A brief history of the Polish inflation after 1984

Inflation and hyperinflation – what they are, what they are not

Inflation is an increase of the amount of money in circulation. Hyperinflation is simply very high inflation, which usually occurs at the last stage of fiduciary currency. Just before the collapse of paper money, there is most frequently a period of a highly dynamic growth of the amount of money in circulation. Consequently, it leads to an equally sharp rise in prices because a greater amount of money follows the same amount of goods. In a nutshell, newly issued money does not have cover in real goods. It has become customary to think that hyperinflation starts when prices increase by at least 50% in one month. On the other hand, we can talk about high inflation when the growth of money amount reaches the rate of 5% in a year.

Historically, gold was the best measure of inflation. Today the gold ore is also treated as the only currency that has no counterparty risk and that is why it was used in this study as an objective measure of inflation.
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Long-term profitability of Bitcoin protocol


  1. The Bitcoin ecosystem must remain stable and profitable for all agents engaged in its day-to-day operations with no extra incentive except transaction (Tx) fees.
  2. Long term means after year 2040, when block reward will be 0 BTC (currently at 50 BTC).
  3. Maximum Bitcoin Tx fee should not exceed 1% of transaction volume. Otherwise it will not be competitive with current fiat-money transaction systems.
  4. Miners’ expect positive average operating profit margin, so let us assume a minimum of 1%. Currently at 29% +/- 30% [i]
  5. Current exchange rates: BTC/EUR 8.39 and BTC/USD 10.74

Let us evaluate current long-term Bitcoin profitability in light of  those assumptions and some statistics.

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Hamlet współczesny

W ubiegłą sobotę widziałem Hamleta wystawianego na deskach Teatru Współczesnego. Przed spektaklem nie czytałem żadnych recenzji, choć słyszałem, że są raczej pochlebne. Dzisiaj znajoma podesłała mi linka do bardziej krytycznej opinii nt. przedstawienia. Polecam przeczytać, gdyż z wieloma tezami Autorki jestem niestety zmuszony się zgodzić. Także w mojej ocenie był to Hamlet zagrany najwyżej na trójkę.

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Bear trap vs. Bull trap

There is an interesting article about possible bubble in precious metals. The charts look very convincing but… Please, read the article first :)

I wonder what is the correlation of those charts. It’d seem rather high on the positive side.

Is the public really in gold and silver?

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Investment strategy

I like being right, I usually am right and I don’t like to explain myself to or argue with people who think they know better. Since I’m also lazy I’ve decided to just give you my investment strategy without any lengthy justification. Take it or leave it.

Making money

If you don’t mind being (called) a speculator this is what you can do to make a lot of money in the coming years:

  1. buy gold (physical coins/bars, GoldMoney.com, various ETFs, RCGLDAOPEN on GPW in Poland)
  2. buy silver (physical coins/bars, GoldMoney.com, various ETFs, RCSILAOPEN on GPW in Poland)
  3. buy precious metals mining stocks (e.x. KGHM on GPW in Poland)
  4. buy agricultural commodities
  5. buy agriculture and agriculture related stocks (e.x. Astarta and Synthos on GPW in Poland)
  6. buy Thorium and Uranium mining stocks
  7. buy BTC (BitCoin) or invest in a BitCoin earning business
  8. buy stocks of companies investing in Africa
  9. few more speculative investments…

Losing money

Remember, don’t be a sucker, don’t lend money, hence avoid:
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Balance in a crisis

Culture out of economics

Right now we are living through the greatest monetary crisis in the history of the world. The crashes of 1974, 2000, 2007-2008 and more that will follow are just the symptoms of a giant government bubble that  pushes whole nations into excessive debt and as a consequence into poverty. Some of us are lucky to prosper but many are not, so people seek a positive balancing force that can help them get through those tough times. Many find it in music.

Greatest bands are born in a crisis

It’s true that every decade has its own music but artists and bands that performed during 70’s and 80’s are still among the most recognized today. In recent years a new wave of artists emerged from somewhat chaotic social mass. An example below – Miss 600:

There are a lot of new bands out there, so what music did you discover recently?
Please tell :D

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Swiss Gold Franc – back to the gold standard?

From political fringes to mainstream economic debate

In his article (in German)  (English Google translated version) Von Thomas Jacob, of the Property and Freedom Society (run by Mises Institute people) proposed a gold backed Swiss Franc. You can also listen to Coben Centre Radio interview (direct link to mp3 in the article) on the subject or you can listen to Jim Rickards interview on Kingworld News.

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Polish debt on negative watch

Still good but riskier

A week ago[i] China’s most known credit rating agency Dagong Global Credit Rating Co., Ltd. (Dagong for short) has announced its negative outlook for polish government bonds. Dagong maintained A and A- credit ratings for both local and foreign currency bonds respectively, but emphasised that the foreign investment structure of Poland might deteriorate in the future.
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BitCoin and free market efficiency

The crash

Today, some time in the morning Mt.Gox, the biggest BitCoin exchange, crashed. One of the accounts was hacked and the database with usernames, e-mails and encrypted passwords was leaked. Right now exchange is out of service and administrators try to bring it back, with better security infrastructure in place.
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Support levels for silver

Is correction in silver price over?

I’m not a fortune-teller and I do not have a crystal ball so I can’t be sure, but I suspect it may still go lower. However, in my opinion if it does there are 3 more support levels on the chart.

One is at current price which is around 92 PLN and below are 65 PLN and 55 PLN.
Prediction for RCSILAOPEN during 2011-06

If silver would ever get that low it would probably be the last time for the foreseeable future.

Green lines on the chart indicate buy signals and so far they are almost 100% accurate. You can look even further into the past and nearly every time when RSI broke through 30 from below and Slow Stochastic broke through 20 from below, the silver price rallied quite strongly. I’d suspect this might happen again and after that we would get some consolidation period.

Than again, you never know how much more currency governments are going to create so in short-term every thing might happen :)

Disclaimer: I own gold, silver and mining stocks so I greatly benefit if there is more demand for precious metals.

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