ecosophia: JMG in lecture mode (Default)
[personal profile] ecosophia
I hope that none of my readers have sunk any money they can't afford to lose into the current Bitcoin bubble. On the off chance that I'm wrong, though, may I offer a friendly piece of advice? 

Get out. 


These days, most people in the final stages of a speculative bubble know perfectly well that it's a bubble, They're convinced that they can get out just before the peak, cash in their gains, and walk away with a pot of money. You know what? Isaac Newton thought that, too. He invested a lot of money in the South Sea Bubble back in 1720, and he lost it all, because when the market turned down, he was convinced it was just another dip and the market would keep going up. You are not as smart as Isaac Newton, folks, and you have even less of a chance of knowing when that decline is going to turn into a plunge that will erase the bubble, your dreams, and your financial future. 

There's a better option. You've heard of a family named Kennedy, right? The reason you've heard of that family is that that old bootlegger and Boston Irish mob kingpin Joseph P. Kennedy, one day in the late 1920s, got a stock tip from his shoeshine boy, realized that this doesn't happen in a sane market, and pulled every dollar he had out of stocks. I don't happen to know where he stuck them, but it was something that wasn't affected by the gargantuan stock market bubble that ended in 1929. The result was that when everyone else lost their shorts, he was sitting pretty, and could snap up a very solid portfolio for pennies on the dollar. (After things bottomed out in the early 1930s, remember, you could buy a share of General Motors for $9 and change.) That wealth was what boosted the Kennedys out of the Boston Irish mob and into the political elite. 

Right now, according to some sources, people are taking out second mortgages on their houses to invest the money in the Bitcoin bubble. That doesn't happen in a sane market. Don't try to time the market. Don't think that you'll be safe if you go to a different cryptocurrency, either, because they're riding the same bubble and will plunge at the same time. There's only one way to survive a speculative bubble: 

Get out. 


No kidding!

Date: 2017-12-12 06:21 pm (UTC)
From: (Anonymous)
I'm watching this with amazement. What is a Bitcoin anyway? Nothing at all, as far as I can tell. First it was supposed to be a cryptocurrency comparable to money, only backed neither by a valuable commodity nor by any government's faith and credit - to me a big problem already - but now people are speculating wildly on it. People don't do that with a currency - the price of rubles might tank overnight, but will never shoot up 1000% - so it's plainly not a real currency, it's like overpriced collectible cards or any other item bought solely to resell it at a profit ... except that the item being bought has no material existence and no guarantee of retaining any value or use whatsoever when the bubble pops. At least a tulip bulb can be planted for pretty flowers, or possibly eaten. And anyone who would take out a mortgage to buy more tulip bulbs is certifiably insane.

(no subject)

Date: 2017-12-12 06:30 pm (UTC)
From: [personal profile] danielsobieraj
Wow. I don’t think it’s a coincidence now that a few of the Youtube channels I follow are pushing bitcoin hard on their viewers in the last week and trying to convince me it’s the next best thing.

I looked into it a while back. The amount of energy needed to mine it makes it a non-starter for me. It isn’t worth it for the environmental impact, let alone that it’s a speculative bubble.

(no subject)

Date: 2017-12-12 07:05 pm (UTC)
From: [personal profile] daveotn
The hour is definitely growing late on this bubble. The tone of even the mainstream reporting has shifted from "Here's an odd currency" to "This is innovative and game-changing" all the way to "This is completely and utterly absurd."

No doubt many people will continually be tempted to ride the wave - just buy it for a day or two! - but at some point very soon there will be nobody willing to buy when you're ready to sell.

The more interesting question is, are we reaching some sort of abstractness asymptote on bubbles? Bundled mortgages seemed pretty abstract compared to corporate stocks, which seemed pretty abstract compared to tulips, but bitcoin is so purely abstract that it's hard to imagine what might come next.

(no subject)

Date: 2017-12-12 07:54 pm (UTC)
elf: Computer chip with location dot (You Are Here)
From: [personal profile] elf
For those who haven't come up with enough ways to burn off their money, bitcoin futures are now available for buying, selling, and other financial shenanigans.

Occasionally I look at Bitcoin and think, oh wow, I could've bought in when they were $100 each and I was thinking 'this would be a fun technogeek thing to do,' and now I'd be rich rich rich! ... only, no. If I'd bought in when they were $100, and got 1-2 bc because that's the most "weird geek oddity" I could afford, I would've cashed out when they hit $1000-$2000, enjoyed the hell out of ComicCon or maybe paid to paint and add shelves to my home office, and been happy with my geekly income.

No way would I have held on through the rise to $4k, $5k, $10k. And the people looking at it now really really need to know: the price is not going to keep rising to $50k. Maybe it'll "stabilize" at $22k (I doubt it; that's not the way these bubbles work), but a $4k-per-coin increase that may take years to reach is not worth mortgage payments.

I have no problems with people who want to throw their leisure money at cryptocurrency instead of Steam's video game sales; Bitcoin is the math puzzle that got famous, and geeks are going to enjoy their own favorite math puzzles. But wow, for vapor investments, cryptocurrencies have to be ridiculously high on the list.

(no subject)

Date: 2017-12-12 08:25 pm (UTC)
From: (Anonymous)
I've been shopping around for internet astrology people who get things right more often than not, and have found one that seems to agree with you on a lot (although her internal bias made her second guess the Trump phenomena even though she spelled out why his chances were much better than most people thought at the time).

I won't name her company because I'm not aware what policies you have on that, but will mention she has been talking up this Saturn in Capricorn thing for a while and how it's the WRONG time to invest, we should be saving our money for hard times, financial games are about to hit a wall of consequences, etc.

Reading astrological reports has been very helpful for me the past couple years, especially the ones that don't sugar coat everything so I can anticipate issues. Therefore it's something I'd like to understand better.

Does anyone have recommendations for approachable astrology books or online classes for beginners? Geomancy has been helpful with some of the concepts, and now I'd like to make more sense of it.


Date: 2017-12-12 09:04 pm (UTC)
From: [identity profile]
Hi John Michael,

Did you just hear that cry of a banshee off in the forest?

Mate, that bitcoin business has always looked like a bubble to me.

The problem as I see it with expansionary monetary policy is that people can even get second mortgages in the first place. I recall from history that during the 1850's gold rush era, Chinese overlords used to loan money to unsuspecting chumps who most likely had no ability to repay the loans. The chumps were sent out to Australia to work as indentured labour on the goldfields until the debts were cleared. That story alone made me nervous of debt. And using debt to speculate is just a doubly bad idea.



(no subject)

Date: 2017-12-13 07:26 am (UTC)
exalhel: (Default)
From: [personal profile] exalhel
I once had the unpleasant experience of finding bitcoin-mining malware on a web server at work that was eating up 99% of CPU. Gee, no wonder the website wouldn't work!

Bitcoin can bugger off.

(no subject)

Date: 2017-12-13 02:15 pm (UTC)
From: (Anonymous)
Bitcoin is very far from nothing, and none of JMG's readers should want anything to do with it.

Bitcoin is nothing short of a commodification of direct environmental destruction. Its consumption of fossil fuel energy and rare-earth minerals is grotesque.


Date: 2017-12-13 05:47 pm (UTC)
From: (Anonymous)
I am completely confused. What the frack is being "mined" here? It still looks like this is nothing but a computer game, and the environmental cost is that of running servers to run the computer game, which is to say that you might as well invest in rare weapons from World of Warcraft. Or am I missing something?
chaosadventurer: Chaos Spy Guy (Default)
From: [personal profile] chaosadventurer
understanding crypto currency and how it relates to fiat currency will help gain a grasp what is about to happen. now to be ready for this next collapse step.
a post worth reading to see how some see crypto currency as the replacement to fiat currency even recognizing that many will be hurt in how ever it plays out.

But, but…

Date: 2017-12-13 08:49 pm (UTC)
jjensenii: South Park avatar (Default)
From: [personal profile] jjensenii
On the other hand, I hear the fundamentals of Dogecoin are much sound such amazing wow. ;P

I actually have about $100 wrapped up in cryptocurrencies at the moment. I won't be able to sell most of it until next Tuesday, but even if I lose it all, meh. It'll sting but that's about it.

I was thinking just last night how Peak Bitcoin is a microcosm for what we're experience re: peak oil and peak civilization. The price soared exponentially and now is on a "bumpy plateau" that people are mistaking for stability. Eventually it will turn down.

The main difference with oil and civilization is the lack of good options just at the moment. At lot of people will hang on to those simply because they have (sometimes literally) no other choice. Then when the choices arrive, it will all come tumbling down.

(no subject)

Date: 2017-12-21 02:36 am (UTC)
yuccaglauca: Photo of a yucca moth on the petal of a yucca flower. (Default)
From: [personal profile] yuccaglauca
The article you linked to suggested another article reporting on how the two developers of Facebook who didn't manage to keep a finger in that pie said they're moving to Bitcoin and the article quotes one of them, saying:

"We’ve seen the bubble term thrown around and it’s just not the right way to look at this," he explained. "Social networks grow in value exponentially based on the number of users and participants. The difference between one and 100 is dramatic — 100 and a million is that much more dramatic and exciting. As more people join it gains more value."

You've mentioned before that you know a bubble's getting ripe when its proponents start saying, "it's not a bubble, it's totally different this time!" but I didn't really expect they'd be so blunt about it.
Edited Date: 2017-12-21 02:37 am (UTC)

For the record

Date: 2017-12-25 05:48 pm (UTC)
From: (Anonymous)
Crypto-currencies have dropped 25-50% suddenly. Lots of theories as to why but it's happening regardless. I foresee another climb up followed by a second, deeper crash. Here's just one article about this:

- Tim


ecosophia: JMG in lecture mode (Default)John Michael Greer

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