Friday, 15 September 2017

Tulips and Bitcoin

At Least They're Real

This Tuesday self-described “no nonsense take no prisoners” Jamie Dimon lambasted Bitcoin at a New York investor conference as per press reports. 
The cryptocurrency “won’t end well,” he told an investor conference in New York on Tuesday, predicting it will eventually blow up. “It’s a fraud” and “worse than tulip bulbs.”
Indeed, at least if you buy a tulip bulb, you have something tangible.  A Bitcoin is the monetization of a wish.
Many self-described “sober investors” who buy Bitcoin offer as their “sound” rationale that governments create national currencies out of thin air without “backing” the issuance with any tangible asset and that as a result these currencies are inherently dangerous.  To avoid this “clear” danger they instead “invest” in a currency issued by a private sector entity out of thin air without “backing” by any tangible asset.  
But there are key differences that make this investment a “wise” one so they say. 
  • First, aggregate issuance is limited.  
  • Second, unlike a government, the private sector entity issuing Bitcoin has no legal powers or ability to support its currency’s value, instead relying on the proven performance of the “free market” for magical solutions.  A dogma that almost certainly Jamie sadly won't have time to address.
To those wise investors AA wants to offer an even more compelling opportunity: AA’s new “virtual” company that will manufacture digital electronic vehicles.  The upside is clearly unlimited as costs of manufacture and selling are low. No raw material except an odd electron here and there is used in the manufacturing process.  There are no associated shipping costs for the product.  Nor do our dealers need to hold physical inventory.
AA’s digital cars also are environmentally friendly.  There are no emissions associated with the manufacturing process or the finished product when in operation.       
Patriotic investors will be happy to note that AA is a proud participant in the current Administration’s Make America Great Again Manufacturing Program.  Our factory is based in the United States where we project that we will employ a virtual workforce of over 150,000 when full capacity is reached.  Strict sourcing standards ensure that only US electrons are used in our product.    
Disclosure: AA and a member of his direct household (Madame Arqala) hold investments in tulips between 15 and 30 bulbs planted in the elegant gardens of Chez Arqala. 

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