In the end, the price decline may be what saves Bitcoin.  When I first arrived on these forums some of the claims were absolutely ridiculous.  1 Bitcoin would eventually buy a car, be worth X times the amount of gold, be worth $100,000+ PER COIN.  I wish I were exaggerating, but I'm not.  Basically there were too many people who thought Bitcoin was their get rich quick scheme because of the massive appreciation.

This price decline should help return a lot of those people to reality.  Not to say there is no profitability in Bitcoin but I think profits are in building the infrastructure, not hording coins and crossing your fingers.  But building an infrastructure takes effort.  Bitcoin isn't going anywhere if you just sit on your hands, at least that lesson is being echoed in the markets now.

S&P and Moodys rate debt based on their probability of default.  They then assign it a grade from AAA to D. 

A comment on zerohedge?  In otherwords, a random guy on the internet with no credentials.   

Are we in bad shape?  Sure.  But fear mongering doesn't help anything. 

Shed debt and save.

In a true deflationary environment, credit contracts and prices decline.  Cash is king in deflationary times.  Or maybe purchasing power is king would be a better way to put it if you've lost confidence in the USD or whatever fiat currency your country uses.  Purchasing power of course is the number of goods or services you can buy with a unit of currency.  What unit of currency you should be saving, will be up for debate and depends on how bad you think things will get.  If you believe the US will endure then cash will serve you well in deflation.  If you believe there will be a global collapse, well then things get a little harder to predict.  Currency in this situation would have to be something more intrinsically useful but still portable.  Bullets perhaps?  I don't know.  I'm not of the opinion that this is the end of the world as we know it so I haven't really thought it through to that extreme. 

Edit:  Looks like Cypher beat me to the punch while I was typing.

And only a fool would think the collapse of the largest economy in the world would not pull everyone else down with them.

Switzerland is pulling out all the stops to devalue the Franc.  So far it hasn't been all that successful but it's definitely something they are trying to achieve.  Record CHF compared to other countries is very bad for their economy.

In a mass selloff like today, just about everything gets liquidated as margin calls come in and people flee to safety.  Treasuries and the USD were about the only long positions that fared well today.  Interestingly, the Swiss Franc held up despite the gov't attempt to devalue the currency.

If we're heading for 2008 redeux, the miner stocks will be taken down with the rest of equities.  

I'm thinking we'll have a bounce too.  I see it happening between 1175 and today's close at 1200.  However, I think it fizzles out around 1260 or the 200dma, which is currently 1286.  Trading below the 200dma seems like a bear market to me but I'm waiting to see how the market reacts to the bounce.  The market is oversold short term and is due for a healthy bounce.

That being said, the last support before bigger losses is around the 1175-1180 area.  If we break that support, look out below.

Silver Wheaton (NYSE: SLW) is my silver play.  It was down 8.6% today so I opened a position.  I have some physical bullion but I'm not a big end of the world type person so I'm content with owning the miners.  Maybe I'm trying to catch a falling knife, we'll see.

I just took a quick glance but I noticed several spelling errors on slide two.  "Indevidual" (twice) and "architectureral."

No, please do.  I posted to the forums so that anyone can chime in, I just added Cypher to the title because he specifically mentioned this author not long ago.  As he mentioned in his post, and I concur, spirited debates generally help in forming ones investment objectives/outlook. 

I'm always open to constructive criticism and different points of view.

Funny you should mention Mish as I found this article on the METAR forum that he started.  Sounds like we come from similar backgrounds. 

I agree with you on Greece, they're past the 150% debt/GDP point-of-no-return.  JPMorgan is saying Italy and Spain will be out of cash by September and February, respectively, if they lose access to the funding markets. 

Probably not since MtGox is in Japan so it's an international wire.  Good to know about TH though, thanks.  Too bad the volume isn't what it is over at MtGox but I suppose it's an option at least.

No one within 500 miles of me.  Good solution, but only for a fraction of the population.

Nope.  Don't say anything again, ever.  Thanks!

It's a solution, but a poor one.  Give the average person two options (we are still trying to make BTC mainstream right?):

A) Keep your cash in an FDIC, interest-bearing account

or

B) Keep your cash in MtGox (security has already been breached) or Dwolla (has blatantly gone against the TOS)

Pretty obvious which one they're going to choose.

Alright BTC is in a free fall.  I have $X,XXX in my bank account that I'd be willing to use to buy BTC's NOW.  What are my options?

MtGox used for example:

1) Dwolla - initiate ACH.  Wait 3 business days.  Oh yeah, and send them a copy of my ID
2) Mail cash or check
3) Liberty Reserve (similar to Dwolla sans photo ID req)
4) Paxum - wire funds to Paxum, wait 3 business days to clear.  Transfer funds to MtGox
5) International USD/EUR wire - Not clear on the timeframe for this one, since it's international I'd imagine at least a few days to clear

Seems like your only option is to have funds already in MtGox/Dwolla/LR in anticipation of a crash.  Otherwise you wait days.  This is probably why the depth on the buy side is so low.  Even if investors wanted to buy in, they're stuck twiddling their thumbs since there are no real viable options to fund quickly.  This needs to be addressed otherwise there's no way to stop these crashes. 

Back up the truck guys!  Start wiring in those funds!  If you wire today through Paxum, you'll probably have your money in MtGox by next week Tuesday 

+1

Take a look at what's going on with the Swiss Franc, which has been at historic levels compared to the USD and Euro.  They are purposely devaluing CHD.  It should be noted that if you chart gold vs CHD, you will see that gold has not appreciated like it has versus other currencies.


Gold is essentially the last monetary proxy which has not been overtly tampered with (it is not under any particular government's jurisdiction and, with the exception of guys like GS and Soros, no goverments really have much interest in its value - so at least government intervention is not an issue).  You can make a similar argument for silver.