Crash Imminent?

MarketWatch recently reported on a particularly alarming correlation between the Dow Jones Industrial Average for the period 1928-1929 and 2013-2014. Curves is hauntingly similar, and if there was any correlation the New York Stock Exchange is set to crash any minute now.

Now there is by all means a lot of skepticism and more positive experts think that this connection does not exist at all, and that the market situation is completely different.

Tom McClellan, the man behind the McClellan Market Report, notes to the site:

"....there is no guarantee that the market has to continue following through with every step of the 1929 pattern. But between now and May 2014, there is plenty of reason for caution."

The picture isn’t pretty. And it’s not as easy as one might think to wriggle out from underneath the bearish significance of this chart.

One of the market gurus responsible for widely publicizing this chart is hedge-fund manager Doug Kass, of Seabreeze Partners and CNBC fame. In an email earlier this week, Kass wrote of the parallels with 1928-29: “While investment history doesn’t necessarily repeat itself, it does rhyme.” And, based on a number of indicators rather than just this chart drawing the 1928-29 parallel, he believes that “the correction might have just started.”

You may still be inclined to dismiss this. But there were many more were laughing last November when this scary chart began circulating. Not as many are laughing now.

Mining the Bitcoin Innovation

There has been a lot of talk concerning Bitcoins lately. Nobody seems to know really what they are, whether they can be used as real payment, and why (in the case the latter is true) my local grocery stores still don't accept them. Perhaps the most pressing issue is how this even can be legal, since it for all intents and purposes are money being made in your own basement.

Inshort Bitcoin is a peer-to-peer digital currency that is not issued by a central authority. The concept was introduced in a 2008 paper by a pseudonymous developer known only as "Satoshi Nakamoto". Who he really is has not yet been unearthed.

In 2012, The Economist reasoned that Bitcoin has been popular due to "its role in dodgy online markets," and in 2013 the FBI shut down one such market, Silk Road, which allowed the sale of illegal drugs for Bitcoins. So far, seizing the funds have come at no or little success, since the FBI apparently just dont have the knowledge of how to seize electronic currency.

Bitcoins are increasingly also used as payment for legitimate products and services. Notable vendors include Wordpress, OkCupid, Reddit, and Chinese Internet giant Baidu.

The creation of Bitcoins are done by so called "miners". These are computers engaged in the upkeep of the Bitcoin transaction system. However, new Bitcoins are created at an ever-decreasing rate, and once this reaches zero, the number of Bitcoins will remain static. At this point the sole incentive for miners will be the transaction fees.

So why is this important? Well, at the current moment, judging by the rate of transactions and production, the Bitcoin will overtake the USD in amounts used by 2069. That is, by 2069 more people will be trading in BitCoins than in USD. In June of 2013 a single Bitcoin was worth approximately $128.

Still confused concerning Bitcoins? Luckily the Bitcoin community recently released a video explaining the whole situation. Watch and enjoy the birth of possibly the next gen currency.