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breed fools geometrically

English translation: there is not an unlimited supply of fools

03:15 Apr 20, 2018
English language (monolingual) [PRO]
Bus/Financial - Economics / Bitcoin
English term or phrase: breed fools geometrically
Link: https://www.bloomberg.com/news/features/2018-04-19/what-bitc...
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For Savouri, the easiest way to understand the efflorescence of theories and valuations being bandied about is to opt for a simple, overarching one: the greater fool theory. It says that one fool buys in the hope that there’s an ever-bigger sucker willing to pay more. “The problem,” he says, “is that we don’t breed fools geometrically."
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Context: the main idea of the linked article is that, there are now numerous theories used in an effort to pin down the true value of Bitcoin, leading to many valuations which vary greatly with each other. For example, three valuations are introduced in the article, from the low of $20 to the high of $15,000. That's what the title means: the true value of Bitcoin remains an unresolved mystery.

The reason I post this question is actually not that there is any term or phrase in the quoted paragraph I don't understand. The reason is, I can't figure out the meaning of the paragraph on the whole. What idea does the author intend to express by it? What role does it play in the article?
Karen Zeng
China
Local time: 01:08
Selected answer:there is not an unlimited supply of fools
Explanation:
The point he is trying to make is that there is a limited supply of fools, especially fools with money! At some point, somebody has to be the last fool in the chain who can't find a bigger fool to pay an inflated price for the asset and they are stuck with it. An asset you can't sell is worth nothing, no matter how much you paid for it. This entire phenomenon is called a "bubble" because the price of an asset gets inflated beyond its ability to sustain that price and then bursts like a bubble, leaving almost nothing behind.

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Note added at 3 hrs (2018-04-20 07:03:57 GMT)
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Yes, efflorescence means abundance. What he is saying is that, because of the "greater fool" effect, the perceived value of the bitcoin has become disconnected from its "real" value so there is no real way to assess what that real value is. If there is no way to assess a real value then the value simply becomes whatever somebody is willing to pay for it and that can change from moment to moment. Anybody's guess of the current value is as good as anybody else's as the value depends on the supply of fools which is very large but not infinite (even if it seems that way some days!).
Selected response from:

Terry Richards
France
Local time: 19:08
Grading comment
Thanks you
4 KudoZ points were awarded for this answer



SUMMARY OF ALL EXPLANATIONS PROVIDED
5 +4there is not an unlimited supply of fools
Terry Richards
Summary of reference entries provided
this is why "geometrically"
danya
Possibly a deliberate reference to Malthus
B D Finch

  

Answers


2 hrs   confidence: Answerer confidence 5/5 peer agreement (net): +4
there is not an unlimited supply of fools


Explanation:
The point he is trying to make is that there is a limited supply of fools, especially fools with money! At some point, somebody has to be the last fool in the chain who can't find a bigger fool to pay an inflated price for the asset and they are stuck with it. An asset you can't sell is worth nothing, no matter how much you paid for it. This entire phenomenon is called a "bubble" because the price of an asset gets inflated beyond its ability to sustain that price and then bursts like a bubble, leaving almost nothing behind.

--------------------------------------------------
Note added at 3 hrs (2018-04-20 07:03:57 GMT)
--------------------------------------------------

Yes, efflorescence means abundance. What he is saying is that, because of the "greater fool" effect, the perceived value of the bitcoin has become disconnected from its "real" value so there is no real way to assess what that real value is. If there is no way to assess a real value then the value simply becomes whatever somebody is willing to pay for it and that can change from moment to moment. Anybody's guess of the current value is as good as anybody else's as the value depends on the supply of fools which is very large but not infinite (even if it seems that way some days!).

Terry Richards
France
Local time: 19:08
Native speaker of: Native in EnglishEnglish
PRO pts in category: 4
Grading comment
Thanks you
Notes to answerer
Asker: Thank you, Terry. I believe your explanation is correct. Now I have another question. Could you answer it? That is, does efflorescence mean "abundance" here? If so, then I don't understand how come the greater fool theory provides the easiest way to understand the abundance of vastly different valuations. If what the speaker said is "the easiest way to understand [why Bitcoin is overvalued] is by using the greater fool theory", then I would agree with him. My point is, the reason for the abundance of vastly different valuations may simply be that there are many factors impacting the value of Bitcoin and the value of those factors are uncertain. I don't see why the reason has anything to do with the greater fool theory.


Peer comments on this answer (and responses from the answerer)
agree  Tony M
58 mins
agree  Sarah Lewis-Morgan
1 hr
agree  Lingua 5B
4 hrs
agree  Daryo: one way of saying it
1 day 1 hr
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Reference comments


5 hrs peer agreement (net): +1
Reference: this is why "geometrically"

Reference information:
https://en.wikipedia.org/wiki/Geometric_progression

danya
Specializes in field
Native speaker of: Native in RussianRussian
PRO pts in category: 8
Note to reference poster
Asker: Thanks


Peer comments on this reference comment (and responses from the reference poster)
agree  Daryo: exactly! Grows much faster than an arithmetic progression.
22 hrs
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14 hrs
Reference: Possibly a deliberate reference to Malthus

Reference information:
Malthusian thesis. Concept that since food production can increase at only arithmetic rate (see arithmetic progression) whereas populations tend to grow at geometric rate (see geometric progression), the number of people would increase faster than the food supply.


    Reference: http://www.businessdictionary.com/definition/Malthusian-thes...
B D Finch
France
Native speaker of: English

Peer comments on this reference comment (and responses from the reference poster)
neutral  Daryo: there are some similarities (like the geometric progression), but here it's about the limited supply of marks/fools waiting to be fleeced, not the limited supply of food.
13 hrs
  -> I think you have failed to understand that the reference to Malthus is a subtle one. The use of the word "breed" is a clue (Malthus wrote that the poor “breed like rabbits; and their poverty breeds filth, ugliness, dishonesty, disease, obscenity, ...").
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