Bitcoin Forum

Where's CypherDoc tho? I still can't see too good.  :-[

But still some FIAT stuff are in green, like Netflix and Wallmart. It is more about where invest, no matter how you are investing

*off-topic flame baiting*

“China Finds $3 Trillion Just Doesn't Pack the Punch It Used To,” a Bloomberg headline from Friday morning reads.

“China’s $3 trillion-plus in foreign currency reserves, the biggest such stockpile in the world, would seem to be a gold-plate insurance policy against the country’s current market chaos, a depreciating currency and torrent of capital leaving the country,” Bloomberg writes, before citing a number of sources who say that in reality, $3 trillion aint what it used to be.

“Some Chinese reserves may have already been committed to fund pet government projects like the Silk Road fund to build roads, ports and railroad across Asia or tens of billions in government-backed loans to countries such as Venezuela, much of which is repaid through oil shipments,” the piece continues. “Then there are other liabilities that China needs to cover, such as the nation’s foreign currency debt to finance and manage imports denominated in overseas currencies.”

As we discussed at length on Thursday, Beijing burned through its UST stash at the fastest pace on record in December, liquidating some $108 billion in reserves in a desperate attempt to manage capital outflows and the yuan devaluation.

Most curiously, the bank's London gold vault only became operational in June of 2014, more than two years after launching the project. It can store some 1,500 tonnes of gold and was built and managed by British security services company G4S.

As Reuters further noted, with other banks withdrawing from the commodities business to cut costs and reduce their regulatory burden, it might be difficult for Deutsche Bank to find buyers amongst its nearest peers. However, one possible buyer is general LBMA-member, Chinese bank ICBC, which we said at the end of 2014, was trying to build a presence in London.

In any case, the list of potential buyers for DB's brand new vault lease remained a mystery, and perhaps our revelation of the exact location of this vault, something potential buyers tend not to appreciate especially when said vault will house up to 1,500 tons of gold, or over $50 billion worth of "inventory", may have dissuaded some. As a reminder, the "secret" location of the Deutsche Bank vault, which as revealed in the G4S building application, is located in the Park Royal complex, and specifically at the 291 Abbey Road, London NW10 7SA location.

As it turns out, one persistent buyer failed to be dissuaded.

According to Reuters, as was rumored one year ago, China's largest bank - and in fact the world's largest bank - by assets, ICBC Standard Bank, is buying the lease on Deutsche Bank's London gold and silver vault, enlarging its footprint in the city's bullion market, four industry sources close to the companies told Reuters.

China's ICBC, which took a controlling stake in Standard Bank's London-based Global Markets business last year, has also applied to become a clearing member of the London gold and silver over-the-counter business.

Paper Money Burning.  Gold/Silver/Bitcoin DGAF.

[ZEROHEDGE] When 3 Trillion Just Isn't Enough: Analysts Fret Over "Worrying" China Reserve Burn (http://www.zerohedge.com/news/2016-01-08/when-3-trillion-just-isnt-enough-analysts-fret-over-worrying-china-reserve-burn)



[ZEROHEDGE] China's Largest Bank Is Mystery Buyer Of Massive 1,500 Ton Gold Vault In London (http://www.zerohedge.com/news/2016-01-08/mystery-buyer-massive-1500-ton-gold-vault-london-chinas-largest-bank)



China is burning its paper and stacking gold faster than ever.  The time of reckoning draws near....

How the hell are they keeping the dow and Chinese composite index floating after a free fall wtf.

there's one aspect of the China story that can't heal itself or transform into something more benign from a market perspective, and that's the Narrative of Chinese Government Competence. To quote myself in "When the Story Breaks":

    "This is a completely different Narrative than the growth story, and it’s the story that one-party States rely on to prevent even the thought of a viable political opposition. In highly authoritarian one-party nations – like Saddam's Iraq or the Shah’s Iran – you’ll typically see the competence Narrative focused on the omnipresent secret police apparatus. In less authoritarian one-party nations – like Lee Kuan Yew’s Singapore or Deng Xiaoping’s China – the competence Narrative is more often based on delivering positive economic outcomes to a wide swath of citizens (not that these regimes are a slouch in the secret police department, of course). From a political perspective, this competence Narrative is THE source of legitimacy and stability for a one-party State. In a multi-party system, you can vote the incompetents (or far more likely, the perceived incompetents) out of office and replace them peacefully with another regime. That’s not an option in a one-party State, and if the competency story breaks the result is always a very dicey and usually a violent power transition."

So when I read an article this morning in a famous media outlet owned by famously Beijing-friendly Rupert Murdoch that "the impression left on investors is that Chinese authorities are out of their depth" and that "certainly with respect to the stock market, their reputation for incompetence is well-earned", I get nervous.
 
I get nervous because the next move in China is going to be a political move, and political moves are never well anticipated by markets. The Beijing regime is going to take steps to defend itself, or at least insulate itself, from the growing Narrative that they are incompetent. Heads will roll. Literally, in all likelihood. But the incompetence genie is very hard to stuff back into the bottle, and depending on whose head is on the chopping block, regime stability can deteriorate very quickly. Now that's what will make me change my bullish stance on China fundamentals, and that's what will make the US market swoon of last August look like a gentle spring rain.
 
From an Epsilon Theory perspective, a collapse in the Narrative of Chinese Government Competence is the biggest systemic risk out there right now, and that's where I'm focusing my risk antennae.

I would take anything from zerohedge with a huge grain of salt.  In fact, I would highly recommend not trying to get your business news from them.  They're fear mongers, always predicting economic Armageddon and pumping gold and silver.  The writers are anonymous.  But the second part of your thread title is correct.   :)

Skepticism is always healthy.  But you seem to be advocating a higher degree of scrutiny for ZH than say, CNBC and other house organs of TPTB.

You know ZH is a Drudge-style clearinghouse, with original content mixed with contributions from third parties (many of whom are not anonymous), right?

And what is your problem with anonymous writers?  You know Satoshi is a nom de plume/guerre right?  And what is your Real Name, Mr. "The Pharmicist?"  Perhaps we should assume you are not legitimate until we know exactly who you are?  Oh wait, that would be lazily indulging in a logical fallacy of the 'shoot the messenger' type.

You sound exactly like the MSM toadies whining about Drudge because he broke their embargo on the Lewinski story.   ;)

Your FUD about ZH identifies you as the one "fear mongering" here.  What's next, "something something blogger pajamas?"   ;D

I would take anything from zerohedge with a huge grain of salt.  In fact, I would highly recommend not trying to get your business news from them.  They're fear mongers, always predicting economic Armageddon and pumping gold and silver.  The writers are anonymous.  But the second part of your thread title is correct.   :)

you mean fear porn, but yea zero hedge is like satire

The central banks' plunge protection teams work together

Chinese stocks are trading at the lows of the day after Overnight HIBOR rates (Hong Kong's interbank borrowing rate) exploded a stunning 939bps to a record high 13.4%. It is clear that banks are utterly desperate for liquidity and/or are extremely concerned about one another's counterparty risk. This has dragged HSCEI down 5% (to its lowest since Oct 2011).

As China’s leaders figure out that pegging the yuan to the dollar while quintupling their debt in five years was a colossal mistake, they are, apparently, concluding that the only way out is a sudden, sharp currency devaluation. As Reuters reports...
   
https://i.imgur.com/tXyN5Uf.jpg

After trying to simultaneously be a Bitcoin Maximalist and Buttcoiner, he vanished in a puff of logic.

I suspect that his attorney told him to shut his yap.  At least here on bitcointalk.org where he did much of his hard-core shilling.

Turmoil in China’s markets rippled around the world in the first week of 2016 as the securities regulator scrapped an equity circuit breaker after just four days and the central bank set a weaker yuan fix for eight days in a row, escalating fears of a global currency war.

Possible that he harbors a slight bit of resentment over what theymos did to the thread we used to enjoy/lurk?

In any event, good riddance to them, amirite?

The Federal Reserve may not have the legal authority to set negative interest rates in the U.S., according to a 2010 staff memo that was posted late last month on the central bank’s website.

The document, which is dated Aug. 5, 2010, and was publicly released on Jan. 29, suggests the law that authorized the Fed to pay interest on excess reserves, or IOER, may not grant it the authority to charge interest. That could constrain the central bank’s ability to take interest rates below zero, though it might be able to find a work-around.

Speculation has increased that the Fed might consider negative rates in the next economic downturn as concerns of a U.S. slowdown have mounted. This also follows recent moves to cut borrowing costs below zero by central banks in Europe and Japan that show it can be done. The opinion of Fed staff back in 2010 was that this would difficult under U.S. law.

I think the gold-oil link that has lasted for over a century is being severed.

New energy technologies are coming on line that will eventually cause the obsolescence of fossil fuels and the gold-oil link is necessarily reflecting that.

There will be a lot of disruption surrounding that delinking given the number of existing geopolitical power structures, petro-dollar debt-based fiat, bonds-for-oil, gold-for-oil, similar inter-national agreements and the mountain of derivative deals that are based on these fundamental long-term linkages of energy and money being broken.

tl;dr oil is being demonetised

I think the gold-oil link that has lasted for over a century is being severed.

New energy technologies are coming on line that will eventually cause the obsolescence of fossil fuels and the gold-oil link is necessarily reflecting that.

There will be a lot of disruption surrounding that delinking given the number of existing geopolitical power structures, petro-dollar debt-based fiat, bonds-for-oil, gold-for-oil, similar inter-national agreements and the mountain of derivative deals that are based on these fundamental long-term linkages of energy and money being broken.

tl;dr oil is being demonetised

It could be almost the exact opposite.  That is, energy (which fossil fuels remain well in the lead in and probably will for some time) may be in fact completely subsume the current function of money as has been seen in the present and past.  That is the base-line functional distinction of 'Technocracy.'

You (MofA) should sit through at least one of Patrick Wood's presentations of Technocracy.  It would probably take only one pass for you to appreciate most of the points.

I personally feel that various groups (including enviros/eugenicists, Technocrats, etc) are being used as useful idiots in a project to move the world forward and we may not see energy as the currency upon which ownership/control metrics are based as the Technocrats dream of, but we could see moves toward such a project and possibly a phase in which we seriously flirt with it.  Being familiar with the paradigm, one can see signs of this already with smart-meters, carbon taxes, fine-grained (personally identifiable) surveillance, etc.

Monetary policy globally has been asked to do something it can't really do," Mr Stevens said.
....
"They were all structural things to help make economies work better, help productivity, assist innovation etcetera. That's where prosperity comes from. It doesn't come from manipulating the price of money," he said.

The stock market is too volatile recently. So the people are seeking safe heaven. They will buy gold first, then bitcoin.

Gold is back in a bull market for the first time since 2013 as concerns about global growth rise.

Gold spot prices climbed to $1,272.77 an ounce on Friday, after settling at $1,264.25 on the previous day.

Thursday's close marks a 20pc gain from the most recent low of $1,052.94 in December, meeting the typical definition of a bull market.

Signs that US growth is slowing and an expectation that the Federal Reserve will delay further interest rate rises have pushed up prices of gold since the start of the year.

And after they buy Bitcoin, they will buy Monero.

3/3/16
Gold soars into bull market as global growth fears mount
http://www.telegraph.co.uk/business/2016/03/04/gold-soars-into-bull-market-as-global-growth-fears-mount/


I guess this is why Frap.doc kept a stash of gold for himself, while telling anyone who would listen they should sell theirs and buy Bitcoin.