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Friday, June 17, 2022

No, crypto isn’t a safe hedge against inflation

Bitcoin tumbled Monday to its lowest level since December 2020 as investors finally realized that cryptocurrencies aren’t the effective hedge against inflation that enthusiasts have claimed.

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Most cryptocurrencies have no inherent value. They’re worth basically what owners say they’re worth, which is a prime example of what’s known in the financial world as the “Greater Fool Theory.”

20 comments:

  1. One of my stepsons kept bugging us to get on board with bit coin etc., we kept politely blowing him off. He’s been real quiet about it lately.

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  2. It is in the long run. Bitcoin at least. Not the other coins.
    And its less artificially manipulated than gold and silver are nowadays.
    But the smart money owns all three + copper jacketed lead

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    1. Bitcoin or any other digital currency that ain't backed by shit ain't worth shit when computers go down or the federal government seizes it control of it.
      Read the part below the asterisk. That's true.

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    2. It's all fiat.....

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    3. Says the hodler.....
      Melk

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    4. Amen, WC. If I can't put it in my pocket, it's useless.

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    5. While bitcoin is Fiat so is the US Dollar.

      Bitcoin is backed by nothing
      The Dollar is backed by....What? The "Full Faith and Credit of the United States"...Who will print more as they choose and will devalue it as they wish.
      Neither are backed by anything but wishes and dreams.

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    6. No government can seize control of bitcoin at this point. Its too distributed among too many non government entities. And governemnts that arent friendly to eachother.
      As for computers/internet shuttin off, well thats what copper jacketed lead is for

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  3. @ wirecutter
    have you noticed the U.S. dollar recently - in fact, ever since Nixon took us off the gold standard in 1971

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    1. Next thing you will be saying Ft Knox is empty!

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    2. https://wtfhappenedin1971.com/

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  4. Same with NFT's. This is what happens when we're surrounded by stupid dumbasses.

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    1. Unless you're the one selling the NFT.....

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    2. NFTs of art are retarded. When you realize how the technology works, you see how it can be used to do a plethora of things to drive efficiency and make governing bodies like the SEC obsolete.

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  5. Bitcoin is just another fiat currency. I'm OK with that. At least there's no central control, no single entity can decide to debase its value. It is decentralized, with nodes all around the world. Our federal government, nor any sovereign government, can seize it.

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  6. At least now the 'miners' will stop using the vast amounts of energy needed to acquire new Bitcoins. Might even reduce the risk of brownouts.

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  7. Never had a solitary inkling to even consider any of that stuff... Like SgtBob said, " If I can't put it in my pocket, it's useless.".......

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  8. it can be put in your pocket, on a thumb drive...just dont forget password(s)

    i own zero of it but do realize that as long as it is accepted for goods or services it is as good as gold...just more volatile in value

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  9. any commodity purchased with cash paper is done with fiat currency. even if you bought gold with cash paper the value of the gold you bought would only be worth the fiat money you paid for it. now, the actual value of gold or any other object like a Picasso painting or whatever one would care to sell is not established by the seller. it's value is based solely upon what the buyer values it for; the sellors price point is only the point of the beginning of negotiations of value which can move up or down the scales of value the buyer perceives. the price you pay for your fuels really should depend on your level of desire to purchase it, and that is driven by what you drive, where you go and how far it is. if you feel the price of fuel is too high for what you value the fuels for, then just say no and don't buy it. find a different way to go.
    for those using electricity to move along, just you wait until the excise tax man catches up to you. your bill will accompany your power bill soon. you see, your car talks to the IRS all the time.
    here is a simple maths problem for numberphiles to consider....
    So, I bought one hundred gallons of diesel fuel on 30 March and paid US $2.88/gal for it using cash money. What would you estimate the value of that one hundred gallons of diesel fuel will be come 30 October of this year for someone in dire need of one hundred gallons of diesel fuel in equivalent dollars? more in value I paid for it or less in value? today's retail market value in my locale is US $5.66/gal. Project the cost trend upwards along the slope from 30 March to 30 October in a straight line. with that limited data points, I'm estimating that I have an RV for sale cheap today... and if nothing changes by 30 October, retail diesel #2/JP-8 is going to hit US $7.90/gal or more... by 30 Jan, the fuel pumps in the USA will need to be calibrated to US $/liter, if only for marketing purposes. I'm quite sure California will lead the way on that; the proles there would be happy to not see a '10' anywhere before the first significant digit of the price of fuel at the pumps.
    inflation is averaging a bit over 8% per month. now we're talking US $ real money. the price of fuel is going to go up as a rising curve vs a straight line along with everything else. so, yes martha, the jackass in chief and his personal trainer/leader, the Magic Negro, has truly made the society of the US CItizen something unexpectedly different(especially for the democrat rank and file voter) than it was two and a half years ago...

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