ECB gets negative interest rate: prepare the DRK flood gates for bankers and Europeans.

[Light]

Today European Central Bank moved to negative interest rates for commercial banks. This means, European bankers will be desperate to keep their money anywhere but with the ECB because now they will be paying 'fees' to ECB for keeping their money with them. One solution for the banks to lessen this loss might be to pass the burden to the ordinary Europeans in the form of increased bank fees. This would most probably result with Europeans taking their deposits out of the banks and either keep it as cash or look for alternative investment options. Some of that money will no doubt spill over to crypto currencies as we get more media attention.

In short, prepare the Darkcoin Flood gates for Bankers and ordinary Europeans :wink:

Source: http://www.theguardian.com/business/2014/jun/05/european-central-bank-cuts-deposit-rates

 

[fernando]

I'm not that sure about the connection you make. Cash in a bank account is the most secure way to store/invest fiat. I don't believe that it can compare to cryptos, which is an extremely risky and volatile investment option atm. Also, institutional investors can't even consider it because of their regulations. High taxes and increased government controls on everything do seem, however, like a more plausible reason for Europeans to turn to cryptos in a bigger way. Time will tell :smile::smile:

 

[Light]

I'm not that sure about the connection you make. Cash in a bank account is the most secure way to store/invest fiat. I don't believe that it can compare to cryptos, which is an extremely risky and volatile investment option atm. Also, institutional investors can't even consider it because of their regulations. High taxes and increased government controls on everything do seem, however, like a more plausible reason for Europeans to turn to cryptos in a bigger way. Time will tell :smile::smile:

Well, firstly if it is in the bank account it is not 'cash' anymore :wink: And i doubt that keeping your money in a bank is the 'most secure way to store/invest fiat' anymore. I am sure you have heard about the stories from Cyprus and here is some other examples of bank runs: https://en.wikipedia.org/wiki/List_of_bank_runs

Yes, I am not arguing that crypto currencies are secure and predictable investments but people have invested in more risky things before. For instance, Junk bonds are high-yield and high risk investment but many people still choose to invest in them. Most humans are greedy species :sad:

 

[fernando]

Well, firstly if it is in the bank account it is not 'cash' anymore :wink: And i doubt that keeping your money in a bank is the 'most secure way to store/invest fiat' anymore. I am sure you have heard about the stories from Cyprus and here is some other examples of bank runs: https://en.wikipedia.org/wiki/List_of_bank_runs

Yes, I am not arguing that crypto currencies are secure and predictable investments but people have invested in more risky things before. For instance, Junk bonds are high-yield and high risk investment but many people still choose to invest in them. Most humans are greedy species :sad:

You are absolutely right about money in bank not being cash! I should have said deposits in a bank account.

As for the security of banks, I agree they are not perfect, but there is no perfect system to store wealth yet. Third parties can always escape with it, or somebody can take it from them (thieves or governments... quite similar many times :wink. If no third parties are involved you still have the risk of someone taking it from you, but you are assuming the responsibility of protecting it yourself.

To be fair with any specific bank, a big part of the risk you assume when having money there is the risk of fiat, not of that particular bank. If a government decides to increase the money in circulation your savings in the bank are damaged, but also your savings in cash under your mattress.

 

[Light]

You are absolutely right about money in bank not being cash! I should have said deposits in a bank account.

As for the security of banks, I agree they are not perfect, but there is no perfect system to store wealth yet. Third parties can always escape with it, or somebody can take it from them (thieves or governments... quite similar many times :wink. If no third parties are involved you still have the risk of someone taking it from you, but you are assuming the responsibility of protecting it yourself.

To be fair with any specific bank, a big part of the risk you assume when having money there is the risk of fiat, not of that particular bank. If a government decides to increase the money in circulation your savings in the bank are damaged, but also your savings in cash under your mattress.

Yes, very good point on fiat being the biggest risk. That's why the only type of big investment that I made to this day have been in real estate. But when I first found out about crypto around 2011, I got in love with the idea. Hayek and Mises have always been my favorites and digital currencies are the closest thing we got to their ideas. ECB will probably start rolling out QE soon but I think it will create more problems than solving them. Soon more and more people and corporations will be unhappy about the current monetary and financial system. We are already starting to see that in order to stay competitive, banks like Germany's Fidor bank becoming interested in crypto technologies (http://www.coindesk.com/fidor-banks-cant-avoid-competition-cryptocurrencies/) and hopefully soon corporations like Ebay/paypal, Amazon will adopt crypto-currencies. (http://www.ibtimes.co.uk/paypal-bit...-very-soon-says-ebay-ceo-john-donahoe-1451477)
...and if Evan and his team delivers what they have promised then I don't see any obstacle on darkcoin's path to become the market leader in this industry, even surpassing bitcoin itself. Let's hope things go smoothly.

 

[fernando]

Yes, very good point on fiat being the biggest risk. That's why the only type of big investment that I made to this day have been in real estate.

Not to be too negative, I earn my living investing in real estate for a couple of clients, so please don't take this in the wrong way... but real estate is the most centralized over-regulated market ever!!! You can't move real estate around, so you are totally at the mercy of local-regional-national governments. They can change the law in a minute and make real estate completely worthless. Also, real estate is intimately related with finance. Most people buy their homes with huge leverage, so if finance goes down real estate goes down too. I don't think dramatic things will happen, but we all should be conscious of the position we are in :smile::smile:

 

[Light]

Not to be too negative, I earn my living investing in real estate for a couple of clients, so please don't take this in the wrong way... but real estate is the most centralized over-regulated market ever!!! You can't move real estate around, so you are totally at the mercy of local-regional-national governments. They can change the law in a minute and make real estate completely worthless. Also, real estate is intimately related with finance. Most people buy their homes with huge leverage, so if finance goes down real estate goes down too. I don't think dramatic things will happen, but we all should be conscious of the position we are in :smile::smile:

Actually you are not being negative at all. When it comes to investment, everything is relative- especially the risks. The reason why I said fiat is the biggest risk and the real estate is a better investment because when/if fiat looses value you can't do anything with it. They just become colorful pieces of dirty paper. Yes, dirty paper because it changes so many hands and contains germs, so you can't even use it as a toilet paper :grin: (ex. German hyperinflation of 1923. People used to go to daily grocery shopping like this: http://goo.gl/bzuPWH)

Real estate on the other hand, especially the land will always have a practical use even if the price of the property gets lower than the amount you have paid. Simple explanation to it is that the land is scarce and the population grows constantly. The only way you can completely loose your land is when the regime changes to communist or socialist system- then most private property will be confiscated and declared public, just like it happened during the Soviet Union.

But for now, if government changes regulations or increases the tax, I will simply pass those new fees to my tenants. Sounds unfair but that's not really my problem. Tenants are the ones who voted for that tax increasing government

 

[gknorr]

Light is right. If you run a small business, you simply must have liquidity. Liquidity in a medium that cannot be frozen or confiscated, as the collapse of the economic system accelerates, is a lifeboat that people are going to take at any price-- but, when that happens, crypto currencies will be appreciating so fast that it won't seem like a risk at all. And Darkcoin is the medium that makes sure that the gangsters will NEVER know what you're doing.

Small business is everything in the US, less so in Europe but still huge. Small businesspeople know their vendors personally, and when things become untenable the whole system will tip hard and fast in this direction. It's an inevitability so far as I can see. The currencies WILL collapse and people WILL save themselves if they can, and they can with crypto.

What people have saved in banks probably isn't relevant to any of this unfolding.

 

[fernando]

Actually you are not being negative at all. When it comes to investment, everything is relative- especially the risks. The reason why I said fiat is the biggest risk and the real estate is a better investment because when/if fiat looses value you can't do anything with it. They just become colorful pieces of dirty paper. Yes, dirty paper because it changes so many hands and contains germs, so you can't even use it as a toilet paper :grin: (ex. German hyperinflation of 1923. People used to go to daily grocery shopping like this: http://goo.gl/bzuPWH)

Real estate on the other hand, especially the land will always have a practical use even if the price of the property gets lower than the amount you have paid. Simple explanation to it is that the land is scarce and the population grows constantly. The only way you can completely loose your land is when the regime changes to communist or socialist system- then most private property will be confiscated and declared public, just like it happened during the Soviet Union.

But for now, if government changes regulations or increases the tax, I will simply pass those new fees to my tenants. Sounds unfair but that's not really my problem. Tenants are the ones who voted for that tax increasing government

There is always some use for land, but I don't agree that the only risk for real estate is a regime change. At a less dramatic level, local governments change the uses approved for land all the time. That shiny plot where someone was going to build condos is only useful to grow potatos now... massive value lost, savings down the drain. Governments can also tax rental properties a lot if they want to encourage people owning their house. Or change the law to protect the tenants that don't pay, so it takes you much more time to evict them.
I like real estate a lot, but I don't believe it is as safe as most people think.

 

[AjM]

I had my funds in the bank and stocks, but then i discovered that funds are sitting duck and losing its value,
at least in the simple bank account, no incoming at all, interest rate is something like 0.2-0.5%, ridiculous!

Not any more, i've invested DRK and masternodes in 2014, and bonus is that the government and no other can spy me and my funds.

 

[Light]

I had my funds in the bank and stocks, but then i discovered that funds are sitting duck and losing its value,
at least in the simple bank account, no incoming at all, interest rate is something like 0.2-0.5%, ridiculous!

Not any more, i've invested DRK and masternodes in 2014, and bonus is that the government and no other can spy me and my funds.

If you are in Europe, having some stocks might not be a bad idea. Once QE starts to kick in, all these cheap money is gonna flood the stock market. European companies will borrow for cheap and buy their own stocks to boost prices artificially up. We have seen this happen in the States and Europe is repeating the same shit. Also expect a property price boom in Europe. Banks are gonna flood the market with mortgages and this will push the property prices up, just like we have seen in pre-2008 crisis in the US.