jonwel

I don't know if I'm allowed to post comments about sponsored content, but I'll try. If it's not allowed, the mods will remove it and pazienza.

At the top of the page I see people waxing lyrical about a manoeuvre by the Chinese government to produce bitcoins, with sales starting today in Australia. People really think they can get rich this way. Well, some will, I suppose, but as a whole it's not possible. You can get rich a) by producing something useful, i.e. material wealth, or b) by robbing other people of their money or material wealth.
This means that while some people can get rich in the short term, only a minority can continue to get rich by reducing others to poverty. And then, when the whole world financial system collapses, also these new rich will lose everything.

Pulaski

Crypto-currency is a bit of an exception, but generally trading currency is a "zero sum gain" activity - you can only profit to the extent that someone else loses, which is why trading currency for profit is much tougher than trading stocks for profit.

Stocks can escalate in value year after year, often for decades or longer, though with occasional hiccoughs. But currencies aren't like that, and the only long term trend you usually find is downwards, and holding a short position i.e. a loan, in currencies is tough as lenders want collateral, which for private individuals typically means a mortgage on your home, but that doesn't really work if you, for example, want to take a short position on the Malawi Kwacha and you don't own property in Malawi.

Trying to profit off cryptos is a mugs game, and should be treated as gambling. I wish I'd bought a few bitcoin when they were under $100 .... and been smart enough to sell them after the "value" passed $10k.

philat98

I thought the Chinese had tried to ban Bitcoin. The whole thing seems to be an elaborate Ponzi scheme.
Its interesting that the swindler Carlo Ponzi was an Italian immigrant from Ravenna.

Pulaski

IMO its even more despicable than a Ponzi scheme as buying cryptocurrency is buying nothing, literally nothing, other than a hope that later you can find someone suffering from the same delusion as you, who is willing to give you something with value in exchange for your "nothing tokens".

Traditionally currency was valuable precious metal, usually gold or silver, and then when carrying your wealth around in bullion form became impractical, paper money helped out as originally it was literally a receipt that you coul take to the bank and exchange for the gold or silver that the paper represented.

Then in the 1930's countries discovered that you could sever the link between papee money and the actual precious metals, and just tell people that the paper money had value - that's a fiat currency, which has value "because the central bank says so!"

What I find odd is that some people who in recent years have complained about fiat currency, as they object to excessive government and interference, and they don't like money that only has value "because the central bank says so", and have instead flocked to cryptocurrencies, which are not backed by bullion, and are not even backed by a central bank or government. Cryptocurrencies are just backed by a shared delusion that a string of digital bits can have value, backed by nothing, not bullion, not any tangible asset, nor even by a government decree.

Geordieborn

... and if you can't trust countries or the central bank are they any different? We live in torrid times...

philat98

The 2008 financial crisis cost the UK £500billion and Covid £400billion. All paid for with QE. £15k for every UK resident. With such colossal money printing it is not surprising there is inflation.