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>> That concludes that this bubble will continue as long as interest rate remains near zero. Yeah, I think that is the generally accepted understanding of what

>> That concludes that this bubble will continue as long as interest rate remains near zero. Yeah, I think that is the generally accepted understanding of what's happening right now especially with additional stimulus / QE methods. Think you are already seeing equity escape into other asset classes in commodities and cryptocurrency, too.

slt2021 6y ago
and look at gigantic bubble that was created in crypto, because of that asset rotation - do you think crypto (which is funny money) is fairly valued as compared to real companies with real cash flows? the only right strategy is what China have been doing - they have been selling US treasuries and buying real assets left and right across Asia and Africa - securing their grip on rare earth minerals, gold/silver, commodities, emerging markets, infrastructure projects and land.
- icelancer 6y ago
  No question. I think you can make the argument Ethereum (and to a lesser extent, Polkadot) could be fairly valued due to what it represents (platform for distributed applications, I refuse to use the shorthand phrase for it or decentralized finance), but BTC is simply just gold / reserve currency in nature and always will be per the Blockstream team's desires. So there's no way BTC's valuation relative to other stores of value is correct. There are potential paradigm shifters in the cryptocurrency space as much as HN wants to shit on it, but I also agree with your larger point more than I disagree with it.
  - slt2021 6y ago
    if there is new better crypto with some guarantees of value - all BTC folks will sell at the top and jump ship. For example imagine European central bank creates its own "green" reserve crypto mined only with green energy and guarantees free circulation and acceptance in eurozone. Embrace-Extend-Extinguish framework can be applied to BTC to kill it with a better alternative, and the higher price for BTC is the stronger incentives to sell at the peak and move elsewhere to more stable place
- icelancer 6y ago
  >> the only right strategy is what China have been doing - they have been selling US treasuries and buying real assets left and right across Asia and Africa - securing their grip on rare earth minerals, gold/silver, commodities, emerging markets, infrastructure projects and land. I'd agree with this but selling US Treasuries is more of an economic weapon rather than an investment strategy on their part, IMO. They do need to raise cash to do the other stuff so it has to come from somewhere, but they aren't dumping them on the market, either; they want stable-type assets around and 30-year US Treasuries are tough to beat. Their Belt and Road Initiative is the right strategy. Politically difficult to explain since it's basically imperialism / mercantilism under a different banner, but when you don't answer to your voters and have central control of the economy and media, who cares?
  - slt2021 6y ago
    China sees what FED is doing with USD and understands that dollar slowly becomes "funny money" so they execute hedge: 1. become worls biggest bitcoin miner - funny money alternative to USD 2. if USD is overvalued then you should buy up undervalued assets in EM and gain mercantile and political benefits 3. their expanded empire will continue to print USD and they will continue to expand everywhere except USA to hedge against USD
  - ur-whale 6y ago
    >30-year US Treasuries are tough to beat. Only because most of the world hasn't caught up yet to what a dollar real's worth is.

slt2021 6y ago

and look at gigantic bubble that was created in crypto, because of that asset rotation - do you think crypto (which is funny money) is fairly valued as compared to real companies with real cash flows? the only right strategy is what China have been doing - they have been selling US treasuries and buying real assets left and right across Asia and Africa - securing their grip on rare earth minerals, gold/silver, commodities, emerging markets, infrastructure projects and land.

icelancer 6y ago
No question. I think you can make the argument Ethereum (and to a lesser extent, Polkadot) could be fairly valued due to what it represents (platform for distributed applications, I refuse to use the shorthand phrase for it or decentralized finance), but BTC is simply just gold / reserve currency in nature and always will be per the Blockstream team's desires. So there's no way BTC's valuation relative to other stores of value is correct. There are potential paradigm shifters in the cryptocurrency space as much as HN wants to shit on it, but I also agree with your larger point more than I disagree with it.
- slt2021 6y ago
  if there is new better crypto with some guarantees of value - all BTC folks will sell at the top and jump ship. For example imagine European central bank creates its own "green" reserve crypto mined only with green energy and guarantees free circulation and acceptance in eurozone. Embrace-Extend-Extinguish framework can be applied to BTC to kill it with a better alternative, and the higher price for BTC is the stronger incentives to sell at the peak and move elsewhere to more stable place
icelancer 6y ago
>> the only right strategy is what China have been doing - they have been selling US treasuries and buying real assets left and right across Asia and Africa - securing their grip on rare earth minerals, gold/silver, commodities, emerging markets, infrastructure projects and land. I'd agree with this but selling US Treasuries is more of an economic weapon rather than an investment strategy on their part, IMO. They do need to raise cash to do the other stuff so it has to come from somewhere, but they aren't dumping them on the market, either; they want stable-type assets around and 30-year US Treasuries are tough to beat. Their Belt and Road Initiative is the right strategy. Politically difficult to explain since it's basically imperialism / mercantilism under a different banner, but when you don't answer to your voters and have central control of the economy and media, who cares?
- slt2021 6y ago
  China sees what FED is doing with USD and understands that dollar slowly becomes "funny money" so they execute hedge: 1. become worls biggest bitcoin miner - funny money alternative to USD 2. if USD is overvalued then you should buy up undervalued assets in EM and gain mercantile and political benefits 3. their expanded empire will continue to print USD and they will continue to expand everywhere except USA to hedge against USD
- ur-whale 6y ago
  >30-year US Treasuries are tough to beat. Only because most of the world hasn't caught up yet to what a dollar real's worth is.