I’m reminded of a 90 year old story. Joe Kennedy, famously rich in the days just before the 1929 stock market crash, is said to have gotten out of the market when his shoeshine boy started giving him stock tips.
Today I’ve seen at least a dozen posts on Bitcoin and I haven’t even been looking for them. If it’s not in bubble stage yet, that’s not far away.
Maybe it means something, maybe it doesn’t. Broadbased economic declines sometimes have the least likely looking beginnings.
The key is how many borrowed money was used to buy crypto-currency.
Until today; it wasn’t easy since there was no futures contracts and the major banks weren’t touching the stuff. Now with futures…
I wonder how many people will laugh at the idea that a hash (number) that is not tangible, cannot be used to pay legal debts; and is not a legal claim on an asset has any value at all.
This is what happens when a handful of people have more money than god and can’t find sensible places to put it. Income inequality is a surefire way to generate high-risk speculative booms.
Thanks for the laugh, Ben. The shoeshine boy story, apocryphal or not, is more like it. In the housing crash hair dressers, waiters, retail salespeople and just rank gamblers of all sorts were buying and flipping houses. In the dot com bubble my idiot mother jumped in………..at the top. And look at the biggest inflows into the stock market today: retail.
There’s not enough actual money in bitcoin to cause a depression. But, the probability that bitcoin values go to zero is quite high, and many people will be wiped out.
The fact that we now have a futures markets is, however, ominous. That market could lead to many investors joining what is basically a Ponzi scheme, and the magnitude of the futures market could cause a depression when it, too, collapses.
Futures markets? Ominous? Nah. I’m worried about how many Diet Cokes Trump had yesterday. Let’s turn on CNN………
I’m not sure there’s any way to determine how exposed we are to the risks. Banks may not give loans for buying Bitcoins directly but they may do so unknowingly. So, for example, banks rarely know what HELOCs are being used for. Additionally, when assets are sold to raise cash that will certainly have some consequences for markets.
Speaking of bitcoin and such, how many of you know that you might unwittingly be aiding someone in the acquisition of so-called cryptocurrencies? See, Cryptojacking craze that drains your CPU now done by 2,500 sites.