el_senor_duerpo

5 ms·

1. 1.▲
   by el_senor_duerpo 13y ago

   I'm always peeved by this reference to Keynes. This is a topic that is universally recognized by almost all economists, with the exception of a few Austrians. In fact, the main proponent of this concept was a conservative economist from the
2. 2.▲
   by el_senor_duerpo 13y ago

   I'm pretty sure I explained the value of use of bitcoins as a medium of exchange in footnote 2. The convenience and ability to facilitate transactions on the black/grey market might cause bitcoins to trade at a slight premium. On the other
3. 3.▲
   by el_senor_duerpo 13y ago

   Ha, um no... That would be nice.
4. 4.▲
   by el_senor_duerpo 13y ago

   First of all, if our actual markets started to experience this kind of volatility, circuit breakers would kick in. Second, even if they didn't the Fed could easily respond in real time. It's not as if the Fed actually, literally "prints mon
5. 5.▲
   by el_senor_duerpo 13y ago

   No, production is not exclusive to manufacturing. It means valued-added. For example, if you bought a dvd from amazon using bitcoin (I have no idea if this is possible), then very little of what you paid would count in bitcoin GDP. All of t
6. 6.▲
   by el_senor_duerpo 13y ago

   Exactly, that's a huge mistake. Shifts in demand cause shifts in supply? That's not obvious at all. The whole point is that supply and demand have different determinants, but they mutually determine quantities and prices.
7. 7.▲
   by el_senor_duerpo 13y ago

   Sure, lots of the stock market is arbitrage. While bubbles form in different markets, they are all eventually followed by a correction. The problem with bitcoin is that there is no fundamental asset underlying the currency. So when there's
8. 8.▲
   by el_senor_duerpo 13y ago

   I am an economist, and I have no idea what that means. Sounds to me like confusion over two things: (i) the difference between "supply and demand" and the "quantity supplied" or "quantity demanded" and (ii) equilibrium. The circular logic i
9. 9.▲
   by el_senor_duerpo 13y ago

   Two quick remarks. First, there already are many virtual/digital currencies, some of which simply peg their currencies to the dollar. But nobody really cares. Why? Well, what's the point? It's just a slightly less convenient form of a dolla
10. 10.▲
    by el_senor_duerpo 13y ago

    Here's the problem. You're talking about traders, but where is the capital? You can't have a financial market purely based on currency speculation. If we're going to talk about bitcoins as though it were an asset (store of value), rather th
11. 11.▲
    by el_senor_duerpo 13y ago

    Well, here's Mt. Gox today: http://bitcoinity.org/markets/mtgox/USD And here's what happened on another exchange while Mt. Gox was down: http://bitcoinity.org/markets/btce/USD
12. 12.▲
    by el_senor_duerpo 13y ago

    This is exactly right. The problem is in some respects worse than stated. After the last bubble, it appears as though speculators did leave. However, every time the demand increases sharply for bitcoins, they return. After all, who could re
13. 13.▲
    by el_senor_duerpo 13y ago

    I think it does describe what happens in the long term. Basically, if the thing can never get off the ground in the short term, then it will never get off the ground in the long term. Every surge in popularity has the high likelihood of set
14. 14.▲
    by el_senor_duerpo 13y ago

    Would you prefer I write in in LaTex and using fancy graphs from Matlab, R, or Matplotlib? Or are you just being mean?
15. 15.▲
    by el_senor_duerpo 13y ago

    Hi there. Actually, I did cover value of Bitcoin in use as a medium of exchange in footnote 2. Because there is no production in the bitcoin economy, or very little to be entirely accurate, the real exchange rate should basically be one. Wh