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The SEC Created Its Own Scammy ICO To Teach Investors a Lesson (theverge.com)
In its latest effort to fend off cryptocurrency scams, the Securities and Exchange Commission launched its own fake initial coin offering website today called the Howey Coin to warn people against fraudulent cryptocurrencies. From a report: The name is a tongue-in-cheek reference to the Howey Test that the SEC uses to determine whether an investment is a security, which the Commission would therefore have legal jurisdiction over. Click 'Buy Coins Now' on the Howey Coins site and you'll be redirected to an SEC page that states: "We created the bogus HoweyCoins.com site as an educational tool to alert investors to possible fraud involving digital assets like crypto-currencies and coin offerings." It even has a white paper [PDF].
Site is hosed, Bro.
Where do I send my money?
This guy's arm just came off!
And THAT'S why... you don't invest in fucking scam coins.
What work are you doing? Complaining on the internet using a computer that was made possible by other peoples' innovation, hard work and CAPITAL?
Perhaps you'd prefer the island paradise of Cuba or the lush mountains of North Korea.
This message brought to by the hundreds of millions of people murdered by communist regimes in the 20th century.
https://fee.org/
Who does this appeal to?
The same people that bought CDOs from that other scam the SEC created: Goldman-Sachs.
Here's the thing - individually hand-crafted items are really expensive. You couldn't afford to buy even a fraction of the stuff you buy, if everything was still made the way it was made in the 18th century. Especially if it were carried on tiny little boats rather than huge container ships. Most of what you have, you can have only because of tools, factories, machines - stuff that increases productivity, expensive stuff. Multi-million dollar items like ships and factories are needed in order to produce your TV, your clothes, and everything you that a serf in 1818 didn't have. Foundries, fiber optic networks, etc are all the goose the lays the golden egg for society, the reason you don't pick cotton for $3 / day.
Shifting gears a little, when were young you may or may not have been taught that saving up is a really good idea, because shit happens. If you have a car, you'll have car problems. You can either scramble to come up with the money to fix it AFTER it breaks, maybe via a pawn shop, or you can put a $10 aside each paycheck BEFORE the car breaks and not get fucked over by a pawn shop. "I can't afford to save $10 of my paycheck", some say. But you CAN afford to pay a lot more than that to a pawn shop? Maybe when your car breaks down you'll use a pay day lender, because you can afford to pay back twice as much? If you're broke, you REALLY can't afford to not aside a few bucks for when shit happens.
You know what other kind of shit happens? If you keep living, you will get old. Really old. Putting a few dollars aside from each check so you have it when you're old is a really friggin good idea too.
So we have a need for really expensive things which produce other good stuff, expensive things like factories, power plants, steel mills, trains, ships etc. Those things are called "capital goods". In order for you to get cool shit, we need a bunch of money to buy capital goods (things like motorcycle factories). Also we have a bunch of people saving up money for when shit happens, and saving up more money for when they get old. Pretty much everyone who both a) isn't stupid and b) was raised by someone who had a clue, is saving some money aside. So there is a shitload of money sitting around being saved up.
Here's a great idea. Instead of having that saved money sitting around getting moldy until you retire in 30 years, why don't we use that saved money to build useful stuff like factories, trains, foundries, power plants, and other things that produce good stuff for everyone? That way everyone can get more good stuff, cheaper. Seem like *maybe* a good idea?
There are two alternatives to buying capital goods with savings. You can have a society without any capital goods, a primitive, tribal society. Or you can have a society in which very few very, very wealthy people can afford to personally buy ships, build factories, etc.
So I assume we don't want only Donald Trump getting any benefit from machinery and stuff, while the rest of us live as serfs, picking cotton buy hand. Okay, cool - give me the money you've saved so I can go build a factory. What? You don't want to hand over your money? But if you do, everybody, society as a whole, will be a lot better off. We can buy a $2 million combine harvester instead of all of us picking peanuts one-by-hand, by hand. Yeah, most people don't want to hand over their savings for the betterment of society.
Okay how about this. If you let us use the $500 you have saved, if you want it back a year from now we'll give you back $550. If you don't end up needing it until you retire, we'll pay you back $3,300. Sound better? You put in $500 now toward buying capital goods, you get $3,300 back later. That's a lot better deal for you, a deal that most people will take, if they've been saving at all.
That's investment, that's capitalism. Saving up for a rainy day like your grandma told you too, then pooling those savings to get useful stuff that makes life better for everyone. That's why we're not subsistence farmers in the US, because we invested and bought machines and other capital goods.
An SEC page? Doesn't sit right. Personally, I pronounce it "sehk", so "a SEC page". Tough one.
When all you have is a hammer, every problem starts to look like a thumb.
>> Unfortunately the way that investments and capitalism work there is no way to actually guarantee that you will get money back on your investment.
>Actually you *can* guarantee it. Most people don't completely guarantee it, because low-risk has much higher returns than no-risk.
Actually no, you cannot. Deflation is a real thing, although it has been a while, and inflation makes most of the 'guaranteed' gains a lie - you are losing real value on your very small returns. This is actually part of the big game plan at present to push the middle class in to more risky investments, which generally end up shoveling the majority of the gains to the primary stakeholders.
Sure, you can have a company that will 'guarantee your return', but who is guaranteeing that company? hmm? There is no safe bet, especially if there is a real economic downturn.
The 'problem' is there has not been one for quite a long time - there have been bumps, however governments have plastered over them by protecting the 'too big to fail' companies using public money, and then printing more and more money to inflate out of their problems. The very rich love this, as most of that new money tgushes up pretty quickly to the top, making them somewhat inflation proof, while inflating away the value of the lower classes.
Your hedging example is quite funny - you think the outcome of an equal bet both ways on a game is no loss? go and check the numbers ;)
Hedging is a way of trying to minimise risk, often by dealing with others who disagree about the level of risk - but it in no way protects you from a general system failure.
But yes, you started off well, only losing the plot towards the end with your thoughts of there being safe investments.
My great grandfather bought a farm in 1912, he lost it in the 20s, and never ever forgot the name of the lawyer who foreclosed on him - it was a very shameful thing back then - the farm was well run and profitable, but economics of farming and debt changed..
He bought another farm around 1940. Larger, better positioned, for less money... Because the value of farms dropped, significantly.
Farms were about the MOST solid asset there was back then..
Many people have forgotten that there are NO safe investments, only considered risks.
However, many MANY more people have forgotten that if you dont save, dont invest, dont bring value, then expect your net worth to tend to zero (if you are lucky).
so far nearly all ICO's are one kind of scam or another, or at best a really REALLY bad investment. sadly people are ignoring this and stil being dumb shits and buying into ICO's, this sort of site regardless of the data collected will probably create some much needed publicity. Though anyone dumb enough to fall for an ICO at this point in time thoroughly deserves to be parted with their money.