by Concannon, the willingness to keep pushing for it remains unabated as the evolution of digital assets keeps its course."
It has been for quite some time CoinLive's conviction, now supported by no other than Nicholas Merten from Datadash, that over the next 6 months, markets will start factoring in the event of the year, that is, the approval of a Bitcoin ETF that will serve as a alternative vehicle to accommodate the massive flows of capital leaving some of the traditional asset classes. As Nicholas suggests, the SEC will have little choice but to provide alternative investments.
Bitcoin as a Hedge to Lower Portfolios' Volatility
Last but not least, crypto assets such as Bitcoin and the likes have an almost non-existent correlation to other traditional assets such as stocks, bonds, and commodities, which makes for a very attractive and broadly-applicable diversification strategy for the professional money as it reduces one’s portfolio volatility. The moment a Bitcoin ETF is confirmed, expect the non-correlation element of Bitcoin as a major driving force to attract further capital.
Anyone Can Be Wrong Datadash, But You Won't be Wrong Alone
Having analyzed the hypothesis by Nicholas Merten, at CoinLive we believe that the conclusion reached, that is, the creation of a Bitcoin ETF that will provide shelter to a tsunami of capital motivated by the diversification and store of value appeal of Bitcoin, is the next logical step. As per the timing of it, we also anticipate, as Nicholas notes, that it will most likely be subject to the price action in traditional assets. Should equities and credit markets hold steady, it may result in a potential delay, whereas disruption in the capital market may see the need for a BTC ETF accelerate. Either scenario, we will conclude with a quote we wrote back in March.
"It appears as though an ETF on Bitcoin is moving from a state of "If" to "When."
Datadash is certainly not alone on his 50k call. BitMEX CEO Arthur Hayes appears to think along the same line.
On behalf of the CoinLive Team, we want to thank Nicholas Merten at Datadash for such enlightening insights.
submitted by Ivo333 to BitcoinMarkets [link] [comments]

An Anarchist Case Against Markets

I originally posted this to DebateAnarchism but thought it would be good for discussion here as well
This post was inspired by a debate I had on this sub with a Market Anarchist, which stopped advancing beyond a certain point due to several impasses that we could never get beyond. It became frustrating for both of us after a while because we kept talking past each other.
I wanted to make this post in an effort to clearly explain the following: 1) What I mean when I say that I am "against markets", 2) Why I am against markets, 3) What mechanisms I think can serve as effective replacements for markets, and 4) Responses to common criticisms.
(Disclaimer: I am only pointing out problems with markets pertinent to the target audience of this sub that supports them - Market Anarchists. There is no need to make criticisms of market features that Market Anarchists do not endorse in the first place. This post is not intended to be a general or all-inclusive criticism of markets, because Market Anarchists are anti-capitalists anyway.)
"Against Markets"
I don't seek to "ban" markets in an anarchist social context (obviously, because I'm an Anarchist), but I seek to make them obsolete. This is what I mean when I say that I am "against markets".
The Problems with Markets (as they pertain to Market Anarchism) (in no particular order)
The authors investigate how worker-owned and capitalist enterprises differ with respect to wages, employment, and capital in Italy, the market economy with the greatest incidence of worker-owned and worker-managed firms. Estimates calculated using a matched employer-worker panel data set for the years 1982–94 largely corroborate the implications of orthodox behavioral models of the two types of enterprise. Co-ops had 14% lower wages than capitalist enterprises, on average; more volatile wages; and less volatile employment. Given the quality of the data set analyzed, the authors argue, these results can be regarded as having broad generality
(Note: Regarding the point about "less volatile employment" in favor of coops...this study was done comparing between capitalist firms and worker coops. The wages were largely reflective of wages for union members because the wages in capitalist firms regardless of whether the workers were union members or not were based on regional collective bargaining by the unions. However, (unlike with the wages) the job security is not reflective of job security for union members. While we can see that union wages are higher than income for workers working in cooperatives, we cannot make a meaningful comparison based on this study between union job security and coop job security.)
If you want an efficient market system for coordinating production and distribution, you need a flexible labor market. Unfortunately, a more flexible ("freer") labor market leads to reduced labor share of income even under worker ownership (Self-Exploitation). On the other hand, workers forming cartels (monopolizing/oligopolizing access the labor in their field) that restrict labor markets is the only way to halt the trend of decreasing labor share of income - this is essentially what the function of labor unions is. So you need labor cartels to prevent Labor self-Exploitation (in the Marxist sense), while these labor cartels will themselves either be impossible to enforce in the absence of authority (because of the equivalent of Scabs) OR even if they can be enforced without authority they will undermine the efficiency of the markets in your society (because cartels screw up the function of prices in a market).
Alternatives
Based on what is written below regarding ECP and HKP, there is no longer a reason (with regard to rational economic calculation or information) to think that decentralized planning and gift economy dynamics would be unable to entirely replace the role of markets.
Answers to Common Criticisms/Objections
I've been told this recently in an argument with a Market Anarchist. However, he never was able to explain specifically how and why these differences would manifest and on what basis one could claim that it would alter my calculus and conclusions above.
In that case you've massively restricted the potential scale and scope in which markets can have a role in the functioning of your economy. I suppose that's fine, but in that case I would ask the question: Why retain them at all? Why not seek to replace them entirely?
To put it simply, ECP just says that you need a mechanism that allows you to compare multiple possible allocation pathways for resources in order to know which allocation pathway is the most efficient use of resources. And HKP basically says that those who do a particular kind of activity in the economy learn the information relevant to that activity as they perform it. Furthermore, this information is disparate and best able to be extracted by lots of people individually doing particular activities that they focus on.
There's nothing inherent about a large firm that prevents this from happening more so than an aggregate of small firms playing the same role in aggregate as the large firm does by itself. Large firms that are run bottom-up and allow their members autonomy (as was the case of with each of the collectives/syndicates in Catalonia, in contrast to large firms in capitalism) can discover and disseminate this information at least as well as an aggregate of small firms playing the same role as the large firm by itself. As support for my claim, I reference The Anarchist Collectives by Sam Dolgoff - a book that contains multiple empirical examples showing that collectivization of multiple separate firms (which had been engaging in exchange transactions with one another to form a supply chain prior to the Anarchist revolution in Spain) into singular firms of operation from start to finish across the entire supply chain, actually improved productivity, innovation within the production process, and distribution of end products. This actually addresses both HKP and ECP. As per Hume's Razor, we can therefore conclude that a reduction in the scope, role, and presence of intermediary exchange transactions/prices between steps in the supply chain neither results in reduced ability to acquire & disseminate information nor results in reduced economic efficiency. Furthermore (as per Hume's Razor), we can conclude that it is not the scope, role, or presence of prices/exchange transactions that enable either rational economic calculation or the acquisition & dissemination of knowledge. This is because (as per Hume's Razor) if it were true that prices/markets are necessary or superior to all other methods for efficient information discovery & dissemination as well as for rational economic calculation, it would not have been the case that we could have seen improvements in productivity, innovation, and distribution of end products in the aforementioned examples after substantially reducing (via collectivization/integration of various intermediary and competing firms) the role, scope, and presence of prices/markets within the economy.
The alternative explanation (one that is more credible after the application of Hume's Razor and keeping the aforementioned empirical examples in mind) is that optimally efficient information discovery & dissemination as well as rational economic calculation, are both possible in a non-market framework when individuals have autonomy and can freely associate/dissociate with others in the pursuit of their goals.
What's written above should be sufficient to address this objection as well. If it is not the scope, role, and presence of prices/exchange transactions that enable either rational economic calculation or the acquisition & dissemination of knowledge...then there is no basis upon which to argue there will necessarily be (from an information or rational economic calculation standpoint) more bureaucracy in aggregate in a society that has replaced markets, than there would be in a society that retains them.
However, there remains the objection that bureaucracy would exist to a larger extent due to the lack of competitive pressures against inefficiency. My response is to point out that empirical evidence from revolutionary Anarchist societies indicate strongly to the contrary. The role and presence of competition was greatly reduced while there was a simultaneous improvement in efficiency. As per Hume's Razor, we can therefore reject the notion that it is competition specifically that inherently prevents bureaucratic buildup in individual firms. It seems, from these empirical examples, that the best way to prevent bureaucracy is not through market competition between several small firms but through Anarchist praxis involving a lack of hierarchy and authority within large firms (recall that I often use the term "firm" to refer to collectives, syndicates, etc. for the purposes of this post), such that there is no ossified system of rank within the large firm. The absence of an ossified system of rank within firms is the true key to preventing the accumulation of bureaucracy within firms.
Note the three types of efficiency in the linked video - Allocative Efficiency, Productive Efficiency, and Dynamic Efficiency.
The evidence from Anarchist Spain during the Spanish Civil War (which I discussed above) indicates that Productive Efficiency and Allocative Efficiency was improved in various industries and communities where Anarchist collectivization took place. This trend only reversed and ended as the State undermined the Anarchists through various measures, such as cutting them off of currency that was needed to acquire resources from outside the Anarchist-controlled regions, using that leverage over currency to take over control of various industries away from the Anarchists, etc... Thus far, the market anarchists I have discussed this issue with have agreed on this point.
Where I have faced disagreement from market anarchists is on the issue of Dynamic Efficiency aka "Innovative Efficiency". Those whom I have discussed this with argue that markets optimize dynamic efficiency better than any other alternative.
My response is as follows... Evidence indeed does not support the commonly held view that (within a market economy) larger firms have greater dynamic efficiency. However, it does show that investment into R&D (especially by small firms) in market settings is substantially impacted by whether or not there are Intellectual Property Rights.
For me, this raises a natural question: In an Anarchist social context where there are no intellectual property rights, would a framework of cooperation/collectivization into larger firms be more dynamically efficient than competition between smaller firms? Let's look at the following...
(1) Evidence shows that, in general, Intellectual Property Rights have a substantial net negative impact on innovative efficiency:
To summarize, although only tentative conclusions can be drawn given the small number of empirical studies, the body of available empirical evidence suggests that patents may substantively hinder both subsequent scientific research and subsequent product development. Across a relatively heterogeneous set of technologies within the life sciences, and examining various forms of intellectual property rights, the available empirical evidence suggests that property rights hinder cumulative innovation—with declines on the order of 30 percent. Clearly much more work is needed in order to examine the extent to which these patterns generalize to other technologies and other forms of intellectual property, but the best available evidence suggests that mechanisms that reward innovation in a way that places the technologies in the public domain—such as patent buyouts—may have substantial benefits in terms of encouraging cumulative innovation, at least in some contexts.
(2) Evidence shows that firms - in the context of a market economy - invest less in R&D without the presence of Intellectual Property Rights of some form.
So to summarize, IP generally has a substantial net negative impact on dynamic efficiency but in the context of a market economy IP is necessary to incentivize firms to invest adequately into R&D.
Based on this we can argue that in an Anarchist social context, a non-market framework (involving decentralized planning and gift economy dynamics) of cooperation/collectivization into larger firms is likely to be more dynamically efficient than a market framework of competition between multiple smaller firms. This means that replacing markets with cooperative/collectivized dynamics will likely improve dynamic efficiency - the opposite of what the market anarchists I have discussed this issue with claim.
I have had a discussion with a market anarchist who argued that certain kinds of tasks will not be adequately completed without monetary incentive - particularly tasks that are unpleasant or those which people do not enjoy.
However, this ignores the historical and contemporary evidence of Anarchists accomplishing these tasks without monetary incentive - see below:
https://theanarchistlibrary.org/library/peter-gelderloos-anarchy-works#toc53
https://theanarchistlibrary.org/library/sam-dolgoff-editor-the-anarchist-collectives#toc57
https://theanarchistlibrary.org/library/peter-gelderloos-anarchy-works#toc24
(A) First, here is the simplified logic behind why I find Marx's Law of Value Compelling as compared to Subjective Value Theory:
(i) The function of markets is to optimize supply and demand so that resources are allocated efficiently. An efficient allocation of resources enables future reproduction and growth of an economy. When the market suddenly undoes the very allocation of supply to fulfill demand that it had previously built up such that the economy subsequently shrinks, the previous build up can be thought of as a market failure. Hence the process by which prices plummet (along with all the subsequent effects) until the market can reorient to start growing the economy again, can be accurately called "correction". Given that prices can be incorrect such that they require "correction", price and value cannot be the same thing.
(ii) A bubble bursts in the economy when previously inflated prices are corrected. (Note that "correction" is not my own term, but a term frequently used to describe such phenomena in economics.)
(iii) The only way to make sense of this is that prices originally (prior to the bubble bursting) deviated from values too much.
(iv) If it is the case that prices can deviate too much from values while prices are derived from the interplay of various actors' marginal utilities, value cannot be subjective. There must be an objective substance of value around which prices can deviate (to an extent).
(v) Therefore, STV is invalid as a theory of value.
(vi) Having accepted this logic, it follows that we require an objective theory of value as opposed to a subjective theory of value. Now the question becomes: What should this objective theory of value be?
(vii) An objective theory of value must express value as being comprised of some definable substance(s).
(viii) Given that we have established value as something objective rather than subjective, it must be possible for commodities to be exchanged in such a way that there is equal Value on both sides of an exchange.
(ix) In order for things to have equal value, the substance of value must be some characteristic that all commodities share but also separates them from non-commodities.
(x) The only such characteristic is that they can all be produced by simple/"unskilled" human labor.
(xi) Therefore, expressing the value of a commodity must be done in units of simple/"unskilled" human labor.
(B) Furthermore, it has come to my attention that some market anarchists find Marx's Law of Value uncompelling as a result of the Transformation Problem. My response is to look into TSSI, which has made it clear that the Transformation Problem is a non-issue.
The reason this is important is that if you agree with Marx's Law of Value, then you necessarily would find worker cooperatives and market socialism of any variety (including market anarchism) highly problematic due to Self-Exploitation.
submitted by PerfectSociety to debatepoliticalphil [link] [comments]

Inflation Deflation Goldman Sachs Hates Bitcoin Bitcoin Q&A: Is Inflation Necessary for the Economy to Work? Bolivar Bitcoins: Inflation drives Venezuelans to use bitcoins What is Bitcoin? Bitcoin Explained Simply for Dummies ...

Bitcoin conceivably offers an entirely inflation-free place to park resources. But what should be clear now is that the inflation central bankers generate is buying the economy something. It's ... The Key to Bitcoin’s Future: Inflation. If the cryptocurrency is going to be used as widely as dollars, its fans must abandon the dream of deflationary digital gold. By . Noah Smith. February 21 ... The algorithm that prevents Bitcoin supply increasing artificially - and which, therefore, prevents continual inflation of prices measured in Bitcoin - also prevents Bitcoin supply changing in response to demand. This can lead to huge price changes, which will depend on Bitcoin’s current and perceived future use as a currency. Bitcoin is therefore not a good store of value. Its value can ... Given an alternative, people won’t stand for another failure in the financial system, like what happened in 2008—or what is happening now in response to COVID-19. Big banks won’t stand the test of time, but Bitcoin will. Introduction. Bitcoin began as a response to the global financial crisis of 2008. (Bitcoin block rewards are financed by Dollar taxes:) Any no-speculation equilibrium price sequence (Q t, P t) with Q t > 0 for some given path B t > 0 can also be supported as an equilibrium price sequence by an alternative path B t ′, provided that 0 < B t ′ < (P t / Q t) y t, per appropriately adjusting the Dollar quantity D t.

[index] [22083] [37562] [14161] [42644] [48706] [17434] [45137] [3628] [38668] [47135]

Inflation Deflation

In Venezuela, an increasing number of people are adopting BITCOINS as an alternative currency to protect themselves from the country's rising inflation. They say crypto-currencies are sometimes ... Basics of Inflation and Deflation with respect to the USD and Bitcoin. Small-scale regional crises could show people why alternative systems (to protect against inflation and currency controls, for refugees to send money home, etc) are better and give them an ... Investors have an alternative to purchasing bitcoins through exchanges; they can create their own through a process known as “mining”. Cloud mining contracts have arisen recently as a new form ... Goldman Sachs held a conference call for clients today on the "Implications of Current Policies for Inflation, Gold and Bitcoin" and turns out... Goldman Sachs ISN'T a fan of Bitcoin. Nope, not ...

#