Show HN: See the Price of Stocks in BTC
stonksinbtc.xyz
stonksinbtc.xyz
~This is~ using a fixed USD/BTC conversion though, not translating each data point with BTC value at the time.
So ~this is~ like viewing historical charts of US stocks in GBP with today's FX; nobody does that, because it doesn't really tell you anything.
More precisely, looking at a single point, 12/14/20 (earliest point in the 1m chart):
- Site says TSLA = 0.03324 BTC;
- TSLA in USD, according to Yahoo Finance: opening $619.00, high $642.75, low $610.20, close $639.83;
- BTC in USD, according to Google: $19272.30;
- $19272.30 * 0.3324 = $640.61, so roughly checks out.
Edit: Of course it's way more obvious if you look at other stocks... People would have been jumping off buildings left and right if the big tech stocks were taking plunges like that.
Could definitely be clearer though on landing IMO.
This website, though a bit barren, nicely illustrates the point.
Another related one is: https://www.fiatmarketcap.com/
It's just shocking to me how people here don't understand inflation. There's such a disconnect between economics education in school and where people end up in reality.
Remember folks, supply is only half the picture. Velocity of money matters. They both matter. [1] Supply went up, velocity went down, net 2% inflation. The fed nailed their target. Once velocity goes up printing will slow, or reverse, to maintain the - wait for it - 2% target.
2%. Not 25%. I mean are you telling me you paid $4 for a loaf of bread last year and now it's 5 - and nobody noticed?
Compare the performance of both BTC and other speculative assets, and stocks, in USD. That's the only one that matters, because taxes.
> Another related one is: https://www.fiatmarketcap.com/
Holy moly is this one off base. This is not how you compare currencies. China has 4X as many people as America does. There's local and regional differences in the cost of goods in the area.
You can compare currencies in a lot of reasonable ways but this sure ain't one of them. A good way is something like the way DXY (the Dollar Index) is calculated - it's based on the relative strength of the dollar compared to a basket of other foreign currencies. But this in and of itself is also not a meaningful number in the sense that the relative strength of a currency is a knob - turn it one way, and you favor exports over imports, and the other way, imports over exports.
You can also convert to a neutral currency like USD then compare the PPP factor - which shows you how far a neutral dollar goes in one country vs another, and this varies based on market conditions, regional conditions and local conditions. In some island nations, the dollar won't go as far as goods are expensive. In Canada, it goes much longer. [2]
Currencies. Do. Not. Have. Market. Caps. Equities have market caps. You measure market caps of companies in terms of currencies. Why? Because if you have a $1B market cap in equities and you start selling, you'll be left with way less than $1B in hand - selling increases supply. If you sell $1B in currency you get exactly $1B dollars.
Comparing money supplies between different countries based on number of units issued, are you serious? It's an utterly and totally meaningless number. It means nothing.
You've given me a headache. It's not often you see stuff just so plain wrong on HN.
[1] https://www.investopedia.com/terms/v/velocity.asp
[2] https://www.indexmundi.com/facts/indicators/PA.NUS.PPPC.RF/r...
Bitcoin is very much a religion at this stage. The network is constrained to a maximum of 350k(!!) txs per day, with the layer 2 solutions failing to gather any sort of traction whatsoever. Yet the bitcoin zealots herald it as the future of finance. How in gods name is 350k txs per day going to handle global finance.
If you get an unlimited amount of something without having to work for it, of course it becomes worthless to you.
What's happening in the economy today is like what would happen if we played a game of monopoly and one player ended up with all the money and the bank started loaning people new money to keep everyone playing... So the richest player would just keep getting more money because the dynamics of the game cannot change... In the meantime, fairness is thrown out the window - Money loses all correlation with value creation. Then there is a point when one of the players grabs the board and flips it over.
Seriously this is why the money supply is actively managed. When people aren't spending, more is created. When people spend a lot, it gets removed from circulation.
> We have a tiny number of massive pockets. The entire financial order ends up depending on the reliability of a handful of high net worth individuals to play along with the current scheme.
High net worth individuals by the way? They're absolutely not sitting on dollars, they own assets. Real estate, stocks, bonds, and some nutters, crypto. That means inflation is irrelevant to them, and all that matters is the performance of their investments relative to the benchmark rates.
> It's no surprise then that governments ends up wanting to control and limit how these high net worth individuals spend or invest their money.
Not really, no. Fiscal and social policy control the distribution of wealth. Progressive taxation and redistribution reduces inequality. This applies equally no matter what we're using as currency. If we switched to BTC, to sea shells, to zombie killing ammunition, fiscal and social policy would apply just as it does now.
Monetary policy operates on a lower level, it controls only the supply.
There is a point when people have gotten wealthy to the point that they have bought everything that they could possibly want but the money keeps coming anyway.
Wealthy people will question whether or not they're actually 'earning' their passive income. The most objective ones will realize that passive income can never be risk-free; it it appears that way, then it means that the risk is systemic. For these people, it actually makes a lot of sense to hedge against systemic risk.
Cash is more liquid than assets and since in the short term inflation is a mild penalty and there is negligible return for risk free assets any more (nor are they as risk free as before), they keep large proportions in cash for the short term while waiting for assets that present a good return.
It is entirely rational to hold some proportion of wealth cash for the short term.
I believe what people are implying when they talk against money supply increase is redistribution of wealth using money supply increase.
> If we switched to BTC, to sea shells, to zombie killing ammunition, fiscal and social policy would apply just as it does now.
It would not be equivalent since with BTC you can't just take away value of your share without making you explicitly pay, it removes invisible tax.
How exactly does this work? To whom is money being redistributed? It's punishment for holding dollars instead of investing them.
> It would not be equivalent since with BTC you can't just take away value of your share without making you explicitly pay, it removes invisible tax.
You're not supposed to save currency, you're supposed to use currency to buy assets, even if those assets are magic beans that live in your computer. That's why we have inflation, because money only has value when it moves.
If you want to print money you have to inject it somewhere, and that place where you inject new money benefits from it - they decide how to spend this new money and this stream of wealth skews economy.
This is high level understanding ofc, I am sure there are a lot of technicalities on how this can be done.
Also, I don't think you should not keep currency but instead you should "invest" at least you could do this when you had gold.
This doesn't make sense. Just buy gold, today. What's stopping you? Backing a currency with anything forces everyone into that asset class. Backing it with nothing and keeping it tightly controlled allows you to back your net worth with whatever you want. Fire up RobinHood and buy you some GLD.
Taking a look at M2 going back to the early 80s, I see no indication of money being removed from circulation. In fact, it appears to be ever skyrocketing higher.
Generally when large funds like Berkshire hold cash it's because they're expecting a downturn and want to snap up assets on the cheap.
What are your thoughts about the rapid asset inflation (stocks/housing) vs the stable consumer goods side of things? Surely they can't stay disconnected forever?
Housing on an inflation-adjusted dollars per square foot basis is exactly the same now as it was in the 1970s according to the BLS, on average, across the US. In fact, after the recent drops, it's probably more affordable per square foot. [1] There are some caveats, though!
Housing is at the mercy of local ordinances. In major metros like SF and NY the city councils refuse to allow new construction, but the economies around them have been so strong that demand outstripped supply and prices skyrocketed.
In suburban areas, setback rules, zoning rules, building codes and also tastes, have left houses twice as big on average now as they were in the 1970s [1]. This is a policy issue though, and it is truly problematic, although COVID seems to have been quite the equalizing force in a lot of ways.
[edit] One way of solving it would be national zoning rules, and permitting the construction of housing in any zone (much like Japan does [2]). The other challenge is Americans need to come to terms with the fact that housing cannot be both affordable and an investment. Investments by definition are designed to become less affordable over time.
As for the stock price explosion, I'll try and dig up an article I saw recently that attributed it to, roughly, poor folks are still poor (and so never really invested), but the wealthy and middle class have actually benefitted disproportionately from the COVID situation, PPP, stimulus, etc, and there's a lot more disposable income right now in the market. I'll mark that as a [citation needed] on myself as I try and dig it up.
[1] https://fee.org/articles/new-homes-today-have-twice-the-squa...
[2] http://urbankchoze.blogspot.com/2014/04/japanese-zoning.html
Sure there might be some disagreements around the nature of the inflation measure (e.g. it doesn't include house prices) but that's another discussion.
Edit: It's worth noting that money supply is believed to be mostly endogenous these days. The monetary system we currently have is a credit based system in that all money is someone's liability and the supply of this money is mostly based upon the demand for credit. The system is quite complicated. The FED uses short term interest rates to influence the demand for credit. Low rates rates make credit creation more likely (stimulates demand). Whereas high rates decrease the amount of credit creation (curtails demand). Furthermore, if people pay back loans then we experience deflation. If there is not enough credit then we experience deflation. If there is too much credit, we get inflation. Here I'm assuming that the credit is spent. I.e. velocity increases. Indeed, people don't borrow and leave the money in their accounts. Instead, they use it to make purchases! General inflation or inflation in a particular market becomes particularly acute if credit is not allocated appropriately. For example during the housing bubble which popped in 2008. The issue here was underwriting standards were not fit for purpose.
But that just means the money is sitting in an account somewhere. If your account doesn't have 25% more money in it you're losing out and someone else is gaining an advantage without working.
At any given instant, that new money has to be somewhere controlled by someone. People would have to be a bit naive to try and hold their wealth in dollars with that sort of unfairness built in. And also even 2% inflation makes it a stupid strategy.
Only partially, because the money supply is actively managed. If it starts coming out an being used, the fed will step in and reduce the money supply to match their commitment targets. They both giveth and taketh away, to meet their 2% target. You are right to an extent that the closer you are to the money supply, the more you can benefit or lose - this is the cantillion effect people are on about these days in crypto land - but this effect is very small in aggregate.
> At any given instant, that new money has to be somewhere controlled by someone. People would have to be a bit naive to try and hold their wealth in dollars with that sort of unfairness built in. And also even 2% inflation makes it a stupid strategy.
Which is why you're not supposed to hold dollars. You're supposed to spend them on investments. This, by the way, is the whole point of inflation - money only has any value at all when its moving.
The monetary base grew by 25% and velocity of money is approaching 1.0. That isn't small, someone has an insane amount of money staring them in the face and they've done nothing to justify it.
This rather undermines the argument that the 2% inflation target is really there for the benefit of the bystanders. It looks like it is mainly for the benefit of the people enjoying the Cantillion effect.
Unless I suppose all the poor and middle-class people in the US are suddenly wealthy, I suppose. I havn't been keeping up with the stats in the last 6 months.
Likely many people are saving a little bit of extra money because the whole COVID situation is pretty nuts and it's leaving people scared. This has reduced velocity, and printing made up for it. More than likely it's everyone who saved a little extra for the rainy day fund, and everyone got a little extra stimulus.
JPow didn't just walk up to some guy on the street and hand him a check for 25% of the entire US M2 money supply, that's not how this works, and further, concentrated wealth positions like that decrease velocity! That's the effect the Fed is trying to counter! To increase velocity the money has to be disbursed.
There's a case to be made in [1] (Sumner) that the Cantillon effect, while it exists, is irrelevant as it doesn't really matter who gets the money first.
[1] https://mises.org/library/note-some-recent-misinterpretation...
It is the pigeonhole principle. The M2 has gone up by ~25% [0] and population has gone up by about 0.6%. At a given moment someone must control around 25% more dollars, and probably more assuming a quite dis-equal distribution of the new money. Unless the US is bailing out foreigners, I suppose. Doesn't seem like a winning strategy if they want to drive up monetary velocity though.
Probably shareholders are the winners here, if I were going to speculate. It is a bit silly and it doesn't help anyone.
It's not the case that some person has more money because M1 has gone up! Instead, what happens is that as the banks are more willing to lend, people will be able to get credit easier, so more people borrow and that's how money that you and I can use (I assume hardly anyone uses notes and coins anymore) enters the economy. If the banks don't lend because there is no demand for credit, then the increase in M1 has little to no impact on the aggregate money supply. You can see that M1 increased by 25% over the year. Bank deposits only increased by 15% over the year, implying that the increase in M1 didn't have as much as an effect on bank credit as you might imagine.
I'm not sure where this 'no evidence' accusation comes from. It isn't in contention that the monetary supply went up 25%, the population isn't growing at anything near that sort of rate. There aren't many ways to make that work out, mathematically, unless someone (realistically, quite a few someone) have 25% more dollars in an account.
If you're talking about the "M1 can _only_ be held..." comment, rojeee is wrong. M1 includes physical currency [0], so entities other than commercial banks can hold it. If I substitute M2 for M1 the point is still indecipherable. Eg - "the increase in M1 has little to no impact on the aggregate money supply" - as far as I'm concerned the M2 is the monetary supply so that makes no sense.
> The burden of proof is on you.
M2 went up 25%, Pidgeonhole principle: someone's account is up 25%. Inflation went up 2%: it isn't ordinary consumers. QED.
[0] https://fredblog.stlouisfed.org/2021/01/whats-behind-the-rec...
Remember that when the FED conducts open market operations to buy securities, what they are doing is swapping central bank reserves for securities. Only banks can participate in this process because only banks can hold central bank reserves. That money doesn't necessarily filter down to us and if it does, it takes a while. I guess that's where the Cantillion effect comes in, apparently. But banks don't just take that money and buy stocks... That's not how it works. The reserves sit on their balance sheet and they are used to settle transactions between banks. The reserves are also make up part of the bank's eligible capital. It is expected that banks awash in central bank reserves are better placed to lend/create credit because of the more favourable financial position and in this chart [0] you can see that M2 money supply (central bank reserves + bank deposits) has increased since the FED start conducting open market operations, which is the desired effect. The M2 money supply has increased because more people like you and me (and companies) are borrowing money to finance purchases.
edit: Amusingly, just realised that I made a logic error in the last sentence above. M2 includes M1 so presumably much of the increase in that chart is an increase in M1. This link [1] better shows what is going on. You can see the increase in M1 but there is also an increase in M2 throughout 2020. You can calculate this yourself by subtracting the number in the M1 column from the number in the M2 column and observe a modest increase - about 15% from Jan 2020 to December 2020. Presumably this is because of the sustained low short term rates and the increase in the M1 money supply via quantitative easing.
[0] https://fred.stlouisfed.org/series/M2
[1] https://www.federalreserve.gov/releases/h6/current/default.h...
1) Monetary inflation: growth of broad money supply; 2) Asset price inflation: stocks, bonds, real estate; 3) Consumer price inflation: everyday goods
Sure, while consumer price inflation is hovering around 2%, asset price inflation is running closer to 10-20%.
I account for inflation as it relates to the basket of goods and services most important in my life. Some of those items are everyday goods inflating at 2% annually. But the biggest things that matter to me: higher education, a home/real estate, medical care ... these are all inflating at a much, much higher pace. In this way, "2% annual inflation" completely misses the mark.
Asset price inflation is not inflation, its ROI, and until there's a study, we won't really know why assets are going up. It may be due to increased liquidity, it might be stimulus checks, it might be all sorts of stuff. You're speculating, and if you're going to make a claim like that we're gonna need a citation.
I'm not saying these things don't matter, I'm saying [citation needed] that it's got anything to do with the Fed.
If I'm the only doctor in town and I charge $1000 one day for a surgery and $2000 the next because I feel like it, that's not inflation.
> I account for inflation as it relates to the basket of goods and services most important in my life.
Feel free but the rest of us are talking about a specific meaning of inflation which is not the same as yours, and so should be addressed in a different thread to avoid confusing people.
1. Yes, medicine is getting more expensive.
2. It's going up faster than inflation.
3. This is not inflation.
For the millions of young adults trying to afford a home right now, it is not ROI. For those fortunate enough to have a portfolio of real assets (including a home/real estate), sure.
2. You're not supposed to save dollars you're supposed to invest dollars. You invest them until you have enough stored value to purchase a house - or at least make the down payment. Once you buy SPY, or bonds, or magic beans that live in your computer, inflation no longer matters.
3. Housing prices are on average the same price now as they have been since the 1970s per square foot across the US (inflation adjusted). New houses are now twice as big. Higher housing prices relative to inflation is largely due to building codes, regulation, and councils restricting development in spite of massive demand. One way to solve this is national zoning ordinances like in Japan where housing can be built in every zone. One way to not solve this at all is Bitcoin, because it doesn't change any of the real issues re: zoning and supply/demand.
None of this is new, this is how it's worked forever.
This has nothing to do with the money supply.
[1] https://fee.org/articles/new-homes-today-have-twice-the-squa...
https://www.macrotrends.net/1378/dow-to-gold-ratio-100-year-...