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Close! The Fed printed many more dollars. Society gradually learns to revalue things and it starts with assets. The same reason Bitcoin and liquid assets are fa

Close! The Fed printed many more dollars. Society gradually learns to revalue things and it starts with assets. The same reason Bitcoin and liquid assets are falling, the Feds destroying dollars. It's not that these things are falling but that USD are becoming more scarce.

space_fountain 8y ago
I don't understand how that would work. Are you saying the fed printing money has meant that things like Bitcoint have gone done in value? Shouldn't it be the opposite since there's more or less a fixed supply of Bitcoin? Or are you saying that Bitcoin went up because they printed money and is now falling again as people get used to the increased monetary supply? That doesn't make sense to me either as I've never heard of an effect like that before
- RA_Fisher 8y ago
  I'm saying this one, > Or are you saying that Bitcoin went up because they printed money and is now falling again as people get used to the increased monetary supply It's pretty amazing, but it's true. The Fed can alter the countable Dollars in existence ("money supply"). They have a gov granted monopoly on 'em.
  - BoiledCabbage 8y ago
    Yah this is ridiculous - 99% of the price change in bitcoin is entirely unrelated to the money supply. At most 1% and almost certainly significantly less is related to it. Bitcoin's price change is due to speculation plain and simple. There is a good amount of what's posted here about the financial system that is true, and a good bunch isn't. Bitcoin has gone up thousands of percent in a few years, gold has barely moved. Trying to claim Bitcoin's movement is due to money supply reasons makes zero space.
    - conanbatt 8y ago
      But stocks have gone down considerably also. There are many things that cause volatility in crypto, but bear in mind stocks lost more than 2 trillion dollars in october. Several times the entire "market cap" of BTC.
gammateam 8y ago
Almooooooost The fed printing more dollars is done in a way designed to push people into riskier products. The literal point is so that people put their money into the economy instead of parking it in a savings account. So even though your favorite personal finance guru is having you celebrate 1.75% in an Allied Savings account in exchange for referral commissions, the point is for that to be an unattractive use of your money. Basically the fed buys things in exchange for dollars that didnt previously exist. Asset goes on the Fed’s balance sheet, the dollars are in the prior owners pockets. The fed predominantly buys US treasuries, from both the secondary market and directly from the US Treasury. When you buy these you are picking them up at a higher price than the last person, and this lowers the return you can get from the treasuries. The US government treasury bonds being the safest assets by guarantee of getting your money back. When you cant tolerate that yield anymore, you buy higher yielding assets that are less safe. The fed bought the whole yield curve, pushing people to buy more municipal bonds, corporate bonds, junk bonds, stocks, private equity funding startups, houses The whole point is to push people to make their money circulate in the economy Yes the market decided that bitcoin and cryptocurrency would give them ROI, after every socioeconomic class figurd out that houses and stocks are too overpriced to make sense Why not crypto? Okay now that went further than demand would tolerate And as risk off mentality comes back, and as other assets lower on the yield & risk curve come back into better lower pricing, people will likely find them attractive again because they are safer and you’ll also get your 5% annually with no work
- RA_Fisher 8y ago
  Okay, so you mention what the Fed buys, but what does it sell? The same stuff, right? Assets. Assets become less scarce (Fed sells), prices go down. At the same time, Dollars become more scarce as the Fed sells their assets.
- joejerryronnie 8y ago
  I was with you until you mentioned crypto in the same sentence as market forces, as if the price of bitcoin or any other crypto currency is due to any factor other than rampant speculation (or blatant price manipulation). At this point, I look at die-hard crypto converts the same as evangelical Christians. Not that either are bad, they just believe in made up things.

space_fountain 8y ago

I don't understand how that would work. Are you saying the fed printing money has meant that things like Bitcoint have gone done in value? Shouldn't it be the opposite since there's more or less a fixed supply of Bitcoin? Or are you saying that Bitcoin went up because they printed money and is now falling again as people get used to the increased monetary supply? That doesn't make sense to me either as I've never heard of an effect like that before

RA_Fisher 8y ago
I'm saying this one, > Or are you saying that Bitcoin went up because they printed money and is now falling again as people get used to the increased monetary supply It's pretty amazing, but it's true. The Fed can alter the countable Dollars in existence ("money supply"). They have a gov granted monopoly on 'em.
- BoiledCabbage 8y ago
  Yah this is ridiculous - 99% of the price change in bitcoin is entirely unrelated to the money supply. At most 1% and almost certainly significantly less is related to it. Bitcoin's price change is due to speculation plain and simple. There is a good amount of what's posted here about the financial system that is true, and a good bunch isn't. Bitcoin has gone up thousands of percent in a few years, gold has barely moved. Trying to claim Bitcoin's movement is due to money supply reasons makes zero space.
  - conanbatt 8y ago
    But stocks have gone down considerably also. There are many things that cause volatility in crypto, but bear in mind stocks lost more than 2 trillion dollars in october. Several times the entire "market cap" of BTC.

gammateam 8y ago

Almooooooost The fed printing more dollars is done in a way designed to push people into riskier products. The literal point is so that people put their money into the economy instead of parking it in a savings account. So even though your favorite personal finance guru is having you celebrate 1.75% in an Allied Savings account in exchange for referral commissions, the point is for that to be an unattractive use of your money. Basically the fed buys things in exchange for dollars that didnt previously exist. Asset goes on the Fed’s balance sheet, the dollars are in the prior owners pockets. The fed predominantly buys US treasuries, from both the secondary market and directly from the US Treasury. When you buy these you are picking them up at a higher price than the last person, and this lowers the return you can get from the treasuries. The US government treasury bonds being the safest assets by guarantee of getting your money back. When you cant tolerate that yield anymore, you buy higher yielding assets that are less safe. The fed bought the whole yield curve, pushing people to buy more municipal bonds, corporate bonds, junk bonds, stocks, private equity funding startups, houses The whole point is to push people to make their money circulate in the economy Yes the market decided that bitcoin and cryptocurrency would give them ROI, after every socioeconomic class figurd out that houses and stocks are too overpriced to make sense Why not crypto? Okay now that went further than demand would tolerate And as risk off mentality comes back, and as other assets lower on the yield & risk curve come back into better lower pricing, people will likely find them attractive again because they are safer and you’ll also get your 5% annually with no work

RA_Fisher 8y ago
Okay, so you mention what the Fed buys, but what does it sell? The same stuff, right? Assets. Assets become less scarce (Fed sells), prices go down. At the same time, Dollars become more scarce as the Fed sells their assets.
joejerryronnie 8y ago
I was with you until you mentioned crypto in the same sentence as market forces, as if the price of bitcoin or any other crypto currency is due to any factor other than rampant speculation (or blatant price manipulation). At this point, I look at die-hard crypto converts the same as evangelical Christians. Not that either are bad, they just believe in made up things.