cryptocurrencies

Some people will need to exit. At some point they will need to cash in their investments. It's all about financial planning, and while I don't disagree that crypto (read Bitcoin) has its place, I disagree that you would really ever want to put all your eggs in that one basket, as your comment suggested, simply due to volatility and future needs. The earlier you start, and the longer you can wait before needing it, then perhaps. But it's certainly not for everyone.

Sure. But the market as a whole needs to sufficiently understand it for the purposes they wish to use it. Else they would be remiss in utilising it, or advising its use. That's why it's currently used as a highly volatile speculation, albeit one that has shown massive growth since inception. Because that's how the majority of people still understand it. That is changing, though.

The problem with this argument is that it is basing future performance on historic, and while the growth from inception to now has been stellar, there may come a point where it enters a more mature stage, where performance is not so good, even over longer periods. As to when and even whether it will ever enter a more mature phase can be debated as well. But I take your point.

Sure, and much of that speaks to having a balanced portfolio sufficient that you can ride out the volatility in any one asset class by having funds available in others. And for that you need to know, or plan for, when you might want/need to draw down, or even perhaps exit.

As you know, we don't really disagree on this matter generally, but the idea of investing exclusively in it is something I'm not in agreement with. It may work for some, depending what stage of their life they're at, and what they're willing to risk, but I don't see it as a generally acceptable principle. Maybe that's my risk-appetite speaking, based on my current situation, and maybe I'll miss out on huge growth by not investing all of my money in it now. But then that does speak to my point about it not being for everyone.

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Disclaimer: I am not Seattle. I'm also not an IFA. I'm merely speaking about what I consider to be reasonable common sense given my uneducated understanding of such matters.

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I'm not saying that everyone should put all of their assets in Bitcoin. I'm just saying that it's not the craziest concept.

Of course the past is no guarantee of the future yet it's generally the best indicator especially when you consider how Bitcoin works. It will mature some day, for sure. So the outsized gains will come down. It will still beat the S&P 500, IMO, because that's mainly just a stand in for real inflation/debasement of the currency and since Bitcoin isn't being messed with (it can't be messed with) it will always be better than that.

I do think that most anyone's long term portfolio would be improved over a 10 year period with a 10% allocation in Bitcoin because it has a good risk/reward characteristic. In other words, $1 in Bitcoin can only go down to zero and it can go a lot higher (and does) so over time it only helps a portfolio.

 

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I assume it's the UK version of an IRA or a 401k in the US. There must be something similar in Australia (retirement plan)?

I also assume the bit about Seattle was humor?

Regarding your first comment...this is what a financial discussion looks like about a new asset class. You'll notice it's not a never ending thread of insults. It's a discussion

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Google is surely thy friend?

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. IFA = Independent Financial Advisor.
They may be known as CFPs in the US (Certified Financial Planner)?

 

You have no interest in personal finance? It's not just Bitcoin that isn't discussed here. I don't see any personal finance discussed here. Does no one care about the economy and how it impacts your personal finances?

The dollar is being debased at a rapid rate. Not everyone lives in the US but most everyone is impacted by the US economy. The problems aren't largely political. Fix the money and you fix the world. Political bickering is just a distracting sideshow.

 

The current economy is certainly interesting to watch. No, scratch that. It's amusing to watch. I expect it shouldn't be too much longer before the global economy as we know it today will no longer exist, which seems pretty obvious. I don't have any concerns about the economy and the direction it is heading in and how it currently impacts or will impact my personal finances.

 

It rarely is... right up to the point that it proves to be.

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It wouldn't be crazy to put all of your money into gold, it that's what you wanted to do.

 

For me to assume something, it would have to mean that you didn't actually say it. Otherwise, no assumption would be required.

Did I say that I had a problem with it. Why do you assume that I have a problem with it?

It's a fact that the dollar is being rapidly debased. The money supply was doubled during Covid (for example). In 1920, $20 bought an ounce of gold, today an ounce of gold cost more than $2,000. The ounce of gold didn't change, the dollar is just worth 100 times less.

In my opinion, sound money would fix most problems in the world. Do you have some kind of problem with that?

 

Sure, I understand that you frequently like to unnecessarily pick a "fight". That's an assumption but all of the evidence between you and well, most everyone else, points in that direction.

There is "goods inflation" and then there is "monetary inflation". You could produce so called "Veblen Goods" (luxury goods) and you might be able to just arbitrarily raise the price because supply is limited and for some goods that isn't a problem (Rolls Royce).

However debasing the purchasing power of the dollar is a monetary problem caused by government debt and poor fiscal policies as well. Today the debt is mounting just because the government spends much more than it takes in and just monetizes the debt by "creating" more to pay the interest on the debt.

You can't do that with Bitcoin. That was the idea behind the gold standard but the government could decide to go off the gold standard, and did. They don't have that ability with Bitcoin.

There were periods in the 1800's when prices were fairly stable, government was smaller, the currency was backed by gold and you didn't have the Fed trying to micro-manage the economy (and generally making things worse).

I'm never wrong but I'm humble enough to realize that I could be wrong one day. Strong money means not debasing the currency. When you can't just print money you tend to not have as many wars and the wars are shorter, because if you have to raise taxes for a war, people aren't going to go for that easily or for long.

If you can't debase the currency it makes for a more equal economic outcome. There will still be those with more and those with less but it will result in a more equal and level playing field.

Now, 2% inflation, for example, just means that we are "OK" with the government only stealing 2% from us instead of 6%. It's still taking from us. Those with the means can partially negate this at least by investing in some assets that will keep up with that inflation.

Those who have less, may not have any left to invest with so they see prices go up, have to pay those higher prices but don't have assets that are going up to help offset that.

Stable prices are particularly good for the lower economic segments of society. Just as micromanaging an economy doesn't work very efficiency in the production of goods decision making (see Soviet planned economies). We know that the free market pricing mechanism results in the most efficient way to allocate scarce resources.

It's the same with the Fed trying to micro-manage the economy. If the economy goes down instead of just letting the free market deal with it and automatically correct, they generally try to stimulate the economy but they do so too late, when the economy is already coming back up.

Therefore they cause/add to inflation. Then they raise rates to deal with inflation but they are late to the game and cause the next recession.

The solution is to let the efficient markets work, don't "print" money in an attempt to "fix" the problem that you just made worse. As I said, strong money, like Bitcoin, is the solution.

You, I'm guessing, just took my "strong money" comment to mean that money is more important than people or some such view. That's why you are wrong and I am right. As you say, sometimes there is objectively just one correct view on a subject.

In this case, I'm right and you are "wrong" simply through lack of education of the subject matter on your part. We can all learn though, wouldn't you agree? Or perhaps I should say, "do you understand"?

 

How can I "still" be wrong if I've never been wrong? Do you understand?

 

When you consistently don't get humor, get along with no one, take everything literally that's a problem.

 

Yes I thought your post 292 was a very accurate pastiche of James's debating style.

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