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Posted
  On 3/14/2021 at 2:15 PM, Biff Tannen said:

Hey man, my investment is looking great right now.  I blame my outrage on diabeetus.  But your avatar still sucks.

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You said you had a tiny amount?

26-BC12-E1-4-D53-4-A07-9-D5-F-E7426-BC19

It’ll be interesting to follow how crypto rich utilize their newfound riches. A lot of people with more libertarian streaks so they’ll prioritize funding different projects/charities.

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Posted
  On 3/14/2021 at 2:23 PM, GRHorn said:

You said you had a tiny amount?

26-BC12-E1-4-D53-4-A07-9-D5-F-E7426-BC19

It’ll be interesting to follow how crypto rich utilize their newfound riches. A lot of people with more libertarian streaks so they’ll prioritize funding different projects/charities.

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I'm just a simple country boy. You might say a cockeyed optimist, who doesn't want to get himself mixed up in the high stakes game of world diplomacy and international intrigue.

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Posted

CIO and then his alternative asset portfolio manager, of ERS just said on this zoom call (it's off the record)...said that they are done waiting for the regulatory framework to take shape.  Their I/C is now developing a IPS criteria for digital assets/Crypto investments at the fund level (not converting assets to Crypto obviously).  Once public institutional funds start investing in stuff like this, that's a sign the fight to invalidate them is coming to a draw.  

Posted
  On 3/15/2021 at 3:12 PM, Lobo said:

CIO and then his alternative asset portfolio manager, of ERS just said on this zoom call (it's off the record)...said that they are done waiting for the regulatory framework to take shape.  Their I/C is now developing a IPS criteria for digital assets/Crypto investments at the fund level (not converting assets to Crypto obviously).  Once public institutional funds start investing in stuff like this, that's a sign the fight to invalidate them is coming to a draw.  

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What, are you in the military? What's with all the acronyms? I know CIO but after that I'm lost.

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Posted

When talking about Investments, I/C usually means Investment Committee.  IPS is Investment Policy Statement.  

I thought everybody in Texas knows TRS and ERS.  Teacher's Retirement System and Employee's Retirement System.  Everybody knows somebody who is either a public school teacher or works for the state.  
 

I wasn't trying to be cryptic, on a thread that deals with investments, sometimes there'll be investment acronyms.  

Posted (edited)
  On 3/15/2021 at 3:27 PM, Lobo said:

When talking about Investments, I/C usually means Investment Committee.  IPS is Investment Policy Statement.  

I thought everybody in Texas knows TRS and ERS.  Teacher's Retirement System and Employee's Retirement System.  Everybody knows somebody who is either a public school teacher or works for the state.  
 

I wasn't trying to be cryptic, on a thread that deals with investments, sometimes there'll be investment acronyms.  

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I didn’t think you were being cryptic. I just didn’t recognize those. Thanks. 
 

For the purposes of the CR thread on this topic and relating to your post. It’s becoming irresponsible for institutional investors like pensions to have zero allocation to Bitcoin. The old school 60/40 portfolio is going to go by the wayside. See fiscal irresponsibility thread. So how does that 40% to bonds get altered? It seems like a natural to move at least small amount to a high performing, non correlated asset like bitcoin. 
 

So when entities like the Harvard Endowment and Calpers and Texas ERS start holding some and it performs well just another roadblock in the way of “banning” Bitcoin. 

It’s already happening.

https://finance.yahoo.com/news/harvard-yale-brown-endowments-buying-213404726.html

To go even further CR, then the real question is when does it become irresponsible for global central banks to not be holding some? Starting with the smaller ones. 

Edited by GRHorn
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Posted

I don't think we're close to seeing institutional funds "holding" the currencies.  What we were talking about this morning was them investing in companies in the crypto-space like custodians, brokers, et. al.  I think that's their first toe in the water, then you'll see them actually convert some assets to crypto-currencies, after that---large banks (primarily those who hold the cash/cash equivalents of said public funds) will go in as well.  Anyway, volumes have been written on this, even on this site. 

But just threw that out there this morning because when a group like ERS or UTIMCO says they're starting to put real due diligence parameters on how to underwrite crypto-deals...that's a big move for three reasons.  1---that's a massive capital pool, 2---smaller endowments and pension funds look to groups like ERS, TRS, and CalPERS for how to sculpt their own asset allocations, 3---groups like these have massive government oversight at the state level (typically the board members not only have to have expertise but also political connectivity) and if you start seeing both Red and Blue states not giving a fuck about the Federal Government dragging its feet on digital currencies...you're gonna see a couple dozen state-level investment funds (Pension, Thrift, et. al.) get into this space by the end of the decade (likely much sooner).  At that point, it won't really matter what the SEC/FINRA/Federal Reserve/CFPB decides to do. Shit, the OCC (Office of the Comptroller of the Currency---the regulator for federally chartered banks) has basically told our bank that we're only 3 years away from being able to bank digital currencies, and a year away from being able to recognize them as collateral for traditional loan platforms.  
 

The real reason the feds will get worried about what I'm describing is the amount of cash and cash equivalents that sits in large banks who are part of the Federal Reserve banking system that these state-level public investment funds (there's hundreds of them nationwide) total in the hundreds of billions, if not trillions.  I'm talking about just the ~5% in cash.  They start putting chunks of that into digital currencies, that's gonna be a slightly bigger deal than a few thousand rich people putting $1m each into bitcoin.  

So I think you'll see them investing at the VC/alt. levels in the space, but the actual holding of assets in bitcoin/etc. won't be for several more years.  Because state governments can't print their own money.  That's why so many states have balanced budget amendments.  They can't monetize their own debt.  But a crypto-currency for state retirement funds, rainy day funds, municipal capital funds, etc.  5% of that starts leaving the banking system, that's gonna raise some eyebrows in Washington.  They're not worried about deep web drug dealers using bitcoin or day trader speculators not paying enough in taxes.  They're worried the world's reserve currency won't be toppled be another foreign government, they're worried it'll be usurped by its own 50 states.  

Then again, it's Monday morning and I don't start thinking until well after a 2-martini lunch.  

Posted
  On 3/15/2021 at 4:02 PM, Lobo said:

Shit, the OCC (Office of the Comptroller of the Currency---the regulator for federally chartered banks) has basically told our bank that we're only 3 years away from being able to bank digital currencies, and a year away from being able to recognize them as collateral for traditional loan platforms.  

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These things are already happening with at least one publicly traded, Federal Reserve member bank, Silvergate. Small, but they're at the forefront of the industry.

 

  On 3/15/2021 at 4:02 PM, Lobo said:

but the actual holding of assets in bitcoin/etc. won't be for several more years.

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Again, already happening if reports with anonymous sources are to be believed and in the CR I believe they are, without questioning. See the article I linked in prior post.

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Posted
  On 3/14/2021 at 2:14 PM, GRHorn said:

It came up again in the fiscal irresponsibility thread. Here’s a good column I found a couple weeks late regarding possible government attacks on Bitcoin. Just trying to help you out @Biff Tannen It’s not too late.  

 

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Quillette? What's next, links on why phrenology is real science?

Posted

In other news:

  Quote

 

Report: Indian government is planning outright ban on cryptocurrency

The government of India is planning to introduce legislation banning cryptocurrency, Reuters reports. The law would impose fines on anyone who trades, mines, or even holds cryptocurrency. The government has a comfortable majority in parliament, giving the proposal a good shot at becoming law.

This would make India one of the most cryptocurrency-hostile jurisdictions in the world. China, for example, has imposed a number of restrictions on trading and mining cryptocurrency, but it hasn't banned ownership of cryptocurrencies outright.

 

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https://arstechnica.com/tech-policy/2021/03/report-indian-government-is-planning-outright-ban-on-cryptocurrency/

Good think for @GRHorn that "the incentive to attack Bitcoin is dwindling."

Posted
  On 3/15/2021 at 9:37 PM, Dahobbs said:

In other news:

https://arstechnica.com/tech-policy/2021/03/report-indian-government-is-planning-outright-ban-on-cryptocurrency/

Good think for @GRHorn that "the incentive to attack Bitcoin is dwindling."

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"Officials seem to be worried that ordinary Indian consumers could make bad cryptocurrency bets and lose their savings as a result. Bitcoin's price rose above $60,000 for the first time over the weekend—double its value at the start of the year. But there have been periods in the past where bitcoin has lost more than 80 percent of its value in a few months."

I hope you don't want gambling to come to Texas if that's the reason.

Posted
  On 3/15/2021 at 11:41 PM, workswithseed said:

"Officials seem to be worried that ordinary Indian consumers could make bad cryptocurrency bets and lose their savings as a result. Bitcoin's price rose above $60,000 for the first time over the weekend—double its value at the start of the year. But there have been periods in the past where bitcoin has lost more than 80 percent of its value in a few months."

I hope you don't want gambling to come to Texas if that's the reason.

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I don't know what Texas and India have to do with each other in this context. 

 

Posted
  On 3/15/2021 at 9:37 PM, Dahobbs said:

In other news:

https://arstechnica.com/tech-policy/2021/03/report-indian-government-is-planning-outright-ban-on-cryptocurrency/

Good think for @GRHorn that "the incentive to attack Bitcoin is dwindling."

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It’ll be interesting to see how well they are able to enforce liquidation of crypto. I’m assuming they make the exchange cited in the story provide info on all clients. Then they go door to door? Not going to be easy.

Let me show you how I could and would work around it. You seem to have a limited knowledge of the system. I pull my coins off the exchange into a hardware wallet (cold storage). If the Indian Feds track me down I say l lost my hardware wallet and the recovery phrase in a fire. Damn the luck. Will they put you in jail for that? It just said fines in the article. Could they even prove a crime? You don’t “own” them anymore. They’re lost, as far as they can tell. 
 

Let’s say I want to buy Bitcoin after this law is passed. Get a vpn, go on foreign exchange and buy some. Pull it offline. Voila. 
 

All that said, comparing India and USA in anything crypto related is a little misleading. More holders are in the US  than anywhere else. Larger institutions and powerful individuals are becoming advocates. The snowball is getting bigger as it’s rolling down the hill. 

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Posted
  On 3/16/2021 at 12:01 AM, workswithseed said:

It's a shitty reason to get rid of something.

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What does that matter? The point is India is doing it, whether it is for the reason stated or to elimate competition with its own proposed digital currency. 

Posted
  On 3/16/2021 at 12:23 AM, GRHorn said:

It’ll be interesting to see how well they are able to enforce liquidation of crypto. I’m assuming they make the exchange cited in the story provide info on all clients. Then they go door to door? Not going to be easy.

Let me show you how I could and would work around it. You seem to have a limited knowledge of the system. I pull my coins off the exchange into a hardware wallet (cold storage). If the Indian Feds track me down I say l lost my hardware wallet and the recovery phrase in a fire. Damn the luck. Will they put you in jail for that? It just said fines in the article. Could they even prove a crime? You don’t “own” them anymore. They’re lost, as far as they can tell. 
 

Let’s say I want to buy Bitcoin after this law is passed. Get a vpn, go on foreign exchange and buy some. Pull it offline. Voila. 
 

All that said, comparing India and USA in anything crypto related is a little misleading. More holders are in the US  than anywhere else. Larger institutions and powerful individuals are becoming advocates. The snowball is getting bigger as it’s rolling down the hill. 

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I mined bitcoin early on. I understand it well enough. I'm just pointing out the very danger that I mentioned previously, governments outlawing the currency, is starting to happen.

Posted
  On 3/16/2021 at 12:51 AM, Dahobbs said:

I mined bitcoin early on. I understand it well enough. I'm just pointing out the very danger that I mentioned previously, governments outlawing the currency, is starting to happen.

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Fair enough. And I pointed out the easy ways to work around the laws described. 
 

Governments try to ban lots of things people want. Drugs, sex, uninflatable and uncensorable money. These things are still available and in fact they thrive. In the case of Bitcoin, the fact that governments are scared of its competition should be a sign that the average person should look into it more closely. 

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  • 2 weeks later...
Posted
  On 3/16/2021 at 1:03 AM, GRHorn said:

Fair enough. And I pointed out the easy ways to work around the laws described. 
 

Governments try to ban lots of things people want. Drugs, sex, uninflatable and uncensorable money. These things are still available and in fact they thrive. In the case of Bitcoin, the fact that governments are scared of its competition should be a sign that the average person should look into it more closely. 

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“Bitcoin can be the next drugs” is a weird flex for someone who started out arguing that Bitcoin is going to be the next money. Your arguments seem all over the place with the only constant being “Bitcoin is the answer.”
 

Although, cocaine’s value has been pretty stable for almost 30 years and in a lot of ways is a pretty good medium of exchange. 

Posted
  On 3/24/2021 at 10:24 PM, 956 Worldwide said:

“Bitcoin can be the next drugs” is a weird flex for someone who started out arguing that Bitcoin is going to be the next money. Your arguments seem all over the place with the only constant being “Bitcoin is the answer.”
 

Although, cocaine’s value has been pretty stable for almost 30 years and in a lot of ways is a pretty good medium of exchange. 

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I said nothing of the sort. It’s fascinating that is what you synthesized from my post.  

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Posted
  On 3/24/2021 at 10:31 PM, GRHorn said:

I said nothing of the sort. It’s fascinating that is what you synthesized from my post.  

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You laid out the parallels pretty explicitly. “Yes, governments can try to ban Bitcoin just like they tried to ban drugs. But the laws will be circumventable (also true of drugs). Drugs are available and thrive, so will Bitcoin. The average person should be interested in it because the government wants to ban it.”

Posted
  On 3/24/2021 at 6:59 PM, GRHorn said:

 

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You are measuring inflation incorrectly. Asset bubbles = no economic goods are directly produced. Asset bubbles are sensitive and volatile, possibly creating the illusion of growth 

The Fed and Treasury are hoping we get at least 2% inflation by 2023.  Deflationary headwinds pose a much greater risk to this economy.

Deflation = 

Deflation is the looming specter threatening our economy, not inflation. Don't know what you Casino boys are squawking about. 

Posted
  On 3/24/2021 at 10:40 PM, 956 Worldwide said:

You laid out the parallels pretty explicitly. “Yes, governments can try to ban Bitcoin just like they tried to ban drugs. But the laws will be circumventable (also true of drugs). Drugs are available and thrive, so will Bitcoin. The average person should be interested in it because the government wants to ban it.”

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So that equals “Bitcoin can be the next drugs”? Cmon 

 

Yes when the government wants to ban an asset like Bitcoin you should be interested. They’re scared of the competition essentially. Why are they? Is it better money? 
 

  On 3/24/2021 at 11:02 PM, washparkhorn said:

You are measuring inflation incorrectly. Asset bubbles = no economic goods are directly produced. Asset bubbles are sensitive and volatile, possibly creating the illusion of growth 

The Fed and Treasury are hoping we get at least 2% inflation by 2023.  Deflationary headwinds pose a much greater risk to this economy.

Deflation = 

Deflation is the looming specter threatening our economy, not inflation. Don't know what you Casino boys are squawking about. 

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Rising commodity prices are not asset bubbles. They are signs of inflation. 
 

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Posted
  On 3/24/2021 at 11:24 PM, GRHorn said:

Rising commodity prices are not asset bubbles. They are signs of inflation. 

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No offense, but incorrect. Commodities tend to reflect changes in the dollar's relative strength in international markets rather than domestic inflation pressures.

Posted

The irrational fear of non-existent inflation is the graveyard for public investment in humans. It's part of the austerity handbook. 

__________________________________________

Posted
  On 3/24/2021 at 11:48 PM, washparkhorn said:

No offense, but incorrect. Commodities tend to reflect changes in the dollar's relative strength in international markets rather than domestic inflation pressures.

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They can be a leading indicator and have been in the past. 

 

  On 3/24/2021 at 11:47 PM, longhornmatt said:

Did you really post that if the government makes a currency illegal, that’s a sign that the average person should look more closely at investing in it?   Come on, man.

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Yes. A strong government and currency doesn’t need to ban competitors.
 

People in India and Nigeria should be, and in Nigeria have been, looking into Bitcoin as an alternative or hedge to their own shitty currency. There’s a reason those countries are pursuing bans. 

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Posted
  On 3/24/2021 at 11:50 PM, longhornmatt said:

Hey, I wonder if there is any non-inflation related reason why oil and gas commodity prices are much higher than they were in March 2020? That’s a puzzler.

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Never let a statistical anomaly (the onset of Covid) go to waste.  ~ Debt Fetish Austerity Ghouls

  • 3 weeks later...
Posted

So funny story... In 2018 I was playing cheap crypto looking for a quick jump. I chose Verge XVG at .12 and it promptly fell to <.01. In the process of swapping USD for BTC so I could buy XVG (geekspeek) I left $500USD in Bitcoin in a wallet. I randomly checked my crypto accounts which I thought was all XVG and found the $500 BTC had grown to almost $3K USD. Now Do I let it ride (house money) or take the money and run? Is BTC in a bubble or is it going to grow 4 fold again?

  • 3 weeks later...
Posted
  On 5/5/2021 at 6:44 PM, Biff Tannen said:

Well this is fantastic.  I'm sure our electrical grid will hold up just fine, as we definitely don't have any problems with that.  God dammit.

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The vast majority of Bitcoin mining in Texas will be off of flared gas from oil wells. 
 

In any case, these are great developments for Texas. Looking forward to the state actually devoting some of its own funds to Bitcoin. It would be a wise move to strengthen our financial position. UTIMCO held (still holds?) gold bullion in NYC vaults. Why not do hold some of this store of value that’s going to appreciate?

It would help further establish Texas and Austin specifically as a burgeoning tech/Bitcoin hub. There’s already a large contingent of prominent bitcoiners in Austin to build on.
 

From a competitive standpoint Miami is making a similar push as well. 

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Posted
  On 3/24/2021 at 11:02 PM, washparkhorn said:

You are measuring inflation incorrectly. Asset bubbles = no economic goods are directly produced. Asset bubbles are sensitive and volatile, possibly creating the illusion of growth 

The Fed and Treasury are hoping we get at least 2% inflation by 2023.  Deflationary headwinds pose a much greater risk to this economy.

Deflation = 

Deflation is the looming specter threatening our economy, not inflation. Don't know what you Casino boys are squawking about. 

Expand  

 Can you explain a bit more why you are so confident on inflation not being a threat? We have not seen these types of price increases on so many commodities and non-commodities since the 70’s. 

Posted
  On 5/5/2021 at 8:44 PM, Biff Tannen said:

Ok that is actually pretty cool.  Not sure how many people have the means for this, but ok.

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My understanding is that the economics of it are a slam dunk. The energy would be lost anyway. It also supposedly lessens the environmental impact with the way it’s captured. Of course that comes from its proponents. 

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Posted
  On 5/5/2021 at 8:22 PM, Dbeasy said:

 Can you explain a bit more why you are so confident on inflation not being a threat? We have not seen these types of price increases on so many commodities and non-commodities since the 70’s. 

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A nice article from Forbes on commodity prices and inflation:

On the surface, it looks bad. Commodity prices are way up. The media is on alert. Inflation worries have dominated the headlines for months. (This weekend even Warren Buffett joined the outcry: “Buffett Warns on Inflation Amid Red Hot US Recovery” - The Financial Times, May 3.) 

And isn’t it obvious? Don’t rising prices constitute inflation by definition? 

The answer is no. Commodity prices and consumer inflation are quite different phenomena. The idea that commodity price increases will drive up consumer prices is plausible – but it is incorrect. Basic commodity prices no longer have any significant effect on long-term inflation.  

In fact, over the past 10 years, the correlation of major commodity prices and consumer price inflation is negative (except for crude oil, which is only slightly positive). Over the long term rising commodity prices have been associated with falling inflation rates. This statement holds whether we look at broad trends or at individual commodity-to-product linkages, like steel and autos, or wheat and bread. (It’s true. Read on.)

  Reveal hidden contents

Which brings us to the crux of the matter. “Inflation” itself is fundamentally a problematic concept. It arose from and applies mainly to prices for undifferentiated physical commodities. It was relevant in the era of industrial economies that dominated the 19th and much of the 20th centuries, when those commodities made up the lion’s share of the cost structure for most consumer goods. It may not be relevant any longer in a technology-driven digital economy, where intangible assets matter more. The disconnect between commodity prices and consumer prices is an important symptom of this change.

https://www.forbes.com/sites/georgecalhoun/2021/05/05/commodity-price-increases-do-not-create-inflation/?sh=2685dd4e57cb

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Posted
  On 5/5/2021 at 8:22 PM, Dbeasy said:

 Can you explain a bit more why you are so confident on inflation not being a threat? We have not seen these types of price increases on so many commodities and non-commodities since the 70’s. 

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@Dbeasy - a nice measurement to follow for how the Fed measures inflation risk:

image.thumb.png.2daa4c835c3a0f78c82baf91e34e62a7.png

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Posted

Thanks for those posts. I had seen some similar articles about commodities. I understand the points being made. 

Here are the reasons I’m still concerned:

1. Multiple people have correctly shown that the official inflation numbers posted by the government deviate dramatically from what people actually put for the goods and services they buy every year. Many of these studies show actual inflation to the consumer of 5-8% annually. For years, consumers just sucked it up and didn’t demand enough higher pay to offset the increases. A tight labor market will put pressure on wages, in my opinion, for the first time in a very long time  

2. As the article correctly points out, a big portion of the economy is now driven by services and digital. Both of those categories have a difficult time absorbing cost increases. It’s one of the reasons health costs go up every year as much as they do. We are now seeing regular price increases in almost all services and digital services. Netflix, doctors, etc. 

3.  With 1 and 2, I see prices rising at the consumer level and it has nothing to do with bottlenecks. 

that’s why I’m still concerned. 

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Posted
  On 5/6/2021 at 12:15 AM, Dbeasy said:

Thanks for those posts. I had seen some similar articles about commodities. I understand the points being made. 

Here are the reasons I’m still concerned:

1. Multiple people have correctly shown that the official inflation numbers posted by the government deviate dramatically from what people actually put for the goods and services they buy every year. Many of these studies show actual inflation to the consumer of 5-8% annually. For years, consumers just sucked it up and didn’t demand enough higher pay to offset the increases. A tight labor market will put pressure on wages, in my opinion, for the first time in a very long time  

2. As the article correctly points out, a big portion of the economy is now driven by services and digital. Both of those categories have a difficult time absorbing cost increases. It’s one of the reasons health costs go up every year as much as they do. We are now seeing regular price increases in almost all services and digital services. Netflix, doctors, etc. 

3.  With 1 and 2, I see prices rising at the consumer level and it has nothing to do with bottlenecks. 

that’s why I’m still concerned. 

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If concerned about inflation, TIPS are one hedge:

https://www.forbes.com/advisor/investing/treasury-inflation-protected-securities-tips/

Treasury Inflation Protected Securities, or TIPS, are bonds issued by the U.S. government that offer protection against inflation plus modest interest payments.

“Many investors save and invest so they can spend in the future,” says Wes Crill, head of investment strategists at Dimensional Fund Advisors in Austin, Texas. “For investors prioritizing preservation of purchasing power, TIPS can contribute to that goal by mitigating the impact of unexpectedly high inflation.”

How Do TIPS Work?
As fixed income securities, TIPS work a lot like the bonds you’re already familiar with. You purchase debt issued by the U.S. government, and receive regular interest payments on the face value, or the par value, of the securities. When the TIPS’s term is up, you are repaid the original amount loaned to the government.

TIPS, however, come with inflation protection baked in. Each year, the U.S. Treasury adjusts the par value of TIPS based on the Consumer Price Index (CPI), a measure of inflation determined by price changes in a basket of leading consumer goods. This helps preserve the purchasing power of your TIPS investment . . .

  Reveal hidden contents

Certainly not investment advice - by any stretch of imagination. Just pointing out one of many inflation hedges.

Good luck.

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Posted
  On 5/6/2021 at 12:53 AM, longhornmatt said:

I don't think TIPS are an appealing investment option for someone who thinks the Consumer Price Index is a faulty measure that understates true inflation.  

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Ya that’s the problem with them. 



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