The $3 trillion+ of money printing behind all this? As you say, completely lost in the wind. But for the record here it is:
https://fred.stlouisfed.org/series/M2
You can go back 100 years in US monetary history and not see its like.
You never really own real estate (almost never the land since it remains the property of the government so it's a lease at best, you own buildings and that's it) - and ownership of real estate means being taxed on it forever for the privilege of having it (with increased levels of taxes over time, of course) which is not really compatible with the concept of 'property' - when you buy an object you don't keep paying for it forever.
And don't even get me started on the fact that most countries will steal that property back at death with outrageous taxation levels. That's some kind of a property all right.
Not paying taxes forever on it would be a start to call it "ownership". As far as I know, on about everything else you buy, you never end up paying x years for possessing them.
1) May survive inflation intact. 2) Cannot really be overpriced (or underpriced) since it is not tied to anything except itself.
This makes for a pretty juicy opportunity for those who don't want to invest in assets the fed has been propping up. Of course there are downsides. The lack of intrinsic value means there is no real price cap at the top... or the bottom. Hence volatility. It can also simply be banned from being purchased with fiat currency.
The Fed isn’t buying most equities. The monetary transmission channel for equities is exactly the same as Bitcoin’s.
Can you explain what you mean by this? From my understanding the fed has been buying corporate bonds and ETFs directly. I shouldn't have said the Fed is buying 'anything else available on equity markets'.
The Fed has been buying bond ETFs as a way to buy bonds. (Bonds are illiquid, and a whale like the Fed buying them individually can create artefacts.)
When the Fed buys it puts the asset on its balance sheet and gives the seller money. That money can then be spent or re-invested. Spoiler: it's been getting re-invested. That is the transmission channel from the Fed's buying to other asset prices, e.g. stocks and non-target bonds and Bitcoin and beanie babies.
It's also a good time to understand "The Cantillion Effect"
> Namely, when you print money, it causes more pounds to chase fewer goods, pushing up the average cost resulting in inflation. His theory has been dubbed ‘The Cantillion effect’, and is a lesson to us all on the effects of inflation ‘financing the financiers’.
https://www.adamsmith.org/blog/the-cantillion-effect
https://fee.org/articles/the-cantillon-effect-because-of-inf...
Also there's a reason besides the technology's deflationary effect - it's the wealth inequality. If the printed money doesn't end up in the hands of the majority of people (i keep hearing real wages are stagnant), then there won't be inflation in the common goods that make the large chunk of CPI.
https://www.lynalden.com/money-printing/
Basically, after 2011 it was mostly for recapitalizing banks when in 2020 it's to support government budget deficit
In all likelihood, if you own none of these you probably don't have much wealth in the first place.
(No offense to anybody, I fall in this category. Aside from my down payment savings fund, I have no wealth to speak of)
1. The exchange rate between USD and other currencies fluctuates about as much as USD/BTC. 2. The exchange rate between BTC and other currencies is relatively stable, or at least uncorrelated to the USD/BTC rate.
But in fact you see neither of these. So either (1) all developed-market currencies are seeing massive fluctuations that are all somehow perfectly correlated with each other, or (2) BTC is the one that's fluctuating, not USD.
Yes, I know, run your own wallet, don't leave your bitcoins on the exchange... Except again, with stocks, you don't have to worry about that. I was personally hoping that a bitcoin exchange would have better security and backups than my home PC. As far as I'm concerned, storing bitcoins on your machine, with no insurance, is not much safer than storing gold bullion in your closet.
I'm just happy what I was wise enough not to put more money in bitcoin than I could afford to lose.
Also, you don't need to store them on your PC. There are also paper wallets, hardware wallets, or you could put your wallet files on a flash drive.
> I'm just happy what I was wise enough not to put more money in bitcoin than I could afford to lose.
That should be the default for ~any investment.
I wish I could withdraw my stocks easily, and it takes a very long time to transfer stocks between accounts or even exchanges. Thats a bug, to me.
I think these days robinhood is similar.
Asking for a friend.
This assumes that you can pay for something in Bitcoin directly (which was a common thing a few years back)
No, Bitcoin has economic activity from transactions on the Blockchain (peer-peer) and mining activity (system-miner). This activity cannot often by disrupted by another currency minting a lot of other currency.
(My assumption when you said "inflation" was a drop in purchasing power of a given asset, not a rise.)
I was referring to the inflation of the US dollar. That's why property, stock, bitcoin, etc. went up.
Is this because BTC price has risen sharply recently?
You don’t have to be genius to understand what is going on: USA printed trillions and gave most of it to already rich people. What are they supposed to do with that money? Only option is buying more real estate, buying stock of their companies, or investing in BTC.
Keep in mind that these trillions hasn’t flow into these assets yet but it will keep flowing and you will see these asset prices increasing.
In essence, if you don’t own any real estate, company stock or BTC then you will essentially own nothing because thieves already sucked all the fiat to its own end.