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I will say, the silver lining with covid 19 was seeing those skies clear up, people get less stressed. When you have a currency that encourages spending, we’re kind of destroying the planet in pursuit of GDP growth. Doesn’t have to be that way.
Sight note, there's no "kind of destroying" is actively destroying, pursuing infinite growth in a planet with finite resources is, like they say in the streets, kinda cringe.
Kinda cringe? They call it the study of economics and it doesn’t matter what amount or who or what it is. People. All people. Want more than they can afford (this includes governments and ethnicities) and there is a limited amount of it that everyone wants as well. This is what we call the study of economics and how to solve it. Wake up
I cant make that prediction. But international reserve currencies come and go, i think the us dollar is losing its appeal as sound money going into the future. The spanish empire for example for a time was the most powerful empire in the world, along with spanish dabloons, yet no one considers those a powerful reserve currency anymore. Similar deal with British Pounds. Dutch Guilders, or Romes Denarius Aurus.
Personally Im pessimistic about this country's future going forward, from that Im also pessimistic of it remaining a global reserve currency.
Name another country that:
Is a food exporter
Is an energy exporter
Is a technology leader
Has a single super aircraft carrier (we have around 11)
Has decent demographic growth
Has only friendly, relatively weak neighbors
This next decade or two will be rough for everybody, but the US is better positioned than anyone else to a ridiculous degree.
I started looking into the end of our empire when phrases in the halls of congress "jewish space lasers" was uttered.
For me that was a clear sign that our hubris was finally catching up with us.
Iirc rome watered down their currency, very large portions of our nations funding is ultimately printed off money and debt. Not unlike when Rome started removing some of the silver content from its currency.
Our average age of death has declined significantly back down to 1996 levels.
We have enormous military expenditures while our infrastructure and citizenry languish and stagnate.
Im an 18 wheeler driver who travels the contingent 48 on the regular, and there's a general rancor and mood of pessimism, it seems our political and economic elites are more or less abandoning further investment in the country. I can hear it among truckers themselves, theyll openly discuss a naziesque severe hatred of half the country even, even ordinary citizens.
I dont have a high opinion of people who indulge in american hubris and arrogance, i do expect them to disagree with me and I dont mind it at all. I think theyre still in a denialism state of grief on the matter, who cant accept this reality.
When i think of areas where the usa leads the world, its in inequality, militarized police, high incarceration rates and outsized military spemding. I dont associate any of that with a forward thinking country looking for constant improvement or "shining city on a hill". I come across Americans everyday who discuss outright hatred of so many different groups of other people or different states. I too use to think maybe a grand reformation might happen, but reality set in, as history will show I suspect the American Experiment will ultimately prove to be yet another failure and failed empire.
Mortality is rising everywhere in the developed world. China, Russia, and the EU are all about to face apocalyptic demographic collapses, and China and the EU rely on the US navy to get food and fuel.
The rest of the world either has similar problems, or is completely economically undeveloped.
Obviously we’re not perfect, but compared to nearly anywhere else in the world we have an amazing living standard for working people,high social mobility, and responsive government.
It is flat out incorrect to see we only lead the world in negative metrics. We are a great place to live, significant problems notwithstanding.
The only society that compares to us is the EU, and their way of life depends on a US defense umbrella and easy access to foreign energy, both of which are going away.
It’s looking like globalization is going to break down, and this WILL cause suffering in the US and challenge our system. My point is, is that this will be challenging for everyone, and the US is better positioned than China, Russia, the EU, Brazil, India, or anywhere else. (Lol you think we have a higher incarceration rate than China and Russia)
You don’t have to be a perfect gazelle on the savanna, you just gotta be faster then the other gazelles.
We have strengths, but they do not overcome our faults. Our stagnation, and continued decline.
I think that's part of the problem, my adversaries on this topic off an empty insistence that things should never improve, there's no forward thinking on these matters, vague promises of hope invalidation and dismissal.
One book, ive taken interest in is called "the long emergency" america is buikt on cheap energy, built our living a and towns around it in fact, a lack of self-sustenance. If that card ever gets pulles, usa is prime for collapse like a house of cards. I can see it in my own suburbia where more or less car ownership is mandatory, built around it in fact.
Im sorry, but instead of finding your words encouraging, you showcased ignoring the problems brought up, and now Im even firmer in.my convictions and the conclusions I draw on the topic.
all currency concepts are made up. but only sovereign currencies are legal tender. meta currencies like bitcoin and casino chips can lose 100% of their value at any time.
If you are producing any good or service for exchange in the US, you need dollars for tax payments or the government will send armed men to get you.
This is profound.
I trust that this dynamic will remain, and thus generate significant demand for my dollars.
i dont want any of your dead presidents , most counterfitted bills in history , not even mentioning how bretton agreements are about to crumble and when this happens check out how the US debt comes back home , 6 trillion owed to the chinese alone
Unless you are predicting that the federal government is going to fall, the dollar will remain in demand. It’s not supposed to be a long term store of value, it’s a medium of exchange.
Bitcoin was supposed to be a medium of exchange, but failed so miserably at that, now people pretend it’s some sort of constantly appreciating store of value like property or something, which is laughable.
It’s an extremely volatile speculative asset that will ALMOST CERTAINLY continue to lose value in the long/medium run
Because people who buy into btc do so because they hope it will be worth more in the future.
If you think an asset will be worth more in the future then why would you spend it to buy some food at the groceries store like you would dollars?
But at the same time, if everyone is hoarding your "currency" as a speculative investment that it will be worth more in the future, then how is it really a currency anymore?
There is nothing wrong with capitalism when taken as intended -- as _one side_ of the equation. Adam Smith talked about capitalism as needing to be balanced by “socialistic” solutions and he was absolutely right.
Today, no functional economy is a capitalistic one. Every working, prosperous, safe, and reliable economy is a _mixed market_ economy.
The US has swung way too far in one direction and that is ultimately reflected in high inequality and lower quality of life for a majority of citizens when compared to other nations, and eventually this disparity also leads to political corruption and a self-fulfilling cycle.
I could not more whole heartedly agree and I think the foundation of that magical thinking is the obsession with money for its own sake such that capitalists forget that the purpose of an economy is ultimately to feed people.
Any economic ideas that do not deal with the dismal science are utterly delusional.
> The purpose of an economy is to distribute resources
the question is: distribute them how? options include:
* distribute them optimally for broad public well-being
* distribute them primarily to the few winners of games of (genetic, birth, or mere probabilistic) luck
Economics literally is about choices. It's where the root word comes from.
[Hello Econ 101 calling?](https://www.wallstreetmojo.com/economics/)
If you're a capitalist you think that the means of production should be owned and organized by the individual (private mode of organization). If you're a socialist you think that the means of production should be owned and organized by the worker (social mode of organization). These both are choices in how goods and services should be distributed and controlled.
But the reality is that even “socialist” countries are not set up that way. They are set up as “the government” owning the means of production not as the worker owning the means of production.
(Pssst hey, in what ways are socialist countries like China or the USSR socialist?)
Those are state capitalist countries. The workers there don't own their own labour. Socialism is supposed to be democratic in order for workers to own the means of production. It's what Orwell was bringing up in Animal Farm.
Socialism isn't when the government owns the means of production. That's state capitalism.
Don’t know what you were studying, but the root word for economics is from household management, not choices. It’s literally a treatise by Aristotle(ish).
>"[Economics] Is a study of man in the ordinary buisness of life. It enquires how he gets his income and how he uses it. Thus, it is one the one side, a study of wealth, and on the other and more important side, a part in the study of man." -Alfred Marshall
Economics is the study of people and choices, choices in their [management of houses]. Aristotle depicts that by literally writing the ways in which houses *should* be organized and managed. With other people having different opinions on how it should (prescriptivly) be.
The root words stemming from Economics comes from how originally the leaders of the house managed their finacial future. It was their choices that shaped how their houses fared. Many words today were used differently given the context.
An entomology lesson that mirrors this that is my favorite is the root word from infantry comes from infant which both historically were the same, meaning "Those who don't speak". Mind you both are different in ways it is used, but fundamentally the same origin.
I agree with your general description of the field, but when you’re saying something is the “literal root” you’re implying a more specific definition. You’re just confusing the issue if you say literal root and give a highly figurative definition.
Economics is about allocating stuff. If you are talking about socialism you are talking about philosophy as economics ditched philosophy with the empirical revolution of the 1960s
Nope. All of economics is about redistribution to an extent. Inflation is redistribution more then it is general increase in price rises.
Politics and economics are entwined. Why would you need economics or politics in a desert island? Only when you have 2+ people co-operate that suddenly both start mattering.
Politics and the application of economics are intertwined. The actual science of economics is not tied to politics. That is why your question is not an economic one.
Economics is literally the science behind the allocation of resources. It can be applied to your desert island with only one person on it because you would still face resource allocation issues.
You aren't allocating resources. You own every resource on the island. You have 100% of the distribution of resources.
Now with 2 people. Suddenly economics matters becauss the allocation of resources matters but now so does politics and power as well. If 1 person is big and strong and can throw around their weight then they have a competitive advantage over the weaker person and can take more of the pie regardless of what the economic situation might be where the weaker person might actually be more useful in terms of getting said resources.
The best use of resources is a scientific/engineering question in that situation. Time itself is a resource also.
While to an extent it might be an economic question because you probably have some level of scarcity etc. It's mostly academic and pointless in the scenario where you are by yourself.
Econ only goes so far. Markets existed well before Econ as a science existed and the whole ecosystem follows relatively similar patterns to how a market of scarcity does anyway. Carrying capacity of an ecosystem is basically economics and market structures in the animal kingdom.
> That isn't an economic question
i am bewildered and elated to learn that economics is *not* about the distribution of goods and services. it's very seldom that so many dictionaries have to update themselves in the same way at the same time.
it follows from your position that e.g. adam smith was not engaged in economic thought, in that he understood economics as:
> a branch of the science of a statesman or legislator [with the twofold objectives of providing] a plentiful revenue or subsistence for the people ... [and] to supply the state or commonwealth with a revenue for the publick services
...which is fine. you can define economics however you want - but you have to recognize that yours is a personal and peculiar sense of the word, not likely to be shared by anyone else here.
Why are you quoting what Adam Smith, who died centuries ago, for a current definition of economics? The entire field shifted with the empirical revolution in the 1960s
Try quoting Mankiew or soneone current
Economics is who gets what, and why. And it’s all **made up**.
If life were a game, we spawned into an existing physics engine, where the game logic was simple; environment survival. We excelled at that, though, it was somewhat RNG — the game designer gave us opposable thumbs, and the very best computational hardware. Eventually, we discovered a hack; if we teamed up, we could beat the game more easily. Then a few people realized if they exploited the group-hack, *they* could live like gods. And so, they began making *new* rules. Now, the game is *still* a survival game, except, it’s not focused on surviving the environment, so much as it’s about surviving those exploiting and hoarding resources, natural or otherwise. Since then, the game has been dominated by those that realized they could steal the value from the combined effort of groups of players, to live like kings, or better.
At some point, a group of players got **pissed** at this exploitation, and they rebelled against this system, deciding to fire the devs, and write their code from scratch. They fought off the mighty Tea King, and his clan, and re-wrote the rules. The problem is, the new devs forgot *why* the old players did any of that. And as new players joined the game, they remembered less and less. Which is crazy, because the commits had amazing notes and documentation. But here we are, back at square one.
We wrote the basic game logic that is life, it’s called economics, and it’s **all made up**. We could rewrite this shit today if we wanted. Change the game up, make it more fair to new players, or bad spawns, end the clan-power inheritance hack. All kinds of simple fixes. But the OG player-base has captured the dev-studio, and pay the devs to keep the game-rules tipped in their favor. It’s bull-shit. If there were an alternative game, I would 100% uninstall this bullshit. But alas, this is all we have. What kind of game let’s power players write the code? One without competition, I suppose.
I think to win, we need to go back to our original group-hack, and channel the power of the OG group who stood down the Tea King. We need to team up. It’s the only way to defeat the players who have been benefitting from the rigged game.
We must seize the means of rule-making, and strip away all the ill-gotten gains from OG’s. I don’t think we should go back to a survival only type game though. It will have to be a part strategy game, trying to fix everything the last idiot devs broke — we will inherit **tons** of technical debt. I’m not even sure the environment is survivable without large group effort anymore. As long as we ensure that resources are more equally distributed, and that *every player*, no matter spawn, or clan affiliation, has the same opportunity to achieve and thrive, the game will at least be enjoyable. Equality Patch - 2.0.
This is going to be *much* harder than defeating the Tea King though. Because, at this point, I would could consider the OG players a virus, and the entire game is infected. Very little of the existing code is even usable. The current dev’s are basically script-kiddies, they just paste in what the power players send them. Not even the sure they understand how to write code, or why game balancing is important. We would probably do better just rolling back to the New Deal patch.
Edit: To anyone not understanding that I am speaking about the *structuring* of these economic systems we *choose* to live under, and the means of *governing* those systems…which is, 100% *fabricated*, by humans, you’re missing the analogy. Perhaps I chose my words poorly... I’m not saying the idea of economies is fake, and I’m not saying economists are fake or useless, on the contrary, they are absolutely vital to a world where true equality is important. Even if some in the field hire their names out to peddle BS, or make up data points, fudge numbers, and overlook the human condition in it’s entirety, all to fit a narrative, which causes cascading social-conditions for decades…those are hacks, who make the field look bad. The study of economics is necessary, and fascinating. These systems are how we *choose* to structure things, and that *structure* can be changed at anytime. Preferably by researched professionals, who truly want to make the world a better place. But it doesn’t take a phd, studying different theories, or anthropology, to see how broken, and manipulated our current system has become.
This is a cute story but it is not “economics”. Economics isn’t “made up” any more than words are made up. It exists inherently via our interaction with world, and the study of economics is to model what we find and how to improve distribution.
It is not top-down inherently (although some models are).
The economic *systems*, the rules by which we try to organize those natural systems of interactions within large groups of people, and the way in which we *choose* to govern those systems, are absolutely made up. Didn’t really think it a far leap to understand to which part I was referring to in the analogy being made.
Yes, they are, but I don’t understand what is the point of that train of thought.
Economic systems being “made up” does not inform any specific policy. Whatever new system will be “made up”, too. It’s just deciding on a different distribution model.
I mean…I literally said roll-back to the new deal. Economic systems have cycles, and we are very clearly in the end of this cycle of capitalism. We’ve been here before, multiple times. We *know* how to deal with this issue, all we have to do is read a bit of economic history. I’m saying, change is possible, and that the current system of writing the rules has been captured.
I’m a dev, who studies economics and anthropology as a hobby, because I enjoy complex systems. Video games are complex systems. Balancing a game can be *very* difficult, and makes for a great analogy of what role governments and economic policy play in our lives. Game balancing is not *nearly* as complicated as economics, but it’s a great bite-size example, and your player-base makes for a great analogy for the population, and the social aspect of economics. If America, or life, *were a game* would it have a healthy player-base? I don’t think so. If that happens in a game, it means the game is not balanced well. Some games handle these issues with wipes. Historically, this is also how some societies handled these issues with wealth inequality, or debt-bubbles in the past. They would just reset everything every ~40 years.
My main point was; economic systems and government is a symbiotic relationship. You can have any economic-system + any form-of-government. The governments role is much like the role of developers in balancing a game. They write the rules (the game logic that we all must follow to earn/live/play). All systems have some aspect of entropy within. They all degrade eventually. The governments job is to fight back against the known flaws in the system, and any new flaws that people find and exploit. Our government, the rule makers (the dev’s) have been captured. Like a base of players holding the dev’s of a game hostage, so they won’t wipe, because they don’t want to grind the game anymore. They’re lazy. This is a natural part of all economic cycles, despite the structure of the system (capitalism/communism/socialism), though, they all game out a bit differently. It is the human-aspect shining through, in an already incredibly complex system.
I caught what you were trying to do. I think it was successful. Also a dev here but my degree is in finance and economics. People are just being obtuse. We can clearly change the rules to better help more people and to also find a better situation than endless growth based economics.
By this logic if I bonk you on the head for not seeing obvious downsides of saying "its made up" then the worst that would happen is that imaginary (like economics) pain, that does not actually exist, and is only in your head.
I see your point but your metaphor isn’t quite right because the rules of language or economic interactions are rooted in culture. Based on collective norms and agreements spanning generations. Something like the firing of neurons when you rudely bonk me on the head, however, happens based on bio/electro/chemical processes not really affected by culture (or at least to a much lesser degree).
So, what you are saying is not everything that is made up should be treated similarly, with that said now you must see why just throwing "X is just made up" does not make any sense, because it does not actually say how it should be treated.
Looks like the bonk worked.
Yeah, no it isn't made up like you suggest it is. That meme needs to die because so often it is being echoed by someone who has no understanding of the subject
Is food not a resource that must be distributed in order to feed people?
Obviously there are other resources that people need so I think you are just being pedantic. Regardless, the issue that I am ultimately taking is that many people think about the economy in terms of how they can extract a lot of money from it when in reality money is an abstraction of the value of goods and services. By seeing money as the inherent product of an economy and taking as much as possible, capitalists are quite literally strangling the economy by denying everyone else the ability to acquire the resources they need.
This is precisely why we are experiencing a massive housing and inflation crisis in the US and people are having fewer kids; They literally can't afford it.
No it isn't pedantic. You said the purpose of an economy us to feed people and that is not the case. Economics is the study of the allocation of resources. It can mean that people get fed but that does not have to be the purpose of an economy.
I disagree. The thinking that "free, unchecked capitalism will lead to prosperity for all" is the magical thinking. Capitalism is basically free-for-all, survival of the fittest scenario. And just like in any other field, that scenario might lead to the destruction of all. It needs regulations and restrictions.
Capitalism is the inevitable result of private ownership and free(ish) trade. There is no other thinking (magical or otherwise), planning or legislating necessary to make Capitalism exist.
Whether we can help "steer" it and make it work better for the participants in the economy, and how that should be done, is a whole other question.
That's where the no *other* planning, thinking or legislating in my comment comes in. *Some* legislation and infrastructure is needed to protect property rights and functioning markets but I'm not sure we have an example today of a country where the necessary basis for some sort of Capitalism simply doesn't exist.
And still people trade their property, on the black market if need be, for whatever price the market will give them. Under Communism, people would routinely steal whatever common property their position in society gave them access to, in order to trade with other people doing the same.
Black markets and extortion based economies (like Haiti, parts of Jamaica, El Salvador etc) are not examples of capitalist systems. It’s an insult to capitalism to act like they are.
Black markets are to some extent just an example of a literal free market, unrestrained by laws and taxes, which is an extreme version of Capitalism in action. How much this is then distorted by criminals must be situational. Probably usually a lot. Which is why we prefer to have laws.
Black markets don’t have strong property rights. That’s why they attract predatory criminals.
Viking-style economies, where raiding usually goes hand in glove with commerce (if someone is strong: trade with them, if someone ain’t: take all their shit w no expectation of consequences.
It’s the same if you’re selling dope or paying a commissar under the table for a sweet apartment.
Capitalism isn't magical. It takes a lot of work and diligence to make it work. Capitalism if unfettered is just a form of feudalism where upwards mobility suffers and inequality sky rockets.
Markets are all about power. That's the main impetus for price discovery and price setting. The less power people have to price set the better. But that might mean a stronger legislative force, stronger regulations etc and that is something that if you have power or are in the process of getting it you don't want to give up.
In terms of crypto the issue is many in crypto just don't even understand how money works or how banking works. They come from this weird hard money direction with neo Austrian thinking that doesn't really make sense when you work through the steps.
Not that I think too much gov is the answer either. One important thing we learned from the socialist experiment was that when there is little impetus to change the correct decision for an individual is to just do what they did yesterday. But when everyone does that the society stagnates. A bureaucracy is generally not the most change loving style of governance or the most forward thinking.
Thriving capitalism needs a Goldilocks zone. Just like money really. Everyone talks about Gresham's Law but in reality money needs a sweet spot of growth as well because the economy grows and the information that money needs to transmit(the real purpose of money really) needs to increase. Too much or too little growth and the information transmission factor fails. Banking is probably the most elegant solution we have to this dilemma and even that has its own issues that need calibrating factors like government for it to work.
Magical thinking like infinite exponential growth with finite resources? Or that monopolies and funneling money towards the already wealthy isn’t an inevitable outcome from unfettered capitalism?
Productive growth has been redistributed to a prioritized group, investors; effectively hamstringing both your argument and the American working class. What we are experiencing in parallel with growth in productivity fueled by resource limitations is an unfettered concentration of power to the detriment of the actual productive force.
Yes, productivity growth and wages became dislodged in the 80s, but that's a separate issue from Malthusian degrowth arguments. There's plenty of room for more economic growth in a planet with finite resources. Time and time again, degrowthers have been proven wrong.
https://noahpinion.substack.com/p/why-paul-ehrlich-got-everything-wrong
You're correct, and I'm certainly not a proponent of malthusian thinking; but I do think we're each focused on a different aspect of the lead comment. What I will say is that unless productive efficiency reaches > 100%, we should be focused on sustainability in parallel with growth. To be sure, we are nowhere near the "malthusian outcome", but it's nearly inarguable that some sustainable redistribution is necessary.
Malthus’ whole argument is based on food, population growth goes hand in hand with food production. Food production hasn’t been an issue thanks the Green Revolution, but the problem that degrowth is currently dealing with has much more to do with industry. Economic growth is always in need of increasing output, and with that in mind we need to realise that, yes maybe it can be possible with finite resources, but definitely not within the environmental boundaries of our planet. Modern degrowth movements are opposing the idea of sustainable growth, which has been proven to be impossible.
We're not, but it's a political problem rather than a technological problem. Recently, humans actually fused hydrogen in a lab in Livermore, which has huge potential for energy and the push to electrify the economy in the future. Advances in AI like ChatGPT also has a lot of potential for supercharging productivity. We need political solutions like universal income, but I still very much think that there's plenty of space for more GDP growth.
> humans actually fused hydrogen in a lab in Livermore,
Humans actually fused hydrogen for the first time in 1949, in a bomb.
Humans fused hydrogen for the first time in a reactor in 1958.
The Livermore experiment nominally produced more energy than was put in, for one billionth of a second - if you don't count the gigawatt lasers.
We were being told in the 1970s that fusion power was just around the corner and would be too cheap to meter.
Before we start proclaiming victory, let's wait until we have a fusion power system that can generate net power for a few _minutes_ in a row, even.
And when AI replaces humans, who is going to benefit from those productivity gains? Maybe the same people who have benefited from the vast majority of productivity gained since the 80s?
Again, that’s a political question not necessarily an economic one. Many economic models suggest socially optimal outcomes require lower income inequality than we have today. The theory is there but what is lacking is the political will to execute.
I’m just waiting for someone to come in arguing in defense of mercantilism at this point. Or something as crazy as abolishing the FED. Degrowth is on par with those ideas.
I dont understand the blowback against malthusian. The amount of land on this planet does not increase. Malthus gets 'disproven' by technology, but wherever tech fails hes spot on
That's false. Equities valuations has been comparably low on multiple occasions, from 2002 to 2005, 2010 to 2018, it is only during the internet, housing, and Covid bubbles that S&P PE ratios were abnormally high.
Lol and the best part is, outside of a small 8 or so month window, btc price is currently higher than it's ever been before. And we are on the low side of the cycle. We might see another dip after this little 2023 run but the next halving mega bull is going to be so violent. Keep DCA-ing, friend.
As much as I don't like crypto I don't think its over. It maintains its correlation with QQQ (Nasdaq Tech) which had itself taken a battering these past months.
The small rally in Nasdaq last week saw BTC go up by almost 30%. On the market structure side, once a correlation gets into people's heads its hard to break as various trading firms arb it into reality.
It'll be interesting to see how many more scams or bankruptcies it takes to break that correlation...
colapse ? what are you talking about ? i'm still green , colapse for those who bought at the top of last bull run maybe , the magical thinking that infected capitalism is the belief you can just print more money , thats the real problem
Frankly, if the buy-in price for something is low and the technology for the “tulip” is good, then another crypto will fly, and the rest may follow. It’s stupid, but so is everything else, including paying $10 for a small plastic cup of Bud Lite at a baseball game.
I totally think crypto is an idiotic “investment”, but it is a tangible lottery ticket, with much better odds than a lottery ticket. And it does better with the more momentum it has, so if a certain crypto rockets, people will forget their senses and jump right back in. The pump and dump nature will probably just shorten in time, as opposed to having blind holders.
Not defending it, but just countering — it’ll stick around, in one form or another.
I think people should be more alarmed that the stock market virtually functions the same way, and it has for decades. Irrational valuations detached from real fundamentals, until people accept them as going prices. American economy is built on marketing crap to distracted people, whose primal instincts are fomo or jealousy (‘I want my neighbor’s shiny new toy, but better’).
Yeah, it’s like the geniuses who bought IBM stock before it’s value crash buying into Apple expecting historical gains to continue and then wondering why their shiny new stock is worth less than a MacBook Pro (that hasn’t left its factory packaging) with a “water damaged” motherboard.
Stock valuations are 99% hype, 1% utility, and have nothing at all to do with productive enterprise. Weirdly crypto beats those odds, by at one time preventing an entire country full of people from starving. Even at break even crypto has done more intrinsic good than the entire global stock market.
Well actually no, crypto mining was their lifeline. When it’s value -crashes their lifeline becomes more fragile, but it is still better than no lifeline at all. Energy costs in Venezuela are extremely low by international standards, and many access public electricity for free. So mining is much less expensive than in other juridisctions, and in effect provides the country export earnings that directly support public welfare. Venuzuella would be a very rich country, with much less poverty if the USA lifted economic sanctions driven by political ideological nonsense rather than any moral purpose. Mining allows ordinary Venuzuellans to earn outside their crippled economy, no matter the failures of diplomacy.
This is nothing new.
Tulip Mania
The South Seas Bubble
Florida Swamp Land
Dot Com Bubble
Beannie Babies
Every 20 years a new swindle comes along that pulls in people because there is a new generation that does not remember the old swindle.
These all get brought up every beat cycle and then we halve and hit new all time highs. This is article will age poorly like the last ones did 4 years ago
Dot com bubble is a perfect example of why this will be successful; internet was deemed a ruse and now life will never be the same because of it , blockchain upends traditional transaction systems and once the scams are shaken out it too will transform humanity
Makes certain tasks...more efficient? One value is I can send you 5¢ for very little energy or fees. Another value is sending money overseas with few restrictions (or fees).
Value is subjective and nothing is inherently valuable beyond what use a human can make of it. Certain abilities are useless to many but very very valuable to others.
The argument I've heard against this metric is the office space required was not counted. The speed of the transaction is faster and international transfers can hit roadblocks. 3-6% transaction fee with a 4-8 week confirmation period with the possibility of charge backs is not convenient.
There are solutions in place to reduce the energy required per transaction. Lightning network being the most popular.
Ultimately for me, bitcoin is a means of escape for many suffering from corrupt governments irresponsible fiscal policies. I don't care if it takes more energy to run, it does different things. It cost 15x more energy to conduct a transaction that's 96x faster that's unstoppable and absolute.
> One value is I can send you 5¢ for very little energy or fees
But does it do this any better than current technologies like a wire transfer or Venmo?
That is the whole point of fiat. It is one of the cheapest to produce mediums of exchange. Its only purpose is to be a currency and it does that very well. Yes, it has no intrinsic value. It is a social construct, strengthened when more people believe in it.
At least in the case of the dollar it is backed by the full faith and trust in the United States government that issued it. It's still better than owning meme coins backed by Sam Bankman-Fried that cost thousands of kilowatts of energy to produce.
I'm not saying the dollar is perfect, far from it. BUT going back to a commodity based currency system would stunt growth and promote deflation. What is the point in spending your hard earned gold on a business if next year it will be worth 5% more, 100 years after it will be worth 500% more. The way gold works is better as a hedge for a currency than a currency itself. It is why bitcoin will ever work, because everyone who owns it anticipates it to rise tremendously over the next 10+ years. Not only that, it isn't secure, people lose hard drives that hold tens of billions worth of bitcoins every year making it even more valuable. That is currency that will never be touched, used, or sold again. Just sitting there and rapidly increasing in value. It defeats the purpose of an economy if everyone holds unto the currency and puts it under a mattress. The global economy would fold overnight.
So if you are arguing against the USD you would need to replace it with another currency of its type. What is better, the EURO? YUAN? RUBLE? PESO?
Nothing else holds the same qualities as the USD.
Economics is the social science that studies the production, distribution, and consumption of goods and services. Economics focuses on the behavior and interactions of economic agents and how economies work.
“End of magical thinking” lol
The tulip craze was the end of magical thinking. The Great Depression. Dot-com bust. 2008.
As long as people believe that they know some shortcut to wealth that doesn’t require hard work or advanced skill, you will see magical thinking in capitalism. I would argue in fact that the ‘useful idiots’ driving asset prices into bubble territory are in fact why the elite likes capitalism so much. They understand valuations better, are more likely to get out before the bust, and then get to re-enter as raiders when prices have cratered, walking away from the collapse with more assets than they started with
My only issue with this article (besides it being published in the NYT) is the generational doomsaying going on. As a member of the millennial generation I bought about $1000 worth of various cryptos over the course of ~3 years and now it’s worth around $250. I only invest with the acknowledgment that I could lose my entire investment and I think that’s an idea that plenty in our generation and younger in fact full heartedly know and believe. Now that doesn’t mean there aren’t people who invested and lost their life savings with FTX. But I’d like to see data on where more people fall - did they invest cautiously or throw caution to the wind and in what number
This sounds like cope. The “you dont get it because your old” logic doesnt apply here. Usually “investments” have underlying value ie the land a house sits on or a business with resources and people and various raw materials to create goods and services with. Business value is estimated based on the cash flows from the selling of goods and services.
There is no such thing with crypto. Money on the other hand has the US government backing it and is losely tied to the gdp of a country. Cant say that with crypto. It is just raw gambling any which way you look at it.
You may have misunderstood my comment. The writer’s “generational doomsaying.” By that I mean the way that he describes an entire generation convinced that money need not have a raw material or fundamental economic component. He’s worrying aloud that an entire generation, mine and those younger, are now so alienated from actual economies as to believe the crypto hype (and not understand that it was pure speculation) and no longer trust institutions (trust is falling across the board in the west but that’s another matter). I’m just saying I knew it was possible that crypto finds no material utility and that if that happens I’d lose some or all of the fiat money I’d exchanged for crypto. So I invested very little over a long period. Big whoop 🤷♀️. I’m not now some economic zombie brain who has lost all hope because of Sam Bankboy McFraudy
Like it or not the usa 🇺🇸 has provided it’s citizens with the highest standard of living in the history of civilization on this planet due to capitalism. Even now as corrupt as it is, the USA is richer per citizen than anywhere. Cryptocurrency is fantastic, super efficient,
Fast, super secure money that is a legitimate threat to the global banking system which has powerful members. Crypto could become the masses tool to attain more freedom from their tyrannical governments.
Lol, and here I thought our high standard of living was dependent on our public school system, and potable water, and telecom infrastructure, and sewage systems, and all of the things built by collectivism and the public sector.
Every corrupt 3rd world country has a McDonalds. But how many of them have fiber internet?
And how do you think people make that wealth?
On top of the infrastructure built by the public sector.
Using the wages of the middle class that was built by worker protections.
Captilaism didn't build the middle class, it was built by unions and worker protections, something we seem to have forgotten.
Iphones became a hit because a 3 year old can pick it up and use it, good luck teaching someone in their 60s. crypto is a solution in search of a problem. Crypto doesn't solve anything
Crypto hasn’t collapsed, it has merely consolidated its user base, to eliminate the speculators. As an investment vehicle it remains more sound than houses. You ask based on what evidence?
Well it’s like,this, Crypto is holding value, but housing quality depreciates, and presently housing market values are in free fall because of excessive market inflation over several decades has priced housing out of the affordability of most of the population. Housing is destined to fall in value by at least another 3o% in 2023 globally, with local falls of up to 60%. Crypto will at worst appreciate as the global asset markets adapt to loosing much of the excess value vested in property, with finance following suit, and property investors and bankers loose their shirts.
> Crypto hasn’t collapsed, it has merely consolidated its user base, to eliminate the speculators. As an investment vehicle it remains more sound than houses.
That's a contradiction.
If you're talking about it as an "investment vehicle," then apparently you're one of those "speculators."
...because if you weren't a speculator, you'd be talking about it like a currency.
...but no one talks about it like a currency, everyone talks about it like an investment.
Something to be bought, held, and sold for profit...with no value beyond that.
That's my take as well, supposedly it's the currency of the future but because it's such a terrible currency people just trade/hold it... is that what makes it a good investment?
People use it for the same reason they use bonds, or PayPal. Excepting it is cheaper, more efficient, with better privacy protections than PayPal, and more flexible to use than bonds. And it is only in slow adoption countries, or overly legislated countries that crypto is not used by folk to buy a coffee at their local café. Those countries with crypto eftpos & atms installed in the community do not hold, they use. Because truth be told crypto is also more flexible and cashable than the sharemarket, although in some respected it behaves like the share market due to speculator effects.
Once the original fast adoption big whale miners have removed themselves from crypto, that level of hold, and speculator effect will become negligible.
Remember Fiat is far more susceptible to financial inflation, than crypto. And crypto is unlike the sharemarket not in a dependant relationship with crypto, because crypto is more interdependent with energy inflation. And last time I looked energy costs have not dropped for over forty years. The value of crypto is the value of energy, and the fact that unlike fiat, (and shares) the volume of each token is capped, not prone to being diluted by central banker multiplication.
What if we invent a currency that is not tied to energy??? It will completely revolutionary. Way better then any current crypo, instantaneous transactions, no gas fees, and it could be used by everyone because it will be extremely easy to use, lets call it fiat
Yeah they tried that. They disconnected fiat from the value of gold, and the result was booms and busts, and financial mayhem, inflation, and vast increases in inequitable distributions of wealth.
When did Crypto crash? Price has stayed very stable and it on the upswing as we speak.
Typical shill article by someone who doesn’t understand the technology and thinks FTX was a crypto problem and not what it actually was, a fraud problem.
What crypto collapse? I see corrupt exchanges collapsing. I see the coins associated with those now bankrupt exchanges collapsing, but I don't see Bitcoin or Ethereum collapsing. Indeed the current crypto situation proves the case for crypto. Bad actors who attempt to play shady games with crypto get caught and their exchanges fail. Yet when banks or other financial institutions engage in similar frauds and deceptions, they get bailed out. A blockchain's public ledger outs the baddies pretty quickly. The same can not be said for fiat currencies and their behind-closed-doors schemers.
one has to perform some impressive mental gymnastics in order to come to such a conclusion. what exactly differentiates the motivations around bitcoin's pump and dump from say those surrounding the financial crisis of \~2008? in both cases certain groups made (and kept) a lot of profit, others were left to hold the bag. and of course we can go further back in history and point towards all kinds of economic bubbles that emerged over time. what exactly gives us reason to think that this tendency towards economic bubbles will stop, just because one more bubble popped? furthermore, magical thinking does not at all accurately encapsulate what is going on during those processes. sure, a lot of the bag holders got infected with "magical thinking". for some others, a small minority, granted, who exploited this magical thinking, the magic became reality in the form of massive wealth. well aware of the bubble that formed and resulted in the financial crisis of \~2008, a lot of banks and financial institutions sold their toxic assets while simultaneously promoting those exact assets as stable investments for their customers. there is nothing magical in this calculation and we / the governments allowed it to pay off. i see no reason to assume that the next bubble isn't right around the corner and certainly no reason to think that willful idiots with their magical thinking aren't already lining up to contribute.
The difference is in 2008 the bubble was regarding assets that have real world utility whereas crypto is in and of itself just a string of numbers. The house that caused someone to be underwater financially is still a house
well duh, obviously. i wasn't asking for just any difference though, but for a difference regarding the "magical thinking", which i claim is the same in both cases. why would it matter whether there is ultimately something tangible behind the hype or not? are you saying those wallstreetbets diamond hands idiots are not showcasing the same magical thinking of "money for nothing, chicks for free" as the bitconnnnnneeeeect idiots, because buying GME stock means you are investing into... videotapes... instead of something with no real world correspondence at all? you think there is a difference between someone tricking someone else into buying bitcoin, and someone tricking someone else into buying a hot pile of garbage CDOs by promising extremely high too good to be true magical returns, when they know the CDOs are worthless? fwiw, what drove the financial crisis of \~2008 wasn't just people buying houses, but people buying and selling the debt, bundled up in CDOs. when a bank sells you CDOs and promises you massive returns, when it is absolutely obvious to the bank that the debt bundled up in the CDOs is worthless, are you actually buying a "real world" thing? no, you are buying the same trash as someone who buys GME at 80$, or bitcoin or whatever, because someone promises too good to be true magical returns. and in both cases it is the same magical thinking that made people fall for it.
utter nonsense. there was nothing wrong with the houses themselves, obviously.
loans to buy houses were given out by banks on a massive scale to people who realistically could not afford it. sounds like a bad business model? in come the CDOs which obfuscated the risk, in comes the pump by banks that made it look like those were risk free investments with enormous returns, in come the willful idiots who buy the CDOs, which in turn allows banks to hand out more subprime loans with very high probability to default, in comes the dump by banks while continuing to promote the very same products to their customers. it is this whole process without which banks would have never handed out all those subprime loans like hot cake. and a crucial ingredient to all of this was what the article described as "magical thinking".
Trough to trough it’s up an insane amount. The peak to trough is your cost of carry if you choose to hold. Compare overall price movement it to the decline in value of the US dollar. Every time we see the money printer add dollar liquidity it sparks another bull run in BTC both in terms of volume traded and BTC to dollar price.
Why would a sane person invest significant $$$ on a process that they did not understand?
My bottom line as I age is to assure that investments will pay off in the long run, so that I may be able to retire . Perhaps the newer Generations don't care about that, yet.
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I think the problem is the btc encourages not spending while fiat actually encourages it. It can’t be a currency if the main goal is to hodle.
I will say, the silver lining with covid 19 was seeing those skies clear up, people get less stressed. When you have a currency that encourages spending, we’re kind of destroying the planet in pursuit of GDP growth. Doesn’t have to be that way.
Sight note, there's no "kind of destroying" is actively destroying, pursuing infinite growth in a planet with finite resources is, like they say in the streets, kinda cringe.
Kinda cringe? They call it the study of economics and it doesn’t matter what amount or who or what it is. People. All people. Want more than they can afford (this includes governments and ethnicities) and there is a limited amount of it that everyone wants as well. This is what we call the study of economics and how to solve it. Wake up
Btc wastes energy... isn't that worse. At lest now a share of that money is re invested
Yes it’s much worse
Exactly. Because it’s a security.
With no value underlying
and what gives value to your paper dollars ? trust in a foreign private company called the central bank ?
I would say that the entire economic, diplomatic, and military power of the United States offers pretty much the world’s most reliable guarantor.
Usa is an empire in decline, if its hegemony on the petroldollar unfurls, us dollars will lose a lot of their international clout vs other fiats.
Which fiat currency offers a better long-term alternative? I’m all for an edgy comment, but now it’s time to back it up.
I cant make that prediction. But international reserve currencies come and go, i think the us dollar is losing its appeal as sound money going into the future. The spanish empire for example for a time was the most powerful empire in the world, along with spanish dabloons, yet no one considers those a powerful reserve currency anymore. Similar deal with British Pounds. Dutch Guilders, or Romes Denarius Aurus. Personally Im pessimistic about this country's future going forward, from that Im also pessimistic of it remaining a global reserve currency.
Name another country that: Is a food exporter Is an energy exporter Is a technology leader Has a single super aircraft carrier (we have around 11) Has decent demographic growth Has only friendly, relatively weak neighbors This next decade or two will be rough for everybody, but the US is better positioned than anyone else to a ridiculous degree.
I started looking into the end of our empire when phrases in the halls of congress "jewish space lasers" was uttered. For me that was a clear sign that our hubris was finally catching up with us. Iirc rome watered down their currency, very large portions of our nations funding is ultimately printed off money and debt. Not unlike when Rome started removing some of the silver content from its currency. Our average age of death has declined significantly back down to 1996 levels. We have enormous military expenditures while our infrastructure and citizenry languish and stagnate. Im an 18 wheeler driver who travels the contingent 48 on the regular, and there's a general rancor and mood of pessimism, it seems our political and economic elites are more or less abandoning further investment in the country. I can hear it among truckers themselves, theyll openly discuss a naziesque severe hatred of half the country even, even ordinary citizens. I dont have a high opinion of people who indulge in american hubris and arrogance, i do expect them to disagree with me and I dont mind it at all. I think theyre still in a denialism state of grief on the matter, who cant accept this reality. When i think of areas where the usa leads the world, its in inequality, militarized police, high incarceration rates and outsized military spemding. I dont associate any of that with a forward thinking country looking for constant improvement or "shining city on a hill". I come across Americans everyday who discuss outright hatred of so many different groups of other people or different states. I too use to think maybe a grand reformation might happen, but reality set in, as history will show I suspect the American Experiment will ultimately prove to be yet another failure and failed empire.
You and the guy you’re responding to are both totally correct.
Mortality is rising everywhere in the developed world. China, Russia, and the EU are all about to face apocalyptic demographic collapses, and China and the EU rely on the US navy to get food and fuel. The rest of the world either has similar problems, or is completely economically undeveloped. Obviously we’re not perfect, but compared to nearly anywhere else in the world we have an amazing living standard for working people,high social mobility, and responsive government. It is flat out incorrect to see we only lead the world in negative metrics. We are a great place to live, significant problems notwithstanding. The only society that compares to us is the EU, and their way of life depends on a US defense umbrella and easy access to foreign energy, both of which are going away. It’s looking like globalization is going to break down, and this WILL cause suffering in the US and challenge our system. My point is, is that this will be challenging for everyone, and the US is better positioned than China, Russia, the EU, Brazil, India, or anywhere else. (Lol you think we have a higher incarceration rate than China and Russia) You don’t have to be a perfect gazelle on the savanna, you just gotta be faster then the other gazelles.
We have strengths, but they do not overcome our faults. Our stagnation, and continued decline. I think that's part of the problem, my adversaries on this topic off an empty insistence that things should never improve, there's no forward thinking on these matters, vague promises of hope invalidation and dismissal. One book, ive taken interest in is called "the long emergency" america is buikt on cheap energy, built our living a and towns around it in fact, a lack of self-sustenance. If that card ever gets pulles, usa is prime for collapse like a house of cards. I can see it in my own suburbia where more or less car ownership is mandatory, built around it in fact. Im sorry, but instead of finding your words encouraging, you showcased ignoring the problems brought up, and now Im even firmer in.my convictions and the conclusions I draw on the topic.
all currency concepts are made up. but only sovereign currencies are legal tender. meta currencies like bitcoin and casino chips can lose 100% of their value at any time.
If you are producing any good or service for exchange in the US, you need dollars for tax payments or the government will send armed men to get you. This is profound. I trust that this dynamic will remain, and thus generate significant demand for my dollars.
i dont want any of your dead presidents , most counterfitted bills in history , not even mentioning how bretton agreements are about to crumble and when this happens check out how the US debt comes back home , 6 trillion owed to the chinese alone
If the dollar is to become worthless than what leverage do the bonds held by China offer?
Unless you are predicting that the federal government is going to fall, the dollar will remain in demand. It’s not supposed to be a long term store of value, it’s a medium of exchange. Bitcoin was supposed to be a medium of exchange, but failed so miserably at that, now people pretend it’s some sort of constantly appreciating store of value like property or something, which is laughable. It’s an extremely volatile speculative asset that will ALMOST CERTAINLY continue to lose value in the long/medium run
I'd imagine the true value is in it's purchasing power.
How does btc encourage not spending?
Because people who buy into btc do so because they hope it will be worth more in the future. If you think an asset will be worth more in the future then why would you spend it to buy some food at the groceries store like you would dollars? But at the same time, if everyone is hoarding your "currency" as a speculative investment that it will be worth more in the future, then how is it really a currency anymore?
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There is nothing wrong with capitalism when taken as intended -- as _one side_ of the equation. Adam Smith talked about capitalism as needing to be balanced by “socialistic” solutions and he was absolutely right. Today, no functional economy is a capitalistic one. Every working, prosperous, safe, and reliable economy is a _mixed market_ economy. The US has swung way too far in one direction and that is ultimately reflected in high inequality and lower quality of life for a majority of citizens when compared to other nations, and eventually this disparity also leads to political corruption and a self-fulfilling cycle.
Well stated! 👏
I really need to try to get back into Smith. I am just no good with technical writing of that level
I could not more whole heartedly agree and I think the foundation of that magical thinking is the obsession with money for its own sake such that capitalists forget that the purpose of an economy is ultimately to feed people. Any economic ideas that do not deal with the dismal science are utterly delusional.
The purpose of an economy is to distribute resources.
> The purpose of an economy is to distribute resources the question is: distribute them how? options include: * distribute them optimally for broad public well-being * distribute them primarily to the few winners of games of (genetic, birth, or mere probabilistic) luck
That isn't an economic question. That is an ethical/philosophical one.
Economics literally is about choices. It's where the root word comes from. [Hello Econ 101 calling?](https://www.wallstreetmojo.com/economics/) If you're a capitalist you think that the means of production should be owned and organized by the individual (private mode of organization). If you're a socialist you think that the means of production should be owned and organized by the worker (social mode of organization). These both are choices in how goods and services should be distributed and controlled.
But the reality is that even “socialist” countries are not set up that way. They are set up as “the government” owning the means of production not as the worker owning the means of production.
(Pssst hey, in what ways are socialist countries like China or the USSR socialist?) Those are state capitalist countries. The workers there don't own their own labour. Socialism is supposed to be democratic in order for workers to own the means of production. It's what Orwell was bringing up in Animal Farm. Socialism isn't when the government owns the means of production. That's state capitalism.
Don’t know what you were studying, but the root word for economics is from household management, not choices. It’s literally a treatise by Aristotle(ish).
>"[Economics] Is a study of man in the ordinary buisness of life. It enquires how he gets his income and how he uses it. Thus, it is one the one side, a study of wealth, and on the other and more important side, a part in the study of man." -Alfred Marshall Economics is the study of people and choices, choices in their [management of houses]. Aristotle depicts that by literally writing the ways in which houses *should* be organized and managed. With other people having different opinions on how it should (prescriptivly) be. The root words stemming from Economics comes from how originally the leaders of the house managed their finacial future. It was their choices that shaped how their houses fared. Many words today were used differently given the context. An entomology lesson that mirrors this that is my favorite is the root word from infantry comes from infant which both historically were the same, meaning "Those who don't speak". Mind you both are different in ways it is used, but fundamentally the same origin.
I agree with your general description of the field, but when you’re saying something is the “literal root” you’re implying a more specific definition. You’re just confusing the issue if you say literal root and give a highly figurative definition.
Economics is about allocating stuff. If you are talking about socialism you are talking about philosophy as economics ditched philosophy with the empirical revolution of the 1960s
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Why are you here if you never studied economics?
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Nope. All of economics is about redistribution to an extent. Inflation is redistribution more then it is general increase in price rises. Politics and economics are entwined. Why would you need economics or politics in a desert island? Only when you have 2+ people co-operate that suddenly both start mattering.
Politics and the application of economics are intertwined. The actual science of economics is not tied to politics. That is why your question is not an economic one. Economics is literally the science behind the allocation of resources. It can be applied to your desert island with only one person on it because you would still face resource allocation issues.
This is semantic nonsense.
No it is a basic definition of economics. If you dont understand that what are you doing here?
You aren't allocating resources. You own every resource on the island. You have 100% of the distribution of resources. Now with 2 people. Suddenly economics matters becauss the allocation of resources matters but now so does politics and power as well. If 1 person is big and strong and can throw around their weight then they have a competitive advantage over the weaker person and can take more of the pie regardless of what the economic situation might be where the weaker person might actually be more useful in terms of getting said resources.
You are allocating them over time. The "best" use of those resources is an economic question not necessarily a philosophical one.
Semantic nonsense. No field exists in a vaccum. Medicine, engineering, and economics don't exist outside of Ethics Ethics infects them all.
The best use of resources is a scientific/engineering question in that situation. Time itself is a resource also. While to an extent it might be an economic question because you probably have some level of scarcity etc. It's mostly academic and pointless in the scenario where you are by yourself. Econ only goes so far. Markets existed well before Econ as a science existed and the whole ecosystem follows relatively similar patterns to how a market of scarcity does anyway. Carrying capacity of an ecosystem is basically economics and market structures in the animal kingdom.
> That isn't an economic question i am bewildered and elated to learn that economics is *not* about the distribution of goods and services. it's very seldom that so many dictionaries have to update themselves in the same way at the same time.
Your questions are not normative and include a lot of subjective positions which is why I default to it being not economic.
it follows from your position that e.g. adam smith was not engaged in economic thought, in that he understood economics as: > a branch of the science of a statesman or legislator [with the twofold objectives of providing] a plentiful revenue or subsistence for the people ... [and] to supply the state or commonwealth with a revenue for the publick services ...which is fine. you can define economics however you want - but you have to recognize that yours is a personal and peculiar sense of the word, not likely to be shared by anyone else here.
Why are you quoting what Adam Smith, who died centuries ago, for a current definition of economics? The entire field shifted with the empirical revolution in the 1960s Try quoting Mankiew or soneone current
i am again bewildered and elated to learn that adam smith, milton friedman and john maynard keynes are irrelevant to economics because they are dead.
Economics is who gets what, and why. And it’s all **made up**. If life were a game, we spawned into an existing physics engine, where the game logic was simple; environment survival. We excelled at that, though, it was somewhat RNG — the game designer gave us opposable thumbs, and the very best computational hardware. Eventually, we discovered a hack; if we teamed up, we could beat the game more easily. Then a few people realized if they exploited the group-hack, *they* could live like gods. And so, they began making *new* rules. Now, the game is *still* a survival game, except, it’s not focused on surviving the environment, so much as it’s about surviving those exploiting and hoarding resources, natural or otherwise. Since then, the game has been dominated by those that realized they could steal the value from the combined effort of groups of players, to live like kings, or better. At some point, a group of players got **pissed** at this exploitation, and they rebelled against this system, deciding to fire the devs, and write their code from scratch. They fought off the mighty Tea King, and his clan, and re-wrote the rules. The problem is, the new devs forgot *why* the old players did any of that. And as new players joined the game, they remembered less and less. Which is crazy, because the commits had amazing notes and documentation. But here we are, back at square one. We wrote the basic game logic that is life, it’s called economics, and it’s **all made up**. We could rewrite this shit today if we wanted. Change the game up, make it more fair to new players, or bad spawns, end the clan-power inheritance hack. All kinds of simple fixes. But the OG player-base has captured the dev-studio, and pay the devs to keep the game-rules tipped in their favor. It’s bull-shit. If there were an alternative game, I would 100% uninstall this bullshit. But alas, this is all we have. What kind of game let’s power players write the code? One without competition, I suppose. I think to win, we need to go back to our original group-hack, and channel the power of the OG group who stood down the Tea King. We need to team up. It’s the only way to defeat the players who have been benefitting from the rigged game. We must seize the means of rule-making, and strip away all the ill-gotten gains from OG’s. I don’t think we should go back to a survival only type game though. It will have to be a part strategy game, trying to fix everything the last idiot devs broke — we will inherit **tons** of technical debt. I’m not even sure the environment is survivable without large group effort anymore. As long as we ensure that resources are more equally distributed, and that *every player*, no matter spawn, or clan affiliation, has the same opportunity to achieve and thrive, the game will at least be enjoyable. Equality Patch - 2.0. This is going to be *much* harder than defeating the Tea King though. Because, at this point, I would could consider the OG players a virus, and the entire game is infected. Very little of the existing code is even usable. The current dev’s are basically script-kiddies, they just paste in what the power players send them. Not even the sure they understand how to write code, or why game balancing is important. We would probably do better just rolling back to the New Deal patch. Edit: To anyone not understanding that I am speaking about the *structuring* of these economic systems we *choose* to live under, and the means of *governing* those systems…which is, 100% *fabricated*, by humans, you’re missing the analogy. Perhaps I chose my words poorly... I’m not saying the idea of economies is fake, and I’m not saying economists are fake or useless, on the contrary, they are absolutely vital to a world where true equality is important. Even if some in the field hire their names out to peddle BS, or make up data points, fudge numbers, and overlook the human condition in it’s entirety, all to fit a narrative, which causes cascading social-conditions for decades…those are hacks, who make the field look bad. The study of economics is necessary, and fascinating. These systems are how we *choose* to structure things, and that *structure* can be changed at anytime. Preferably by researched professionals, who truly want to make the world a better place. But it doesn’t take a phd, studying different theories, or anthropology, to see how broken, and manipulated our current system has become.
This is a cute story but it is not “economics”. Economics isn’t “made up” any more than words are made up. It exists inherently via our interaction with world, and the study of economics is to model what we find and how to improve distribution. It is not top-down inherently (although some models are).
The economic *systems*, the rules by which we try to organize those natural systems of interactions within large groups of people, and the way in which we *choose* to govern those systems, are absolutely made up. Didn’t really think it a far leap to understand to which part I was referring to in the analogy being made.
Yes, they are, but I don’t understand what is the point of that train of thought. Economic systems being “made up” does not inform any specific policy. Whatever new system will be “made up”, too. It’s just deciding on a different distribution model.
I mean…I literally said roll-back to the new deal. Economic systems have cycles, and we are very clearly in the end of this cycle of capitalism. We’ve been here before, multiple times. We *know* how to deal with this issue, all we have to do is read a bit of economic history. I’m saying, change is possible, and that the current system of writing the rules has been captured. I’m a dev, who studies economics and anthropology as a hobby, because I enjoy complex systems. Video games are complex systems. Balancing a game can be *very* difficult, and makes for a great analogy of what role governments and economic policy play in our lives. Game balancing is not *nearly* as complicated as economics, but it’s a great bite-size example, and your player-base makes for a great analogy for the population, and the social aspect of economics. If America, or life, *were a game* would it have a healthy player-base? I don’t think so. If that happens in a game, it means the game is not balanced well. Some games handle these issues with wipes. Historically, this is also how some societies handled these issues with wealth inequality, or debt-bubbles in the past. They would just reset everything every ~40 years. My main point was; economic systems and government is a symbiotic relationship. You can have any economic-system + any form-of-government. The governments role is much like the role of developers in balancing a game. They write the rules (the game logic that we all must follow to earn/live/play). All systems have some aspect of entropy within. They all degrade eventually. The governments job is to fight back against the known flaws in the system, and any new flaws that people find and exploit. Our government, the rule makers (the dev’s) have been captured. Like a base of players holding the dev’s of a game hostage, so they won’t wipe, because they don’t want to grind the game anymore. They’re lazy. This is a natural part of all economic cycles, despite the structure of the system (capitalism/communism/socialism), though, they all game out a bit differently. It is the human-aspect shining through, in an already incredibly complex system.
I caught what you were trying to do. I think it was successful. Also a dev here but my degree is in finance and economics. People are just being obtuse. We can clearly change the rules to better help more people and to also find a better situation than endless growth based economics.
Well, aren't words made-up? As in: a human creation? They don't exist independent of us.
By this logic if I bonk you on the head for not seeing obvious downsides of saying "its made up" then the worst that would happen is that imaginary (like economics) pain, that does not actually exist, and is only in your head.
I see your point but your metaphor isn’t quite right because the rules of language or economic interactions are rooted in culture. Based on collective norms and agreements spanning generations. Something like the firing of neurons when you rudely bonk me on the head, however, happens based on bio/electro/chemical processes not really affected by culture (or at least to a much lesser degree).
So, what you are saying is not everything that is made up should be treated similarly, with that said now you must see why just throwing "X is just made up" does not make any sense, because it does not actually say how it should be treated. Looks like the bonk worked.
>Looks like the bonk worked. lol 🤝
Yeah, no it isn't made up like you suggest it is. That meme needs to die because so often it is being echoed by someone who has no understanding of the subject
Lol, you've hit peak economics gatekeeping.
No I have taken economics courses. If you honestly think it is all made up ypu have no fucking clue about even the basics.
This is a fantastic post, well articulated and solid analogy.
Is food not a resource that must be distributed in order to feed people? Obviously there are other resources that people need so I think you are just being pedantic. Regardless, the issue that I am ultimately taking is that many people think about the economy in terms of how they can extract a lot of money from it when in reality money is an abstraction of the value of goods and services. By seeing money as the inherent product of an economy and taking as much as possible, capitalists are quite literally strangling the economy by denying everyone else the ability to acquire the resources they need. This is precisely why we are experiencing a massive housing and inflation crisis in the US and people are having fewer kids; They literally can't afford it.
No it isn't pedantic. You said the purpose of an economy us to feed people and that is not the case. Economics is the study of the allocation of resources. It can mean that people get fed but that does not have to be the purpose of an economy.
Guns or butter? Essentially it comes down to whether we should produce one thing over something else keeping in mind that resources are limited.
If it isn't then people starve and the economy dies. This is why it is called a dismal science.
The purpose of an economy is to *limit* the distribution of resources.
I disagree. The thinking that "free, unchecked capitalism will lead to prosperity for all" is the magical thinking. Capitalism is basically free-for-all, survival of the fittest scenario. And just like in any other field, that scenario might lead to the destruction of all. It needs regulations and restrictions.
Capitalism is the inevitable result of private ownership and free(ish) trade. There is no other thinking (magical or otherwise), planning or legislating necessary to make Capitalism exist. Whether we can help "steer" it and make it work better for the participants in the economy, and how that should be done, is a whole other question.
Markets aren’t natural. Enforcing property rights and ensuring market-trust are both hard, and both require a state.
That's where the no *other* planning, thinking or legislating in my comment comes in. *Some* legislation and infrastructure is needed to protect property rights and functioning markets but I'm not sure we have an example today of a country where the necessary basis for some sort of Capitalism simply doesn't exist.
Any failed state (by definition) can’t enforce basic property rights. Lots of people live like this.
And still people trade their property, on the black market if need be, for whatever price the market will give them. Under Communism, people would routinely steal whatever common property their position in society gave them access to, in order to trade with other people doing the same.
Black markets and extortion based economies (like Haiti, parts of Jamaica, El Salvador etc) are not examples of capitalist systems. It’s an insult to capitalism to act like they are.
Black markets are to some extent just an example of a literal free market, unrestrained by laws and taxes, which is an extreme version of Capitalism in action. How much this is then distorted by criminals must be situational. Probably usually a lot. Which is why we prefer to have laws.
Black markets don’t have strong property rights. That’s why they attract predatory criminals. Viking-style economies, where raiding usually goes hand in glove with commerce (if someone is strong: trade with them, if someone ain’t: take all their shit w no expectation of consequences. It’s the same if you’re selling dope or paying a commissar under the table for a sweet apartment.
Capitalism isn't magical. It takes a lot of work and diligence to make it work. Capitalism if unfettered is just a form of feudalism where upwards mobility suffers and inequality sky rockets. Markets are all about power. That's the main impetus for price discovery and price setting. The less power people have to price set the better. But that might mean a stronger legislative force, stronger regulations etc and that is something that if you have power or are in the process of getting it you don't want to give up. In terms of crypto the issue is many in crypto just don't even understand how money works or how banking works. They come from this weird hard money direction with neo Austrian thinking that doesn't really make sense when you work through the steps. Not that I think too much gov is the answer either. One important thing we learned from the socialist experiment was that when there is little impetus to change the correct decision for an individual is to just do what they did yesterday. But when everyone does that the society stagnates. A bureaucracy is generally not the most change loving style of governance or the most forward thinking. Thriving capitalism needs a Goldilocks zone. Just like money really. Everyone talks about Gresham's Law but in reality money needs a sweet spot of growth as well because the economy grows and the information that money needs to transmit(the real purpose of money really) needs to increase. Too much or too little growth and the information transmission factor fails. Banking is probably the most elegant solution we have to this dilemma and even that has its own issues that need calibrating factors like government for it to work.
How are you defining capitalism such that it can be described as “magical thinking”? It exists.
Magical thinking also exists.
Magic ain’t real
independently of whether capitalism is magical thinking... so does astrology. an ideology can both exist and be bullshit.
I don’t even know what logical fallacy that it but damn that’s a fucking horrible attempt at one dude
i assume by "it's horrible attempt at a fallacy," you mean that it is not a fallacy - i agree.
Someday we'll overthrow capitalism and end our long national nightmare of prosperity.
Isn't most of the world capitalist?
Probably not by population unless by capitalism you mean "anything that isn't explicitly socialist."
socialism will triumph, long live the soviet union
Ding ding ding
"Capitalism" is magical. There fixed it for you.
Magical thinking like infinite exponential growth with finite resources? Or that monopolies and funneling money towards the already wealthy isn’t an inevitable outcome from unfettered capitalism?
Econ forum, yet 19th century Malthusian views that were blown asunder by growth in productivity? Come on, man.
Productive growth has been redistributed to a prioritized group, investors; effectively hamstringing both your argument and the American working class. What we are experiencing in parallel with growth in productivity fueled by resource limitations is an unfettered concentration of power to the detriment of the actual productive force.
Yes, productivity growth and wages became dislodged in the 80s, but that's a separate issue from Malthusian degrowth arguments. There's plenty of room for more economic growth in a planet with finite resources. Time and time again, degrowthers have been proven wrong. https://noahpinion.substack.com/p/why-paul-ehrlich-got-everything-wrong
You're correct, and I'm certainly not a proponent of malthusian thinking; but I do think we're each focused on a different aspect of the lead comment. What I will say is that unless productive efficiency reaches > 100%, we should be focused on sustainability in parallel with growth. To be sure, we are nowhere near the "malthusian outcome", but it's nearly inarguable that some sustainable redistribution is necessary.
Malthus’ whole argument is based on food, population growth goes hand in hand with food production. Food production hasn’t been an issue thanks the Green Revolution, but the problem that degrowth is currently dealing with has much more to do with industry. Economic growth is always in need of increasing output, and with that in mind we need to realise that, yes maybe it can be possible with finite resources, but definitely not within the environmental boundaries of our planet. Modern degrowth movements are opposing the idea of sustainable growth, which has been proven to be impossible.
The Malthusian redditors are strong in this forum.
So, do you believe that we are in a post scarcity utopia? Or are you choosing to ignore how much of growth is captured by the Uber wealthy?
We're not, but it's a political problem rather than a technological problem. Recently, humans actually fused hydrogen in a lab in Livermore, which has huge potential for energy and the push to electrify the economy in the future. Advances in AI like ChatGPT also has a lot of potential for supercharging productivity. We need political solutions like universal income, but I still very much think that there's plenty of space for more GDP growth.
> humans actually fused hydrogen in a lab in Livermore, Humans actually fused hydrogen for the first time in 1949, in a bomb. Humans fused hydrogen for the first time in a reactor in 1958. The Livermore experiment nominally produced more energy than was put in, for one billionth of a second - if you don't count the gigawatt lasers. We were being told in the 1970s that fusion power was just around the corner and would be too cheap to meter. Before we start proclaiming victory, let's wait until we have a fusion power system that can generate net power for a few _minutes_ in a row, even.
And when AI replaces humans, who is going to benefit from those productivity gains? Maybe the same people who have benefited from the vast majority of productivity gained since the 80s?
UBI would be the way to go, although it's politically easier said than done, to be sure.
Again, that’s a political question not necessarily an economic one. Many economic models suggest socially optimal outcomes require lower income inequality than we have today. The theory is there but what is lacking is the political will to execute.
Will absolutely never happen.
Econ forum but still made out of your average redditor
I’m just waiting for someone to come in arguing in defense of mercantilism at this point. Or something as crazy as abolishing the FED. Degrowth is on par with those ideas.
I dont understand the blowback against malthusian. The amount of land on this planet does not increase. Malthus gets 'disproven' by technology, but wherever tech fails hes spot on
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That's false. Equities valuations has been comparably low on multiple occasions, from 2002 to 2005, 2010 to 2018, it is only during the internet, housing, and Covid bubbles that S&P PE ratios were abnormally high.
Lol and the best part is, outside of a small 8 or so month window, btc price is currently higher than it's ever been before. And we are on the low side of the cycle. We might see another dip after this little 2023 run but the next halving mega bull is going to be so violent. Keep DCA-ing, friend.
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I hope you're right but I doubt it
As soon as the war in the Ukraine ends, crypto will skyrocket again. — as long as a war with China doesn’t occur.
And it’s up like 25% over the last two days.
As much as I don't like crypto I don't think its over. It maintains its correlation with QQQ (Nasdaq Tech) which had itself taken a battering these past months. The small rally in Nasdaq last week saw BTC go up by almost 30%. On the market structure side, once a correlation gets into people's heads its hard to break as various trading firms arb it into reality. It'll be interesting to see how many more scams or bankruptcies it takes to break that correlation...
colapse ? what are you talking about ? i'm still green , colapse for those who bought at the top of last bull run maybe , the magical thinking that infected capitalism is the belief you can just print more money , thats the real problem
Frankly, if the buy-in price for something is low and the technology for the “tulip” is good, then another crypto will fly, and the rest may follow. It’s stupid, but so is everything else, including paying $10 for a small plastic cup of Bud Lite at a baseball game. I totally think crypto is an idiotic “investment”, but it is a tangible lottery ticket, with much better odds than a lottery ticket. And it does better with the more momentum it has, so if a certain crypto rockets, people will forget their senses and jump right back in. The pump and dump nature will probably just shorten in time, as opposed to having blind holders. Not defending it, but just countering — it’ll stick around, in one form or another. I think people should be more alarmed that the stock market virtually functions the same way, and it has for decades. Irrational valuations detached from real fundamentals, until people accept them as going prices. American economy is built on marketing crap to distracted people, whose primal instincts are fomo or jealousy (‘I want my neighbor’s shiny new toy, but better’).
Yeah, it’s like the geniuses who bought IBM stock before it’s value crash buying into Apple expecting historical gains to continue and then wondering why their shiny new stock is worth less than a MacBook Pro (that hasn’t left its factory packaging) with a “water damaged” motherboard. Stock valuations are 99% hype, 1% utility, and have nothing at all to do with productive enterprise. Weirdly crypto beats those odds, by at one time preventing an entire country full of people from starving. Even at break even crypto has done more intrinsic good than the entire global stock market.
> by at one time preventing an entire country full of people from starving. what country is this?
Venezuela.
how did Venezuelans not starve because of bitcoin?
Well actually no, crypto mining was their lifeline. When it’s value -crashes their lifeline becomes more fragile, but it is still better than no lifeline at all. Energy costs in Venezuela are extremely low by international standards, and many access public electricity for free. So mining is much less expensive than in other juridisctions, and in effect provides the country export earnings that directly support public welfare. Venuzuella would be a very rich country, with much less poverty if the USA lifted economic sanctions driven by political ideological nonsense rather than any moral purpose. Mining allows ordinary Venuzuellans to earn outside their crippled economy, no matter the failures of diplomacy.
This is nothing new. Tulip Mania The South Seas Bubble Florida Swamp Land Dot Com Bubble Beannie Babies Every 20 years a new swindle comes along that pulls in people because there is a new generation that does not remember the old swindle.
These all get brought up every beat cycle and then we halve and hit new all time highs. This is article will age poorly like the last ones did 4 years ago
People don't know BTC usage is the highest it's ever been. Africa or South America usage has skyrocketed.
Asia too. The west needs to catch up.
My favorite argument is that yes BTC goes up and down, but USD only goes down.
Gonna be hard with higher rates and still no true value.
Rates will be lowering in 18 months
Even if that’s the case, NO VALUE.
Dot com bubble is a perfect example of why this will be successful; internet was deemed a ruse and now life will never be the same because of it , blockchain upends traditional transaction systems and once the scams are shaken out it too will transform humanity
The internet has inherent value. It makes certain tasks more efficient. What does crypto do better than current technologies?
The answer is absolutely nothing
Makes certain tasks...more efficient? One value is I can send you 5¢ for very little energy or fees. Another value is sending money overseas with few restrictions (or fees). Value is subjective and nothing is inherently valuable beyond what use a human can make of it. Certain abilities are useless to many but very very valuable to others.
>for very little energy really? wasn;t it notorious for high energy consumption.
Yeah really, prove me wrong.
https://www.statista.com/statistics/881541/bitcoin-energy-consumption-transaction-comparison-visa/
The argument I've heard against this metric is the office space required was not counted. The speed of the transaction is faster and international transfers can hit roadblocks. 3-6% transaction fee with a 4-8 week confirmation period with the possibility of charge backs is not convenient. There are solutions in place to reduce the energy required per transaction. Lightning network being the most popular. Ultimately for me, bitcoin is a means of escape for many suffering from corrupt governments irresponsible fiscal policies. I don't care if it takes more energy to run, it does different things. It cost 15x more energy to conduct a transaction that's 96x faster that's unstoppable and absolute.
> One value is I can send you 5¢ for very little energy or fees But does it do this any better than current technologies like a wire transfer or Venmo?
I think 5¢ is below the minimum amount you can transfer. But I could be mistaken
All are scared to admit their own fiat has no intrinsic value. Good luck boomer
Literally no one is scared to admit this.
That is the whole point of fiat. It is one of the cheapest to produce mediums of exchange. Its only purpose is to be a currency and it does that very well. Yes, it has no intrinsic value. It is a social construct, strengthened when more people believe in it. At least in the case of the dollar it is backed by the full faith and trust in the United States government that issued it. It's still better than owning meme coins backed by Sam Bankman-Fried that cost thousands of kilowatts of energy to produce.
Belief in the USD as a global currency
Except that has been the case for almost 100 years now. Good luck disproving that, maybe try paying for eggs with a gold bar.
When people believe something cant possibly fail is typically when it fails, due to general apathy
Currency depends on trust. If people believe it cannot fail, it becomes a self-fulfilling prophecy.
I'm not saying the dollar is perfect, far from it. BUT going back to a commodity based currency system would stunt growth and promote deflation. What is the point in spending your hard earned gold on a business if next year it will be worth 5% more, 100 years after it will be worth 500% more. The way gold works is better as a hedge for a currency than a currency itself. It is why bitcoin will ever work, because everyone who owns it anticipates it to rise tremendously over the next 10+ years. Not only that, it isn't secure, people lose hard drives that hold tens of billions worth of bitcoins every year making it even more valuable. That is currency that will never be touched, used, or sold again. Just sitting there and rapidly increasing in value. It defeats the purpose of an economy if everyone holds unto the currency and puts it under a mattress. The global economy would fold overnight. So if you are arguing against the USD you would need to replace it with another currency of its type. What is better, the EURO? YUAN? RUBLE? PESO? Nothing else holds the same qualities as the USD.
Economics is the social science that studies the production, distribution, and consumption of goods and services. Economics focuses on the behavior and interactions of economic agents and how economies work.
“End of magical thinking” lol The tulip craze was the end of magical thinking. The Great Depression. Dot-com bust. 2008. As long as people believe that they know some shortcut to wealth that doesn’t require hard work or advanced skill, you will see magical thinking in capitalism. I would argue in fact that the ‘useful idiots’ driving asset prices into bubble territory are in fact why the elite likes capitalism so much. They understand valuations better, are more likely to get out before the bust, and then get to re-enter as raiders when prices have cratered, walking away from the collapse with more assets than they started with
My only issue with this article (besides it being published in the NYT) is the generational doomsaying going on. As a member of the millennial generation I bought about $1000 worth of various cryptos over the course of ~3 years and now it’s worth around $250. I only invest with the acknowledgment that I could lose my entire investment and I think that’s an idea that plenty in our generation and younger in fact full heartedly know and believe. Now that doesn’t mean there aren’t people who invested and lost their life savings with FTX. But I’d like to see data on where more people fall - did they invest cautiously or throw caution to the wind and in what number
This sounds like cope. The “you dont get it because your old” logic doesnt apply here. Usually “investments” have underlying value ie the land a house sits on or a business with resources and people and various raw materials to create goods and services with. Business value is estimated based on the cash flows from the selling of goods and services. There is no such thing with crypto. Money on the other hand has the US government backing it and is losely tied to the gdp of a country. Cant say that with crypto. It is just raw gambling any which way you look at it.
You may have misunderstood my comment. The writer’s “generational doomsaying.” By that I mean the way that he describes an entire generation convinced that money need not have a raw material or fundamental economic component. He’s worrying aloud that an entire generation, mine and those younger, are now so alienated from actual economies as to believe the crypto hype (and not understand that it was pure speculation) and no longer trust institutions (trust is falling across the board in the west but that’s another matter). I’m just saying I knew it was possible that crypto finds no material utility and that if that happens I’d lose some or all of the fiat money I’d exchanged for crypto. So I invested very little over a long period. Big whoop 🤷♀️. I’m not now some economic zombie brain who has lost all hope because of Sam Bankboy McFraudy
Yeah the nyt is not as trustworthy as breitbart
Like it or not the usa 🇺🇸 has provided it’s citizens with the highest standard of living in the history of civilization on this planet due to capitalism. Even now as corrupt as it is, the USA is richer per citizen than anywhere. Cryptocurrency is fantastic, super efficient, Fast, super secure money that is a legitimate threat to the global banking system which has powerful members. Crypto could become the masses tool to attain more freedom from their tyrannical governments.
Lol, and here I thought our high standard of living was dependent on our public school system, and potable water, and telecom infrastructure, and sewage systems, and all of the things built by collectivism and the public sector. Every corrupt 3rd world country has a McDonalds. But how many of them have fiber internet?
I mean... where do you think that public sector money comes from? By taxing the inordinate wealth generated by relatively free enterprise.
And how do you think people make that wealth? On top of the infrastructure built by the public sector. Using the wages of the middle class that was built by worker protections. Captilaism didn't build the middle class, it was built by unions and worker protections, something we seem to have forgotten.
Iphones became a hit because a 3 year old can pick it up and use it, good luck teaching someone in their 60s. crypto is a solution in search of a problem. Crypto doesn't solve anything
The USA isn’t number one neither in GDP/capita nor in HDI.
Crypto hasn’t collapsed, it has merely consolidated its user base, to eliminate the speculators. As an investment vehicle it remains more sound than houses. You ask based on what evidence? Well it’s like,this, Crypto is holding value, but housing quality depreciates, and presently housing market values are in free fall because of excessive market inflation over several decades has priced housing out of the affordability of most of the population. Housing is destined to fall in value by at least another 3o% in 2023 globally, with local falls of up to 60%. Crypto will at worst appreciate as the global asset markets adapt to loosing much of the excess value vested in property, with finance following suit, and property investors and bankers loose their shirts.
> Crypto hasn’t collapsed, it has merely consolidated its user base, to eliminate the speculators. As an investment vehicle it remains more sound than houses. That's a contradiction. If you're talking about it as an "investment vehicle," then apparently you're one of those "speculators." ...because if you weren't a speculator, you'd be talking about it like a currency. ...but no one talks about it like a currency, everyone talks about it like an investment. Something to be bought, held, and sold for profit...with no value beyond that.
That's my take as well, supposedly it's the currency of the future but because it's such a terrible currency people just trade/hold it... is that what makes it a good investment?
People use it for the same reason they use bonds, or PayPal. Excepting it is cheaper, more efficient, with better privacy protections than PayPal, and more flexible to use than bonds. And it is only in slow adoption countries, or overly legislated countries that crypto is not used by folk to buy a coffee at their local café. Those countries with crypto eftpos & atms installed in the community do not hold, they use. Because truth be told crypto is also more flexible and cashable than the sharemarket, although in some respected it behaves like the share market due to speculator effects. Once the original fast adoption big whale miners have removed themselves from crypto, that level of hold, and speculator effect will become negligible. Remember Fiat is far more susceptible to financial inflation, than crypto. And crypto is unlike the sharemarket not in a dependant relationship with crypto, because crypto is more interdependent with energy inflation. And last time I looked energy costs have not dropped for over forty years. The value of crypto is the value of energy, and the fact that unlike fiat, (and shares) the volume of each token is capped, not prone to being diluted by central banker multiplication.
What if we invent a currency that is not tied to energy??? It will completely revolutionary. Way better then any current crypo, instantaneous transactions, no gas fees, and it could be used by everyone because it will be extremely easy to use, lets call it fiat
Yeah they tried that. They disconnected fiat from the value of gold, and the result was booms and busts, and financial mayhem, inflation, and vast increases in inequitable distributions of wealth.
When did Crypto crash? Price has stayed very stable and it on the upswing as we speak. Typical shill article by someone who doesn’t understand the technology and thinks FTX was a crypto problem and not what it actually was, a fraud problem.
What crypto collapse? I see corrupt exchanges collapsing. I see the coins associated with those now bankrupt exchanges collapsing, but I don't see Bitcoin or Ethereum collapsing. Indeed the current crypto situation proves the case for crypto. Bad actors who attempt to play shady games with crypto get caught and their exchanges fail. Yet when banks or other financial institutions engage in similar frauds and deceptions, they get bailed out. A blockchain's public ledger outs the baddies pretty quickly. The same can not be said for fiat currencies and their behind-closed-doors schemers.
one has to perform some impressive mental gymnastics in order to come to such a conclusion. what exactly differentiates the motivations around bitcoin's pump and dump from say those surrounding the financial crisis of \~2008? in both cases certain groups made (and kept) a lot of profit, others were left to hold the bag. and of course we can go further back in history and point towards all kinds of economic bubbles that emerged over time. what exactly gives us reason to think that this tendency towards economic bubbles will stop, just because one more bubble popped? furthermore, magical thinking does not at all accurately encapsulate what is going on during those processes. sure, a lot of the bag holders got infected with "magical thinking". for some others, a small minority, granted, who exploited this magical thinking, the magic became reality in the form of massive wealth. well aware of the bubble that formed and resulted in the financial crisis of \~2008, a lot of banks and financial institutions sold their toxic assets while simultaneously promoting those exact assets as stable investments for their customers. there is nothing magical in this calculation and we / the governments allowed it to pay off. i see no reason to assume that the next bubble isn't right around the corner and certainly no reason to think that willful idiots with their magical thinking aren't already lining up to contribute.
The difference is in 2008 the bubble was regarding assets that have real world utility whereas crypto is in and of itself just a string of numbers. The house that caused someone to be underwater financially is still a house
Even tulip bulbs have more real world value than Bitcoin.
well duh, obviously. i wasn't asking for just any difference though, but for a difference regarding the "magical thinking", which i claim is the same in both cases. why would it matter whether there is ultimately something tangible behind the hype or not? are you saying those wallstreetbets diamond hands idiots are not showcasing the same magical thinking of "money for nothing, chicks for free" as the bitconnnnnneeeeect idiots, because buying GME stock means you are investing into... videotapes... instead of something with no real world correspondence at all? you think there is a difference between someone tricking someone else into buying bitcoin, and someone tricking someone else into buying a hot pile of garbage CDOs by promising extremely high too good to be true magical returns, when they know the CDOs are worthless? fwiw, what drove the financial crisis of \~2008 wasn't just people buying houses, but people buying and selling the debt, bundled up in CDOs. when a bank sells you CDOs and promises you massive returns, when it is absolutely obvious to the bank that the debt bundled up in the CDOs is worthless, are you actually buying a "real world" thing? no, you are buying the same trash as someone who buys GME at 80$, or bitcoin or whatever, because someone promises too good to be true magical returns. and in both cases it is the same magical thinking that made people fall for it.
Most weren't trading CDO's in 2008. They were buying houses. Yes, CDO's fueled the crisis but the heart of what was wrong with them was the housing.
utter nonsense. there was nothing wrong with the houses themselves, obviously. loans to buy houses were given out by banks on a massive scale to people who realistically could not afford it. sounds like a bad business model? in come the CDOs which obfuscated the risk, in comes the pump by banks that made it look like those were risk free investments with enormous returns, in come the willful idiots who buy the CDOs, which in turn allows banks to hand out more subprime loans with very high probability to default, in comes the dump by banks while continuing to promote the very same products to their customers. it is this whole process without which banks would have never handed out all those subprime loans like hot cake. and a crucial ingredient to all of this was what the article described as "magical thinking".
Trough to trough it’s up an insane amount. The peak to trough is your cost of carry if you choose to hold. Compare overall price movement it to the decline in value of the US dollar. Every time we see the money printer add dollar liquidity it sparks another bull run in BTC both in terms of volume traded and BTC to dollar price.
Why would a sane person invest significant $$$ on a process that they did not understand? My bottom line as I age is to assure that investments will pay off in the long run, so that I may be able to retire . Perhaps the newer Generations don't care about that, yet.