3 ms·

Anyone have recommendations for books about financial bubbles? I have a few bitcoin and I believe it is a legitimate currency, but I'm feeling uneasy with the

by Luc 13y ago

Anyone have recommendations for books about financial bubbles? I have a few bitcoin and I believe it is a legitimate currency, but I'm feeling uneasy with the 'this time it's different' reasoning which is supposed to justify its current runup. Amazon reviews aren't being particularly helpful; there isn't a book that stands out in my searches so far. I'll probably order 'Manias, Panics and Crashes' by Kindleberger & Aliber ( http://www.amazon.com/Manias-Panics-Crashes-History-Financial-ebook/dp/B007OSIOWM/ http://www.amazon.com/Manias-Panics-Crashes-History-Financia... ) EDIT: Thank you all for your excellent suggestions!

jafaku 13y ago
http://unqualified-reservations.blogspot.com/2013/04/bitcoin-is-money-bitcoin-is-bubble.html http://unqualified-reservations.blogspot.com/2013/04/bitcoin... https://www.youtube.com/watch?v=qHUPPYzzZrI https://www.youtube.com/watch?v=qHUPPYzzZrI
- Luc 13y ago
  Thanks. I didn't watch the video yet, but I've read the article before. What I'm wondering is whether the bubble is stable, or inflating above the eventual equilibrium (and more importantly, deflating by the time I want to convert to another currency). I have a feeling the current lawlessness has a lot to do with the value attached to bitcoin, and that probably won't last.
  - jafaku 13y ago
    It's not really a bubble (other than in the sense given to it in the article) and it's definitely not above the eventual equilibrium. The video explains it very well.
    - Luc 13y ago
      I'll watch the video, but I'd rather make up my own mind and look at source material, scholarly research and history as much as possible.
jyu 13y ago
The Devil Take the Hindmost http://www.amazon.com/Devil-Take-Hindmost-Financial-Speculation/dp/0452281806 http://www.amazon.com/Devil-Take-Hindmost-Financial-Speculat...
pjc50 13y ago
"Extraordinary Popular Delusions and the Madness of Crowds" (Mackay, 1841) http://www.gutenberg.org/browse/authors/m#a516 http://www.gutenberg.org/browse/authors/m#a516 Good chapters on tulip mania, the original South Sea bubble, Mississippi company, the introduction of paper money and hyperinflation in the French ancien regime. Bonus fun on "Influence of Politics and Religion on the Hair and Beard", duelling, and "Popular Follies of Great Cities" (which were basically memes long before the internet).
maxerickson 13y ago
I remember liking 'Irrational Exuberance': http://www.econ.yale.edu/~shiller/books.htm http://www.econ.yale.edu/~shiller/books.htm
grey-area 13y ago
All the Devils are here is interesting on the US housing crisis which sparked the last bust. Fiat Money Inflation in France is an interesting short outline of a currency which goes horribly wrong due to being debased (opposite problem to bitcoin): White describes a disillusioned public who, under the influence of increasingly self-serving public officials and orators, accepted more and more assignat printings even though the perils of such printings had been documented throughout history... Bitcoin is interesting because it has this hard limit, which means in theory it will reach a point where no more currency is made, and thus it is relatively stable in value. Until them though the value of it will ramp up in relation to real goods and other currencies (deflation). It's a really interesting experiment, though it does heavily reward the initial investors and skews it towards being an investment (and a bubbly one at that) rather than a currency, at least till the hard limit is reached. I do find the question of whether the public could be persuaded to just up the limit and print more bitcoin interesting - I suspect if we had bitcoin as a world or national currency, just like assignats or other currencies, people could be persuaded to print more or otherwise bend the rules for the good of the nation/world/economy.

by Luc 13y ago

jafaku 13y ago

http://unqualified-reservations.blogspot.com/2013/04/bitcoin-is-money-bitcoin-is-bubble.html http://unqualified-reservations.blogspot.com/2013/04/bitcoin... https://www.youtube.com/watch?v=qHUPPYzzZrI https://www.youtube.com/watch?v=qHUPPYzzZrI

Luc 13y ago
Thanks. I didn't watch the video yet, but I've read the article before. What I'm wondering is whether the bubble is stable, or inflating above the eventual equilibrium (and more importantly, deflating by the time I want to convert to another currency). I have a feeling the current lawlessness has a lot to do with the value attached to bitcoin, and that probably won't last.
- jafaku 13y ago
  It's not really a bubble (other than in the sense given to it in the article) and it's definitely not above the eventual equilibrium. The video explains it very well.
  - Luc 13y ago
    I'll watch the video, but I'd rather make up my own mind and look at source material, scholarly research and history as much as possible.

jyu 13y ago

The Devil Take the Hindmost http://www.amazon.com/Devil-Take-Hindmost-Financial-Speculation/dp/0452281806 http://www.amazon.com/Devil-Take-Hindmost-Financial-Speculat...

pjc50 13y ago

"Extraordinary Popular Delusions and the Madness of Crowds" (Mackay, 1841) http://www.gutenberg.org/browse/authors/m#a516 http://www.gutenberg.org/browse/authors/m#a516 Good chapters on tulip mania, the original South Sea bubble, Mississippi company, the introduction of paper money and hyperinflation in the French ancien regime. Bonus fun on "Influence of Politics and Religion on the Hair and Beard", duelling, and "Popular Follies of Great Cities" (which were basically memes long before the internet).

maxerickson 13y ago

I remember liking 'Irrational Exuberance': http://www.econ.yale.edu/~shiller/books.htm http://www.econ.yale.edu/~shiller/books.htm

grey-area 13y ago

All the Devils are here is interesting on the US housing crisis which sparked the last bust. Fiat Money Inflation in France is an interesting short outline of a currency which goes horribly wrong due to being debased (opposite problem to bitcoin): White describes a disillusioned public who, under the influence of increasingly self-serving public officials and orators, accepted more and more assignat printings even though the perils of such printings had been documented throughout history... Bitcoin is interesting because it has this hard limit, which means in theory it will reach a point where no more currency is made, and thus it is relatively stable in value. Until them though the value of it will ramp up in relation to real goods and other currencies (deflation). It's a really interesting experiment, though it does heavily reward the initial investors and skews it towards being an investment (and a bubbly one at that) rather than a currency, at least till the hard limit is reached. I do find the question of whether the public could be persuaded to just up the limit and print more bitcoin interesting - I suspect if we had bitcoin as a world or national currency, just like assignats or other currencies, people could be persuaded to print more or otherwise bend the rules for the good of the nation/world/economy.