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Posts Tagged ‘Central banks’

Why would you ever use BitCoins?

April 12, 2013 72 comments

From $266 to $54.25 in a matter of hours. An 80% fall puts the dramatic crash of the dot-com bubble at the beginning of the century to shame. Even Cypriot banking customers were recently allowed to keep more of their deposits. And this is the “currency” that is supposed to compete and replace fiat currencies, like the US dollar and the Euro, to create a more stable and trust worthy financial system.

BitCoin 2013-04-11

Source: bitcoin.clarkmoody.com

Advocates of BitCoins usually argues that it is the lack of government involvement, central banks and limited and finite supply that make BitCoins a valid and superior alternative to fiat currencies. Business Insider (BI) argues very well against this idea and concludes that BitCoins don’t have any intrinsic value but that fiat currencies do. BI points out that fiat currencies has the “slight” advantage, over BitCoins, of a legal system, authorities and the full force of the army backing them. Whilst this is a strong argument, let’s forget that for a minute, just for arguments sake, and imagine that BitCoins has replaced fiat currencies and then just ask us, why would you ever use a BitCoin?

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Bernanke again

January 29, 2010 1 comment

Not unexpected but still not great news. Bernanke will lead the Fed for another term.

Many of the senators voting against Bernanke and even those who voted for him argued along the lines of “better the devil you know”. Isn’t there something wrong and totally unnecessary with a vote when you only have one alternative? Isn’t that what the west used to criticize the USSR for when it came to their elections? Only one candidate.

How can the Senate vote on the head of the Fed if they only have one alternative? Off course they will vote for Bernanke no matter how much they don’t like him or how inappropriate he is to run the Fed.

Oh well. The market has to live with him for another term. At least we know the Fed will get it wrong … again. There is some comfort in that!

Crisis will happen again, it’s human nature

September 9, 2009 Leave a comment

It is human nature that will make sure another crisis will happen again, according to Mr Alan Greenspan, the former head of Federal Reserve, in a recent interview with BBC. I couldn’t agree more. However, I think we differ on what part of human nature will be more responsible for the crisis.
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The case against Bernanke

Reappointing Mr Ben Bernanke as head of the Fed is a mistake, as Stephen Roach correctly concludes in today’s FT. It seems though that Mr Roach is missing the point on Bernanke’s current action.

Mr Bernanke has been no better than Mr Alan Greenspan in understanding the driving forces for this, or any previous recessions and bubbles, and Bernanke is a student of the Great Depression, so he should know. A big driver has always been central bank actions, mostly the creation of cheap money – through low interest rates or as now through what they call quantitative easing. Printing money to you and me!
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