Bitcoin Forum

Good bye dollar, hello Bitcoin!

http://www.federalreserve.gov/newsevents/press/monetary/20120913a.htm

"Committee agreed today to increase policy accommodation by purchasing additional agency mortgage-backed securities at a pace of $40 billion per month."

"These actions, which together will increase the Committee’s holdings of longer-term securities by about $85 billion each month through the end of the year"

so what does this mean they will lend out 40 Billion $ a month to who ever wants a mortgage?

The Fed is printing out new dollars to loan to their friends at a cheap rate so that they can pass the cost on to you.

yesterday CAD was worth 2.5% more then USD today its 3.1%

Silver:

http://www.kitco.com/images/live/silver.gif

Gold:

http://www.kitco.com/images/live/gold.gif

I doubt this affects Bitcoin as much as it affects precious metals but it will affect Bitcoin as well. The pressure to go up is increasing and we have the Bitcoin conference coming up as well. Block halving is getting closer... etc.

Yep! plus the bitinstant prepaid card that is comming plus Gavin's announcement....
A lot of movements for bitcoin in the next few months. That's gonna be exciting!  

It will affect many things other than precious metals as well. Consider companies that are based in the U.S. but do the majority of their sales in foreign countries. Continual QE creates favorable exchange rates for companies like that when they repatriate their earnings. My most favorable pick in this regard is probably Philip Morris International (PM.)

1. As in the past those announcements lacked to have an immediate effect on USD/BTC price.

2. The effect will nevertheless be felt when USD inflates in comparison to other currencies like EUR, GBP etc. due to arbitrageurs that help decouple BTC price from USD price IMO. Maybe I got number 2 wrong here. PLs correct me if thats the case.

There are more dollars now, all else equal it has to boost the price some (maybe tiny). But Bitcoin is a better money because of stuff like QEx, but most people participating in the bitcoin market (at least the segment demanding coins) know this so no immediate effect imo.

Chodpaba,

Can you explain the correlation? I'm missing  it.

And Samson said, With the jawbone of an ass, heaps upon heaps, with the jaw of an ass have I slain a thousand men.

Sounds like a bad ass.

https://bitcointalk.org/index.php?topic=85448.msg1188427#msg1188427

Still...?

http://cdn.memegenerator.net/instances/400x/26705317.jpg

It's official.  QE3 is here.  Here, Fed chairman Ben Bernanke describes vividly the personal biological pre-conditions that motivated this latest round of purchasing.
http://i.telegraph.co.uk/multimedia/archive/02338/bernanke2_2338974b.jpg

You called?>?

blood shot eyes, are you implying that he's high?

+1

It is in the future as the dollar becomes weaker.....

What a dog on day (Week) for traders.
Got almost toasted as my broker disconnected me 2 times while the FOMC meeting for almost a minute.


Maybe drunk
http://i50.tinypic.com/nqe7lt.jpg

Maybe he's referring to some other bodily feautures here??

That's what I assumed he was talking about.

https://i.imgur.com/aKya0.jpg

And we have a winner.

Do you think he's got 2 dicks?

First picture of Ben Bernanke

https://i.imgur.com/XaiUx.gif

FTFY

Then again who am I kidding?  Never good at making these things.  Oh well, enjoy ;)

http://dfullerton.smugmug.com/photos/i-wNKDpvP/0/X3/i-wNKDpvP-X3.jpg

Is that Ben Bernanke?

Shit if it isn't it sure looks like him......LOL!

lol unlimited QE, fuking ingenious

what if QE3 works   :o

You'll never hear anyone on this forum admit to it. :D :D

how badly would gold crash if the economy recovered?

back to 300$/oz?

Thats a long process, that can take up to a decade from now. Therefore it would be a long slide, rather then a crash (unless the government decides to seize all physical gold possessions once again).

Well I think the goal of QE is to weaken the dollar. So yes, QE3 will work, as did QE1&2.


how low will the USD be when that happens is the real question. I don't think we'll ever see 300$/oz again without a "New Dollar"

QE isn't about weakening the dollar... that's a side effect
its about forcing banks to loan money.

traders are all like Mitt Romney they only know how to make money on a crashing stock.

QE does "work" for what it's intended, governments printing money can stealthily tax everybody a certain % per dollar they have.

If the government were to ask every one for this money a) they wouldn't get it and b) it would create a shit storm.

When tax moneys desperately needed governments think outside of the box and move the goal posts. By changing the term tax for stimulus so few people realize what's going on they are fooled into believing it's a good thing and they don't lose anything from it!!  

-With tax they take a little bit of money off everyone so people have less purchasing power after collection (this will piss everyone off and wont get you re-elected)
-With 'stimulus or QE' they print more money, devaluing everyone's money a little bit so people have less purchasing power after printing (this is known within high government circles as happy tax :) )

right,

So the only thing that could foil QE plans is if everyone invest into things like Gold and not them self's, and hope the economy goes to shit, just so they can play out their "financial meltdown survivor" fantasy

Ah ah, what a shitty strategy then. They must be morons  :o
Hint : they are anything but stupid.

yes youtube videos are telling everyone the dollar is going to crash hardcore very soon.
the solution? buy gold! :D

right....

buy can food / rice if your scared of a financial meltdown.

no one in their right mind is going to trade their food for your gold....

I never said the USD will crash. Just a slow and steady grind.
Hyperinflation could happen, but I think it'll be prevented.
And if that happens, yes people will accept gold. Always better than worthless paper. At least that's what history shows.
But again, I still have doubts they'll go that far.

And btw, don't worry about what I do. Ask yourself what the US gov is doing, and why

Works well to a point.  I habitually keep as few USD as possible.  To some degree I buy things that I may or may not if I were not wanting to unload rapidly declining USD denominated assets in risky entities (e.g., anything quote/unquote 'regulated' by those retained by our political leadership for that purpose.)  A fair fraction of the excess goes into PM's however, and for a time a chunk of it went into Bitcoin.  As more and more people turn into PM/Bitcoin 'weirdo's like myself, I would expect a shift in strategy.  Until then I figure that QE will keep on keepin' on.

Accd to Sinclair, large corporations are already or soon will be taking almost exactly the same actions I am personally.  That is, keeping a portion of their reserve in the form of gold.

You mean like the hoards of cash they are sitting on?

Yes, it sounds like a tall tale, but I have about as much respect for Sinclair's insight, knowledge, motives, and all around decency as anyone I can think of in the space.

Though I don't have personal experience as a shareholder (since I dump all such assets immediately if I end up with them) I would expect that shareholders want the best return they can get and expect the corporation to deliver.  If parking some reserve in gold is a good way to whether a storm (and recent history demonstrates that ain't a half bad strategy) then it does not seem to me that shareholders would care that much...but for the 'unorthodoxy' which we've all been conditioned consider gold reserves as being.

Granted, I was just pointing out a certain irony in the juxtaposition of your posts.

I do not find it unlikely in the least that prudent companies might hedge their operational reserves in commodities.

Chumping Gerald Celente is one thing.  Chumping GE is quite another.  Anyone with a modicum of thoughtfulness can keep that asset safe...and although you don't want to hear it, they can also convert it to other forms of wealth without a great deal of effort.  (Voice of experience, BTW.)

Actually it would probably be somewhat more difficult for a corporation to keep their deep storage gold safe given that they need to comply with laws and that they would likely have a big enough pile to go after.  I've a sneaking suspicion that the entities who run ETF's are going to find that out.  But I consider the wisdom of keeping one's gold at an ETF to be only slightly higher than keeping one's BTC with pirateat40.

Some companies understood that, and don't invest in ETFs. The famous example is the university of Texas (http://www.zerohedge.com/article/golden-tipping-point-university-texas-takes-delivery-1-billion-physical-gold).
And when you see the bond king advising to buy gold (http://www.zerohedge.com/news/bill-grossbuy-real-assets-gold-house), you know that there's an increasing number of people/funds/companies thinking about it.

And again, if you all agree the Fed is giving everyone an incentive to buy gold, you should ask yourselves why. It's not that they are so stupid that they don't understand the consequences of their actions. They want people to sell their dollars. A cheap dollar boost exports (thus GDP) and devalue the debt. But obviously they'll never say it publicly.

I advise you to read "Currency Wars" by Jim Rickards, it explains this a lot better then I do.
You can also check what he said in this article (http://www.usnews.com/opinion/blogs/economic-intelligence/2012/08/20/how-china-is-driving-federal-reserve-policy) published the 20th of August :


To be fair, he got it wrong on the kind of easing the ECB did (Buy short-term bonds Vs. Lower interest rate)

nah, better be bringin' me some other commodity that I can use. Maybe that could be blankets, fuel, #H of manpower. But it sure wont be gold at my lil pit stop.  Well, atleast not if conditions were such that a recovery to 'advanced' society were not going to happen in my life time.

I can picture several scenarios where people would trade gold and several where gold or anything else that was non essential to survival would be uncommon. Some form of a central market would have to exist to ultimately give gold value.

Basically you're advocating barter. Nothing bad with that, if possible it's always better, I agree. But if it's not, then you need a "common good that most people accept". That's called money.
And what humanity historically selected as the "best money" is gold. But that's ok with me if you don't accept it, I'll buy what I need to your neighbor.


Obviously pricing is difficult without a central market (not only for gold, same with any goods), but it is still better than no trade.
And if you look at history, gold wasn't imposed. It emerged (bottom-up).

I disagree. I believe this phrase, 'rich as Croesus,' would find quite the opposite point of emergence if studied a bit. Just to say that I feel the value given to gold from its collection by great societies, rulers, empires, etc lead to its use in trade and not the other way around.

gold is cool and all, but this is the 21st century

can't we make the a perfect money?

limited supply
impossible to counterfeit
easy to transfer, secure p2p exchange

 ;)

From what archaeologists know, humanity began to play with gold around 4000BC (link (http://www.chemicool.com/elements/gold.html)), a lot before Croesus. And it's the first proof we have, so it's probably even older.
At that time it was only jewelery, just another good to trade. Quite the same idea as today, people like to wear shiny rocks, something I don't really get, but apparently the average human disagree with me (ask women  ;D). That's where the value of gold (or silver) appeared.

It was only later that it became one of the most used form of money, because people understood that it was scarce, and impossible to create from something else (though a lot of people tried). Nowadays it's possible, but insanely expensive (Synthesis of precious metals (http://en.wikipedia.org/wiki/Synthesis_of_precious_metals)).

And btw, rulers never liked gold or silver as money, because they were not able to counterfeit it. How are you supposed to pay for crazy invasion wars with a limited amount of money ?
A interesting example is one of the first inflation of modern history during the roman empire, where the silver denarius went from 95% silver to 0.02% in 200 years (link (http://silverismoney.files.wordpress.com/2008/06/kasun060908b.gif)).


I wouldn't be here if I didn't agree with that. But we have to let the market make this choice. That's a lot of people, with a big inertia. Gold still have a long time to go (if only for jewelery).
Anyway is it really a problem if we use both ?

If only someone would come up with som... hey, wait a minute, I see what you did there.

PETER SCHIFF: The Fed Just Unleashed 'Operation Screw'
http://www.businessinsider.com/operation-screwed-2012-9 (http://www.businessinsider.com/operation-screwed-2012-9)

Furthermore, both Bitcoin and gold are fungible.  If you can find someone 'here' who wants to get their gold from 'there' to 'here' (once you are on-site 'there'), Bitcoin could make it safe and easy to transfer gold as well.  Each person would need a trusted party on the opposite side, though, to carry out their wishes.  Possibly this would be a good related business for someone doing escrow.

PETER SCHIFF: VIDEO Operation Screw: The Fed goes all-in on QE
http://www.youtube.com/watch?v=LS879r7xeLc (http://www.youtube.com/watch?v=LS879r7xeLc)

If the economy recovers, interest rates will rise, rendering the US Gov debt untenable, and encouraging further purchases of gold as a hedge against USD collapse.

I think this is really important to understand

there is no way out for the Keynesians at this point...when the music stops there will not be enough chairs