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Bitcoin Refutes ABCT

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aervew Posted: Fri, Oct 21 2011 6:25 AM

 

 

1. during bitcoin speculative mania, its prices moved away from actual market price. this is in sharp contradiction with the rothbardian specilation microeconomics concept. It also had all sorts of gimmick products, spin off enterprises and similar(bitcoin radios, tv streams, alternate websites with crude design and low quality), with no sustainable revenue model, purely based on increasing their market value.

2. In order to fit into austrian theory, it thus has to be an instance of an ABCT bubble with prices distorted by monetary policy.

3. However the part of ABCT where the bubble is burst due to tightening money has not been present. The boom&bust took place in an environment of purely static interest rates: the major currencies have not changed theirs during the last few years.

4. Conclusion: BITCOIN bubble proves itself as an odd case to the ABCT model, not fitting its conditions, thus refuting its idea of explaining the causal model of economic bubbles.

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z1235 replied on Fri, Oct 21 2011 8:13 AM

aervew:
1. during bitcoin speculative mania, its prices moved away from actual market price.

What was the bitcoin's "actual" market price during that time?

4. Conclusion: BITCOIN bubble proves itself as an odd case to the ABCT model, not fitting its conditions, thus refuting its idea of explaining the causal model of economic bubbles.

No, I refuted ABCT way before bitcoin's rise&fall. I managed to hike up a mountain from 400ft to 2000ft above sea, and back, without any monetary tightening whatsoever. 

 

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1. Specilation? Not sure what you mean, but Rothbard agreed with that wise old practical economist, P.T. Barnum, who taught us that there is a sucker born every minute. That alone is enough to explain the bitcoin phenomenon, one of trivial size in any economy. ABCT is needed to explain how a whole country seemingly turns into suckers at once, such as in the housing bubble and the dot.com bubble. Barnum said there is a sucker born every minute, but he will agree that they grow broke very soon, and do not become men of wealth. How then do we explain this mass contagion of madness during a bubble? For that, we have ABCT.

2. Nope. ABCT recognizes that there are small groups of idiots always, Such is the way of the world. They need no special circumstances to act like the fools they are.

3. The bitcoin bubble burst once the fools had been fleeced by the pumpers and dumpers, and the supply of people foolish enough to buy bitcoins had run out. There were not too many of those in the first place, perhaps in some small part due to Smiling Dave's constant warnings and mockery of the bitcoin idiots.

4. Points 1, 2, and 3 having been refuted, point 4 therefore falls by the wayside unsupported, just like bitcoins themselves.

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Wheylous replied on Fri, Oct 21 2011 12:29 PM

point 4 therefore falls by the wayside unsupported, just like bitcoins themselves.

I chuckled.

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Clayton replied on Fri, Oct 21 2011 3:43 PM

Chia Pets were quite the hot commodity back in the 1980's.

1. during Chia Pet speculative mania, its prices moved away from actual market price. this is in sharp contradiction with the rothbardian specilation microeconomics concept. It also had all sorts of gimmick products, spin off enterprises and similar(Chia Pet radios, tv streams, alternate websites with crude design and low quality consumer products), with no sustainable revenue model, purely based on increasing their market value.

2. In order to fit into austrian theory, it thus has to be an instance of an ABCT bubble with prices distorted by monetary policy.

3. However the part of ABCT where the bubble is burst due to tightening money has not been present. The boom&bust took place in an environment of purely static interest rates: the major currencies have not changed theirs during the last few years.

4. Conclusion: Chia Pet bubble proves itself as an odd case to the ABCT model, not fitting its conditions, thus refuting its idea of explaining the causal model of economic bubbles.

Clayton -

http://voluntaryistreader.wordpress.com
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Clayton,

Call me crazy, but I suspect there are those who will think you have actually disproven ABCT from the Chia Pets. So we now have bitcoins and Chia Pets disproving ABCT.

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