Bitcoin has started to rise again, and it looks like it might be the start of the next Bitcoin bubble. Although many people have known about Bitcoin for years, most people have not purchased any coins and do not understand it.
Image courtesy bitcoincharts.com
How is this bubble different?
Accelerating Technology, Dreams Come True, Internet, Money, Success, US Economy
Many people think that this is a great time to buy gold. However, the same people who are saying that now were saying it when gold was at $1,800 per oz.
The price of gold has fluctuated over the last 5 years.
Personally, I think it is better to hold gold than dollars. The dollar is collapsing, and I think it will continue to collapse over the next decades. However, that does not mean that everyone should go out and buy gold.
Internet, Investing, Money, Success, US Economy
Bitcoin has had an interesting history. Launched in 2009, it was revolutionary in combining cryptography with money. Perhaps the motivation for this idea was to create a system that distributes financial resources to those who have computing power.
Image courtesy of BitcoinCharts.com
We may never know the motivations behing Bitcoin. The mysterious creator, Satoshi Nakamoto, cut off communication in 2011. The name appears to be a pseudonym and he has never been identified. It has been theorized that he is not even a single person, but a group of people who have opted for anonymity. If this is the the case, they have succeeded.
Has Bitcoin revolutionized the way that humans use money?
Consider the following 4 phases of money:
- Fiat Currency
The first phase of human exchange predates the first villages. It was simply the exchange of x amount of one good for y amount of another good. For example, “I’ll give you 3 apples for 2 pears”. Although this worked, it was cumbersome because there was no simple way to value a given good.
Accelerating Technology, Dreams Come True, Money, US Economy
It has been quite interesting to watch Bitcoin as it has gone through one bubble, and consistently risen since. Many people thought that Bitcoin was finished after its stratospheric rise in 2011, and it’s subsequent collapse to $3. Can Bitcoin survive such a massive devaluation?
Image courtesy Bitcoin Charts
Recently Bitcoin has achieved quite a bit of attention, because of WordPress.com announcing that they will accept payment in Bitcoin. More recently, Reddit has decided to accept Bitcoin. The more interesting (and perhaps) exciting development is that you can now buy pizza with bitcoins.
Accelerating Technology, Dreams Come True, Internet, Investing, Money, Success, US Economy
Creative Commons -- Tax Credits
So, the Fed is trying to give another bolt to the economy.
It didn’t seem to work before, but if there’s one thing that we have all learned is that if a tactic continually fails, you should keep doing it until it works.
Sort of like smashing your head into a wall repeatedly if you need to make a household repair.
Well, here are some lessons I have found around the internet. Just like the Fed knows they can always print more money, I know people will always publish more posts.
So relax! These do not require you to smash your head into the wall. Just give them a read.
Wall Street Journal — Management Secrets of the NFL
Dumb Little Man — 13 Warning Signs That What Your Delegated Won’t Get Done
Financial Samurai — A Day Job is Much Easier Than Entrepreneurship
Finance Fox — Do You Need a Career Change?
Invest It Wisely — You Don’t Need to be Born an Entrepreneur
Untemplater — What is eHealth Insurance?
The Digerati Life — Skip Commercial Banks! How Cash Only Living Can Work
Business Strategy, Internet, Investing, Money, Success
President Obama upset some business folks when he basically said… you didn’t build your business.
In fairness, here’s what he said:
“If you were successful, somebody along the line gave you some help. There was a great teacher somewhere in your life. Somebody helped to create this unbelievable American system that we have that allowed you to thrive. Somebody invested in roads and bridges. If you’ve got a business, you didn’t build that. Somebody else made that happen,” he said. “The Internet didn’t get invented on its own. Government research created the Internet so that all the companies could make money off the Internet.”
So, he could be referring to the roads and businesses. In other words, businesses do not build the infrastructure necessary to allow their companies to bring in raw materials and send out completed products, or however else they conduct their operations.
But he’d still be misguided, for a few reasons–and perhaps it’s semantics.
If what the president is saying is that businesses did not build the roads, then he is only partially correct. Money from businesses in the form of taxes did indeed pay for those roads and bridges. Businesses partnered with government to create infrastructure.
Business Strategy, Internet, Investing, Money, Online Investing AI
Federal Reserve Building--Creative Commons
After two record-breaking attempts to jump start the economy through with no signs of success, the Federal Reserve is now debating a third round of quantitative easing.
QE 3, as it will be called, won’t work. But, beyond that, this is a reckless and unethical way to subvert the traditional role of the board. This continual monetization of debt and debasement of the currency could lead to a super bubble–and a resulting pop that will make 2008 look like a slight recession.
Let’s look at why the Fed is considering a third round of easing. It’s simple: the election year is coming up. A sitting president who is facing high unemployment and a weak economy will not get re-elected. Like a giant campaign kitty, the Fed is going to kick in hundreds of billions to make sure the president gets reelected. This isn’t a Democrat or Republican thing either, folks. Both sides do it.
Investing, Money, US Economy
Image courtesy H Elise from Creative Commons.
It’s been an interesting week for investors. Usually, when someone says the week has been “interesting,” it means that it’s been scary. That holds true in this instance.
The Fed has moved away from another round of quantitative easing. The government released some oil from its strategic reserve. In the past eight weeks, the Dow has fallen seven times.
How’s that for interesting?
One way an investor (and we’re all investors technically) can prepare for our interesting future, is to get educated. The good thing is there’s always quality content online.
Here are some of the things I’ve been reading:
Internet, Investing, Money, Online Investing AI, US Economy
Image courtesy Creative Commons
So, oil prices shoot up and the government…
Then, weeks later oil prices plummet. And the government…
Releases oil from the strategic reserve–a tactic to lower prices.
Let’s talk about the Federal Reserve now. The Fed pumped billions of dollars into the economy, hoping it would fire up the economy. A year later, even with a weak economy, they decide…
To do nothing.
Most investors are scratching their heads and wondering WTF is going on?
I have a few
deeply insightful, well-thought out reasons conspiratorial guesses for this bizarre financial behavior.
Investing, Money, US Economy
Last week’s tax and unemployment package was just one of a long series of events that will destroy the dollar. While most people are blissfully unaware, the government is working to undermine the U.S. dollar. I have written about this massive change that will affect all of our lives many times before.
Photo by dcJohn
This latest act of congress makes it clear why the dollar has no hope for survival: our government has no desire to be financially responsible. America is a country of debtors. We have the lowest saving rate of any developed country. Why would our elected representatives be any more responsible than we are?
How did this happen?
Dreams Come True, Investing, Money, Success, US Economy