Yanis Varoufakis Discuses Bitcoin and Litecoin on RT Posted on December 7, 2013 by Yves Smith Yves here. Yanis makes a couple of observations which won’t sit well with digital currency enthusiasts. Post navigation ← The BLS Report Covering November 2013: Effects of the Government Shutdown Fade, Part Time Work Increases Capital Inflows and Booms in Asset Prices → Subscribe to Post Comments 26 comments Jerome December 7, 2013 at 5:37 am He is criticizing bitcoin for it’s current lack of use as a medium of exchange but he ignores the fact that you could make the same argument about gold. Furthermore bitcoin is built to make Internet transactions cheaper. Gold doesn’t have that and probably never will. R Foreman December 7, 2013 at 6:29 am Here’s another observation.. alternative currencies which don’t float with the USD and JPY will continue to rise as Yellen and Abe continue their rampant money printing operations. Have a nice day! AbyNormal December 7, 2013 at 7:43 am oh yeah, you got the world by the ballz…you really think ‘they’ are going to let you pick up more than a crumb or two? “All one needs is a deep pocket, moderate intelligence, and unfussiness about moral scruples.” The Art of Currency Manipulation http://www.kaushikbasu.org/Currency%20manipulation.pdf “Mood evidently affects the operation of System 1: when we are uncomfortable and unhappy, we lose touch with our intuition. These findings add to the growing evidence that good mood, intuition, creativity, gullibility, and increased reliance on System 1 form a cluster. At the other pole, sadness, vigilance, suspicion, an analytic approach, and increased effort also go together. A happy mood loosens the control of System 2 over performance: when in a good mood, people become more intuitive and more creative but also less vigilant and more prone to logical errors.” Daniel Kahneman, Thinking, Fast and Slow Be Like Water ~Bruce Lee R Foreman December 7, 2013 at 8:26 am Same thing is happening in equities. http://www.zerohedge.com/news/2013-12-06/just-two-charts Only difference is you can’t buy your vpn and hosting service using ibm stock, and you can’t stash your ibm stock onto an encrypted disk drive or write its number down and recreate it on computer later. Get a clue Aby. “You dishonored my family and a shaolin temple. Now you must die”. -Bruce Lee matt December 7, 2013 at 7:18 am gold is so last century JB December 7, 2013 at 10:46 am Her hair looks great….. are those extensions? susan the other December 7, 2013 at 11:17 am Interesting that Varoufakis is so generous to Bitcoin. Focusing on its fixed supply and therefore relative uselessness as a modern medium of exchange. As if somehow this feature wasn’t the very reason for being of Bitcoin, Professor? Just mint up a billion more Bitcoins and it will be an effective currency. But not a store of wealth. The two just don’t go together at all. Bitcoin has been an excellent research project, proving this very point. neretva December 7, 2013 at 12:37 pm Yes, I was surprised too. The other day he was lamenting and crying over the Greek state today he is enthusiastically a “virtual”. Maybe because he is in TX. pebird December 7, 2013 at 11:22 am Bitcoin will be an alternative currency when people stop asking “how much is that in dollars”. Until then, its another asset. docg December 7, 2013 at 12:17 pm To me, the bottom line on “currencies” such as Bitcoin is the issue of trust. Bitcoins are supposed to be difficult to mint. Bitcoins are supposed to be limited to a certain fixed maximum. Bitcoins are theoretically freely transferable. At any give moment, a Bitcoin is supposed to be worth such and such an amount, in dollars, Euros, whatever, and if I want to cash mine in for that amount I can readily do so. Etc. Etc. But, as with the Bible, the things that you’re li-bel to read about Bitcoin, ain’t necessarily so. Currency issued by a government is backed up by that government. Currency issued by a bunch of wheeler dealers is back up by: nada. well, Duh! Not rocket science folks. The Dork of Cork December 7, 2013 at 12:04 pm Well I agree with Yanis on this one ….. Taxed backed fiat until the wholesale breakdown of the production /distribution /consumption system and then metal for exchange. It (bitcoin) has no relationship with the present physical economy. Its a offshoot of the scarcity merchants pushing people into these trades but it losses as a medium of exchange when the shit hits the fan. Nevertheless he still talks shit. http://www.youtube.com/watch?v=e4yawdyuqP8 The Dork of Cork December 7, 2013 at 12:20 pm In the words of CH Douglas – if finance cannot meet real demand then finance has failed this simple requirement – it has failed and will be replaced. CH Douglas However finance has another option – it can simply destroy you piece by piece so as to make its balance sheet whole. I find the start of this video striking – a Greek Hi tech tram servicing a flea market. http://www.youtube.com/watch?v=ERygawES4zs I guess Its the Juxtaposition of these 1rst and third world markets which is striking Local production for local demand does not exist in Greece or indeed any euro country as a result of the euro system built over the decades. People are now forced to trade their accumulated physical capital for scarce money tokens. We can see quite clearly that the money power will just simply cut off bits and pieces of its Imperium rather then change its spots. F. Beard December 7, 2013 at 12:52 pm Common stock is the IDEAL private money form for reasons that might fill a book (but since I’ve already spewed them online, I probably won’t write it). Plus, since most people are resistant to the idea of just sharing vs hoarding and subtle theft via government-backed credit creation, what good would it do anyway for the effort? One day we SHALL have just money creation but how many will be mere ashes by then because of their stubbornness? P James December 7, 2013 at 2:40 pm “John Law (baptised 21 April 1671 – 21 March 1729) was a Scottish economist who believed that money was only a means of exchange that did not constitute wealth in itself and that national wealth depended on trade. He was appointed Controller General of Finances of France under King Louis XV. In 1716 Law established the Banque Générale in France, a private bank, but three-quarters of the capital consisted of government bills and government-accepted notes, effectively making it the first central bank of the nation. He was responsible for the Mississippi Bubble and a chaotic economic collapse in France. Law was a gambler and a brilliant mental calculator. He was known to win card games by mentally calculating the odds. He originated economic ideas such as “The Scarcity Theory of Value” and the “Real bills doctrine”. Law’s views held that money creation will stimulate the economy, that paper money is preferable to metallic money which should be banned, and that shares are a superior form of money since they pay dividends.” http://en.wikipedia.org/wiki/John_Law_(economist) Chris Cook December 7, 2013 at 6:58 pm Perhaps Law’s best insights were contained in his 1705 proposal for a land-backed currency for Scotland Money and Trade Considered – With a Proposal for Supplying the Nation with Money The original form of stock was a credit instrument sold at a discount and redeemable in value provided by the issuer. But for the last 300 years we have suffered an aberration into modern finance capital consisting of its bastard offspring: common stock (shares in a joint stock company); and loan stock (interest-bearing debt) into which it forked, Government stock is and always was essentially state credit sold forward at a discount. P James December 8, 2013 at 5:36 pm “But for the last 300 years we have suffered an aberration into modern finance capital consisting of its bastard offspring: common stock (shares in a joint stock company); and loan stock (interest-bearing debt) into which it forked.” Could you explain why these are ‘aberrations’? Do you have a text explaining your ideas in an accessible way that I can read, perhaps online? Thanks P James December 8, 2013 at 5:39 pm “He was responsible for the Mississippi Bubble and a chaotic economic collapse in France.” This sounds a bit like BS actually. One man responsible? Some wikipedia editor’s opinion. Jack Parsons December 8, 2013 at 7:46 pm One big cite for this claim is “Extraordinary Popular Delusions and the Madness of Crowds”. This wonderful tome describers 7 major financial bubbles. It was written in 1849. The prose style is surprisingly modern. The short edition just has the bubbles. The long version has very detailed descriptions of the 8 Crusades (yes, eight) and alchemy. A classic of economics and mass psychology. Highly recommended. Philippe December 8, 2013 at 9:00 pm What I was objecting to was the assertion that ‘one man’ could be responsible for something like the MIssissippi Bubble or the “chaotic economic collapse in France”. Such a statement essentially asserts that no one else was involved or responsible. There were no speculators in the Mississippi Bubble, only John Law. There were no investors or bankers or government officials or anyone else involved in the “economic collapse in France”, only John Law. BS. Chauncey Gardiner December 7, 2013 at 7:16 pm Wondering if a crypto-currency will emerge to become Keynes’ Bancor? I would love to hear Steve Keen’s thoughts on this. OpenThePodBayDoorsHAL December 8, 2013 at 12:42 am I will be meeting with Steve in January to discuss Bitcoin and will revert back. My take: it’s much more useful than bank money for certain things (cross-border, person-to-person payments, payments for the unbanked, 2/3 of the world’s population) and if /when merchants adopt it, it will be useful for commerce as well. Meantime governments will try and suppress it everywhere, and may succeed. P James December 8, 2013 at 5:43 pm “Wondering if a crypto-currency will emerge to become Keynes’ Bancor?” The ‘Bancor’ would be an arrangement between different governments/ central banks. So crypto currency would not be necessary. Instead it would be more akin to ‘special drawing rights’. The Dork of Cork December 7, 2013 at 9:14 pm Pointless global trade matters if you have almost worthless scotish land but if you have agricultural land of average French quality then whats the point of global trade ? So much is lost in transmission. Law can go fuck himself and charge for the service… lets see how he can feed himself. Jack Parsons December 8, 2013 at 8:37 pm “Fiat Money” means that the government requires you pay your taxes in that money. If cryptocoins are to be real money, a government must set a price on it. The government does not let you pay your taxes in stock options. Bitcoin has some really interesting features that make it a useful and new kind of currency. For example, it enables M-out-of-N voting transactions. There can be three parties to a transaction, and the transaction goes through if two parties vote yes. The third party’s opinion does not matter. This allows two parties to hire an independent arbitrator, and the arbitrator’s vote settles the matter. Illuminati Sith Lord December 10, 2013 at 12:49 am Well, 45 members of the Swiss parliament signed a postulate asking for Bitcoin to legally be treated as a foreign reserve currency (like the Euro or the Dollar). There is a good start. And, JB, Meghan Lopez is super-bright AND smoking hot! ISL Paul Richardson December 10, 2013 at 2:13 am Hmmm with all this talk of bitcoin I wonder if we ought to revive Esperanto as well Comments are closed. Tip Jar Please Donate or Subscribe!