There was talk about renaming the Krugman thread for this purpose, but that seems to be going nowhere. Besides which, I feel the Krugman thread should be left to discuss Krugman while this thread can be used for more general economic discussion.
Discuss:
- The merits of competing theories.
- The role of the government in managing the economy.
- The causes of and solutions to our current economic woes.
- Comparisons between the economic systems of different countries.
- Theoretical and existing alternatives to our current market system.
edited 17th Dec '12 10:58:52 AM by Topazan
Blowout soon fellow Stalker
Also that, investing in bitcoin is quite possibly going to cancel out whatever positive effect Tesla's cars are going to have on the environment.
Oh really when?
A procrastination in of itself
As in Tesla investors have been pushing Musk to spend company money on Bitcoin? That sounds pretty out there, can you give me some more reading on it?
Also doesn’t Musk as CEO have a level of fiduciary responsibility to not spend company assets on brain-dead stupid ideas just because some of his investors are memelords?
Bitcoin to hedge against the dollar. That’s some stupid-ass shit.
“And the Bunny nails it!” ~ Gabrael “If the UN can get through a day without everyone strangling everyone else so can we.” ~ Cyran
Oh, bother.
The article does note that there are other factors that may have contributed to the stock price drop besides Musk's tweets. Still, it'd be hard to argue that his tweet didn't have any impact.
Disgusted, but not surprised
A procrastination in of itself
I mean, it’s Bitcoin, I’m not sure if it’s value is rational enough for even something as irrational as Musk’s Twitter to have a proper cause and effect impact on it.
“And the Bunny nails it!” ~ Gabrael “If the UN can get through a day without everyone strangling everyone else so can we.” ~ Cyran
Oh, bother.
It probably didn't help that the US Treasury Secretary Janet Yellen recently called it out for being an "extremely inefficient way of conducting transactions".
Edited by M84 on Feb 23rd 2021 at 10:41:49 PM
Disgusted, but not surprised
Redmess
Musk does have a bit of a history of ill-advised financial adventures on Twitter. The problem seems to be that he still operates as if he is running a start-up that can afford that sort of looseness with media, rather than of a multimillion dollar company where every stray comment can have million dollar consequences.
Optimism is a duty.
Oh, bother.
![[up]](https://static.tvtropes.org/pmwiki/pub/smiles/arrow_up.png "[up]"){kind=icon}
Not even multi million - multi billion.
A procrastination in of itself
Assuming Fighter is right that it wasn’t Musk’s idea to invest in Bitcoin, then he may well succeeded to well with him meme reputation. If he’s now got a significant chunk of his own investors treating Tesla as a meme rather than a serious investment.
Edited by Silasw on Feb 23rd 2021 at 2:47:50 PM
“And the Bunny nails it!” ~ Gabrael “If the UN can get through a day without everyone strangling everyone else so can we.” ~ Cyran
Lost in Space
This is the General Economics thread, not the hate on Elon Musk thread, but I'll do that irritating "facts" thing again.
Tesla's bitcoin position is less than a tenth of its liquid cash assets as of Q4 2020. I don't know the exact figure. There is no risk of the company becoming insolvent as a result of its investment. In fact, that investment earned $1 billion on paper before it tanked, so...
Elon Musk does not personally invest in bitcoin or any other commodity or stock. He owns shares in his companies and that's it.
If a single person, no matter how influential, tweeting out memes can cause a stock or a commodity to change drastically in value, doesn't that say something about the markets?
Edited by Fighteer on Feb 23rd 2021 at 10:41:07 AM
"It's Occam's Shuriken! If the answer is elusive, never rule out ninjas!"
Blowout soon fellow Stalker
Says a lot about a company that invests in stupid shit like Bitcoin
Oh really when?
Lost in Space
I'm not personally in favor of that move; I happen to think it's ridiculous, but I'm not a board member of Tesla. I care about it making clean vehicles and energy products, not what it does with its cash as long as that doesn't affect its production.
Edited by Fighteer on Feb 23rd 2021 at 10:08:28 AM
"It's Occam's Shuriken! If the answer is elusive, never rule out ninjas!"
Also that, investing in bitcoin is quite possibly going to cancel out whatever positive effect Tesla's cars are going to have on the environment.
Quite, and I'm not sure the point of bitcoin.
The value of currency lies in its state backing, I can understand why cranks want a stateless currency but what benefit to society do serious people see in it? Or is it just a means to make money off of those cranks?
Edited by Fourthspartan56 on Feb 23rd 2021 at 7:07:53 AM
"Sandwiches are probably easier to fix than the actual problems" -Hylarn
Lost in Space
Bitcoin wonks point out that the electronic trade in dollars consumes far more energy than bitcoin mining ever will. That's certainly some kind of fallacy but you have to understand the mindset to effectively debate it.
If we want to discuss the particulars of cryptocurrency, there's another topic for it that's better suited. I absolutely disagree with the "libertarian digital gold" concept behind it but a lot of people do believe in it, and that's a substantial part of what a successful currency needs... besides a state backer, of course.
Edited by Fighteer on Feb 23rd 2021 at 10:11:19 AM
"It's Occam's Shuriken! If the answer is elusive, never rule out ninjas!"
Fair enough, if this has to be taken to a different thread I wouldn't object to talking about it there.
"Sandwiches are probably easier to fix than the actual problems" -Hylarn
A procrastination in of itself
Not risking insolvency is a justification for private individuals to piss away money on silly things, but I don’t think publicly traded companies get to do that, every dollar must be accounted for.
Good for him? I’m not sure how his personal investment situation is relevant to if it’s wise for Tesla to invest in Bitcoin.
So how do you know this isn’t just an online thing? For Musk to be pressured to put company money into Bitcoin it’d presumably need to come from board members of something, not random chatter online.
Right, his actions are official company actions, so the legal responsibility falls onto the cooperate person of Tesla.
I imagine that any claim of a fiduciary duty breach would come down to a court case emerging. At a guess a Tesla investor would have to sue, claiming that the Bitcoin investment was such a stupid thing that it amounted to carelessness with their investment money.
Indeed. It says that the Bitcoin market is so stupidly volatile that nobody serious about money should be investing in it.
You are clearly not cutthroat enough for the investment world. 
You can’t let a cooperate boss waste a sum of money just because they’re running a good company that’s still growing regardless of the waste. Profits must be maximised at all times. 
Lost in Space
- Well, that's for investors to decide, not random people on an Internet forum.
- Because people are accusing him of "investing in bitcoin", which is false, or at least misleading.
- I have no inside information on the deliberations of Tesla's board.
- It shows that the markets are fundamentally irrational, bitcoin notwithstanding.
Edited by Fighteer on Feb 24th 2021 at 7:35:17 AM
"It's Occam's Shuriken! If the answer is elusive, never rule out ninjas!"
Besides, bitcoin isn't necessarily and unwise investment. After all, it's designed to inflate in value. There's a hard limit on how many can be produced in a given amount of time, so as demand increases, the monetary value of a bitcoin increases. Mind you, this very feature makes it unsustainable as a medium of exchange, but I doubt anyone buying bitcoin as an investment cares at all about that. Buying bitcoin is a lot like buying stock—buy in when everyone else is selling and you can make a bundle.
Figure of Hourai
Still an absurd investment for a car company.
Avatar Source
A Self-inflicted Disaster
But then, what's the point of Bitcoin? The stock market is supposed to reward entrepreneurs for innovations and good business decisions. What does investing in cryptocurrencies do? If there isn't any function to the cryptocurrency market other than a venue for speculation, it's just a form of gambling.
Well, apparently you can use it to engage in highly illegal transactions on the deep web. :|
Welcome to Estalia, gentlemen.
Oh, bother.
Bitcoin's a modern day Tulip Mania.
Disgusted, but not surprised
Like reflections in the glass!
I'd say its worse than tulips, after all I assume you couldn't buy drugs or AK-47s with them like you could with crypto.(I think)
Edited by MorningStar1337 on Feb 24th 2021 at 7:11:47 AM
A procrastination in of itself
Bitcoin may be designed to go up in value due to a reduced flow of coins but because of the human element that’s far from guaranteed.
Tomorrow an arms trafficking ring could decide to sell up their Bitcoin wallet and cause a run, the day after the FBI could seize multiple wallets from drug dealers and reduce the supply enough to cause a leap in value.
Bitcoin isn’t an investment, it’s a gamble.
“And the Bunny nails it!” ~ Gabrael “If the UN can get through a day without everyone strangling everyone else so can we.” ~ Cyran
I think Musk's investment in Bitcoin is concerning, there are serious questions about the environmental effect of bitcoin
and if they're correct then they need to curtailed as quickly as possible. If he throws his support behind them then that would make that harder.
"Sandwiches are probably easier to fix than the actual problems" -Hylarn