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Stock market - Inflation - S&P
- Thread starter sergeylim88
- Start date
Global Liquidity RoC Annual + CPI Annual Debasement Plot.
Net-worth (Invested Assets/ Assets) Plot.
Anything performing above debasement plot is real wealth generation and retention, then take off for lifestyle chips.
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Investment is a need when you hold an asset (fiat) subject to debasement, of which inflation is a symptom.
Doing this means guarantee of loss in real terms (purchasing power).
Investing by definition involves and requires risk. You can mitigate but not eliminate it.
On the other hand, holding non inflationary assets eliminates the need of investing.
Btc is the most notable example of such assets.
100,000$ invested in the FTSE from May 2006 against UK BOE & CPI debasement annualised.
Number go up, but spending power go down, as a % is shaved off for financial repression to cover a part of the debt refinancing.
I.e people believe they are getting wealthier but they are not in real terms
Only two markets have outperformed currency debasement, and they are the most volatile.
Nasdaq @18% PA
BTC @150% PA
And its forecast to determine the impact over time (ahead) following current processes.
Number go up, but spending power go down, as a % is shaved off for financial repression to cover a part of the debt refinancing.
I.e people believe they are getting wealthier but they are not in real terms
Only two markets have outperformed currency debasement, and they are the most volatile.
Nasdaq @18% PA
BTC @150% PA
And its forecast to determine the impact over time (ahead) following current processes.
Moreover, the Last round od QE has generated a massive redistribution of wealth. The bottom half of retirees have been disproportionately hurt as they normally rely on short term rates to maintain their standards of living.
Fiat’s inflationary nature is a systemic harm to society: people are forced to seek higher-yielding, riskier assets to keep pace with inflation, which leads, out of necessity, to speculative bubbles and financial instability. At the contrary, btc incentivizes savings and long-term thinking, promoting financial security and stability, and protects individuals from the systemic harms embedded in inflationary fiat systems.
Currency debasement has plagued societies for centuries, from the Roman Empire’s coin clipping, the Weimar Republic’s printing crisis, to the abandonment of the gold standard in 1971.
Additionally, debasement isn’t always linear and is subject to central bank policy shifts, economic crises, and political intervention.
Bitcoin is a revolutionary response to the historically pervasive issue of unpredictable currency debasement.
Real world fluctuations in fiat currency value are way more harmful than the apparent volatility of btc, as purchasing power erodes more rapidly with each cycle of fiat debasement, contrasting it with Bitcoin’s consistent, unchanging supply schedule.
As debasement accelerates, the value of btc relative to fiat trends toward infinity. This diverging trajectory highlights btc’s robustness against fiat’s structural weaknesses.
I have stopped looking at money per se but rather the size of the central bank's balance sheet and I deflate that by nominal GDP to describe what I call liquidity although that really has to be weighted by the maturity structure of the central bank's balance sheet which is highly skewed right now. This particular measure had typically been between 5 and 7%, during the great financial crisis it got up above 20% and started coming back down when the balance sheet got smaller and nominal GDP got larger but it's a measure of how much the central bank's balance sheet can support transactions demand as measured by nominal GDP.
But it's actually the shrinking of the unit of account that is we're measuring everything with smaller units. So instead of measuring things with the yardstick we're measuring things with a ruler.
That's why many people have argued for a gold standard but if you go back over the past 200 years prices would rise after every major gold find such as the gold rush and San Francisco in the 1850s and the Yukon find in the 1890s.
Fiat’s inflationary nature is a systemic harm to society: people are forced to seek higher-yielding, riskier assets to keep pace with inflation, which leads, out of necessity, to speculative bubbles and financial instability. At the contrary, btc incentivizes savings and long-term thinking, promoting financial security and stability, and protects individuals from the systemic harms embedded in inflationary fiat systems.
Currency debasement has plagued societies for centuries, from the Roman Empire’s coin clipping, the Weimar Republic’s printing crisis, to the abandonment of the gold standard in 1971.
Additionally, debasement isn’t always linear and is subject to central bank policy shifts, economic crises, and political intervention.
Bitcoin is a revolutionary response to the historically pervasive issue of unpredictable currency debasement.
Real world fluctuations in fiat currency value are way more harmful than the apparent volatility of btc, as purchasing power erodes more rapidly with each cycle of fiat debasement, contrasting it with Bitcoin’s consistent, unchanging supply schedule.
As debasement accelerates, the value of btc relative to fiat trends toward infinity. This diverging trajectory highlights btc’s robustness against fiat’s structural weaknesses.
I have stopped looking at money per se but rather the size of the central bank's balance sheet and I deflate that by nominal GDP to describe what I call liquidity although that really has to be weighted by the maturity structure of the central bank's balance sheet which is highly skewed right now. This particular measure had typically been between 5 and 7%, during the great financial crisis it got up above 20% and started coming back down when the balance sheet got smaller and nominal GDP got larger but it's a measure of how much the central bank's balance sheet can support transactions demand as measured by nominal GDP.
But it's actually the shrinking of the unit of account that is we're measuring everything with smaller units. So instead of measuring things with the yardstick we're measuring things with a ruler.
That's why many people have argued for a gold standard but if you go back over the past 200 years prices would rise after every major gold find such as the gold rush and San Francisco in the 1850s and the Yukon find in the 1890s.
Nasdaq is an investment.
Btc is a currency.
You can’t compare the two. It is a fallacy.
They have different nature, purpose, functions in the economy, value drivers and metrics.
When i first acquired bitcoin in 2010 it was at that time a emergent 'currency'.
Today it is not, and the data doesn't support the idea of that fallacy both in adoptive uses or in basic math surrounding its price drivers..
BTC is a monetary inflation hedge that has technology at its core = hence volatility and growth spurts as its globalised by its digital aspects.
Gold is a Monetary Inflation Hedge.
Both are not Inflation Hedges (CPI) but pure 'monetary inflation' hedges (there's a difference).
Monetary Inflation at its purest form is CB Balance Sheets which seeps in to the Global Liquidity Markets via re-hypothication of Gov debt(s) (leveraged ratios) driven by volatility.
Hence BTC follows GL by 3-5 Weeks and CB's by 9-12 months, Gold follows at a slower pace.
Hence both move in sync with Global Liquidity, and Global Liquidity moves in rhymes of Debt Refinancing (CB).
When liquidity becomes restrictive (debt-refinancing sucking it up) Monetary Inflationary Hedge assets get crushed.
Hence BTC follows a 4yr cycle which is tied around the 4yr cycle of debt refinancing.
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this is such a profound thing to understand
only those who have some edge should invest, which is obviously not the case for the vast majority
people should be able to save in an asset without counter party risk - due to technological progress they should even benefit from natural deflation and postponed consumption when saving
instead the monstrosity of central planing not only dilutes the currency people are forced to use and which is unusable for conservation of wealth, not only are they forced to impetuous and irrational exposures, but they also get shaved on fees connected with regulated investment tools and related taxes
currency is a convenience tool with underlying asset that is not suitable for practical use (like dollar backed by gold)
bitcoin is the asset itself (digitalized energy) - one day we will probably use currency backed by bitcoin
Metcalfe’s Law (the value of a network is proportional to the square of the number of its users (V ∝ n²)) applies to btc. Its adoption, measured by the number of active wallets, transaction volume, and the increasing acceptance as a payment system, has grown exponentially over time. The growth in adoption supports its increased network value.
The Stock to Flow model too applies to btc: price is driven by scarcity.
Gresham’s Law states that bad money drives out good. In fact, people spend fiat (inflationary) before btc (deflationary).
The S-curve of technology adoption describes what happened to btc since you first acquired it in 2010.
this is btw the future of banks - they have to get divested of the ability to cheat with fractional reserves of nonexistent currency and renew their natural role in the society as custodians of bitcoin as a reserve asset that allows full transparency in both full and fractional reserve operation mode (whatever the customer voluntarily prefers and pays for)
Traditional banks have no future.
This is the essence of banks as we know them today.
No custodians are needed.
There's some solid footing to that argument, mainly because BTC is energy intensive thus rises/declines somewhat in sync.
But when you get down to the nuts and cracks of it, energy costs are manipulated via debasing the currency (overtime) and coordinated control (Int World Order) to ensure supply covers demand, this is paid for again via debasement.
Debasement is quantifiable by liquidity, and liquidity has a 96.5% correlation with BTC price (and Nasdaq similar).
The % difference is actually just due to the delay as it seeps into the markets.
So yes it is digital energy, but stored energy it isn't, unless you refer to spending power, then yes its stored spending power, which is basically represented as a monetary inflation/debasement hedge.
this is one of my "sins" as a hard-core bitcoiner - it is not feasible in a foreseeable future - I don't believe any layer two can support noncustodial money in the next 50 years
people are useless monkeys and we will need a complete gradual change of mindset in the society - until then there is nothing wrong about putting your trust in an institution (which is clearly defined in case of a bank) IF you can freely choose which one and anyone is allowed to start one
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once again one of the basic laws of human stupidity (Carlo Cipolla).
It won’t happen.
I must say that I have learned to profit from banks, even though I no longer need them. So, after all, it would be in my best interest that they remain as they are.
I generally agree, but allow me to rephrase - it's energy used/spent to create an absolute scarcity - a tool utterly essential to prevent cheating backed by force in a thermodynamic system for good - the energy in bitcoin is not "stored" in a physical "restorable" way but in a sense that anyone is forced to use the same (actually even more) physical energy in future to reverse what was done with bitcoin
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