Bitcoin is backed by CPU computational cycles. Admittedly that is CPU cycles that have been already expended to create the Bitcoins, but that is something that can be quantified in terms of kilowatt-hours needed to generate that many hashes as exist in the blockchain.
How much is a kilowatt-hour of electricity for you right now? Since you are using a computer, I presume you do consume at least a little bit of power from time to time.
The design of Bitcoin doesn't prevent resources from being used to mine them. Bitcoins can be mined as fast as anyone who has the resources cares to mine them... for a short period. But eventually the increased difficulty will catch up with them. But the key word here is "eventually".
The "eventually" of the Bitcoin software to increase difficulty is a pretty short period of time. The algorithm for increasing (or decreasing.... it does happen) difficulty is based upon the frequency of work units being process, where processing more work units in a given period of time will send the difficulty factor up. It takes between two weeks and about two months to adjust, but the adjustment definitely going to happen and is a part of the software and protocol (lower difficulty work units are rejected by most of the nodes).
Early on in the history of Bitcoins there had been large server farms turned on and then later turned off trying to mine Bitcoins. I seriously doubt that even major national governments who purposely devoted significant resources as a major national project to do the same thing could today have nearly as much impact as some of those early spikes in mining did during the first six months or so of Bitcoin being used. A nice idea in theory, but it has already been tried and the attempt to thwart Bitcoin failed.
Not a good straw man argument. That effect of the influx would be temporary. Gold would still be scarce.
Technically it would be scarce, but it would depend on how much gold was brought in and how often. Bringing in hundreds or thousands of metric tons of gold per year over the course of a couple centuries would certainly impact the price of gold on the global market, and make packages of gold foil become consumer goods right next to aluminum foil. Heck, it could become common enough that people would bake potatoes inside of gold foil and throw it away afterward. It would still be a relatively "scarce" material, but if enough gold was found from some source its value as a monetary exchange unit would pretty much disappear.
I think the American people are much more distrusting of their government as opposed to when confiscation of gold first took place under the Roosevelt administration. See also Executive Order 6102 for some more details, including how President Ford signed the repeal of the laws you are talking about. Of course since such laws were held to be constitutional previously, it is likely that a legal action to declare such laws unconstitutional would have a huge uphill fight in a court room.
More likely any move to confiscate gold would create a political firestorm that no politician would want to touch right now, and might even incite a riot or armed rebellion. I certainly think open defiance of gold ownership laws that would restrict how much you can own would happen.
And it is not all due to trust (or not) and maturity, so that bitcoin will eventually achieve the same. Major traditional currencies are so stable because there is major active intervention to stabilize them (among other things against the effects of attempted speculation), from national banks and monetary policies. Bitcoins don't have this, so won't be as stable. It will be much more speculative than traditional currencies, and more similar to having your savings in speculative stocks.
This is a comment to frame if only to show ignorance of the concept of money and the role that central banks have played in national economies.
If you are thinking on the order of a year or two, I'd have to agree with you. It will be interesting to see where Bitcoins will be in a hundred years, and in what state the U.S. Dollar and the Euro are going to be like in the same time frame. I have my doubts that Bitcoins (or currencies like Bitcoins) will be gone in 100 years, but I think it is almost certain that Dollars and Euros will no longer be used. I'd love to take a wager on this too, but the question is what would be wagered?
You are missing the point of people buying things. Sometimes you simply have to buy items at the price it is today, and you can't wait until tomorrow or next year to make that purchase. Computers are a really good example of that, as it may cost $2000 for a system that does the things you need it to do today, but in three months that same computer system may only cost $1000.
Of course one of the reasons why many businesses buy that $2000 computer today instead of waiting is because waiting those three months is also going to be likely lost opportunities that would be worth well more than the $1000 difference in price by waiting, so they get the computer today. There are other motivations, and depreciation is hardly the only factor. If buying that $2000 computer means you can't even conduct business without that computer, there are also other intangible factors like losing market share to competitors or pissing off customers by waiting which also come into play.
It is also a good example on how deflation is not necessarily a bad thing for ordinary consumers or even businesses, as people will still buy things even if the price continues to drop.
Another example of this is a "Dutch Auction" where the price of items is offered at a very high price, and over time the price drops gradually (or even rapidly) until somebody places a bid. When that bid is offered, the sale is over. This was done originally to speed up the sales of tulip bulbs in Amsterdam (hence the origin of the term), but it is used in other sales as well.
These are bad examples, as the barter economies you mention are both localized - the POW's trade cigarettes with other POWs in the same camp, and the Minecraft players are trading blocks with players on the same server.
That is where money starts... on the local level. It worked in ancient times and it works today in the same principle, which is how stuff like Ithica Hours developed, not to mention the original coinage of gold. Keep in mind that coinage was originally done to demonstrate metal purity and weight, where the seal of the government (or the face of the emperor as it may be) acted as the authentication of that value.
You can always send the iron bars via Fed Ex or some other courier. Of course you have to decide how to pay the courier.
Another real world example that happened because international currencies broke down: Just before the collapse of the Soviet Union, Pepsi wanted to move into Russia and get a foothold of the Russian market (presumably before Coca-Cola got there). Russian Rubles were essentially worthless in western Europe and America, so they needed to come up with some way to get their investment back and essentially get value for the Pepsi syrup as well as spending money to build bottling plants in Russia. Their solution was to buy a bunch of shipping containers full of vodka with the Rubles, and the ship to bring them to America. It sailed to NYC, and Pepsi sold not just the vodka but also the container ship as well for Dollars.
I'm not saying that barter is easy, but in some cases it can happen. Now you can exchange Rubles for Dollars much more easily, but that is also due to the fact that there are many more trades happening between America and Russia today than was true in the 1980's when Pepsi first tried to get into Russia.
As much as I hate to admit it, this is true. While I could very easily trade my labor and the fruits thereof for anything that can be made or acquired locally, if I want an orange or banana, I'm going to need some way to pay to have it shipped here.
You could always pay for oranges or bananas with other commodities like a pound of beef or a hunk of iron.
It is interesting that when a group of people get together in most situations that involve economic activity, something ends up as a medium of exchange even if there is no legal tender. An example of how this happened was in POW prison camps during World War II, where Red Cross packages would include a couple cigarettes with each POW ration. Cigarettes became a medium of exchange because it fit several properties useful as money, and even non-smokers collected cigarettes.
I've seen similar kinds of things happen in multi-player video games and other situations. If a game doesn't have any in-game currency (aka "gold coins" or "credits"), it doesn't take long for players to end up finding some other medium of exchange. To use an example from multi-player Minecraft servers, it is quite common for diamonds to be used as a medium of exchange (and a lesser extent stacks of stone blocks).
It's also a great way to show how something can have value without being a great medium of exchange. Though tribesmen do pretty well trading the ground beef whilst it's still in the cow, I guess.
That is where the term "shares of stock" actually came from. People would literally have a share in a cow and upon slaughter would split the cow between the owners of that cow with proportional amounts of meat. The "Stock Markets" were places where you bought and sold domestic animals. Quite a few financial terms are derived from the exchange of commodities like this.
Heck, the term "salaries" comes from the daily allotment of salt ("sal" in Latin). You can find other related terms to other commodities as well.
You can't buy anything with BTC without converting them between it and another currency.
This isn't true. Bitcoins are a medium of exchange. It is commonly used as a currency converter (IMHO it does a very good job in Foreign Exchange markets), but that isn't its only role.
It is possible to pay salaries in bitcoins and other currencies. Look up Ithaca Hours for an example of how alternate currencies can and have been used in the past to pay for labor. You can also purchase items and services directly in Bitcoins (some webhosting services are currently offered directly in Bitcoins) and it is commonly used for voluntary donations to many organizations as well.
The one thing that is difficult to do with Bitcoins though is to pay taxes, and that unfortunately is something that needs to be in the "legal tender". Also, if you sue somebody in a courtroom those debts will be settled in whatever form of payment acceptable by the judges involved, and that will likely be something like a Euro or U.S. Dollar and Bitcoins will not be likely recognized. This isn't to say Bitcoins could not be used in this fashion, but it takes a deliberate government act to recognize Bitcoins as a valid legal tender.
gold be definition is deflationary there is a set amount of gold on earth. as the population increases there is less gold per person available. hence as population increases you will have deflation because there will be less and less money available per person.
Most people don't count gold buried in the Earth as something provably having value. In other words, until it is mined and made into bullion bars or some other usable form, it really doesn't count. Gold being used in electronic circuitry or other industrial uses also isn't really considered money.... although it can be used as a stock resource after a fashion to "mine" more gold.
As such, there have been times where gold has definitely seen inflation. A notable era when this happened was in the 1850's when the California gold mines significantly impacted the global gold markets and the value of gold compared to other precious metals (as well as the price of other commodities like grain, bread, beer, and other common items) showed a clear example of inflation just like a government "printing" fiat money.
On top of all of that, there isn't a "set amount of gold on the Earth". Well, there in there might be, but if or when mining operations start to seriously happen in space it is possible that several thousand metric tons of gold could be found in some asteroids or extra-terrestrial sources that would also significantly change the value of gold here on the Earth. I'm not saying it is happening right now, but it is very possible that the global gold supply could increase much faster than increases in population.
The value of a U.S. Dollar is the collective faith that the American people place upon whatever they think they can purchase with a U.S. Dollar. BTW, that faith is no different than religious faith, or the faith that Domino's Pizza will get you some food in 30 minutes or less.
Of somewhat interest is how much people outside of America think of the dollar and what goods they are willing to trade for that dollar. It is also relevant that U.S. Dollars can be used to pay taxes in America at all levels of government, which also helps to give legitimacy to the currency.
Well it seems that some analysts are not doin their jobs.
That is quite common. Most people are lazy, and stock analysts are no different.
I heard of a really interesting scam idea related to this "forecasting" that seems so silly that it is amazing that it isn't more common. It goes something like this:
An analyst sends out 100k letters (give or take) to a bunch of medium or high wealth clients. For about half of them, he forecasts that the stock market is going to soar, and the other half he predicts that the market will crash. By keeping careful track of who he sent letters to, whatever the market does, this "analyst" drops that half of the client list and only sends additional letters to the half that he "accurately" predicted. The "successful" half of the prediction pool of clients they do the same thing, about 25k that the market will soar and another 25k that the market will tank. Wash, rinse, repeat.
After doing this a few times, by pure blind luck, this "analyst" has "predicted" the market successfully for some people over the past few months or even the past "year". He starts to charge "clients" a fee for successfully predicting the market in the future, and they start to believe him because he has been successful in the past. Obviously. As long as these "clients" don't talk to each other, he can keep doing these "predictions" until his coin flipping skills wash out and he has no more clients. Even if one or two of his "predictions" don't pan out, he can still claim a high prediction rate that might keep people paying for his service.
Often I think many of these professional analysts are nothing more than a scam artist like I've described here. Flipping a coin on some stock and essentially saying patent nonsense. It is possible for a real analyst to put in some incredibly hard work to gather real data and to crunch numbers in a fashion that would offer real predictions, but that takes a whole bunch of effort and sometimes costs quite a bit of money (especially doing the surveys that I mentioned above). Your example here about ignoring seasonal sales from one quarter to the next is spot on for the kind of things that a real analyst needs to look for if they want to model their predictions accurately. You also have to know the product in terms other than just some numbers on a spreadsheet.... something these analysts also fail to do as well most of the time.
The analysts try to use things like reported sales in trade journals and by 3rd parties like major retail chains (aka Wal-Mart, Target, Cosco, Best Buy, etc.) to try and anticipate independently what sales might be for a company like Apple. They might even conduct surveys of customers and ask customers if they've purchased electronic products recently, and if so what brands and items have they purchased. Much of this is even healthy in a market as it acts as an independent verification that the company is accurately reporting the information it is supposed to report. Sometimes these forecasts will simply be based upon reported sales of similar products that have happened in the past, thus the analysts are using some models that may or may not be accurate with what is actually happening today.
In other words, analysts can legitimately anticipate what a quarterly report is likely going to say even before it is released based upon public information. Sometimes they are wrong, and a good analyst will try to re-evaluate their independent data sources and models if that happens too often.... or in some cases seek an audit of the company itself if they start to suspect that some mis-reported information is coming from "official" sources. It is highly unlikely that a company such as Apple is going to risk mis-reporting those kind of numbers though as it would land several Apple executives into prison for doing that kind of thing.... but it happens from time to time as well.
I would remind people that the 2008 debacle was largely caused by irresponsible speculation and corruption (falsely valued derivatives, etc). Complete with government collusion (the problems with Freddie and Fannie).
The fiasco in 2008 was due to the credit rating agencies over valuing the "safety" of the derivatives and other investments, claiming that they were rated as "AAA" or some other "safe" investment, when in fact they were more or less worthless (the term commonly used is "junk" status as in "junk bonds"). One of the reasons for this was because of an inappropriate relationship between the companies who were exploiting the inflated ratings on their debt instruments and the credit rating agencies, where the "investors" who were using the information from the rating agencies weren't really the customers paying for the ratings.
Some of this can be blamed on the part of the investors involved, as they shouldn't be looking at "free" things given by brokers who are tweaking the numbers to extract more money from these investors. These investors should have been working together to independently evaluate these investments and really finding out how much they were worth rather than taking the word of a brokerage firm. In addition, much of the derivative market turned out to be a sort of Ponzi scheme simply disguised to look legal. That works fine for those early investors as they make a pile of money, but eventually somebody gets left holding the bad and screwed over in the end.
There is nothing wrong with speculation in and of itself, as long as the people involved in making those investments are well aware of the risks involved. If this particular trader of the original story had risked $1 billion of his own money that he had obtained legally through other means and saw the whole pile of money disappear as a bad investment, the story would have ended right there. The problem was that he was risking $1 billion of other people's money that was given to him on a condition it would be used for much safer investments. That is where it turned into a criminal endeavor as he destroyed the fiduciary responsibility which was entrusted in him and violated the contract with the people depending on this trader.
As for Fannie Mae and Freddy Mac, those organizations are also using "other people's money" and recklessly using it as well. The problem is that the "investors" are taxpayers who have the money taken from them at gunpoint anyway, so there is no fiscal responsibility other than to think they can take even more money at gunpoint from the same "investors" if they get into trouble. On the rare chance that Fannie Mae or Freddy Mac turn a profit, the profits disappear into the fiscal black hole known as the National Debt, so there is really no incentive at all to even be efficient or to consider the needs of their investors when making decisions. Such is the case for any government agency, so it isn't exclusive to just these two agencies.
The trade was unauthorized because the information about the bonuses was "privileged" information. The SEC operates its rules for trading on the premise that all investors should at least in theory have access to the same information at the same time. In this case the broker had knowledge of the information in the quarterly reports prior to a general public dissemination of the information, therefore he had a fiduciary responsibility to refrain from trades until the information went public.
This is one reason why "insider trading" is such a major crime, and what ultimately nailed Martha Stewart (particularly as she sat as a governor on the board of trustees for the NYSE). People in "high places" have a standard of responsibility that they should be following and it is stricter than what "ordinary" investors typically operate in. That they get time to think about the impacts of this information and can anticipate market moves by having access to such information makes it important to be much more cautious when acting upon such information.
When a large number of corporate officers start to sell off stock in the company they work for (or start buying it for that matter), it is usually considered something important to consider when investing into that company. It is assumed that those officers are acting on public information or that there are external reasons for those actions (such as personal bankruptcy or a windfall of money coming their way), but it can be due to confidential information that either hasn't or won't be publicly released. The SEC is not happy if that information is unjustly exploited and costs ordinary shareholders potential profit, which is where the crime actually happens.
Which is why we need to do away with those laws that ban murder, stealing, rape and piracy (the kind you do with a boat) - cause they are CLEARLY worthless as "outlaws" keep committing those crimes, and all they are good for is preventing "law abiding citizens" from returning in kind.
Murder, theft, rape, and other crimes commonly thought of as felonies by ordinary citizens (forget what a legislature says on the topic, I'm talking the big ones that are common in almost any society at any time period), it isn't that laws ban these activities.... they just promise that if you commit them that you will be prosecuted and that your liberties will be taken away on either a temporary or permanent basis for having engaged in those acts.
Being declared an "outlaw" used to mean that you were literally outside of the law and unfit for making any claim upon the law for protection. In ancient times you could literally kill, rape, steal from, or do whatever you pleased to an outlaw because they quite literally were outside of the law. That was their punishment for choosing not to conform to society's laws and ignoring the courts in the first place. Sadly, it is the outlaws that have rights now and it is ordinary citizens trying to obey the law that has their rights stripped from them.
That's only because you haven't been a victim of it. I'm pretty sure if you were one of the people with their limbs blown off you'd be singing a different tune. Not that I'm disagreeing with you, just trying to keep this in perspective.
This is assuming that every "victim" (however you define it) is willing to trade security for their civil rights? I doubt it would make much of a difference on how I feel about keeping civil rights if I or one of my children were injured or killed in an incident like this. Demanding police actually do their job and stop this BS that can be called "security theater" and instead actually gathering information and finding the "bad guys" who are doing these silly things is more what I would be demanding.
In other words, I would want to have officers on patrol and to have the American government stop doing stupid things that cause other cultures to be angry with America. It doesn't need an increase in anybody's budget either, and I'll even admit that you can't be 100% successful in catching all of the idiots in this world. Furthermore, if there is a foreign government involved with this kind of activity, bomb the hell out of that government and teach them to never do this kind of shit again or it will be returned with interest. Make sure that heads of state are prime targets together with their legislative buildings as well, not to mention military headquarters too.
If this is some domestic nut job, there is absolutely nothing more that really could have been done other than tracking the idiot down who did this and making sure he lands in prison.
On the positive side, meteoric impacts of the size necessary for a mass extinction event are more likely to be tracked than not tracked. Some significant charting of our Solar System has happened in the past decade where very large asteroids (aka larger than 10 kilometers in diameter) are very unlikely to be hiding and a great many new asteroid discoveries are on the dozens of meters in diameter scale rather than the kilometer scale of size. In other words, while undoubtedly meteors that are on the scale of something that could make a very bad day for somebody under the impact zone and could still destroy cities, it won't really kill all life and even likely that human societies would continue with stuff that would go by without a warning.
The thing is, we don't know as much about this universe as we think we know. There are certainly dangers that we could face that could cause a planet-wide sterilization event. There are even some things which could exterminate all life in the entire Solar System at once like a hypernova going off nearby.... assuming we as a species even start a colonization of Mars and other bodies around this Solar System. What is known though is that the likelihood of survival will increase if we have our species go elsewhere and colonize other worlds.... just as Doctor Hawking has suggested and you have implied. If the Earth is completely sterilized, however that may happen, it could at least in theory be "repopulated" from those who have spread life elsewhere in the universe.
The population of mankind is not growing exponentially at all. If anything, in a couple of generations there appears to be a very stable population that will be sustaining itself on the Earth or even have the population go into decline. Such a decline is already happening in many parts of Europe and is definitely projected to hit North America within the next 20-30 years or so. In fact, America already has a negative birth rate and the population would be declining if it wasn't for immigration... with the negative birth rate projected to even overtake immigration in the long run.
It is nice to be alarmist about the growth of global populations, but this "fact" is something that needs to be soundly refuted every time it is brought up. Malthus was wrong, and every generation that tries to bring up his arguments is consistently proven wrong again and again.
For myself, I think the quest to journey to other planets and establish colonies on Mars or the asteroids is going to be something that will ultimately be beneficial to life here on the Earth as well. By trying to build another ecosystem somewhere off of the Earth, we are going to learn just how complex life is here and how much we are dependent upon a great many things we take for granted now. It will be that quest for knowledge about the environment that future Martians (aka people living on Mars) will be able to bring back to those here on the Earth about how precious our environment is here. By necessity they will develop technologies which promote the development of life giving resources that can be used on the Earth as well to lessen our impact upon this planet as well.
The Earth hasn't exactly been sterilized, but there have been several mass extinction events that wiped out vast numbers of life forms on this planet, including one that wiped out vastly more than even the K-T event that killed off the dinosaurs (a relatively mild mass extinction event by some standards). That a few microbes were able to cling onto some minor hunk of rock and then repopulate the Earth afterward should be seen as a coincidence or a lucky break.
The lucky coincidence that the Sun also happens to orbit in a nearly circular pattern around the galaxy (not all that common from some observations) may have also been a significant factor for why life hasn't been completely sterilized either. What you are describing here isn't really "proof" that a hostile universe won't kill off everything on the Earth in some fashion regardless of what we may or may not do as a species.
I still feel it is irrelevant with regards to the frequency of the meals. Both are "taxable"... all that is different is that the IRS pays attention to one kind of "benefit"
(aka daily meals) and doesn't pay attention to the other kind.
It is a bad thing that emergency rooms have been perverted into a primary healthcare system when that is not what it was originally set up to be working as. It is an example of a very well intentioned policy gone wrong because there were huge unintended consequences to the policy.
This is not "let their bodies lie in the street", but rather being honest about health care and really rethinking the system for how it should be provided. Will poor people receive inferior treatment to those who are wealthy? If you think they should get the same level of treatment, you are living in an imaginary world that has never existed and certainly doesn't exist today. "Equalizing payments" between people only increases costs and the current system is flat out corrupt where even poor people are paying far too much for health care than they can possibly afford and certainly are paying more than they would in a competitive market place.
I am not suggesting that capitalism is perfect, but in a system that is open to new enterprises in a market with low barriers to entry (and a government which is committed to keeping those barriers to entry low and even lowering them when practical) and where new and innovative ways to do the same task can be conceived, I think it could be working out a whole lot better. This doesn't happen right now and indeed most governments around the world add barriers to entry and restrict people even trying to start some sort of healthcare practice... encouraging monopolies to form and establishing legal monopolies with regards to political connections rather than even competence.
And in regards to "nationalization": Perhaps this is something about where I grew up, but for even "public goods" I think they should be controlled as locally as possible or even privatized when reasonable. Even things like roads, police, and fire protection can be provided in many cases by private contractors.... working for individuals and not even communities. It is possible and doesn't require large amounts of taxes to support them. For myself, I am a believer in a very limited government that has restricted authority to do very few things and to let its citizens work out everything else. There is a role for government, but it doesn't need to be nearly as expansive as it currently is in almost every part of the world. I know of private toll roads that receive no public funds at all, private police departments that contract with ordinary citizens for services, and even private fire departments that provide services for people to help lower their home owners insurance rates.
So no, many things don't need to be nationalized, even if your "nation" is as small as Monaco. Much of this is also a principle of freedom, where if you want to live in a country where everything is nationalized, I don't want to stop you from doing that. Just don't force those beliefs down my throat and give me a chance to set up a country where I can live with my own views on how to govern and leave me alone. If I can get a group of several thousand or million people together who passionately dislike government, let me do that and leave me alone. The problem is that those who promote socialism can't leave others alone and want to cram their view of the world down the throats of those who hate it.
Voluntary donations seem to work for public television. Surprisingly, the U.S. federal government actually receives quite a bit of money through voluntary donations as it is, although I'll openly admit it wouldn't even pay the interest on the interest on the debt at the moment. Most churches and indeed "charitable organizations" receive their operating money from voluntary donations in America as well. I do know of some churches in other countries that are paid through taxes, so I can understand reluctance on the idea.
It does take a moral society to encourage the idea socially... which is no different than getting rich people to voluntarily limit the amount of income they receive either and in fact has more of a likelihood of happening as well. Access to some public services could be restricted or kept at a minimal level for those who don't "dontate" to the government or other ways of encouraging people to give money to the government.
I'm just suggesting that pointing a gun at everybody to force them to pay taxes may not necessarily be the only way for governments to raise money for their services and there definitely are some drawbacks to the idea . Governments already have enough advantages simply by being the people who make the laws that plenty of revenue sources can exist through other means. Heck, intentionally inflating the money supply as an indirect tax could be one of those ways for governments to get the income they need to operate their services in many cases.
Slashdot Mirror
Bitcoin is backed by CPU computational cycles. Admittedly that is CPU cycles that have been already expended to create the Bitcoins, but that is something that can be quantified in terms of kilowatt-hours needed to generate that many hashes as exist in the blockchain.
How much is a kilowatt-hour of electricity for you right now? Since you are using a computer, I presume you do consume at least a little bit of power from time to time.
The design of Bitcoin doesn't prevent resources from being used to mine them. Bitcoins can be mined as fast as anyone who has the resources cares to mine them... for a short period. But eventually the increased difficulty will catch up with them. But the key word here is "eventually".
The "eventually" of the Bitcoin software to increase difficulty is a pretty short period of time. The algorithm for increasing (or decreasing.... it does happen) difficulty is based upon the frequency of work units being process, where processing more work units in a given period of time will send the difficulty factor up. It takes between two weeks and about two months to adjust, but the adjustment definitely going to happen and is a part of the software and protocol (lower difficulty work units are rejected by most of the nodes).
Early on in the history of Bitcoins there had been large server farms turned on and then later turned off trying to mine Bitcoins. I seriously doubt that even major national governments who purposely devoted significant resources as a major national project to do the same thing could today have nearly as much impact as some of those early spikes in mining did during the first six months or so of Bitcoin being used. A nice idea in theory, but it has already been tried and the attempt to thwart Bitcoin failed.
Not a good straw man argument. That effect of the influx would be temporary. Gold would still be scarce.
Technically it would be scarce, but it would depend on how much gold was brought in and how often. Bringing in hundreds or thousands of metric tons of gold per year over the course of a couple centuries would certainly impact the price of gold on the global market, and make packages of gold foil become consumer goods right next to aluminum foil. Heck, it could become common enough that people would bake potatoes inside of gold foil and throw it away afterward. It would still be a relatively "scarce" material, but if enough gold was found from some source its value as a monetary exchange unit would pretty much disappear.
I think the American people are much more distrusting of their government as opposed to when confiscation of gold first took place under the Roosevelt administration. See also Executive Order 6102 for some more details, including how President Ford signed the repeal of the laws you are talking about. Of course since such laws were held to be constitutional previously, it is likely that a legal action to declare such laws unconstitutional would have a huge uphill fight in a court room.
More likely any move to confiscate gold would create a political firestorm that no politician would want to touch right now, and might even incite a riot or armed rebellion. I certainly think open defiance of gold ownership laws that would restrict how much you can own would happen.
And it is not all due to trust (or not) and maturity, so that bitcoin will eventually achieve the same. Major traditional currencies are so stable because there is major active intervention to stabilize them (among other things against the effects of attempted speculation), from national banks and monetary policies. Bitcoins don't have this, so won't be as stable. It will be much more speculative than traditional currencies, and more similar to having your savings in speculative stocks.
This is a comment to frame if only to show ignorance of the concept of money and the role that central banks have played in national economies.
If you are thinking on the order of a year or two, I'd have to agree with you. It will be interesting to see where Bitcoins will be in a hundred years, and in what state the U.S. Dollar and the Euro are going to be like in the same time frame. I have my doubts that Bitcoins (or currencies like Bitcoins) will be gone in 100 years, but I think it is almost certain that Dollars and Euros will no longer be used. I'd love to take a wager on this too, but the question is what would be wagered?
You are missing the point of people buying things. Sometimes you simply have to buy items at the price it is today, and you can't wait until tomorrow or next year to make that purchase. Computers are a really good example of that, as it may cost $2000 for a system that does the things you need it to do today, but in three months that same computer system may only cost $1000.
Of course one of the reasons why many businesses buy that $2000 computer today instead of waiting is because waiting those three months is also going to be likely lost opportunities that would be worth well more than the $1000 difference in price by waiting, so they get the computer today. There are other motivations, and depreciation is hardly the only factor. If buying that $2000 computer means you can't even conduct business without that computer, there are also other intangible factors like losing market share to competitors or pissing off customers by waiting which also come into play.
It is also a good example on how deflation is not necessarily a bad thing for ordinary consumers or even businesses, as people will still buy things even if the price continues to drop.
Another example of this is a "Dutch Auction" where the price of items is offered at a very high price, and over time the price drops gradually (or even rapidly) until somebody places a bid. When that bid is offered, the sale is over. This was done originally to speed up the sales of tulip bulbs in Amsterdam (hence the origin of the term), but it is used in other sales as well.
These are bad examples, as the barter economies you mention are both localized - the POW's trade cigarettes with other POWs in the same camp, and the Minecraft players are trading blocks with players on the same server.
That is where money starts... on the local level. It worked in ancient times and it works today in the same principle, which is how stuff like Ithica Hours developed, not to mention the original coinage of gold. Keep in mind that coinage was originally done to demonstrate metal purity and weight, where the seal of the government (or the face of the emperor as it may be) acted as the authentication of that value.
You can always send the iron bars via Fed Ex or some other courier. Of course you have to decide how to pay the courier.
Another real world example that happened because international currencies broke down: Just before the collapse of the Soviet Union, Pepsi wanted to move into Russia and get a foothold of the Russian market (presumably before Coca-Cola got there). Russian Rubles were essentially worthless in western Europe and America, so they needed to come up with some way to get their investment back and essentially get value for the Pepsi syrup as well as spending money to build bottling plants in Russia. Their solution was to buy a bunch of shipping containers full of vodka with the Rubles, and the ship to bring them to America. It sailed to NYC, and Pepsi sold not just the vodka but also the container ship as well for Dollars.
I'm not saying that barter is easy, but in some cases it can happen. Now you can exchange Rubles for Dollars much more easily, but that is also due to the fact that there are many more trades happening between America and Russia today than was true in the 1980's when Pepsi first tried to get into Russia.
As much as I hate to admit it, this is true. While I could very easily trade my labor and the fruits thereof for anything that can be made or acquired locally, if I want an orange or banana, I'm going to need some way to pay to have it shipped here.
You could always pay for oranges or bananas with other commodities like a pound of beef or a hunk of iron.
It is interesting that when a group of people get together in most situations that involve economic activity, something ends up as a medium of exchange even if there is no legal tender. An example of how this happened was in POW prison camps during World War II, where Red Cross packages would include a couple cigarettes with each POW ration. Cigarettes became a medium of exchange because it fit several properties useful as money, and even non-smokers collected cigarettes.
I've seen similar kinds of things happen in multi-player video games and other situations. If a game doesn't have any in-game currency (aka "gold coins" or "credits"), it doesn't take long for players to end up finding some other medium of exchange. To use an example from multi-player Minecraft servers, it is quite common for diamonds to be used as a medium of exchange (and a lesser extent stacks of stone blocks).
It's also a great way to show how something can have value without being a great medium of exchange. Though tribesmen do pretty well trading the ground beef whilst it's still in the cow, I guess.
That is where the term "shares of stock" actually came from. People would literally have a share in a cow and upon slaughter would split the cow between the owners of that cow with proportional amounts of meat. The "Stock Markets" were places where you bought and sold domestic animals. Quite a few financial terms are derived from the exchange of commodities like this.
Heck, the term "salaries" comes from the daily allotment of salt ("sal" in Latin). You can find other related terms to other commodities as well.
You can't buy anything with BTC without converting them between it and another currency.
This isn't true. Bitcoins are a medium of exchange. It is commonly used as a currency converter (IMHO it does a very good job in Foreign Exchange markets), but that isn't its only role.
It is possible to pay salaries in bitcoins and other currencies. Look up Ithaca Hours for an example of how alternate currencies can and have been used in the past to pay for labor. You can also purchase items and services directly in Bitcoins (some webhosting services are currently offered directly in Bitcoins) and it is commonly used for voluntary donations to many organizations as well.
The one thing that is difficult to do with Bitcoins though is to pay taxes, and that unfortunately is something that needs to be in the "legal tender". Also, if you sue somebody in a courtroom those debts will be settled in whatever form of payment acceptable by the judges involved, and that will likely be something like a Euro or U.S. Dollar and Bitcoins will not be likely recognized. This isn't to say Bitcoins could not be used in this fashion, but it takes a deliberate government act to recognize Bitcoins as a valid legal tender.
gold be definition is deflationary
there is a set amount of gold on earth. as the population increases there is less gold per person available. hence as population increases you will have deflation because there will be less and less money available per person.
Most people don't count gold buried in the Earth as something provably having value. In other words, until it is mined and made into bullion bars or some other usable form, it really doesn't count. Gold being used in electronic circuitry or other industrial uses also isn't really considered money.... although it can be used as a stock resource after a fashion to "mine" more gold.
As such, there have been times where gold has definitely seen inflation. A notable era when this happened was in the 1850's when the California gold mines significantly impacted the global gold markets and the value of gold compared to other precious metals (as well as the price of other commodities like grain, bread, beer, and other common items) showed a clear example of inflation just like a government "printing" fiat money.
On top of all of that, there isn't a "set amount of gold on the Earth". Well, there in there might be, but if or when mining operations start to seriously happen in space it is possible that several thousand metric tons of gold could be found in some asteroids or extra-terrestrial sources that would also significantly change the value of gold here on the Earth. I'm not saying it is happening right now, but it is very possible that the global gold supply could increase much faster than increases in population.
The value of a U.S. Dollar is the collective faith that the American people place upon whatever they think they can purchase with a U.S. Dollar. BTW, that faith is no different than religious faith, or the faith that Domino's Pizza will get you some food in 30 minutes or less.
Of somewhat interest is how much people outside of America think of the dollar and what goods they are willing to trade for that dollar. It is also relevant that U.S. Dollars can be used to pay taxes in America at all levels of government, which also helps to give legitimacy to the currency.
Well it seems that some analysts are not doin their jobs.
That is quite common. Most people are lazy, and stock analysts are no different.
I heard of a really interesting scam idea related to this "forecasting" that seems so silly that it is amazing that it isn't more common. It goes something like this:
An analyst sends out 100k letters (give or take) to a bunch of medium or high wealth clients. For about half of them, he forecasts that the stock market is going to soar, and the other half he predicts that the market will crash. By keeping careful track of who he sent letters to, whatever the market does, this "analyst" drops that half of the client list and only sends additional letters to the half that he "accurately" predicted. The "successful" half of the prediction pool of clients they do the same thing, about 25k that the market will soar and another 25k that the market will tank. Wash, rinse, repeat.
After doing this a few times, by pure blind luck, this "analyst" has "predicted" the market successfully for some people over the past few months or even the past "year". He starts to charge "clients" a fee for successfully predicting the market in the future, and they start to believe him because he has been successful in the past. Obviously. As long as these "clients" don't talk to each other, he can keep doing these "predictions" until his coin flipping skills wash out and he has no more clients. Even if one or two of his "predictions" don't pan out, he can still claim a high prediction rate that might keep people paying for his service.
Often I think many of these professional analysts are nothing more than a scam artist like I've described here. Flipping a coin on some stock and essentially saying patent nonsense. It is possible for a real analyst to put in some incredibly hard work to gather real data and to crunch numbers in a fashion that would offer real predictions, but that takes a whole bunch of effort and sometimes costs quite a bit of money (especially doing the surveys that I mentioned above). Your example here about ignoring seasonal sales from one quarter to the next is spot on for the kind of things that a real analyst needs to look for if they want to model their predictions accurately. You also have to know the product in terms other than just some numbers on a spreadsheet.... something these analysts also fail to do as well most of the time.
The analysts try to use things like reported sales in trade journals and by 3rd parties like major retail chains (aka Wal-Mart, Target, Cosco, Best Buy, etc.) to try and anticipate independently what sales might be for a company like Apple. They might even conduct surveys of customers and ask customers if they've purchased electronic products recently, and if so what brands and items have they purchased. Much of this is even healthy in a market as it acts as an independent verification that the company is accurately reporting the information it is supposed to report. Sometimes these forecasts will simply be based upon reported sales of similar products that have happened in the past, thus the analysts are using some models that may or may not be accurate with what is actually happening today.
In other words, analysts can legitimately anticipate what a quarterly report is likely going to say even before it is released based upon public information. Sometimes they are wrong, and a good analyst will try to re-evaluate their independent data sources and models if that happens too often.... or in some cases seek an audit of the company itself if they start to suspect that some mis-reported information is coming from "official" sources. It is highly unlikely that a company such as Apple is going to risk mis-reporting those kind of numbers though as it would land several Apple executives into prison for doing that kind of thing.... but it happens from time to time as well.
I would remind people that the 2008 debacle was largely caused by irresponsible speculation and corruption (falsely valued derivatives, etc). Complete with government collusion (the problems with Freddie and Fannie).
The fiasco in 2008 was due to the credit rating agencies over valuing the "safety" of the derivatives and other investments, claiming that they were rated as "AAA" or some other "safe" investment, when in fact they were more or less worthless (the term commonly used is "junk" status as in "junk bonds"). One of the reasons for this was because of an inappropriate relationship between the companies who were exploiting the inflated ratings on their debt instruments and the credit rating agencies, where the "investors" who were using the information from the rating agencies weren't really the customers paying for the ratings.
Some of this can be blamed on the part of the investors involved, as they shouldn't be looking at "free" things given by brokers who are tweaking the numbers to extract more money from these investors. These investors should have been working together to independently evaluate these investments and really finding out how much they were worth rather than taking the word of a brokerage firm. In addition, much of the derivative market turned out to be a sort of Ponzi scheme simply disguised to look legal. That works fine for those early investors as they make a pile of money, but eventually somebody gets left holding the bad and screwed over in the end.
There is nothing wrong with speculation in and of itself, as long as the people involved in making those investments are well aware of the risks involved. If this particular trader of the original story had risked $1 billion of his own money that he had obtained legally through other means and saw the whole pile of money disappear as a bad investment, the story would have ended right there. The problem was that he was risking $1 billion of other people's money that was given to him on a condition it would be used for much safer investments. That is where it turned into a criminal endeavor as he destroyed the fiduciary responsibility which was entrusted in him and violated the contract with the people depending on this trader.
As for Fannie Mae and Freddy Mac, those organizations are also using "other people's money" and recklessly using it as well. The problem is that the "investors" are taxpayers who have the money taken from them at gunpoint anyway, so there is no fiscal responsibility other than to think they can take even more money at gunpoint from the same "investors" if they get into trouble. On the rare chance that Fannie Mae or Freddy Mac turn a profit, the profits disappear into the fiscal black hole known as the National Debt, so there is really no incentive at all to even be efficient or to consider the needs of their investors when making decisions. Such is the case for any government agency, so it isn't exclusive to just these two agencies.
The trade was unauthorized because the information about the bonuses was "privileged" information. The SEC operates its rules for trading on the premise that all investors should at least in theory have access to the same information at the same time. In this case the broker had knowledge of the information in the quarterly reports prior to a general public dissemination of the information, therefore he had a fiduciary responsibility to refrain from trades until the information went public.
This is one reason why "insider trading" is such a major crime, and what ultimately nailed Martha Stewart (particularly as she sat as a governor on the board of trustees for the NYSE). People in "high places" have a standard of responsibility that they should be following and it is stricter than what "ordinary" investors typically operate in. That they get time to think about the impacts of this information and can anticipate market moves by having access to such information makes it important to be much more cautious when acting upon such information.
When a large number of corporate officers start to sell off stock in the company they work for (or start buying it for that matter), it is usually considered something important to consider when investing into that company. It is assumed that those officers are acting on public information or that there are external reasons for those actions (such as personal bankruptcy or a windfall of money coming their way), but it can be due to confidential information that either hasn't or won't be publicly released. The SEC is not happy if that information is unjustly exploited and costs ordinary shareholders potential profit, which is where the crime actually happens.
You really think his trading firm would out him and send him to jail if he *made* money, instead of giving him a raise and a promotion?
If it caused the company to go bankrupt in the process? Yes.
Which is why we need to do away with those laws that ban murder, stealing, rape and piracy (the kind you do with a boat) - cause they are CLEARLY worthless as "outlaws" keep committing those crimes, and all they are good for is preventing "law abiding citizens" from returning in kind.
Murder, theft, rape, and other crimes commonly thought of as felonies by ordinary citizens (forget what a legislature says on the topic, I'm talking the big ones that are common in almost any society at any time period), it isn't that laws ban these activities.... they just promise that if you commit them that you will be prosecuted and that your liberties will be taken away on either a temporary or permanent basis for having engaged in those acts.
Being declared an "outlaw" used to mean that you were literally outside of the law and unfit for making any claim upon the law for protection. In ancient times you could literally kill, rape, steal from, or do whatever you pleased to an outlaw because they quite literally were outside of the law. That was their punishment for choosing not to conform to society's laws and ignoring the courts in the first place. Sadly, it is the outlaws that have rights now and it is ordinary citizens trying to obey the law that has their rights stripped from them.
That's only because you haven't been a victim of it. I'm pretty sure if you were one of the people with their limbs blown off you'd be singing a different tune. Not that I'm disagreeing with you, just trying to keep this in perspective.
This is assuming that every "victim" (however you define it) is willing to trade security for their civil rights? I doubt it would make much of a difference on how I feel about keeping civil rights if I or one of my children were injured or killed in an incident like this. Demanding police actually do their job and stop this BS that can be called "security theater" and instead actually gathering information and finding the "bad guys" who are doing these silly things is more what I would be demanding.
In other words, I would want to have officers on patrol and to have the American government stop doing stupid things that cause other cultures to be angry with America. It doesn't need an increase in anybody's budget either, and I'll even admit that you can't be 100% successful in catching all of the idiots in this world. Furthermore, if there is a foreign government involved with this kind of activity, bomb the hell out of that government and teach them to never do this kind of shit again or it will be returned with interest. Make sure that heads of state are prime targets together with their legislative buildings as well, not to mention military headquarters too.
If this is some domestic nut job, there is absolutely nothing more that really could have been done other than tracking the idiot down who did this and making sure he lands in prison.
On the positive side, meteoric impacts of the size necessary for a mass extinction event are more likely to be tracked than not tracked. Some significant charting of our Solar System has happened in the past decade where very large asteroids (aka larger than 10 kilometers in diameter) are very unlikely to be hiding and a great many new asteroid discoveries are on the dozens of meters in diameter scale rather than the kilometer scale of size. In other words, while undoubtedly meteors that are on the scale of something that could make a very bad day for somebody under the impact zone and could still destroy cities, it won't really kill all life and even likely that human societies would continue with stuff that would go by without a warning.
The thing is, we don't know as much about this universe as we think we know. There are certainly dangers that we could face that could cause a planet-wide sterilization event. There are even some things which could exterminate all life in the entire Solar System at once like a hypernova going off nearby.... assuming we as a species even start a colonization of Mars and other bodies around this Solar System. What is known though is that the likelihood of survival will increase if we have our species go elsewhere and colonize other worlds.... just as Doctor Hawking has suggested and you have implied. If the Earth is completely sterilized, however that may happen, it could at least in theory be "repopulated" from those who have spread life elsewhere in the universe.
The population of mankind is not growing exponentially at all. If anything, in a couple of generations there appears to be a very stable population that will be sustaining itself on the Earth or even have the population go into decline. Such a decline is already happening in many parts of Europe and is definitely projected to hit North America within the next 20-30 years or so. In fact, America already has a negative birth rate and the population would be declining if it wasn't for immigration... with the negative birth rate projected to even overtake immigration in the long run.
It is nice to be alarmist about the growth of global populations, but this "fact" is something that needs to be soundly refuted every time it is brought up. Malthus was wrong, and every generation that tries to bring up his arguments is consistently proven wrong again and again.
For myself, I think the quest to journey to other planets and establish colonies on Mars or the asteroids is going to be something that will ultimately be beneficial to life here on the Earth as well. By trying to build another ecosystem somewhere off of the Earth, we are going to learn just how complex life is here and how much we are dependent upon a great many things we take for granted now. It will be that quest for knowledge about the environment that future Martians (aka people living on Mars) will be able to bring back to those here on the Earth about how precious our environment is here. By necessity they will develop technologies which promote the development of life giving resources that can be used on the Earth as well to lessen our impact upon this planet as well.
The Earth hasn't exactly been sterilized, but there have been several mass extinction events that wiped out vast numbers of life forms on this planet, including one that wiped out vastly more than even the K-T event that killed off the dinosaurs (a relatively mild mass extinction event by some standards). That a few microbes were able to cling onto some minor hunk of rock and then repopulate the Earth afterward should be seen as a coincidence or a lucky break.
The lucky coincidence that the Sun also happens to orbit in a nearly circular pattern around the galaxy (not all that common from some observations) may have also been a significant factor for why life hasn't been completely sterilized either. What you are describing here isn't really "proof" that a hostile universe won't kill off everything on the Earth in some fashion regardless of what we may or may not do as a species.
I still feel it is irrelevant with regards to the frequency of the meals. Both are "taxable"... all that is different is that the IRS pays attention to one kind of "benefit"
(aka daily meals) and doesn't pay attention to the other kind.
It is a bad thing that emergency rooms have been perverted into a primary healthcare system when that is not what it was originally set up to be working as. It is an example of a very well intentioned policy gone wrong because there were huge unintended consequences to the policy.
This is not "let their bodies lie in the street", but rather being honest about health care and really rethinking the system for how it should be provided. Will poor people receive inferior treatment to those who are wealthy? If you think they should get the same level of treatment, you are living in an imaginary world that has never existed and certainly doesn't exist today. "Equalizing payments" between people only increases costs and the current system is flat out corrupt where even poor people are paying far too much for health care than they can possibly afford and certainly are paying more than they would in a competitive market place.
I am not suggesting that capitalism is perfect, but in a system that is open to new enterprises in a market with low barriers to entry (and a government which is committed to keeping those barriers to entry low and even lowering them when practical) and where new and innovative ways to do the same task can be conceived, I think it could be working out a whole lot better. This doesn't happen right now and indeed most governments around the world add barriers to entry and restrict people even trying to start some sort of healthcare practice... encouraging monopolies to form and establishing legal monopolies with regards to political connections rather than even competence.
And in regards to "nationalization": Perhaps this is something about where I grew up, but for even "public goods" I think they should be controlled as locally as possible or even privatized when reasonable. Even things like roads, police, and fire protection can be provided in many cases by private contractors.... working for individuals and not even communities. It is possible and doesn't require large amounts of taxes to support them. For myself, I am a believer in a very limited government that has restricted authority to do very few things and to let its citizens work out everything else. There is a role for government, but it doesn't need to be nearly as expansive as it currently is in almost every part of the world. I know of private toll roads that receive no public funds at all, private police departments that contract with ordinary citizens for services, and even private fire departments that provide services for people to help lower their home owners insurance rates.
So no, many things don't need to be nationalized, even if your "nation" is as small as Monaco. Much of this is also a principle of freedom, where if you want to live in a country where everything is nationalized, I don't want to stop you from doing that. Just don't force those beliefs down my throat and give me a chance to set up a country where I can live with my own views on how to govern and leave me alone. If I can get a group of several thousand or million people together who passionately dislike government, let me do that and leave me alone. The problem is that those who promote socialism can't leave others alone and want to cram their view of the world down the throats of those who hate it.
Voluntary donations seem to work for public television. Surprisingly, the U.S. federal government actually receives quite a bit of money through voluntary donations as it is, although I'll openly admit it wouldn't even pay the interest on the interest on the debt at the moment. Most churches and indeed "charitable organizations" receive their operating money from voluntary donations in America as well. I do know of some churches in other countries that are paid through taxes, so I can understand reluctance on the idea.
It does take a moral society to encourage the idea socially... which is no different than getting rich people to voluntarily limit the amount of income they receive either and in fact has more of a likelihood of happening as well. Access to some public services could be restricted or kept at a minimal level for those who don't "dontate" to the government or other ways of encouraging people to give money to the government.
I'm just suggesting that pointing a gun at everybody to force them to pay taxes may not necessarily be the only way for governments to raise money for their services and there definitely are some drawbacks to the idea . Governments already have enough advantages simply by being the people who make the laws that plenty of revenue sources can exist through other means. Heck, intentionally inflating the money supply as an indirect tax could be one of those ways for governments to get the income they need to operate their services in many cases.