The man who dodged the Dogecoin
decryptmedia.com
decryptmedia.com
A huge chunk of the new money that the Fed is injecting into the system is going straight into the financial sector and some of it is going directly into cryptocurrencies.
People have started to figure out that hard work doesn't pay. To earn money, you just need to get close to the massive stream of money that the Fed is constantly dumping into the economy.
The whole financial system is an over-engineered mess; packed with technical debt and vulnerabilities. If it was a software system, it would have been rewritten decades ago.
Like all of the software that runs power plants, defense systems, medical records? You make a good point, accidentally, that no, in fact most systems that become large and complex aren't re-written.
The market cap of all stock markets is on the order of $100T. Total bond market cap is of similar scale. The total market cap of cryptocurrencies is $200B (and shrinking).
Cryptocurrencies could be 10 bigger than what they are today and they'd still be a rounding error compared to the overall financial markets.
The only thing proven by cryptocurrencies is that, at a global scale, the long tail provides enough opportunities for niches to exist.
Exactly.
How many times have you heard the argument that cryptocurrencies will never completely replace national currencies, so they should be worthless?
Or that because it's harder to buy a coffee with Bitcoin than Euros, that Bitcoin is a fraud.
It's not either-or. It isn't all or nothing.
Cryptocurrencies can co-exist with national currencies and do just fine.
I hear this all the time, as if the Fed creates money out of thin air and gives it directly to crony capitalists.
But I never hear about the actual mechanism that's used.
Since this story rarely gets specific enough to really understand what's going on, I tend to think it's a fairy tale.
Can you describe how this massive money stream works?
Do rich people check their bank balance and there are mystery billions from nowhere?
And just how massive is massive? Are we talking billions of dollars a day or what?
What central banks are doing is buying bonds and other assets from the private sector, and paying for them by creating new money. In the past they might have created new money by ordering a truckload of new $100 bills to be printed, but now they can do it simply by changing the central bank balance of whoever they are buying the bonds from.
This activity inflates the money supply. Because big government susidies, policies and overall spending tend to go to big corporations; much of that new government bond money ends up going into speculative investments like the stock markets, financial corporations and cryptocurrencies.
> via open market operations
> This activity inflates the money supply
This sounds like conspiracy theory bullshit that confuses the quantitative easing that happened after the financial collapse with what's happening today.
Citation needed.
https://www.investopedia.com/terms/o/openmarketoperations.as...
National debt over time chart (from Wikipedia): https://en.wikipedia.org/wiki/National_debt_of_the_United_St...
^ That's more than $10 trillion of new money 'borrowed' from the Fed by the government and then injected into the system in just 10 years. $1 trillion per year equates to 10% of the US GDP.
Quantitative easing is different because the Fed went beyond the regular open market operations of just buying government bonds; they also started buying other kinds of assets. After the 2008 crisis, the Fed purchased toxic assets from troubled banks; the same toxic assets which caused the financial crisis. See https://www.csmonitor.com/Business/The-Circle-Bastiat/2010/0...
It's deceptive to conflate the Fed's response to the 2008 financial crisis with normal non-crisis operations.
It's true that the Fed purchased a lot of securities in response to the crisis.
You can see their balance sheet ballooning from $0.9T to $4.5T here --> https://imgur.com/a/PGthKNj
When the Fed buys securities, they essentially create new money out of thin air. So that's $3.6T of new money.
But that program ended four years ago. Since then the Fed's balance sheet has been gradually shrinking.
Since the program ended, the Fed has sold $0.4T of those securities.
Just like the Fed creates new money when they buy securities, they destroy money when they sell securities.
So for the last four years, the Fed has been destroying money, not creating it.
This has nothing to do with the national debt, or the government selling bonds to finance the budget deficit.
With the exception of the Fed's crisis response (which ended four years ago), the bonds that fund the national debt are held by the general public and as foreign reserves by nations around the world -- not by the Fed creating money.
If the government can keep accumulating debt forever without limits, is it actually debt? If someone kept loaning you more money every year and they let you use some of the money from your new loan to pay back all of your old loan... and they let you keep doing this forever; is it actually a loan?
That’s called “quantitative easing” and was a temporary reaction to the global economic crisis. There were only a few rounds of that, the last of which was years ago.
A weird, philosophical skepticism towards fiat currency and an irrational belief in high rates of inflation even without any evidence for it has been a common folk belief amongst goldbugs for decades. (Side note: what's the cryptocurrency equivalent of a goldbug? A bitbug?)
The general mechanism for the FED to influence the money supply is by borrowing and lending money with commercial banks. QE is only really used as a last resort.
The fin. system is working fine. A lot of crypto is speculation, which has always existed in one form or another.
Oh wait...
I think the lesson is that jokes wear off quickly and anything money-like hooks people the same way.
Are you thinking of Billy Markus? He's in the article. He's lower-profile than Jackson Palmer but his involvement is by no means a secret: https://motherboard.vice.com/en_us/article/jp5x3d/dogecoins-... . It seems that Markus did all the actual initial software, having begun work on it before Palmer independently came up with the (rather brilliant) Dogecoin name and marketing strategy.
(The other essential piece of journalism on the history of Dogecoin seems to be https://motherboard.vice.com/en_us/article/78xqxb/the-guy-wh... )
I'm a little skeptical about Palmer's ongoing Dogecoin apology tour. Partly that's because it looks like another marketing operation to me. That's not to say that what he's saying is simply insincere. But I do get the impression that when he saw the marketing opportunity to be the founder of a far-out, headline-generating cryptocurrency he seized on that; and now that he sees the opportunity to be the remorseful crypto-skeptic, delivering what-have-I-wrought confessions to a media that's mostly soured on cryptocash and is now highly receptive to that message, he's pouncing on that opportunity too.
> When I asked about the recent Coinbase rumor, he answered, albeit hesitantly. “There’s no way of submitting all the legal documentation that Coinbase requires. It’s by no means likely that they’ll get it.”
This does seem to be accurate https://www.reddit.com/r/dogecoin/comments/9j1yuf/dogecoin_d... https://twitter.com/langer_hans/status/1051943757715820545 but the reason why is hardly something that reflects only badly on Dogecoin. Evidently the Coinbase application process is designed for VC-funded startups, while Dogecoin is closer to a community-run open source project, led by people who have day jobs in tech and aren't gambling on a big ICO bonanza.