A VC - Latest Comments in Conferences (continued)

Re: Conferences (continued)

Doug Kersten — Tue, 17 Nov 2009 12:23:24 -0000

Wow, I really wish I could have gone to the New Business Models For News event. I have been reading Jeff Jarvis' book and have been inspired by the Knight News Challenge to take some things I've been working on and apply them to local news. It seems like the local news space is really beginning to heat up with people getting serious about working on sustainable business models. I didn't realize until the last few months, when I first got interested in it, how many opportunities there are in local news. Check out my Knight grant proposal if you want ( http://talktownnews.wikidot... ) and let me know what you think.

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kidmercury — Thu, 12 Nov 2009 17:27:58 -0000

as i have noted before gold is not perfect, nor do i think a return to the gold standard is the ideal solution -- but it sure beats what we currently have, which is insanity, as evidenced by the wealth allocation thorughout the world (the 1% that owns everything is not really that much smarter and more entrepreneurial than everyone else...rather the game is simply rigged in their favor). there is inflation and cheating of sorts under the gold standard, but it is not nearly as outrageous as what we currently have. ultimately even central banker alan greenspan, the primary man responsible for this current economic mess, admitted that gold is necessary to economic freedom in an essay he wrote entitled, "gold and economic freedom."

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ShanaC — Thu, 12 Nov 2009 16:57:48 -0000

Still a nice monacle.

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ShanaC — Thu, 12 Nov 2009 16:57:25 -0000

I don't want Gold (ok, if I were dating someone very seriously, and he gave me a gold bullion, I'm not saying no, you're a shmuck, for giving me gold, though I would wonder what was the senitment)

I do what to create a liquid markets and equivalent systems available for the Farmville money that allows you to buy the Tractor so that you can do what you do with Google et al which are in the public markets Fair is fair. It's just a matter of identifying how the cash flow works and how to create spread. That is much more complex than even I really understand, because it really means radicalizing the notion of what money is in these spheres. It would be beyond normal market cap of a company to take them into somewhere like a country, except not- and what does that even mean. And how would you treat that? How do you treat the people involved? What would people do exactly under the circumstances?

I don't really know...It's never been done on a hugely massive scale needed to make it really doable. which is the problem...It needs cohesion to happen and become valuable and to create real cash flows, otherwise it is immensely silly.

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ShanaC — Thu, 12 Nov 2009 16:50:51 -0000

There were runs on metal based currencies and inflation in the Roman Republic and Empire Period as well. Metal never solves, it is what you value. It's a form of fiat currency...

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kidmercury — Thu, 12 Nov 2009 09:33:45 -0000

indeed, cash flow is for investments, which gold is not. but as for taking the cash flow from investments and storing the portion meant for savings in gold? now that's what i'm talkin' about!

lol, but you are just an eternal optimist, you are not going to like gold no matter what. gold is bad news, even people who are not familiar with gold instinctively know liking it requires accepting bad news. as bad news is my specialty it is only fitting i embrace gold.

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kidmercury — Thu, 12 Nov 2009 09:29:17 -0000

true. and wait till the government secrecy collapses and all that they've been hiding gets revealed. technology that will change the world forever will be ours.

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fredwilson — Thu, 12 Nov 2009 09:28:54 -0000

cash flow

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kidmercury — Thu, 12 Nov 2009 09:27:35 -0000

well, the proof is in the pudding; gold is up over 50% over the past year. the DJIA just got back to 10,000, where it was a decade ago. unfortunately, the dollar lost a lot of purchasing value over the past decade, so the 10,000 DJIA now is worth less than the 10,000 DJIA a decade ago. meanwhile, gold has nearly quadrupled in value over the past ten years. i agree with you that gold is a terrible investment, but an excellent store of value, as it has been for several thousand years. in a world where there are no other formidable stores of value (save perhaps oil), that makes gold quite valuable.

it is true that gold is only valuable because people value it. but what isn't?

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fredwilson — Thu, 12 Nov 2009 08:25:50 -0000

Can't argue with that so much. But the exhaust fumes of our paranoia can produce amazing things

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fredwilson — Thu, 12 Nov 2009 08:24:49 -0000

Ewe had terrible price inflation in the US in the 70s. IBM and DEC were still good investments. Give me real businesses with cash flow over silver and gold anytime

Now, I do think putting some of your fixed income assets into australian denomination is a good idea and was an even better idea a year ago

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fredwilson — Thu, 12 Nov 2009 08:19:20 -0000

Gold is like a tractor in farmville. It is only valuable because people value it. It does not produce cash flow. It is useless to me. Give me google, facebook, amazon, and other cash machines at a fair price. You all can have all the gold you want

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kidmercury — Thu, 12 Nov 2009 07:01:49 -0000

just wanted to drop a bit of doom and gloom into this conversation about DARPA:

DARPA's attempt to create a super spy system (unconstitutional, of course, but most things the govt does these days are)
DARPA creates terrorism futures markets (creates incentive to make your bets come true)

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kidmercury — Thu, 12 Nov 2009 06:55:54 -0000

you should start your own world, prokofy. not sure how you are going to market it since you think we are all eternally doomed to poverty if content is free, but i think you would be able to run a very good world, and could make a lot of money off selling virtual goods if done properly.

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kidmercury — Thu, 12 Nov 2009 06:51:16 -0000

do i take delivery of gold.....you know it shana!!!! but these days for delivery i focus on silver, as that will be much more applicable to daily transactions. and if we get to a point where we are actually trading gold and silver coins as money....lol, oh man there are going to problems so big who knows if a gold or silver coin is actually going to be able to help you.

but i am very precaution-oriented, and so i do have physical gold and silver in possession; i view it as a no-brainer when thinking of real insurance policies. the majority of my gold though is stored in vaults with bullion vault, which i can fully manage online.

"At the same time, if I am not mistaken, we went off the gold standard, we also saw the growth of the debt market, the equity market, and the derivative market, alongside the growth of computers on wall street."

yup, and all those markets suck, as we are in the process of learning. computerized trading, which i invest in and plan to invest more in should i be fortunate to acquire greater wealth, is a casino. it is not real investing in productivity like fred and that type of venture capitalists do. it is actually counterproductive and distorts prices (but i encourage people to do it otherwise they will get robbed via price inflation). when you perpetually inflate the money supply, as has been done in the USA since the end of the gold standard in 1971, you create an environment where production is increasingly not dictated by market supply and demand, but rather by what wall st wants to gamble on. as an example, real estate prices are MASSIVELY over inflated (because govt printed too much money and then created the tax incentives and welfare handouts to have this money wind up in the real estate market). even now, when the free market rears its ugly head to bring prices back down to reality, govt AGAIN inflates the money supply to make the problem worse. the result is people spend half their income on a small apt. and gold is trading over $1100/oz.

"It would mean turning off huge amounts of information that we have now."

not really. all it would do is ensure money is not overcreated and that is distribution is a bit more democratized. all the other markets and stuff can exist. what we may find, though, is that a lot of that stuff is unnecessary; it is noise. clearing out the noise will make it easier to hear the signal.

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David Semeria — Thu, 12 Nov 2009 04:05:03 -0000

Exactly.

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David Semeria — Thu, 12 Nov 2009 04:04:52 -0000

"Colorless green ideas sleep furiously" (Chomsky)

Certainly parseable, but alas not understandable.

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ShanaC — Thu, 12 Nov 2009 01:51:45 -0000

I use it like Dr. Bloom would state about the later dialogues: With Socratic irony.

I don't think average consumers in the US at least are going to go running around to trade on a daily basis lots of currencies. The notion that for certain items a weak dollar might be good is beyond some people.

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andyswan — Thu, 12 Nov 2009 01:20:14 -0000

Little known fact.....that historical statement was followed by " but I know I know more than your dumbass!" (high-five)

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ShanaC — Thu, 12 Nov 2009 01:15:13 -0000

I don't agree, if I think about it, we're still ignorant in so many ways.

"I know that I know nothing" Socrates., Apology, On the pronunciation of the Oracle of Delphi that he is the Wisest man.

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ShanaC — Thu, 12 Nov 2009 01:08:58 -0000

Kid- Can you take your gold on delivery? And would you? I mean really stick it in a lockbox somewhere.

Only ask because you get some funny views about this stuff once you've sawed out nickle silver and copper by hand. Buying sheet silver from the street and not having a stable studio to do silver soldering properly and learn lost wax based techniques of silver casting, has changed my perspective. So is loving the Met and the Temple of Karnak in the Anciet Egypt section, and the Oriental Institute here. They had a hell of a gold collection, and trust me, it didn't help them. Their world was based in Gold and other straight commodity items, up to trade in kind.

The romans were much less reliant on gold. technically they had a metal based currency. It wasn't a bullion currency though, it was a wieght based currency based on the wieght of certain metals. The actual coin was worth more than the base metal. It was more vulnerable to price flucations than a trade in kind system. There was a market made for coins.

I doubt you want to take delivery of gold. Or live in a world where you want everything backed by such a limited supply of one thing. I get why you want to make it commodity backed, but it actually makes it harder to trade goods-in-kind, especially if you want to make goods-in-kind 1:1 parity. If I have a way of making all wheats if a certain kind parable, and we move back to a system, it will be much harder to trade in kind quickly.
It's one of the reasons we floated currencies in the first place. At the same time, if I am not mistaken, we went off the gold standard, we also saw the growth of the debt market, the equity market, and the derivative market, alongside the growth of computers on wall street. We also developed a system to make sure we could analyze all of this stuff, and tools to work them (the spreadsheet). You would basically have to wind back down history to Bretton-woods, as well as pre-depression era banking, and parts of the Opec Oil-Shock, and decide that it is easier as a system to not know what others are doing and make markets out of it. It would mean turning off huge amoutns of information that we have now.

The question is: Can we focuses it and narrow it into useful streams rather than wide rapids to cross? Right now, we're cascading into some massive problems. We'll hopefully get out of some of them, but if we don't realize how to, it will be a nervewrecking place to be in 50 years out.

Re: Conferences (continued)

Prokofy — Wed, 11 Nov 2009 23:25:22 -0000

No, I had to re-upload my picture. It fell out for some odd reason. These aren't glasses but a monacle.

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Prokofy — Wed, 11 Nov 2009 23:23:56 -0000

What I know about Internet gold investors is that the people in Second Life who claimed to be making those "too good to be true and probably isn't" numbers were the same people running the banking scams and pyramid schemes that eventually collapsed and made little mini-precursors to the Madoff story. That sort of reputation clings to the "Internet gold" thing regardless of what you say or debates you imagine you won.

I personally value experience and the life of the mind more than making gold but maybe that's because I'm not good at it. I do take in about US $2000 a month from thousands of small transactions in Lindens in Second Life from all my customers, so I think in five years I have amassed a lot of experience about how virtual goods work and what sells and I even occasionally do some consulting for people to help them. Yet the fixed costs for server rental (tier) and the fact that you can't really pay yourself a salary make it only a tiny business for sure, almost not worth the trouble if you are not fascinated by people and systems. Business never interested me until I could have tools like the levers of SL to see how it works. To just park money into something and wait for it to grow interest seems terribly dull to me, but as I said, I just don't care enough about it. As they say, you can't take it with you.

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ShanaC — Wed, 11 Nov 2009 23:04:12 -0000

It's showing now. It can take a few moments. I like the glasses choice FYI.

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fredwilson — Wed, 11 Nov 2009 22:05:16 -0000

I'm never saying I don't believe you to prokofy