Replaced crypto with stocks, how does it read now?
When someone makes an argument of the sort that just because there is a market for something then it magically becomes useful, it tells me they haven’t heard or understood this quote:
“The market can remain irrational longer than you can remain solvent”
Also, strange how such prominent tulip story never resulted in adoption of tulips by any country? So weird, why is that?
And yet with Bitcoin, we see adoption not by one, but by several G-7 countries as a valid payment mechanism, one small country as legal tender, another small country preparing a bill this year, and Russia signalling it will regulate Bitcoin as currency, not property?
Strange, that.
But anyway, here you actually presented some arguments and explanations for why bitcoin can be useful.
Now, I don’t think bitcoin will actually end up anywhere useful in the end because it doesn’t really solve anything that fiat doesn’t (except perhaps for people in the illegal payments market) but we can disagree on that.
My point was about the previous argument, that there was inherent usefulness or value in bitcoin just because there are people speculating on it, that is fallacious.
This would mean much cheaper commodities(including gold and silver), much cheaper land, much cheaper housing, a lot fewer bubbles in the stock market. Much more healthy fiscal environment overall, with other stores of value "demonetized" and devoid of the monetary premium. A stretch goal for sure, but maybe can be eventually approached asymptotically on a longer time scale.
However, a pure monetary asset doesn't need to have any intrinsic value. It just needs to be a widely accepted store of value (and preferably, but not necessarily medium of exchange).
As such, it would seem that an entirely speculative asset would be one of the greatest achievements we will ever make.
Seems contradictory at first, but if you really think about it, I see nothing of fundamental importance that comes even close to it today. Especially today.
How would you suppose bitcoin or any other crypto would lead to this?
If it becomes the global reserve currency, and remains accessible to everyone - the world would end up on a disinflationary Bitcoin standard.
In a disinflationary/deflationary environment the cost of borrowing/interest rates goes up, thus the leverage that is fueling asset inflation is removed. Blackrock doesn’t buy single family houses cash, they have access to the fed discount window.
During the gold standard we’ve had prices stable for hundreds of years in some examples, so at least we’ve seen that historically prices can be quite stable.
Today, land has become the primary saving vehicle and that’s less than ideal.
Personally I’d love to see land demonetized as an asset via Georgist taxes.
The ultra-wealthy deploy or deny capital to mold the society to their views.
"Social utility" is just this mind virus the ultra-wealthy spread in everyone's mind to make their rule-by-proxy feudalism palatable to the peasant class.
but to your point, you are exactly correct. Stock markets is a game, designed to methodically transfer wealth from the peasant pockets to the ultra-wealthy that write the rules of the game.
One, and most common, game is to have peasants as suckers of the last resort and have their pension funds buy all kinds of garbage because "mandates". Why would anyone want to hold negative yielding debt? But they do.
What the fuck are you talking about? If the stock market didn't exist, it would literally be impossible for average people to own (parts of) extremely productive and profitable large companies.
The average Joe would just fall even further behind.
These articles are pointless. No one is going to bother reading Brian Arthur of all people to have any clue.
Just the same dumb conversations over and over and over.
It reads like a false equivalence.
I do own stocks in companies such as Woolworths (retailer), BHP (mining company) and Westpac (banking company). The fact that they produce goods or services that they can sell at a profit was a huge decision in my decision to invest (and a big reason why I didn't invest in crypto).
I don't have data, but I suspect this is how most stockholders think. They accumulate shares over their lifetime and rely on the dividends to pay for their lifestyle during retirement.
Yes, Wall Street Bets exists, but the average person with stocks is not a day trader leveraging themselves up to their eyeballs to gamble on some crazy contracts.
Amazon hasn't been profitable on paper for decades. Tesla took until 2021 to make a profit.
You'd underperform terribly if you were to wait until they make a profit, as markets are forward looking and you are paying attention to trailing indicators.
Profits today for an organization size of Amazon is execution of a plan put in place 5 years ago.
If you are about to dive into value investing: Berkshire made most of their money from Apple, which was a side bet made by a hired portfolio manager, not Buffett himself.