Wednesday, March 14, 2018

Allianz catches up

What took it so long?

“In our view, its intrinsic value must be zero,” Stefan Hofrichter, the company’s head of global economics and strategy, wrote in a recent web post. “A bitcoin is a claim on nobody – in contrast to, for instance, sovereign bonds, equities or paper money – and it does not generate any income stream.”


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  2. I happen to disagree, Harry.

    Fiat currencies are, by definition, a claim on nothing. To give incentives for that belief, governments with a taxation basis make the promess they can somehow cover those claims with future taxation.

    But that promess is still just that, a promess, and its main purpose is not to be real, but to reinforce the belief in the fiat currency. As long as that belief is kept, they won't need anything else.

    IOW, what a fiat currency really needs is belief, it doesn't really matter wherefrom such belief comes.

    So, IMHO, since bitcoin is an 'emergent belief phenomena' exercised by many millions of people worldwide, it is quite possible it is more robust than many, if not most, of the more standard currencies out there.

    Economists have been predicting bitcoin's failure for a while. I predict they will keep getting their predictions wrong for quite a longer while.

  3. I consider national currencies to be supported by the united production of the citizenry -- passed through as taxes, as you say. So there is the promise of a share in the national wealth.

    If the citizenry stops believing (as they did in Argentina) then it's no better than bitcoin. But looking from the other direction, bitcoin never gets better than Argentinian currency in the'90s.