Sunday, August 20, 2017
Wednesday, August 16, 2017
Currencies are used as a means of payment. But paying with bitcoin is a game of chance because of the wild price fluctuations. Tomorrow`s value of any payment could be much higher or lower than expected. Neither seller or buyer can calculate the transaction.
Currencies are also used as a calculation basis. Prices, interest rates & debts are denominated in dollar, euro or an other currencies. If a company would mark their prices in bitcoin they would lose customers when a sharp bitcoin rally makes their goods & services too expensive or they would suffer high losses when a bitcoin crash makes them too cheap.
If someone borrowed bitcoin last November - or made a debt calculated in bitcoin - his debt multiplied with the factor 8. Bitcoin borrowers could get bust because of sudden bitcoin price rise, lenders could get bankrupt, when the price of bitcoin crashes.
The sharp rise of the bitcoin price reduced prices of other assets & goods calculated in bitcoin about 80% since last November. A sharp general price drop is called deflation and could do a lot harm to the economy and could even create a depression
The amount of bitcoin is limited by its constructors (wikipedia). A growing economy needs a growing money supply to finance a rising amount of goods & services. Otherwise prices would have to fall constantly. If bitcoin would replace the dollar the US would experience constantly falling prices. Therefore a bitcoin economy would be a deflationary economy.
Bitcoin is a highly speculative asset & a toy for speculators, nothing else.
Sunday, August 13, 2017
There were more paintings which caught my eyes of course.
Thursday, August 10, 2017
These vehicles will get cheaper in the coming years thanks to technological progress, competition and mass production - and they will become common in the 2020s. Then the new car revolution will curb the demand for gasoline considerably. Bad for Opec because crude oil is mainly used to produce gasoline. The chart below shows that oil is already irrelevant as power source for electricity production: Just one percent of the US electricity comes from petroleum.
It´s similar with heating (chart below: source eia.gov/). Less than 20% of US households use oil for heating, the majority is heating with natural gas and electricity (produced mainly by coal & natural gas).
So, most of the oil - about 70% - is used for transportation and around 30% for petrochemical products ( energy).
But it will get worse for Opec. The cartel also has to fight against a rising competition. Technological progress is reducing the cost of oil exploration and is making more of the oil reserves in the ground accessible. The rise of US fracking since around 2006 is just the begin. Today the costs to extract an extra barrel of oil (break even point) in the US vary around $50. The productivity of fracking is rising swiftly which leads to shrinking costs (economics21 oilprice econbrowser). A study by BP explains that fracking is "a standardized, repeated, manufacturing process" and "manufacturing productivity has led to a trend decline in the prices of goods relative to services" (forbes).
So the break even point for producing oil has been moving lower and will continue to fall in the coming years. Falling costs of fracking also raise the chance that in the coming years the US oil producers will be accompanied by oil producers from China and other countries. In June 2013, the United States Energy Information Administration (EIA) released a world shale oil and gas reserve assessment that showed 32 countries outside the United States have substantial reserves locked up in 137 different formations - units that can be exploited using Bakken-like technology....The EIA placed China third behind Russia and the U.S. in tight shale (tribune ).
After 2020 oil prices could fall well below $20 thanks to sinking production costs and a shrinking gasoline demand. Saudi Arabia and other big producers, who are sitting on huge oil reserves that should last many decades, would be well advised to sell their oil now. Maybe the advent of electrical cars - in combination with the evolution of fracking - is the real reason for cheap oil and will destroy Opec soon.
Tuesday, August 8, 2017
Monday, August 7, 2017
artifactnyc) belongs to my favorite places, because the art trader has frequently changing art shows which are usually amazing.