Don't Take The Bait

BITSTAMP:BTCUSD   Bitcoin / U.S. Dollar
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Bitcoin             has been experiencing a deflationary cyle for almost 2 years - trading under fair value given normal electricity costs (unless you are making cow pellets to burn for free :-)). This is part of why we are here and part of the bigger hyperinflationary cycle that is being spawned in the process. It is trading extremely cheap! Don't take the bait.


To reiterate what was explained and demonstrated in Part I; the fiat currencies of the Corrupt West have already been hyperinflated (in the correct use of this term). The money supply of these fraudulent, fiat currencies has been diluted to worthlessness, in fundamental terms. The central banks and our governments have already promised to complete this hyperinflation spiral, through driving the exchange rate of our currencies to zero (and stealing all our wealth in the process).

The true meaning of hyperinflation has now been defined. The factors which have made this economic holocaust both inevitable and irreversible have now been explained. One task remains to be completed: the proof. If our currencies have already been hyperinflated to worthlessness in fundamental terms, where is the economic carnage (i.e. price spiral) which is the consequence of the exponential, ultra-extreme dilution of these fiat currencies?

This task will be accomplished in Part III             . It will first be explained how-and-why there is always a time-lag between when a currency has been rendered fundamentally worthless, and the time when the official exchange rate of that currency reflects this worthlessness. It will also be explained how the banking crime syndicate has managed to extend this time-lag through assorted lies, manipulation, and other financial crimes.

btw. the link and the words above below the link are Jeff Neilson's. I agree with him.
This hyperinflation analysis lacks two key factors: money velocity & credit.

The vast majority of existing money supply and, increases/inflation of the money supply has been through the extension of credit not "money printing." We pay for most goods and services using credit i.e. food, cars, homes, tuitions. Fractional reserve banking requires only a fraction of the loaned amount is held in reserves by the lending institution. Thus, using the hypothetical example of $1000 in deposits with a 10% reserve requirement, the money multiplier enables $1000 in deposits to become $10,000 in the banking system ($1000 in government fiat and $9000 in credit money). Take a look at the Ratios of Debt and Money to Base Money to get an idea of how big this difference is http://www.debtdeflation.com/blogs/2009/01/31/therovingcavaliersofcredit/ I would also suggest reading the first two comments on the article you referenced.

Second, if base money supplies are inflated but sit on the balance sheets of banks rather than moving throughout the economy to purchase goods and services (velocity of money) 'price inflation' will not happen.
Both good points. But history tells us the truth. As to the first point, the old and the new. Actually, there is already a shortage of cash and this will only get worse. As to your second point, I would ask that you dig deeper and undertand that 1) the inflated balance sheets make its way through the system in very dysfunction ways if banks are not lending. Also, this system has already "printed" enormous amounts of credit. It has been done. 2) price inflation can come from a different direction through the portal of deflation. Suppliers get crushed as they swirl around in the deflationary whirlpool and take their "dysfunction balance sheet misappropriated banks" along with them. Supply dwindles across the board until only the most liquid elite remain and make you pay what they see fit to get away with. Then hyperinflation takes hold. Hyperinflation is born out of brutal deflationary cycles led by those with WHO HAVE ENORMOUS DEBTS AND currencies that feel the binary switch of trust to....no trust crash - cas, credit or otherwise. Then it happens quickly. And it won't be viewed as just price inflation.
oaksacorn oaksacorn
Keep and mind the subtlties between recesions/stagnation/deflation and recessionary cycles that were not let to flush out but feuled with excessive credit and regulation and taxes and debt to GDP. Recessions, depressions, growth/price inflation and hyperinflation. Along with this, there is a difference between these issues when tied in with levels of debt to gdp.
Lovely charts. What are your thoughts on Monero?
Seems cool. I like it. Scalable. Looks like a very good buy chart wise.
Ero23 oaksacorn
Thanks I agree! I became a fan of it's fundamentals after reading the RingCT paper
Ero23 oaksacorn
Would love to see a chart of this as well
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