Dinar Daily
Welcome to Dinar Daily Discussions.

Logging in with your USERNAME allows you to participate in discussions, see what has recently been posted, and other options. Guests have limited abilities.

We are NOT a guru forum. We are a dinarian forum. The opinions expressed on the forum do not reflect the of opinion of Dinar Daily specifically, but rather reflect the views of the individual posters only.

Disclamer:

We are in compliance with, "Copyright Disclaimer Under Section 107 of the Copyright Act 1976, allowance is made for "fair use" for purposes such as criticism, comment, news reporting, teaching, scholarship, and research. Fair use is a use permitted by copyright statute that might otherwise be infringing. Non-profit, educational or personal use tips the balance in favor of fair use."




Join Us for Dinar Discussions and More -- We Keep it REAL
 
HomeSearchMemberlistFAQLog inRegister
Awarded by Feed Spot Blog
Iraqi Dinar Blogs
DINAR INFORMATION LINKS

PARTNER SITES
Key Words
Adam Montana, AdminBill, Benjamin Fulford, Currency Exchange, David Schmidt, Dinar, Dinar Guru, Dinar Recaps, Dinar Rv, Dinar Scam, Dr Clarke, Frank26, Gary Larrabee, Gurus, Guru Hunters, JerzyBabkowski, Kaperoni, Kenny, Monetary Reform, Mnt Goat, My Ladies, Okie, Poppy, RamblerNash, Ray Renfrow, Redenomination, Revaluation, Ssmith, TNTBS, Tnt Tony, WING IT, We Are The People, Willis Clark, WSOMN, Yosef, Zap
Share | 
 

 Bitcoins Go Splat.

Go down 
AuthorMessage
Kevind53
Super Moderator
Super Moderator
avatar

Posts : 25756
Join date : 2011-08-09
Age : 18
Location : Umm right here!

PostSubject: Bitcoins Go Splat.   Wed Dec 18, 2013 8:38 am

http://www.garynorth.com | Home
 
 
Gary North - December 18, 2013

Bitcoins have just suffered another huge hit. The other shoe has just fallen.

Bitcoins were selling at $1,242 on November 29. The headlines were all over the Web: "Bitcoins surpass the price of gold." That was the peak. They are around $500 today. That is a decline of 60%.
When an investment fad ends, it usually ends spectacularly. A 60% decline in less than three weeks indicates that the Bitcoins fad is over.

What is significant is why the collapse occurred. We know exactly why. China's government took two steps.
First, on December 5, the People's Bank of China announced that Bitcoins posed an unacceptable risk. It banned financial institutions from using Bitcoins. The price of Bitcoins fell by 30%.

Second, on December 18, the Bank forbade any third-party exchange of yuan (renminbi) for Bitcoins. Immediately, China's largest exchange ceased taking any new yuan deposits. That announcement has collapsed the market in China. It has collapsed the market worldwide.

When you get into a market, you need an exit plan. All of a sudden, there was no exit plan in China.
Around the world, the currency-denominated price of Bitcoins is down. That is how much clout the Chinese government has in this market.

NOT AN ALTERNATIVE CURRENCY
As I have said repeatedly, Bitcoins are not an alternative currency. They are an extension of a nation's government-run currency, meaning a real currency. You buy Bitcoins with real money. Then, to make a profit, the Bitcoins buyer must do one of two things: (1) get someone to sell him a good or service; (2) get someone to sell him a real currency that buys goods and services.

There is no visible independent market for goods and services sold for Bitcoins as a stand-alone currency. This is the central fact of the economics of Bitcoins.

The key national currency for Bitcoins is China. Young Chinese programmers and their age peers are the dominant users. The average Chou in China does not own a computer. The Chinese who are doing the buying and selling are young adults. They don't have much money. They know nothing about economics. They have never heard of fractional reserve banking. They are involved in their first investment mania.
Their parents may be buying apartments. That takes a lot of money. That market is also a mania, but it is closed to young adults. So, they bought Bitcoins.

Old Chinese without computers buy gold coins. Gold coins are also too expensive for the programmers. They need something that can be bought in fractional units. This is why Bitcoins has taken off in China. This is why China is the key market. It is a market for middle-class kids in a market where no one with experience is buying or selling.

The People's Bank of China has decided to nip this in the bud. The programmers are now trapped. They own a non-currency that was promoted as a future currency. But it is not a currency. It is bought and sold with currency. The people's Bank of China just made it more difficult to buy and sell this non-currency.

DECEMBER 5
The handwriting was on the wall on December 5. On that day, the People's Bank of China announced its "unacceptable risk" policy. On that day, Bank of America Merrill Lynch released a report saying that Bitcoins were a currency of the future. USA Today reported this.

Quote :
Bank of America's report said the virtual currency could become a "serious competitor" to traditional money transfer providers. Bitcoin can help users avoid high taxes, capital controls and government seizures, but also is highly volatile, the report noted. Bitcoin, at its introduction in 2009, traded for less than $1. BoA placed the currency's maximum value at $1,300 per Bitcoin and said its maximum market capitalization would be $15 billion.

On the day the report appeared, Bitcoins fell below $1,000. A week before, the price was at $1,242.
Bad timing, surely.

GREATER FOOLS
As I have said, Bitcoins are not a stand-alone currency, and they will not become a stand-alone currency. They are simply a plaything of young programmers and speculators. A Bitcoin is something you buy because someone else bought it. You cannot buy anything with it from any seller who does not sell his Bitcoins for real money.

The seller must re-supply whatever it is he sells. He can do this only with real money. That means that he must sell Bitcoins for dollars, euros, pounds, or -- until today -- yuan.
This is obvious to anyone familiar with business. But it was not obvious to the programmers who touted Bitcoins as an alternative currency.

If the central banks of the world imitate the People's Bank of China, the Bitcoins market will plummet again. Bitcoins are not a separate currency. They are a speculative bubble that rose from nothing to an international fad, a fad based on selling real currencies, getting into a mania, and hoping to sell to a greater fool for his real currency.

The supply of greater fools has been slashed by the People's Bank of China. If other central banks follow, this market will end as it began: the plaything of programmers.

CONCLUSION
Bitcoins' future depends on the tender mercies of central bankers.
It always did.

Bernanke has said as much. He said it in a September 6 letter. He repeated this in testimony to Congress in mid-November.

Quote :
Although the Federal Reserve generally monitors developments in virtual currencies and other payments system innovations, it does not necessarily have authority to directly supervise or regulate these innovations or the entities that provide them to the market. In general, the Federal Reserve would only have authority to regulate a virtual currency product if it is issued by, or cleared or settled through, a banking organization that we supervise. Given the Federal Reserve"s authority and the manner in which virtual currencies have developed, the Federal Reserve has focused primarily on a supervised banking organization's role in the products' sale and distribution, as well as the applicable regulations, such as Bank Secrecy Act (BSA) /anti-money laundering (AML) requirements. . . .
As noted above, the Federal Reserve plans to work with other FFIEC member agencies on electronic cash and related issues such as virtual currencies, as needed, for banking organizations. The Federal Reserve will continue to monitor developments as part of its broad interest in the safety and efficiency of the payment system. We also stand ready to cooperate with other agencies in fulfilling their mandates, as appropriate.

At any time, the FED can pull the plug on what remains of the Bitcoin mania. Any programmer who thinks differently has had too much Jolt Cola. He needs to sober up.
 
For my background articles on Bitcoins, click here. (This may take a few seconds, as the search engine "mines" the site.)
Here is one, published on November 29, the day Bitcoins peaked.
http://www.garynorth.com/public/11828.cfm
Here is how I ended it.
Whenever somebody tries to sell you an investment that is based on the economic analysis of a market -- an analysis that cannot possibly be true -- do not buy the investment. This is a simple rule. I adhere to this rule.

There has to be an economic justification for a capital investment, and there is no economic justification of buying Bitcoins as an alternative currency. That was how Bitcoins were initially sold, and it was impossible as an economic concept from the beginning. The Austrian theory of money shows why.

I do not invest in capital that has no economic justification other than the greater fool theory. There are too few fools to keep the scheme going.

Bitcoins are not illegal. They should not be made illegal. They should merely be avoided.

*****************
Trust but Verify --- R Reagan Suspect

"Rejoice always, pray without ceasing, in everything give thanks; for this is the will of God in Christ Jesus for you."1 Thessalonians 5:14–18

       
Back to top Go down
View user profile
dinarstar
VIP Member
VIP Member


Posts : 2327
Join date : 2011-10-09

PostSubject: Re: Bitcoins Go Splat.   Wed Dec 18, 2013 8:26 pm

WOW!!...I wonder what Texas Randy K. will have to say about Bitcoin now?
Big Hat but no...Bitcoin...OUCH!!...what happened!??!  scratch  scratch

*****************
"Success is not final, failure is not fatal. It's the courage to continue that counts."
Winston Churchill
(1874-1965)
hug
Back to top Go down
View user profile
alleyrose
Super Moderator
Super Moderator
avatar

Posts : 2852
Join date : 2011-08-24
Location : Australia

PostSubject: Re: Bitcoins Go Splat.   Wed Dec 18, 2013 10:30 pm

Wow! Thanks Kevin!!

*****************
All we have to do is decide what to do with the time that is given to us.........~Gandalf~




Come visit me: www.alleysplace.net
Facebook: www.facebook.com/alleysplace1/
Back to top Go down
View user profile
livingintheloop69
Forum Friend
Forum Friend


Posts : 114
Join date : 2013-12-09

PostSubject: Re: Bitcoins Go Splat.   Mon Dec 23, 2013 5:18 pm

bitcoin will be doing this for the next couple years at least. as long as you dont get scared and sell on dips you'll probably be back on top again no diff from stock market you havn't lost until you cashout
Back to top Go down
View user profile
Guest
Guest



PostSubject: Re: Bitcoins Go Splat.   Wed Dec 25, 2013 11:47 am

I looked into this a couple weeks ago and decided not to do it.  Can someone who has more knowledge about bitcoin..? explain it to me.. what is it exactly..? can I take it to the bank or any grocery store and go shopping with it..? or it's basically only virtual...???

Thanks a lot
Back to top Go down
Kevind53
Super Moderator
Super Moderator
avatar

Posts : 25756
Join date : 2011-08-09
Age : 18
Location : Umm right here!

PostSubject: Re: Bitcoins Go Splat.   Wed Dec 25, 2013 3:15 pm

Nope ... it is a virtual currency, the only way to convert it into cash is to try and sell it to someone else for cash. Otherwise you can only spend it with vendors who accept it as currency at whatever rate they are accepting it at.

*****************
Trust but Verify --- R Reagan Suspect

"Rejoice always, pray without ceasing, in everything give thanks; for this is the will of God in Christ Jesus for you."1 Thessalonians 5:14–18

       
Back to top Go down
View user profile
Ponee
Admin
Admin
avatar

Posts : 34196
Join date : 2011-08-09

PostSubject: Re: Bitcoins Go Splat.   Wed Dec 25, 2013 3:26 pm

There is such diverse opinions with Bit coins.  I started posting about them because I too had my attention caught by them recently.  I wish I had purchased them awhile ago when they were next to nothing and caught that upswing when it was at $1,000 a per. 

I am still interested in learning about the whole concept of them.  It is very interesting to me and there is so much I don't understand.

*****************
Back to top Go down
View user profile
Guest
Guest



PostSubject: Re: Bitcoins Go Splat.   Wed Dec 25, 2013 3:31 pm

@Kevind53 wrote:
Nope ... it is a virtual currency, the only way to convert it into cash is to try and sell it to someone else for cash. Otherwise you can only spend it with vendors who accept it as currency at whatever rate they are accepting it at.
So if it's virtual currency and only selective vendors accepts it at the rate they decide to accept.  Is there a list of vendors accepting bitcoins..? and how one can buy and study this..? three weeks ago it was more than the price of gold and now it's 500??? it has lost it's value in half and I understand with every investment, there is risk.
Back to top Go down
Ponee
Admin
Admin
avatar

Posts : 34196
Join date : 2011-08-09

PostSubject: Re: Bitcoins Go Splat.   Wed Dec 25, 2013 4:39 pm

Bitcointrading.com  is  a site to look into.  It has online stores that use bitcoins - http://www.bitcointrading.com/forum/spend-bitcoins/online-stores-accepting-bitcoins/

http://www.shopify.com/blog/10480345-75-places-to-spend-your-bitcoins#axzz2oWazNRHK

https://bitdazzle.com/

There are more sites out there also I believe.

I expect to see more and more online shopping sites to offer the bitcoin payment option.


But, I can not get my head around the instability of it.  How it can be viable if it fluccuates that much much.

*****************
Back to top Go down
View user profile
Guest
Guest



PostSubject: Re: Bitcoins Go Splat.   Wed Dec 25, 2013 6:29 pm

Ponee,

Me too.. I am having hard time believing in the virtual currency.  To me, it feels like scam, smells like scam and do I want to touch it...? prolly not ")
Back to top Go down
livingintheloop69
Forum Friend
Forum Friend


Posts : 114
Join date : 2013-12-09

PostSubject: Re: Bitcoins Go Splat.   Fri Dec 27, 2013 6:20 pm

Nadita wrote:
I looked into this a couple weeks ago and decided not to do it.  Can someone who has more knowledge about bitcoin..? explain it to me.. what is it exactly..? can I take it to the bank or any grocery store and go shopping with it..? or it's basically only virtual...???

Thanks a lot
your debit card is virtual but you can still take it to the bank, shopping, etc. the concept of being virtual isn't foreign, i bet you do 99% of your banking and shopping virtually as it is. the problem bitcoin isn't widely accepted enough yet. someone came out with a device like a zip drive basically which stores your zip coins that you can swiipe at a machine at a coffee shop problem is there was a limited amount made, they sold out and they cost $130 which is more than im willing to pay for a payment device essentially like a credit card which allows me to carry my bitcoins. 

someoen else posted in this forum a documentary about a guy who went 101 days spending nothing but bitcoins so yes you can use it for daily transactions. if you watch the clip you will hear where the guy ran into problems such as buying gas.
Back to top Go down
View user profile
livingintheloop69
Forum Friend
Forum Friend


Posts : 114
Join date : 2013-12-09

PostSubject: Re: Bitcoins Go Splat.   Fri Dec 27, 2013 6:22 pm

@Ponee wrote:
Bitcointrading.com  is  a site to look into.  It has online stores that use bitcoins - http://www.bitcointrading.com/forum/spend-bitcoins/online-stores-accepting-bitcoins/

http://www.shopify.com/blog/10480345-75-places-to-spend-your-bitcoins#axzz2oWazNRHK

https://bitdazzle.com/

There are more sites out there also I believe.

I expect to see more and more online shopping sites to offer the bitcoin payment option.


But, I can not get my head around the instability of it.  How it can be viable if it fluccuates that much much.
any merchant who takes them has a coinbase account which instantly converts them to dollars so they aren't subject to the swings unless a vnedor conciously decides not to swap them out
Back to top Go down
View user profile
livingintheloop69
Forum Friend
Forum Friend


Posts : 114
Join date : 2013-12-09

PostSubject: Re: Bitcoins Go Splat.   Fri Dec 27, 2013 6:24 pm

Nadita wrote:
Ponee,
Me too.. I am having hard time believing in the virtual currency.  To me, it feels like scam, smells like scam and do I want to touch it...? prolly not ")
you shoudln't call something a scam just because you dont fully understand it, if you understand it and wanna call it a scam fine but until you understand it your making a premature judgement same way alot of our friends and family probably call the dinar a scam when its not. 

also, the concept of virtual currency isn't very crazy. i bet most of you use your debit cards for 90% of your purchases. i bet 99% of you do most of your banking and bill pay online virtually and dont write checks.

the virtual aspect of it confuses people b/c there is no phsyical coins like there's physical dollars but understand you already live in a virtual banking world and do most of your stuff without tangible money
Back to top Go down
View user profile
Guest
Guest



PostSubject: Re: Bitcoins Go Splat.   Fri Dec 27, 2013 6:37 pm

@livingintheloop69 wrote:
Nadita wrote:
Ponee,
Me too.. I am having hard time believing in the virtual currency.  To me, it feels like scam, smells like scam and do I want to touch it...? prolly not ")
you shoudln't call something a scam just because you dont fully understand it, if you understand it and wanna call it a scam fine but until you understand it your making a premature judgement same way alot of our friends and family probably call the dinar a scam when its not. 

also, the concept of virtual currency isn't very crazy. i bet most of you use your debit cards for 90% of your purchases. i bet 99% of you do most of your banking and bill pay online virtually and dont write checks.

the virtual aspect of it confuses people b/c there is no phsyical coins like there's physical dollars but understand you already live in a virtual banking world and do most of your stuff without tangible money
I agree with you that I shouldn't be calling it a "scam"  that is true that I don't understand it completely.  I would like to have someone who has done it, meaing investing in bitcoins and use it to buy goods in regular shops and how it works and how many shops or vendor are accepting it in the US

I still like my cash Smile I don't do much with virtual or shopping online.. I am the touch and feel person.. Smile
Back to top Go down
livingintheloop69
Forum Friend
Forum Friend


Posts : 114
Join date : 2013-12-09

PostSubject: Re: Bitcoins Go Splat.   Fri Dec 27, 2013 7:04 pm

Nadita wrote:
@livingintheloop69 wrote:
Nadita wrote:
Ponee,
Me too.. I am having hard time believing in the virtual currency.  To me, it feels like scam, smells like scam and do I want to touch it...? prolly not ")
you shoudln't call something a scam just because you dont fully understand it, if you understand it and wanna call it a scam fine but until you understand it your making a premature judgement same way alot of our friends and family probably call the dinar a scam when its not. 

also, the concept of virtual currency isn't very crazy. i bet most of you use your debit cards for 90% of your purchases. i bet 99% of you do most of your banking and bill pay online virtually and dont write checks.

the virtual aspect of it confuses people b/c there is no phsyical coins like there's physical dollars but understand you already live in a virtual banking world and do most of your stuff without tangible money
I agree with you that I shouldn't be calling it a "scam"  that is true that I don't understand it completely.  I would like to have someone who has done it, meaing investing in bitcoins and use it to buy goods in regular shops and how it works and how many shops or vendor are accepting it in the US

I still like my cash Smile I don't do much with virtual or shopping online.. I am the touch and feel person.. Smile
right now bitcoin is mainly speculative. i mean not enough vendors accept it to make it like a paypal for example. i dont have to use paypal to buy stuff i could easily use my credit card but paypal is easy, widely accepted and offers some protection so i use it.

bitcoins aren't like that. sure i can go online and buy a pair of alpaca socks with bitcoins but why when i can use my credit card. and why when my bitcoins today may be worth twice as much tomorrow. right now bitcoins are mainly speculative. 

some merchants do offer discounts of 10% for paying in bitcoins so thats maybe one plus or one reason to use them. the only things which you HAVE to pay for bitcoins is stuff on black marketss like silkroad. you wanna buy some weed brownies yeah bitcoins are the only way to pay but aside from that i really dont see much reason to use bitcoins over debit or credit card.

as a merchant a plus is there's no chargebacks from credit card companies.

my fav video i tell family about when they inquire about bitcoins is a youtube vid titled the truth about bitcoins i think it gives a well rounded education on bitcoins
Back to top Go down
View user profile
 
Bitcoins Go Splat.
Back to top 
Page 1 of 1

Permissions in this forum:You cannot reply to topics in this forum
Dinar Daily :: OTHER INVESTMENTS :: BitCoins-
Jump to: