
The Economy Is Full of Cryptocurrency and Collective Delusion - JumpCrisscross
https://www.bloomberg.com/view/articles/2018-02-11/the-economy-is-full-of-crypto-and-collective-delusion
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mrjaeger
Why was this not submitted under it's original title "The Economy Is Full of
Crypto (And Collective Delusion)"? The submitted title is wildly misleading,
as the author is not arguing generally that finance has become untethered from
productive work, but that this has become the case for certain crypto related
use cases.

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Hasz
I wouldn't exactly characterize it as misleading -- "Finance has become
untethered from productive work" is the subtitle.

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tikhonj
The subtitle is misleading _out of context_. The actual title is far more
representative of the article.

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tmnvix
I think finance was already mostly untethered from productive work - at least
in the anglosphere.

Just look at what banks are lending for these days. It's mostly mortgages. By
giving people money just to transfer ownership of unproductive assets we've
created a speculative asset boom which has had all sorts of downsides for
productivity.

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toomuchtodo
Those assets are productive as long as the mortgage is being paid, either by
the owner or the tenant.

Why are loans being originated for properties with values that have decoupled
from realistic wage multipliers? That’s an important fianance question.

~~~
tmnvix
Yes, that was badly worded on my part - the mortgaged properties can and are
likely to be productive.

What I was trying to get at was that the lending of money to bid up the prices
of those assets beyond prices that can be justified by their income earning
potential is unproductive.

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JamesBarney
Are you asking why single family homes have a high p/e ratio relative to other
assets?

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cjensen
Wow. The first sentence is so wrong I can't even.

Venezuela's problems are entirely self-inflicted. US sanctions have very
little effect on the worth of their money. Spending vastly more than they
make, in part because of their incompetence at running an oil industry, is
causing the hyperinflation.

The second part about the Berkeley city council proposing a dumb idea is a
"dog bites man" story. It's not news when they suggest doing something dumb.
It's only news when they try something crazy and it ends up being a great
idea.

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Roritharr
As someone who isn't even claiming to be knowledgeable about finance, I often
get asked by many peers why their work is worth so much less than owning
assets is. The ownership of a decently placed house can generate as much
income as 10 years of training and a full year of work as an engineer. Why?

Is there a comprehensive answer? I can only shrug.

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AznHisoka
Because a house fulfills one of the basic needs of humans (shelter)?

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justboxing
This exactly. Food, clothing and shelter. If your investment provide any of
this, you'll make money in and up or down economy.

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tananaev
Like with any other market bubbles in the past, there will be a day of
reckoning. I believe most of the coins and tokens will become almost
worthless, but it's likely that we'll have a number of winners that will bring
some utility value.

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spodek
> _It 's true! There is something sort of charming and hopeful about it
> though. In the old economy, to build something valuable, you had to build
> something valuable. In the new economy, you can just launch an intrinsically
> worthless token and go around to people and say "what if this was valuable?"
> And if you can convince them of your vision -- your vision of it being
> valuable -- then it will be valuable. It's finance untethered from
> productive work. It's so ... postmodern._

For those too young to remember, paragraphs exactly like this appeared in the
late 90s before the dot com bubble burst.

When the shoe shine guys start talking stocks, it's time to sell. Same with
random people talking ICOs.
[http://archive.fortune.com/magazines/fortune/fortune_archive...](http://archive.fortune.com/magazines/fortune/fortune_archive/1996/04/15/211503/index.htm)

It's not postmodern. It's predictable.

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AlexCoventry
These cherry-picked examples are akin to claiming on the basis of this article
that "Journalism has become untethered from productive work," when all it
really shows is "Bloomberg column-inches have become untethered from
productive work."

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jpmattia
Matt Levine's article reads like a dinosaur whining that a meteor that has hit
his environment, and now everything is changing. I must have missed the point.

It's strange, because Matt's articles are usually worth reading slowly and
digesting.

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jaimex2
Because fractional banking and governments printing money isn't a thing right?

