/biz/ - Business & Finance

>while the value of currency has always been arbitrary

lol

>>580314
Enlighten me as to the humour in that statement. Are you implying the value of Gold wasn't arbitrary?

>>580315
I am.

>>580317
I am not economist, and so I had to investigate this claim.

http://www.investopedia.com/articles/investing/071114/why-gold-has-always-had-value.asp

While it was inevitable that gold specifically be chosen, this does not leave it with any more value than, say, bottle caps in an apocalypse scenario.

ITT : i'm justifying myself being lazy sack of shit

>>580320
If gold or bottle caps had an arbitrary value, everything would have arbitrary value. Their price is determined from supply and demand like anything else.

Something doesn't need a function to be valuable. It can be worth something (others goods or services) just because of it's aesthetic (or social) value.

>>580323
This is true. I retract my statements regarding the value of gold being arbitrary, it was very narrowminded.

However, I think it remains that fiat money is the definition of arbitrary. It has value not because of supply and demand, but just because the government demands it. While at the moment fiat money has value it being worth goods and services, that's all that's supporting it. Otherwise, it's just paper. In the modern transition from gold to bitcoin, why risk everything on paper?

>>580313
Pretty soon everything will just be in a big ledger of accounts. The units of currency will be used for purchasing instead of directly exchanging goods and services.

>>580326
I think this is how the future is looking as well. The blockchain is one of the more interesting aspects of bitcoin and other crypto currencies.

>>580332
You might be interested in this, then:

http://www.scribd.com/doc/250009335/A-Novel-Approach-for-Computer-Worm-Control-Using-Decentralized-Data-Structures

>>580325
You need to dig a bit deeper on how federal money works.
It's just not what every the government what's it to be woRth but how it inertlaze

With global economy

You'll just have to deal with it. Fiat currency isn't going away. Also there has always been economic instability and huge chances of losing money since economies have existed. That's something that no government has been able to get rid of, and a good thing too. The market doesn't and shouldn't guarantee you stability.

Commodity backed currencies are obsolete. Get over it and stop trying to use it as an excuse.

>>580325
The US dollar is based on supply and demand. If it wasn't there wouldn't be inflation, deflation, or trade in currency.

>>580313

Do you actually want to start a business or are you just asking a rhetorical question?

If it's the former, what type of business do you want to start? What are your long-term goals for the business? Do you want to grow a large corporation or do you just want to be self-employed with a comfortable lifestyle?

There are ways to circumvent the central banking cartel but it is highly dependent on what you wish to achieve.

>>580419
>or are you just asking a rhetorical question?
You caught me.

Just accept Bitcoin

>>580465

>You caught me.

Not necessarily.

My point was (or was going to be) that just because the central bankers push fiat currencies to facilitate their manipulations of the market, that doesn't mean you have to base your business model on fiat currencies. You could always accept PM, barter, or as >>580470 says, cryptocurrencies.

But even if you don't want to do that, the problem with fiat currencies are their long-term stability. At the point of transaction, for an item worth X dollars or euros or whatever, you receive X dollars or euros or whatever. So your main issue in starting a business in this climate when you don't accept the central banks' economic manipulations would simply be to hold the minimum amount of cash practical, converting all you can to tangible assets as soon as you can after receiving it.

Does "買っときなさい" mean "買っておきなさい"?

>>580518
>wanting to take bitcoin or shiny bitcoin (aka gold) instead of USD
It's like you WANT to lose money.
>convert all you can to tangible assets
What you want to do is convert all you can to productive assets.

>>580551

>It's like you WANT to lose money.

OP expressed concern about doing business in a fiat economy and I responded in kind. The value of USD is just as arbitrary as anything else. The only difference between it and, for example, "shiny bitcoin" is that people who don't give two shits about whether you live or die can't press a button and instantly inject a trillion shiny bitcoins into circulation.

>What you want to do is convert all you can to productive assets.

That depends on the risk level of those assets, their liquidity relative to your needs, and whether their production aligns with your long-term goals.

>>580518
>hold the minimum amount of cash practical, converting all you can to tangible assets as soon as you can after receiving it.
Don't large companies tend to prefer hard investments anyway just because it's more lucrative to expand the business than sit on money?

>>581148
Tell that to Apple.

>>580313

All mediums of exchange are, essentially, arbitrary. In fact, it's actually superior to having your medium of exchange be a consumption good, like oil or wheat, because then you have conflicts between people trying to accumulate the good for use and people trying to accumulate it for monetary purposes. Fiat currency merely takes that to the next logical step of being able to create/destroy it on command, in order to prevent some of the more glaring flaws of gold (short-term hyperinflation/hyperdeflation). Historically speaking, they've done a good job of this- price volatility in major economies has sharply decreased, making it easier than ever to plan, invest, and save, and long-run positive real interest rates mean that complaints of "muh debasement" are unfounded- a dollar invested in T-bills in 1900 would be worth even more today than it would have been then.

And the point of a business is to have a real asset, one that makes money regardless of whatever currency is doing. If you make widgets for 1.0 currency units, and sell widgets for 1.1 currency units, then you're making a profit regardless of what the currency units are doing, whether they're bitcoins, US dollars, Nuka-Cola bottle caps, or gold.

>>581148

>Don't large companies tend to prefer hard investments anyway just because it's more lucrative to expand the business than sit on money?

That's a loaded question on several fronts.

As I alluded to dumping money into growth is not always the best option. Prudence dictates that any dollar spent on a company's growth go through some level of cost/benefit analysis. It doesn't matter if it originated as revenue or came out of an investor's pocket. If you don't stand to turn that dollar into several more dollars, you shouldn't spend it. Hence holding it for better opportunities.

But honestly, for whom is it more lucrative? That philosophy leads to the current shortcomings of the corporate world, where C-level executives focus on explosive, unsustainable growth to appease pump-and-dump shareholders. Any downturn or setback leads to massive contractions from markets, products, service sectors, etc. that would never have been entered if those in charge could see past the next quarterly earnings report.

What happens under this philosophy is that average people suffer, workers laid off, IRAs tanking, etc. while the suits get golden parachutes and the large investors leave someone else holding the bag.

Now, I'm a hardcore capitalist. I don't want to regulate this type of behavior, it's at least theoretically completely voluntary for all parties involved. But the volatility and fluidity created by these practices have far-reaching effects. It's not as simple as just avoiding it, as the central bankers have woven most facets of the economy into their web of lies, and they are in bed with the people who profit from this.

We would be better served focusing less on increases in share price as a function of the appeal of an investment and more on the company's ability to deliver consistent dividends while maintaining stock value. That money to which you refer should, by and large, be sent to the shareholders unless executives have a compelling case to reinvest it.

>>580313
fiat money buys you a real ferrari, hot wife and mansion

>>580313
what youre saying would make more sense if youre in a place w strict capital controls

you can just transfer your fiat currency into real estate, equity, commodities, gold, dogecoin, whatever other assets if you want.

there's no rule that your savings has to be in fiat currency

>>580325

>not based on supply and demand
>govt demands it

Wow.

>>580313
>fiat money is bad
>that is why I don't want to exchange my worthless fiat money for productive physical assets like a business