Why Warren Buffett Still Won't Invest in Bitcoin (cnbc.com) 253
Investor Warren Buffett addressed the annual shareholder meeting today for his multinational holding company Berkshire Hathaway — and said he still wouldn't buy bitcoin.
But this time he gave a detailed explanation why. CNBC reports:
"Whether it goes up or down in the next year, or five or 10 years, I don't know. But the one thing I'm pretty sure of is that it doesn't produce anything," Buffett said.... "If you said... for a 1% interest in all the farmland in the United States, pay our group $25 billion, I'll write you a check this afternoon," Buffett said. "[For] $25 billion I now own 1% of the farmland... Now if you told me you own all of the bitcoin in the world and you offered it to me for $25 I wouldn't take it because what would I do with it? I'd have to sell it back to you one way or another. It isn't going to do anything... The farms are going to produce food...."
"Assets, to have value, have to deliver something to somebody. And there's only one currency that's accepted. You can come up with all kinds of things — we can put up Berkshire coins... but in the end, this is money," he said, holding up a $20 bill. "And there's no reason in the world why the United States government... is going to let Berkshire money replace theirs."
Later Saturday Berkshire Hathaway's vice chairman Charlie Munger had an even harsher appraisal of bitcoin. "In my life, I try and avoid things that are stupid and evil and make me look bad in comparison to somebody else — and bitcoin does all three," Munger said.
"In the first place, it's stupid because it's still likely to go to zero. It's evil because it undermines the Federal Reserve System... and third, it makes us look foolish compared to the Communist leader in China. He was smart enough to ban bitcoin in China."
"Assets, to have value, have to deliver something to somebody. And there's only one currency that's accepted. You can come up with all kinds of things — we can put up Berkshire coins... but in the end, this is money," he said, holding up a $20 bill. "And there's no reason in the world why the United States government... is going to let Berkshire money replace theirs."
Later Saturday Berkshire Hathaway's vice chairman Charlie Munger had an even harsher appraisal of bitcoin. "In my life, I try and avoid things that are stupid and evil and make me look bad in comparison to somebody else — and bitcoin does all three," Munger said.
"In the first place, it's stupid because it's still likely to go to zero. It's evil because it undermines the Federal Reserve System... and third, it makes us look foolish compared to the Communist leader in China. He was smart enough to ban bitcoin in China."
And that is _exactly_ it. (Score:5, Insightful)
Too bad too many people do not mind doing a lot of damage for a chance at personal gain. Which, incidentally, is pretty much the core definition of "evil". If you add to this that cypto-"currencies" are the key ingredient to ransomware, the damage becomes extreme.
Sure, for a while this was a new, nerdy thing. But anybody still in today knows what they are doing and there are no excuses for such behavior.
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If so I hope you're not a fan of gold, dollars, or sex.
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Those that allow unregulated, hard to track electronic transfers. For the others, tracking is pretty much established, typically for the hand-over. Well, it seems we need that for the crapcoins as well, including regulation, money-laundering provisions and long prison times for those knowingly aiding crime while doing transactions.
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Re:And that is _exactly_ it. (Score:5, Insightful)
Buffet has done plenty of damage for personal gain, that is not even close to what this is about. What he's talking about is that bullshit nonsense that has no inherent value is not a safe investment. He doesn't care about you, he cares about him. He's not gonna go all tulip bulb.
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If he was running the train company as well as sending the cargo, then I'd say you have a point. I really doubt that he was, however.
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Well, this definition has a lot of overlap with "predatory capitalism". An ideology that has no long-term survivability in a limited environment (such as this planet) and generally should land people in prison. Sometimes it does.
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I think you're conflating one type of speculation with another. Buffet (as far as I can tell) "speculates" that a company will produce more in the coming periods that are worth a certain increased value to whatever market segment they sell into and that will raise the value profile of that company and inherently the stock price. This will allow him to cash out when someone else noticing the rise decides to buy in. He has extracted value from the actual increase in production going on. Sure, a glib take is t
So in other words (Score:5, Insightful)
My opinion exactly.
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His reasons are good, and what people miss. Making money in investments should be about... investing. That's not gambling, or speculation. It means you're loaning money and being paid interest, or getting rent, or getting dividends, or helping a company grow its business. In other words, you loan money so that it does something. Even if you're 4 degrees of freedom away from it in a mutual fund, your investment is going out there and doing stuff.
Investing in crypto, just because there's a trend towards it
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Fiat currencies derive their value from a power game, grounded in bloodshed.
While I don't agree that's where they derive all their value from, nor even MOST of their value, it *is* the ultimate reason why the dollar will HAVE a value throughout thick and thin. Because they will shoot you if you disagree. Crypto currencies don't have that backing. Any day they can become worthless just because the pyramid of speculation stops having new sources of greed to prop it up. If I had any clue when that might be I might be tempted to short them, but I don't. It could be tomorrow, it could b
Breaking news: The Pope is Catholic! (Score:5, Insightful)
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This is such a ridiculous over simplification and couldn't be further from the truth if it tried.
Financial markets are built upon speculation against assets that don't reflect the value of the underlying asset. It is long since disproved that the market price of a share in a company reflects the fundamental value of that company. Price discovery is a myth perpetuated by Wall Street to make you think that the price of a share is a fair reflection of demand and supply based on company fundamentals. Think I'm
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Off market transactions get reported, but they have absolutely zero impact or effect on price discovery. The expectation that the value of a stock has ANYTHING to do with (predicted) future cash flow of the company is at best naive and at worst wilfully ignorant. There are countless examples of rampant stock manipulation, naked short selling, cellar boxing and countless other schemes and cons that have absolutely nothing whatsoever to do with a general consensus and everything to do with price manipulation.
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Its not that, he has been investing for a loong LOOONG time. He invests in bonds in other currency's only because he can research the health of the foreign power. You can invest in the eruo by looking at current political trends, who is running the banks etc. Bitcoin has none of that, on purpose I might add and is a constantly deflationary currency. Investing in bitcoin is a 100% gamble as if the currency traders ever decide to cabal themselves, they can just manipulate the market anyway they want.
Does
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" It is long since disproved that the market price of a share in a company reflects the fundamental value of that company."
How would one go about proving such a thing? Since value is by definition what someone is prepared to pay, it seems like a self refuting assertion.
Re:Breaking news: The Pope is Catholic! (Score:5, Informative)
How would one go about proving such a thing? Since value is by definition what someone is prepared to pay, it seems like a self refuting assertion.
Enron, Worldcom, Theranos, WeWork, hell the whole dot com era are all examples about how the market price of a share has little to do with the value of the company. There are so many more examples.
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Financial markets are built upon speculation against assets that don't reflect the value of the underlying asset.
Yes but there are varying levels of speculation that you are missing. Berkshire Hathaway has always been conservative on not investing in extremely speculative assets. They did not invest in dot com before 2000 for this same reason. As far as I remember they did not bet heavily on housing before 2008. Given the history of Buffett and his company, not investing in Bitcoin seems to be par for the course.
I agree (Score:5, Interesting)
Even though I have some crypto currency I am agreeing with WB. Possession of tangible assets is important. Money has no value unless there is an authority that is willing to accept it. We saw that during the pandemic, no matter how much money we threw at someone they were unwilling to trade some vital products for money because they needed it themselves.
When push comes to shove, you cannot eat money. Crypto is even worse, it requires a functioning IT infrastructure to be able to perform transactions.
*Sitting on the fence.
Electronic USD (Score:2)
Crypto is even worse, it requires a functioning IT infrastructure to be able to perform transactions.
The dollar is getting close to this point too. There's only $6B in USD hard currency, but $21.8T of USD money supply. Most people -- unless maybe they've lived through a natural disaster -- don't realize the USD has already become electronic currency.
Currency isn't an investment . . . (Score:2, Interesting)
I'll say it again.
Currency is used to exchange wealth. It isn't an investment. When you invest, you use a currency to buy SOMETHING with the expectation that something grows in value somehow.
Yes, currency speculation is also a thing, but that's why it's called speculation. Smart investors don't speculate on currency
Accidentally gave a solid nod to BTC (Score:2)
The Federal Reserve system has done tremendous damage to the US dollar and economy. They are deeply responsible for the creation of the 2008 asset bubble that wrecked millions of households and are currently creating one that is so bad that when it pops it will probably destroy conservatively half of the middle class.
I really, really hate how so many "educated" people love to pull a well, akshually meme in real life with citing some bullshit theoret
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Circumstantial evidence. Anecdotal evidence. But no actual evidence. Still, I can accept that the reserve is corrupt. What I can't accept is that replacing it with something worse is a good idea.
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https://www.youtube.com/watch?v=ePKcmZVz26E
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To say they Fed did damage to the economy is to assume an alternate reality with no Fed that is doing a lot better. That's a tricky counter factual to argue successfully.
Save, invest, speculate, gamble .... (Score:5, Insightful)
Savings is when someone borrows from the lender, use the funds and return a fixed interest and the principle. Lender only cares about the probability of the borrower returning the money and is not concerned with how the funds are used. Did the borrower build a home with it, or threw a grand wedding reception to his daughter's renting the Palace of Versailles. (Yes, it actually happened).
Speculate is buy something and hope to sell it later to someone. By definition buying crypto coins is speculation. The only way you are going to get the money back and profit is by selling it to another person. Yes, you can speculate on stocks and bonds, and lots of them do. But speculation is not the only use for those instruments.
Speculation without any serious analysis, or rational thought would be gambling. One can gamble with crypto, or stocks or bonds, or in bet in sports, lottery etc.
I am not saying crypto is bound to fail or any such thing. Just saying the correct word for buying crypto is speculation not investment.
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By definition buying crypto coins is speculation.
From the viewpoint of "I want to profit", the above makes sense to me. But there is another use for virtual currency, and it is "I want to enact a transaction either without certain fees or with some degree of anonymity or with some party that I'd have difficulty getting money to otherwise." In other words, in this latter capacity virtual currency can (does) serve as a transaction facilitator, rather than a profit engine.
I am not saying crypto is bound to fail or any such thing.
Agreed, and I'd go farther:
Not sure he's even singling out Bitcoin here (Score:5, Insightful)
Of course not (Score:2)
Anybody who knows anything about Warren Buffett and about Bitcoin knows he wouldn't speculate in it.
I think the truth is (Score:2)
Pyramid scheme (Score:2)
Factually speaking, Bitcoin is a pyramid scheme. Like any pyramid scheme, you might make money out of it. The scheme might run for a long time. Heck, it could run for decades. But let's not lose sight of what it actually is.
"Still" won't invest in Bitcoin? (Score:2)
Why would anyone think his attitude towards Bitcoin would ever change?
Warren Buffet worked too hard to build his wealth, to squander it on speculation. He has always invested in companies based on the fundamentals. By contrast, speculating on Bitcoin, or Gamestop, or any company or asset just because you think the value will go up, is very risky. Investing in companies that have solid fundamentals--companies that produce something that people want, and have a business model that makes financial sense--is st
It's 13 years now (Score:2)
How much is it worth? (Score:2)
Re:They both missed the point (Score:5, Insightful)
Little problem with your fantasy there: Bitcoin does the same, only more extremely and without actually being useful as a currency.
Re:They both missed the point (Score:5, Insightful)
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That' a weird defintion of value. It produces nothing, consumes resource
Value - negative value, sure, but value nonetheless. There's an interesting point there. If you own a cryptocoin you need to spend money just to keep it and/or use it. You don't really see it because that money is in the bitcoin that the miners get for running their servers. They can't just stop, though, because once the network gets too small, an attacker can get 50% of the network and just take over whatever coin they want to. As an owner of bitcoin, at one point or another you are going to have to pay
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That' a weird defintion of value. It produces nothing, consumes resource
Value - negative value, sure, but value nonetheless.
Negative value is not value. That's just fucking retarded.
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This is a nerd/scientific site, not a finance site. We're completely happy with positive and negative values.
Re: They both missed the point (Score:2)
I have used several erp systems. To control the geneal ledgers of various companies. Negative values are useful to know. The world of double entry accounting uses negative values. As all books need to add up to zero.
If you dont like deperciating assets. Then money isnt for you. I suggest communism since you like being told what to think too.
Bitcoin without actively being pumped up always trends downward. It then goes low and suddenly spikes to new highs. Which fuels new highs again, and the interest fa
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They can't just stop, though, because once the network gets too small, an attacker can get 50% of the network and just take over whatever coin they want to
I wonder how much it would take to temporarily disable enough servers to take over the entire Bitcoin network and fake a few ledger entries.
You could probably have a trillion real$$$ in the bank by the time anybody realized what was going on.
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OK, not a trillion. All of Bitcoin together isn't worth that much, but you get the idea.
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OK, not a trillion. All of Bitcoin together isn't worth that much, but you get the idea.
Well, investopedia [investopedia.com] claims just over a Trillion in market cap.
You'd have to a) get a big chunk of it into your own wallet b) get it converted into something else and c) get it elsewhere. Immediately anyone realises what you have done, everything's going to stop and some/many of your transactions are likely to be reversed, so you need to get it somewhere where you can do proper money laundering.
I'm guessing that, if you prepare well, you can get away with hundreds of millions up to a billion or so. Which is i
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Two countries nobody wants to emulate. There is a lesson in that.
Also, Warren Buffet could probably buy both of them.
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Who has been lobbying for 30+ years to get Congress to tax billionaires more.
Re:They both missed the point (Score:5, Informative)
Real money (e.g. the US Dollar) is backed by a government's reputation for being able to pay back its debts. Cryptocurrency has no such backing. Therefore, cryptocurrency is not actually a currency, it's just incorrectly called that out of false advertising and/or wishful thinking. Since it is not actually a currency, it is just a speculative investment with no intrinsic value.
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Real money (e.g. the US Dollar) is backed by a government's reputation for being able to pay back its debts.
But what debt? Ever since the U.S. dropped the gold standard, the currency no longer represents a debt that the government owes you.
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Cryptocurrency has no such backing. Therefore, cryptocurrency is not actually a currency,
From what I have read about economics, money is quite a complex subject. Why is a piece of paper with some particular fancy printing on it classed as money? Or why is a number in a computer bank account denoted in GB pounds money? From what I understand, Bitcoin is at best a tradeable asset, in the sense that rare stamps can be traded. But rare stamps are not money. The value of bitcoin is always judged relative to a real currency. What would I do if someone paid me in bitcoin, instead of pounds? More than
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Re:They both missed the point (Score:5, Insightful)
Re:They both missed the point (Score:5, Insightful)
There is another thing bing missed. As you mention gold, silver, and diamond in addition to being valued as jewelry each have industrial applications, that like Buffet mentions can produce more desirable things. Equally importantly they have no exact substitutes. There is nothing like gold, silver, or specific arrangements of carbon. The periodic table says to.
You can't FORK gold.
You very much can fork crypto-currency and get something that is exactly the same...or so similar its not really more or less suitable for any application. Its happened directly bitcoin v bitcoin cash. Its happened indirectly bunches of times over, ether, monero being the main examples. The ONLY thing you have to do is convince so other people to use it as a currency, which it shares with any traditional currency fiat or otherwise. Now the crypto bros will say, look man only Ether and Bitcoin are real everything else is a shit-coin. Uh-hugh but then there is Doge, which was started as joke or maybe a toy but enough idiots believe even in that its kinda like the velveteen-rabbit and its very much taken on all the properties that make it look as real as bitcoin! People will pay me actual money for it, financial institutions you can name are trafficking in it.
That last bit about Doge is the confirmation Buffet is spot on here. At the end the day Uncle Sam inst going to let you forget about the green-back - at least not without a heck of fight you and I really DON'T want to be around to witness. May you.something something.Interesting times.something something.
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By that definition - what does stock trading produce?
Re:They both missed the point (Score:5, Informative)
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isn't that volatility inherent in the design of the system? Even stocks, which have a rather distant connection to things with real value, tend to be volatile. ISMT the less direct the connection to something with tangible value is, the higher the volatility. Bitcoin was designed to have *no* connection.
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Investing in stocks is ok because the companies that you buy usually do something useful. If you believe in the thing they do provides value then that's ok, even if you buy something from someone else since they can invest in something else. What is not useful is speculation, simply investing in something because you think someone else buy it from you at a higher price later, you just become a parasite that takes there cut without contributing anything. Shares in my opinion have too much speculation, especi
Re:They both missed the point (Score:5, Insightful)
If I purchase 1% of a company's stock I have 1% ownership, which is exactly the type of ownership Buffet was referring to when being offered 1% of all farmland in America. For companies that pay dividends, I then get 1% of the future dividends of the company (income), assuming the company continues to pay dividends.
It seems like all of the cryptocoin enthusiasts have entirely forgotten what the words "ownership" and "tangible assets" mean.
Re:They both missed the point (Score:5, Interesting)
I never bought that analogy. Sure, you consume a real resource to product btc. However that resource (electricity generating the compute power plus a small fraction of the cost of the hardware in wear and tear) then disappears and can no longer be used.
If you mine gold, silver, diamonds.. you have an object that is a store of value representing the work that went into it, which can then be used.
BTC just seems to take, not give. It's value requires being translated into fiat, you can buy very few things with it directly. Somewhere in the chain of purchasing an item, crypto is converted into fiat. NFTs asides.
I'm sure I'm just dumb though and it's totally not a speculative asset use nearly exclusively for criminality and grift. Or won't be in the future. Or something.
Re:They both missed the point (Score:5, Insightful)
Sure, you consume a real resource to product btc. However that resource (electricity generating the compute power plus a small fraction of the cost of the hardware in wear and tear) then disappears and can no longer be used.
Yes: opportunity cost. Had all the electricity used to mine bitcoin (and fossil fuels used to generate that), all the hardware thrown at mining, been used elsewhere like on gaming, engineering or science projects (or not spent at all, saving the effort to produce that gear) - quite possible the world as a whole would have been a better / nicer one today.
Note that I have nothing against crypto currencies in principle. But wasting enormous compute resources & energy on something that (essentially) could be pulled from thin air? Beside wasteful that's just dumb.
Maybe that would be a good way to judge specific crypto coins: resources needed for their creation, compute power / bandwidth used for handling it, etc. 'Embedded gear-friendly' coins vs. coins that require more serious hardware, compute-heavy vs. bandwidth-heavy coins, Joules required to perform a $10 / $100 / $1000 value transaction, and so on. Beside their ideological properties, just hold some yardsticks against the many coins around & see how they measure up.
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I think your "optimistic" scenario is removing the bad features of BitCoin, but isn't adding any features to give it stable value, so it will still be (at best) enormously volatile.
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Diamonds is an interesting choice. If you go back to 1888, De Beers had a bunch of valueless, mostly white rocks. Then they cut them and ADVERTISED THE HELL out of them being essential for new brides and for engagements. All of a sudden, everyone wanted the mostly white rocks and because of demand, they shot up in price. Because nobody actually owned or cared about diamonds until then, De Beers became the de-facto monopoly.
Creating demand for something gives it value. Sure diamonds are actual physical thing
Re:They both missed the point (Score:4, Insightful)
Because according to that logic, the electricity that was used by you tying out that nonsense would make your contribution intrinsically valuable. It would make every comment on the internet, no matter how dumb, valuable.
But at the end of the day in reality, the energy spent on mining is only of value to those that value it via PoW, because they created a system for themselves which puts a value on it for themselves. To anyone else it's pretty much a waste of energy and an electronic waste production at an increased rate.
The next thing you'll tell us is that there are no scams, because if someone overpays for something, then that expense, no matter how stupid, necessitates an increase in the intrinsic value.
Come to think of it, this starts to sound a lot like money laundering.
Re:They both missed the point (Score:5, Insightful)
Fallacy of equivocation [wikipedia.org]. You are using the word "value" in a different sense, and it is one that is not relevant to this conversation.
Specifically: gold has intrinsic value because you can build useful things out of it (like conductors). Businesses have intrinsic value because their primary function is to produce things of value (like food, clothing, etc.). That is the sense of the word "value" in this discussion.
You used the word value to mean "cost" which is not at all the same thing. The cost of mining a bitcoin, though measurable, does not instill into a bitcoin some sort of industrial use. You still can't eat a bitcoin, or make a screwdriver out of it, etc.
So, in the meaningful and relevant sense of the word "value," bitcoin has no intrinsic value. That means that its only source of value is what a person is willing to pay for it, based on nothing but speculation about what someone else would also be willing to pay for it. That is why people keep mentioning the greater fool theory [wikipedia.org] when talking about bitcoin. That is its only function in the market.
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Bitcoin is proof you harmed the environment. That is all it does. For nothing gained.
-cough on the Bitcoin pollution. There should be a Bitcoin Pollution index.
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"Gold and silver have value for two reasons and only two reasons: People like shiny metals and we, as a society, have decided that gold and silver have value."
Wrong. Gold and silver have insane use in the medical and electronics industries. Did you even graduate from middle school?
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But if you're going to buy an inflation hedge, there are traditional ways of doing this, a few of which have not yet been bid up beyond the sky. Crypto is a fake speculation.
Furthermore Buffett is a value investor, who buys assets that produce income. There are also a number of these that are not already inflated.
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You are talking about currency with an essentially fixed supply. That has been tried before! It led to devastating global financial meltdowns, and switching to fiat money (what we have today) is how we pulled ourselves out of that crisis.
To be a bit more precise, we used to use "commodity money" which meant the coins were forged from actual gold (or what-have-you). The money itself had intrinsic value in that it could be consumed "directly" and used for different purposes if desired. Bitcoin, by contras
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I don't buy this evil argument. For one thing, as the population grows, you need more currency. Let's imagine a mini country with 2 people and 2 potatoes every year, and $2 in circulation. Each potato sells for $1. Now the population doubles, production doubles, now there are 4 potatoes every year. It wouldn't make sense if potatoes are now 50c instead of $1 because there is only $2 in circulation, and a deflationary economy is dangerous and unstable. Nor does it necessarily make sense if the holders of the
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Re:They both missed the point (Score:5, Insightful)
The U.S. Treasury? You mean the arm of the Executive Branch? Let me remind you before the Republican Party turned itself over to a third rate grifter and inveterate (invertebrate is more apt) liar from New York City, he reminded the American people he was the King of Debt: https://www.politico.com/story... [politico.com]
Americans were stupid enough for them to give him an Electoral Collage win, though he lost the popular vote. Then his morons in Congress decided that what the rich really needed was big tax cut. They claimed it would pay for itself while the GAO said it wouldn't. Why did they have to listen to GAO, their party was being run by a stable genius who disdains actual expertise in favor of incompetents who praise him. His cabinet was testimony to that.
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A flat tax?
What, exactly, are you suggesting is to be taxed?
Assets (aka 'wealth')?
Windows?
Spare bedrooms?
Income?
Because they all have issues...
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of course there will still be a sales tax
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The EU is weird in that the central bank and the governments are separate. In most countries they are basically the same so when the central bank buys government bonds it is basically destroying the bonds previously issued.
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As an investor Buffet is looking to spend USD not necessary hoard it as cash. But hoarding USD as deposited cash does - for the holder - at least produce interest.
So cryptos can be seen like gold or silver, etc. being something that accumulates in value. Or at least with some dramatic volatility. And with a novelty risk as it's not impossible the new shiny replaces bitcoin as fad or the week/decade/whatever.
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The question is not about currency (Score:5, Insightful)
If you read that article, Warren Buffet is not talking about "Buying US dollars", but instead about investing money into farmland. Such an action will generate value in the form of food and other crops that grow.
The crypto-hype is different. Nothing gets invested there since there is a deflationary aspect to it. In the Mindset of someone believing the hype why would you spend your "Bitcoin" to buy some farm land, when instead you can just leave it in your wallet and it'll become more valuable? If you belive in the "line going up" it doesn't make any sense to invest in a company that may provide you with some meagre share of its profits.
He sees this from the other side. What if the US economy would collapse and the dollar would be worthless. Having invested in farmland will still provide him with food he can eat himself or swap for other things.
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The traditional answer to that question is that the government demands taxes, taxes must be paid in USD, if you don't pay your taxes you will be shut down, therefore USD has utility value. Bitcoin only has value as long as everyone agrees it has value. USD has value because the government has guns and they will shut you down.
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The traditional answer to that question is that the government demands taxes, taxes must be paid in USD, if you don't pay your taxes you will be shut down, therefore USD has utility value
I don't know what world you live in but every country generally wants you to pay taxes in their currency because of convenience. No one likes exchanging money. Back in ye olden days, gold and silver were used. Remember when salt was used in Roman days? In medieval Japan, rice was used as the defacto currency for taxes; however, that does not mean only rice was accepted as payment. Everything was just valued against rice. A fisherman owes 10 bags of rice as taxes; he could pay with the equivalent amount of f
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Not the US Dollar, not the chinese Yuan. So why Warren accepts USD!? Does it produce anything?
Warren accepts USD because it is the most convenient for him being based in the US. If he was based in Europe, the default payment would be Euros. That being said, you are completely missing the point. Warren does not invest in the currency; he uses the currency. He is stating that investing in the currency has no real point.
Simpathizing with the Chinese government? That tells it all.
And when did he do that? Didn't you just say he did not take the Chinese Yuan? Confused , are we?
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Futures are an investment in a good that is real and pork bellies are food ...
It's a bet on the future price of those goods, not an investment in nothing
Re:Pork bellies don't produce anything either (Score:4, Informative)
It's also useful for the consumers of the pork bellies because they know what price they will pay.
But the net result is that forward/future contracts actually *increase* production of the underlying good.
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Gold has physical uses and because it doesn't go away, it makes no difference if the physical use is today or tomorrow. It's a tangible asset. Still, you're right that irt is primarily used to store value. How much in the way of gold bars (as opposed to anything else made of gold) does he own?
Same argument against gold (Score:2)
What if I were to offer him gold? While it has a few uses, ultimately we bury most of it in vaults as a store of wealth. It's not doing anything or producing anything. Just storing value.
He has made the same argument against gold in fact.
The second major category of investments involves assets that will never produce anything, but that are purchased in the buyer’s hope that someone else – who also knows that the assets will be forever unproductive – will pay more for them in the future. Tulips, of all things, briefly became a favorite of such buyers in the 17th century.
This type of investment requires an expanding pool of buyers, who, in turn, are enticed because they believe the buying pool will expand still further. Owners are not inspired by what the asset itself can produce – it will remain lifeless forever – but rather by the belief that others will desire it even more avidly in the future.
The major asset in this category is gold ... Gold, however, has two significant shortcomings, being neither of much use nor procreative. ... if you own one ounce of gold for an eternity, you will still own one ounce at its end.
What motivates most gold purchasers is their belief that the ranks of the fearful will grow. During the past decade that belief has proved correct. Beyond that, the rising price has on its own generated additional buying enthusiasm, attracting purchasers who see the rise as validating an investment thesis. As “bandwagon” investors join any party, they create their own truth – for a while.
More in his 2011 annual letter [berkshirehathaway.com], page 18.
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What if I were to offer him gold?
If you offered it below market value he'd be a fool not to take it and immediately sell it. However he is on record numerous times stating that he's not a fan of gold, preferring to invest in producers and not in value stores that may increase in value due to speculation.
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Now tell me which of any of those have actual practical applications that are useful to your average person and aren't just technical masturbation fantasies?
- There is no hedge against inflation that's based on currency, that's a fantasy. Only actual tangible assets can be a hedge against inflation, and even then it's never guaranteed, so somewhat useless as an actual hedge.
- Delusional.
- Transfer of funds in seconds across the world already happens billions of times a day. And 'almost no fees' is laughable
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- not controlled by malevolent governments who are ultimately just serving the interests of the in-crowd
So change your government. Bad government is not an argument against regulation, its an argument against bad government. There's nothing in unregulated finance that fixes any problems created by bad government - it just moves the issues to people you have no control over. Throwing away regulation because of bad actors is like throwing away both your paddles because neither is your preferred choice. Good luck paddling to shore.
- transfers of funds in seconds across the world for almost no fees (try that with banking!)
Paypal, etc. This has no value unless I can spend crypto on useful items, in real
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I'm struggling to see what "functionality" it has. Whatever functionality you might argue for is encompassed in some lines of C code, that can be replicated for free, thus arguably has no value.
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If you study human behavior as written in the stocks of hyped companies, you would recognize that most definitely, there will not be another massive peak in Bitcoin's value for a while. The path from here will be noisy, but mostly down for the indefinite future. Eventually, there may be organic growth, but balloons nearly always burst in the same way: a massive run up, pop, wild noise for a while which calms to a slow descent.
As another poster pointed out, it should not be any surprise that Buffet is stee
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I don't disagree with you... but not because of that.. Bitcoin has had a lot of massive peaks, each looks ridiculous until you see the next even more ridiculous one.
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Why do you think proof of work is what holds back a surge?
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I mean, the dominant coin in terms of what?
Market cap, I suppose. It's the largest chunk on coin360 [coin360.com] by far.
USDT has massive trade volume because it's the shaky transfer medium to get money from one exchange into another while avoiding a round trip to fiat that would get your country's tax collectors interested. Everyone knew it was supremely dodgy and now that they've been forced to publish at least a summary of their financial status, any idiot suspects that all that "commercial paper" that makes up the bulk of their holdings is worthless loans the
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"People who couldn't understood Bitcoin and missed their chance are the loudest complainers and have all sorts of reasons for it."
We had "bitcoin" in the 70s. The permission-less distributed database is NOT NEW, and it failed because of scaling - they simply do not scale at all because of the insane power requirements that keep going on a massive climb with the addition of every node.
Plain and simple - you're just the latest sucker in a 50-year-old scam.