Best investment while we travel

[daletournier]

Originally Posted by Dockhead

Well, I never said that it solved the problem. In fact I specifically said that we may get the meltdown after all, but that even deferring it is a really good results under the circumstances. We don't know what is going to happen next.


But all the quantitative easing was intended to stop deflation, and it more or less did that job. I am not so concerned about the debt -- 108% of GDP is not pleasant of course, and will be much more unpleasant if interest rates spike up, but this is not an exceptional quantity of debt and it is not disastrous by itself. I am concerned about is the money supply, the expansion of which is truly unprecedented in an environment without hyperinflation. We could flip over from deflation to hyperinflation in the twinkle of an eye, and that would be sheer devastation.


For this reason I thought three times before making the decision to liquidate my U.S. estate holdings -- mortgaged real estate is a very good thing to own in an inflationary environment.


But what kind of brink we were standing on in 2008, few people realize. The events of 1929-1940 might be now referred to as the First Great Depression. Really.

Hi Dh, just arrived at Curacao back online, sad its the first thing I do..lol.

Yes the meltdown could still happen but now it will most likely be bigger due to putting it off and increasing debt levels across the board.

108% of GDP, I dont see that as a major issue as you point out but that is only one source of debt ,private household debt in places like Australia is much more worrying, money that goes to servicing mountains of debt isnt used elsewhere, corporate debt, some commentators belief this to be the biggest problem particularly due to stock buy backs because of cheap money.

Maybe if the deflation was allowed to happen we'd be way over the worst of it by now, a system that was naturally trying to deleverge got leveraged up more, therefore I'm not convinced deferring it was a good thing, sure the wealthy were able to increase their positions as markets have boomed due to never ending stimulus, but is this a good thing? hey I've benefited from the craziness but it dosent mean I think it's a good thing.

Ray Dalio (biggest hedge) believes we are in a very similar situation to the 1920's-1930's, how long can we keep deferring it, QE to infinity? -10% interest rates?

We are in uncharted waters but saying we dont know the outcome doesn't hold water for me, we saw what happened in 2008, we've had a preview.

[daletournier]

Agree, 100%

Originally Posted by Belezar

“But what kind of brink we were standing on in 2008, few people realize. The events of 1929-1940 might be now referred to as the First Great Depression. Really.“

Yep. It might have been worse than the first one, too. We were a few phone calls from a complete financial system failure.

I personally think that there was too much quantitative easing. And too much transparency at the Fed. The idea that it was helpful I disagree. At some point there is a need to force folks to walk on their own, even if there was some more pain. The current global rate situation is vexing. It will be interesting to see where things stabilize.

[daletournier]

Originally Posted by Copacabana

Exactly. The USD is the "Petrodollar". The fact that oil is traded in USD means that countries have to hold billions of USD in reserve to buy oil. Imagine what would happen if they suddenly didn't need to hang on to USD and let it go?

When the US invaded Iraq (the last time), it was no coincidence that it occurred just after Hussein began talking of selling oil in Euros and other currencies. Venezuela also began talking about the same thing recently, which perhaps explains why the US is suddenly interested in "freeing" Venezuela. The USD is a ticking bomb...

It's by far still the number one currency in world trade but its percentage of use in world trade is dropping, I cant remember the figures of hand but there is a de dollarization occurring, countries are looking for alternative ways ,this isnt helped by the US weaponizing the dollar when it suits.

[daletournier]

Originally Posted by pt49

"Institutional Investors" are typically banks, pension funds, insurance companies, and hedge and mutual funds.

Have you got links to these institutions coming onboard? The bitcoin community talks about it but is it happening? To be honest I haven't looked real hard.

[daletournier]

Ignore last post.

Originally Posted by pt49

The primary hurdle that must be overcome to win intitutional investors is the matter of custody.
The first large company to begin offering solutions to custody is probably Fidelity. Fidelity Investments is one of the world's largest financial services providers, with more than $7 trillion in client assets under administration. They have now moved into handling digital assets... https://www.fidelitydigitalassets.com

Now Bakkt have launched services also.
ICE Futures U.S., one of the world's largest commodities markets, began trading Bakkt Daily and Monthly Bitcoin Futures, the first physically delivered crypto-currency futures contracts ever traded on a federally regulated exchange.
They started about 5 weeks ago (late sept 2019), and are now doing over 1,000 futures contracts a day. These contracts must be settled in actual Bitcoin, not USD.
https://www.bakkt.com/markets

[pt49]

From the Australian Financial Review this week:

‘As the ASX (Australian Stock Exchange) moves towards the pointy end of replacing Australia’s equity clearing and settlement system, it is suddenly dawning on a range of market participants that their businesses could disappear.

‘There are fears among equity issuers, company secretaries, stockbrokers and providers of share registry services that replacement for the 25-year-old system called CHESS (Clearing House Electronic Subregister System) will allow ASX to extend its clearing and settlement monopoly into other areas.

‘It is feasible the ASX’s blockchain-based distributed ledger technology could be used to replace the work done by share registries, which enjoy about $500 million a year in revenue from being the middlemen in managing share ownership.’

If this "Blockchain technology" can replace a half a billion dollar business in just one tiny sector, is it too much of a stretch of the imagination to see "Blockchain technology" replacing money (as we know it)?

[Belezar]

It just depends on what you mean. The technology may have many uses, but replacing money as we know it is a bit too far to me. It’s only real use is illegal transactions. Of course, you can do lots of things with it, but nothing legal that I can’t do now. A government’s real strength is its ability to control the currency and tax. If the government was the only issuing source then sure, it’s possible. But that is the technology, not bitcoin itself.

[daletournier]

Originally Posted by pt49

From the Australian Financial Review this week:

‘As the ASX (Australian Stock Exchange) moves towards the pointy end of replacing Australia’s equity clearing and settlement system, it is suddenly dawning on a range of market participants that their businesses could disappear.

‘There are fears among equity issuers, company secretaries, stockbrokers and providers of share registry services that replacement for the 25-year-old system called CHESS (Clearing House Electronic Subregister System) will allow ASX to extend its clearing and settlement monopoly into other areas.

‘It is feasible the ASX’s blockchain-based distributed ledger technology could be used to replace the work done by share registries, which enjoy about $500 million a year in revenue from being the middlemen in managing share ownership.’

If this "Blockchain technology" can replace a half a billion dollar business in just one tiny sector, is it too much of a stretch of the imagination to see "Blockchain technology" replacing money (as we know it)?

As said earlier blockchain isnt bitcoin and vise versa. I have no doubt blockchain is part of our future but will Bitcoin ? Bitcoin advocates are betting it will be, key word is bet. What about the other 2000+ cryptos?

Also theres other competing technologies like hashgraph. It's very early days.

[daletournier]

Originally Posted by Belezar

It just depends on what you mean. The technology may have many uses, but replacing money as we know it is a bit too far to me. It’s only real use is illegal transactions. Of course, you can do lots of things with it, but nothing legal that I can’t do now. A government’s real strength is its ability to control the currency and tax. If the government was the only issuing source then sure, it’s possible. But that is the technology, not bitcoin itself.

I dont think that's quite true, it has uses but as Dh pointed out its volatility at this stage keeps it from being used as a currency.

You buy a car one afternoon with Bitcoin and the next day Bitcoin goes up by 20%, effectively that car just cost you 20%. Until theres stability amongst other things it's very limited as a currency.

If those that own Bitcoin were honest they would admit they buy hopeing the price goes up, sure they believe in the idea BUT ultimately they are speculating.

[pt49]

Originally Posted by Belezar

It just depends on what you mean. The technology may have many uses, but replacing money as we know it is a bit too far to me.

Fair enough, we can't all see into the future I guess.

It’s only real use is illegal transactions.

Untrue.

Of course, you can do lots of things with it, but nothing legal that I can’t do now.

You can't legally take $10,001 dollars on an airplane and fly to Australia... but you can convert $1 billion dollars into Bitcoin, record it on a tiny device carry it in your pocket and fly to Australia... COMPLETELY LEGALLY.

A government’s real strength is its ability to control the currency and tax. If the government was the only issuing source then sure, it’s possible. But that is the technology, not bitcoin itself.

Sorry mate... a governments real strength is its ability to control its people...
Our governments use our central banks to control (enslave) the people.
"We the people", now have a means of circumventing government control by the banking system. Agreed it's very early days as yet, and there are hurdles to overcome before mainstream adoption takes place... I remember diving headlong into the "Internet" when it started, and I put up with my freinds thinking I was mad (they were the Ostriches with their heads stuck in the sand) for years... but now .com is very very real.
Remember a cartoon character by name of Dick Tracy? He invented the Apple wrist phone... in 1946 (possibly earlier).

[pt49]

Originally Posted by daletournier

I dont think that's quite true, it has uses but as Dh pointed out its volatility at this stage keeps it from being used as a currency.

You buy a car one afternoon with Bitcoin and the next day Bitcoin goes up by 20%, effectively that car just cost you 20%. Until theres stability amongst other things it's very limited as a currency.

If those that own Bitcoin were honest they would admit they buy hopeing the price goes up, sure they believe in the idea BUT ultimately they are speculating.

BTC's "volatility" is what is so attractive to speculators.
Speculators buy and sell (trade) in vain attempts to maximize profits... most evident in Forex trading.
I am not a speculator in the true definition because I only buy and hold, I don't sell... regardless of whether BTC becomes a commonly used currency in the future, I don't really care at this point in time.
I believe that Bitcoin will increase in value over time, and for the last 10 years this has definately been the case.

If bitcoin goes up 20% after you used it to buy a car, you don't lose anything, but the seller just made 20% (in dollar value, and only if he didn't convert it immediately back to dollars.)
Of course, the car begins depreciating in value immediately after you buy it..

[daletournier]

"If bitcoin goes up 20% after you used it to buy a car, you don't lose anything, but the seller just made 20% (in dollar value, and only if he didn't convert it immediately back to dollars" quote.

Or he lost 20% if it went down , this could be all his profit gone, and this is why the volatility of cryptos make them currently unsuitable as a currency. You dont want to spend because bitcoin could go up tommorow and he dosent went to be paid in crypto as bitcoin could go down tommorow.

Currencies need relative stability to work.

[pt49]

Originally Posted by daletournier

Currencies need relative stability to work.

No argument there mate, and there's no stability really in fiat currency's either at present... because QE is destroying them.
It will happen in time with a crypto, be it BTC or other.

[SF Bay Dude]

Originally Posted by sailingfarmer

The problem with stocks is the market is close to an all time high... the reason the stock market is so high is because of a lack of options. Bonds pay diddly and CD's worse. Stocks are very risky if the FED ever raises interest rates and takes the dollar and economy off life support. Say you buy a stock today and stocks sell off 50%.... suppose because of the week economy as a result of a crash generates less dividends or none... if you try to sell your stock you not only get less or no income but you can lose 50% of the value of your investment. That is why stocks are considered historically riskier than bonds or fixed income.

Quote from page 1 of this thread a few years ago. Fairly telling... Nobody knows. Market blew the lid off the all time high. If OP would have invested his/her 500K, they'd have a lot more right now.

[pt49]

Originally Posted by SF Bay Dude

Quote from page 1 of this thread a few years ago. Fairly telling... Nobody knows. Market blew the lid off the all time high. If OP would have invested his/her 500K, they'd have a lot more right now.

That was posted on 6th Oct '16... Bitcoin price opened at $608 that day... it has since been as high as $19,377 and as low as $3,135 while it currently sits at $9,311.
At the lowest our investor would have had well in excess of 400% gains while currently he would have over 1,400% gain.

An allocation of 1% into BTC then ($5,000) would now be worth $76,570, giving our man massive profits in only 3 years...

... with just 1% risk to the downside.