This analogy is both amusing and not inappropriate.

I would, however, note that one is more likely to succeed by knowing their enemy and choosing the time and place of a conflict.

ql;bdfr  (Quite Long, But Did Finally Read...and an interesting read it was.)

Here's a thought experiment that I am playing around with:

Seems to me that with some effort, the USD-as-global-reserve-currency might (or might not) be able to go on for some time, particularly if we take Iran's Khuzestan region.  But there will come when it is no longer sustainable.

We (the US) are the world's gold kings at this point, particularly since there is very little chance that we will give Germany's gold back (the 'Marshal Plan' may have been a bit more involved than is typically documented in the history books me thinks.)  If we went to a 'gold standard' monetary system (which would, of course, be a transient thing) at this point, the US (and our hangers on) would on top for a while.

The pace of gold outflow toward Asia is increasing as is native accumulation through production in Asia.  As time goes by, our 'gold advantage' dwindles.

For this reason, a logical strategy might be to get rid of the current USD reserve currency regime in a controlled demo somewhat prematurely.  We then end up fighting the battles with more control and direction than if we try to milk the current regime until the bitter end.

Taxes don't bother me as much as they seem to bother a lot of people.  I guess it's in part 'cuz I'm a lib.  If I made some bucks on PMs, I did so in a society which facilitated it so I'm happy enough to support that society.

It bothers me that my tax dollars are going toward killing innocent people in other countries.  It bothers me that corporations buy politicians so that a) they can shirk their own responsibility for taxes and b) they can use _my_ tax dollars to fund illegal wars which benefit them much more than they benefit me.  But, at the end of the day, not paying my taxes is a counterproductive way to 'change the system' and is likely to bring me trouble which I don't need. 


I also have interest in keeping some of my PMs off-shore.  The difficulties I perceive here are that I have little confidence that a financial institution in a foreign country would put my interests first in the event of a crisis or catastrophe.  I could easily see them drilling all foreign owned safe deposit boxes, for instance.  Particularly if that country happened to end up allied with the US and the US issued instructions to do so.  I am not blessed with any trustworthy private partners to operate on my behalf in a foreign land.  A secondary issues is that I doubt it would be practical to travel freely in a situation that I am trying to protect against.  So, my stash might be in Switzerland, but my ass cannot get beyond TSA to go get it.

I'll note again that one of the HUGE draws of Bitcoin, to me, was that it would allow a transfer of PMs between two mutually interested but non-trusting parties in different parts of the world.  That is, a transfer of, say, KRs could be ratcheted in using Bitcoin while keeping the transfer safe from a high percentage loss and relatively private from prying eyes.

Probably the way to pull it off would be for the principles to travel to the respective foreign counties while leaving their stashes in the care of a local trusted individual.  The transfer then gets ratcheted in, and the principles drifts off to do whatever they are going to do with their newly transferred loot.

That was the same question I asked 3/4 ago when I considered mining.  Seemed to me that the money was better spent just hoarding BTC.  If Bitcoin takes off big-time, the hoard would be bigger than even a huge miner could generate.  If it did not then my mining gear would be an albatross, and probably obsoleted fairly quickly in either situation.

There was also a factor of wanting to support Bitcoin on philosophical grounds.  I considered that soaking up liquidity by hoarding during the high inflation period was as good a way to do that, and since there was no eminent threat of a 51% attack by adversaries, there was already enough hashing power to protect the Bitcoin network.

The spread is a cost of doing business when it comes to physical.  In my case it is close to negligible and tax issues are a much bigger factor.  If one plans to flip PMs there is little reason to be dealing with physical and a lot of reasons not to be (imho.)  If one is worried about being MF-Global'd playing with ETFs or something like that, one can still hold a core position in physical.  Unless they don't desire a core position I suppose.

Just looked for the first time today.  Over 80.  I'm actually quite surprised to see the relationship we see between gold/silver and the USDX today and it strikes me as noteworthy.

I sure am glad that such manipulation never happens with Bitcoin :^)

No harm no foul.  I remember the dark days of $2.change BTC when it seems like you and I were about the only two people supporting it's potential.


I'm all for diversifying and the only reason I don't personally don't practice what I preach more than I do is that I have relatively few responsibilities and the ability to take a financial hit better than a lot of people.

I have to point out that it seems to me like you are promoting more of a position in bitcoin than I feel is prudent for most people.  I'm a big fan of Bitcoin, but I cannot see how it is anything but a monster speculative investment (if it can even be called an investment per-se.)  Much more risky than PM's even if one does not believe in them.  Since I don't subscribe to your letter or whatever, I don't know the percentages you recommend for Bitcoin, but it _feels_ like you are suggesting a more heavy weighting than most people probably should take (in my opinion.)


Believe it or not, I actually consider Bernanke more of a wizard than a criminal (though I am unconvinced that it's actually his brain doing the processing.)  I am in some awe that he(?) has been able to keep things going to the extent that he has, but he has no real chance for long term success.  Kind of like Sisyphus and his task.

When Ben finally loses his battle with the rock I want to have control of some PM's first and foremost.  I want to also have control of the BTC as a another tool in my toolbox, and also as a side-bet with huge upside potential.

I guess I'll feel free to poke fun at you if any of your calls go off by 1% for a matter of hours then?

You may or may not have noticed, but the USDX got up to almost .80 for a time today.  I'm surprised that PM's held up as they did to be honest, and I doubt that I am alone.  USDX seems to ratchet back and forth while PM's just keep on ratcheting up.  I can live with that.

If somehow the rest of the world cannot hold the USDX up (by devaluing their own currencies) and it gets down to .72 again, it will be very interesting to see where the price of Gold and Silver will be.  Any guesses?  Or do you suppose that it is impossible to see those kinds of USDX numbers again?

Wrong-ish.  The lists are simple and freely available for anyone to create.  If they are credible and seen as such by a majority of users, they survive.  The moment they are suspect, they die.

The lists are also not integral for the function of Bitcoin.  If through some sort of coordinated attack on the loose network of list maintainers they needed to be disregarded for a time it would not impair the ability of the Bitcoin network to function.  It could create a mess to clean up, but without such a 'weapon', Bitcoin would probably suffer a terminal blow to it's survival under this magnitude of attack.  Or would if/when Bitcoin grows to scale.

If such a system was in place, a list maintainer (or some other entity) could issue something to build into the block as an identifier of origin.  That's just the first idea which came to mind and there are probably other ways to do it (if network analysis by the list maintainers were not sufficient for the task.)

Seems to me that a decent solution to any class of 51%-ish problems (including evilvladmirinc or evilnsagov) would be to have any interested group publish white or black lists.  If a majority of users choose find a particular list credible for some reason, chains with the offending blocks would be rejected by the majority and the blocks would be valueless (no matter what hardware they were generated on.)  Under such a scenario, anyone who had the interest could support then network to their hearts content but if they pissed off the natives, they, and their investment, gets voted off the island.

I've mentioned before that having such a solution developed, tested, and in place would be in my opinion a prudent defensive tool and one who's very existence would almost guarantee that it would never need to be used.  The complexity (although rather modest compared to the 'supernode cluster architecture' needed for Bitcoin scaling) and increased latency would be a nuisance, but I doubt that it would be much more than that.

I was in a particularly harsh mood yesterday, but I pretty much stand by what I say.  What I did not do was accuse you of stating exactly what was going to happen exactly when.  Keeping up with your copious work is challenging and not interesting enough for me to actually do in a nit-picky sort of way.  My sense is that you do tend toward shorter term calls than I usually feel comfortable with, but I am most interested in dealing with relatively long time horizon.

I will say that your notable animosity toward PM's remains somewhat baffling and has piqued my interest and some other peoples as well it seems.  Only time will tell how that is going to work out for you and your embryonic flock.  I expect that your chances of that position working out extraordinarily will be only when measured against Bitcoin at a particular snapshot in time, and even then it will be a long-shot.

As for my expertise in investing, I will be the first to admit that I have none.  I have observations about things which I gladly spit out, but I rarely state with any certainty what they actually mean since I don't really know.  To the extent that my own personal investment decisions have so far worked out fairly well, that is due to my having the luxury of being able to be patient and not everyone has such a luxury.

I am very drawn to 'open source' and as a consequence, 'closed source' does put a bad taste in my mouth.  It is very unlikely that I would subscribe to your newsletter or anyone elses' on any topic for that reason among others.

My conceptions on 'money', 'currency' of various types, 'value', 'risk', etc are not something that I could just start drafting up as a thesis from a cold start, and if I did, it would not likely occur on this thread of this board.  Nor would it be particularly useful to anyone.  As the right combination of interest, time, and opportunity arises, I'll possibly produce comments about some of these things.  Or continue to do so I should say.  I've avoided some recent comments on other threads for lack of one component or another, but some of them had me shaking my head and led to comment that personal finance lessons are a poor model to help understand global monetary systems and the entities who operate within them.

I never gave a damn about stock and did not pay attention to who said what about them.  I care about physical, and I remember getting a stronger sense of trepidation every week from Trader Dan in particular that something ominous (albeit temporary) was approaching.  Since I had no intent to unload any PM's for years, I didn't care very much.

One thing that is crystal clear to me is that if anyone claims to know exactly when exactly what is going to happen, run, don't walk, in the opposite direction.  This holds for Trader Dan, Jim Sinclair, and cypherdoc.

As for Sinclair and mining stock, the message I've gotten from him over the years is to be very cognizant of naked short selling.  I'm wary of that from reading other works and research as well.  It is well beyond my ability to protect my interests if such a problem exists and when it comes to a head if it does exist.  That is to say, to be one of the few who make it through the escape hatch.  That and other reasons are why I hold zero shares of stock in any company traded on US exchanges.


No, it is evidence that my old habit of trolling dies hard.  I'll award myself several points for getting a response (though it is a hollow victory considering your, um, generative capacity) but I'll award you a point for the 'closed mind' comment


Considering...nope.

Actually I have put more than a little thought into more than a few of my posts here on this board regarding the set of topics (which are vast and complex.)  I'll continue to do so from time to time as long as I continue to post here.

I don't listen to all of the KWN stuff.  I pay particular attention to a select handful of people but listen to others if I am bored and have time.  A lot of the KWN regulars including especially the most bullish were saying anything but 'up, up, up' when you supposedly made your genius call to dump gold.  There was closer to universal consensus that it was a time to expect something of a blow-off in fact.  To be fair, a lot of these same folks called the bottom of the correction to soon and to high.


I don't understand 'cycles', but nor do I understand voo-doo.  Both have their practitioners and followers, and many of latter will shell out items of value for the service of the former.  To each his own.

I was expecting the end of the property bubble in 2004 and I expect that it was due to paying attention to someone.  Maybe I was just wrong on my own, but probably not.  I try to amalgamate input from a wide variety of viewpoints and don't get fixated on any particular one.

I run across exceedingly few sources who share my understanding of money (right or wrong though it may be.)  One or two on KWN, but they don't usually get heavily into the subject.  I really cannot think of anyone on this forum.  Most amatures will try to map their own joe-sixpack experiences with money, finance, etc to financial institutions, but it works about as well as mapping Newtonian physics to quantum electrodynamics...it is only practicable by those who have an extraordinary mastery of both subjects and very very few people do.

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The following is courtesy of KingWorldNews.com:

Today legendary trader and investor Jim Sinclair told King World News the gold market has turned into a coiled spring that will be extraordinarily explosive on the upside.  Sinclair also said that central banks have been aggressively accumulating gold because it is going to part of the monetary solution.  But first, here is what Sinclair had to say about the gold market:  “The attempt to keep (the gold market) from moving higher, creates, by nature, a spring, a coil as it were in markets.  If the spirit of the gold market could have been broken, it certainly would have been broken down at the $1,500 level.  This thing is turning into a spring, into a coil, and when it goes it’s going to be something to behold on the upside.  Both in the shares and in gold itself.”
==================

My observation over the years is that when we have a year or so of chop, the last few months of the chop fall below the preceding trend line, then a new trend line with a greater slope comes into existence.  Looks to me like we are getting to toward the end of this latest choppy pattern.

One way or another Sinclair was, by happenstance, one of the first people in the PM space who I started paying attention to, and in spite of his 'outlandish' claims that gold would hit $1650 which most people wrote off as completely bonkers at the time.  Even if he does make a wrong call and I take a hit by listening to him it is most unlikely that it would erase more than a minor fraction of the gains which I can thank him, in part, for my realizing.

Sinclair is the guy who rode the last bull and stepped off at the top of the market in '80.  I don't know if he was as free with his information and advice at that time since I was not around, but the guy seems to have an understanding of the markets.  Does he have other motivations?  It would be foolish to ignore the possibility.  The same could be said for the provider of any financial advice however.

Good point about it not taking very many 'natives' to make one's life miserable...if not past history.

Another thing I anticipate is that if it gets to the point there the totalitarian measures which are clearly being set up go into implementation, it will almost certainly coincide with massive upheavals in other parts of the world as well.  Most likely a world war with almost all countries being belligerents or cooperative allies with belligerents.  If the trigger is limited to an economic collapse, this also will likely be very widespread.  In either a shooting war or severe economic crisis being an outsider, particularly one from an enemy nation, does not sound fun to me.  Since the conditions in a give country are quite unpredictable under such a strain, it would be difficult to plan and pre-arrange an 'escape package' (again, absent unlimited funds.)

Absent an absolute necessity I do not believe that the US would implement the totalitarian measures which are stacking up on the book since they would not serve anyone very well and would likely cause a revolt if implemented 'for the fun of it.'

I've thought about splitting over the years.  My current philosophy is that the US is probably going to be so hated around the world that I would end up a stranger in a land which I didn't understand and surrounded by people who would be glad to see me dead.  Probably a better quality of life laying low in the US since I understand the culture.

If I were a billionaire and could afford 150,000 acre ranch or two in Paraguay with a garrison of security personell (like both Bush Jr. and Bush Sr. as I understand things) then it might be a different story.  I'm not.

I'm a bit surprised too.  If this many people have this favorable impression of gold relative to other forms of wealth management then I am starting to get concerned.  OTOH, if the same survey was done in India, China, etc, the numbers would likely be much higher.

On the plus side, it does indicate an increasing potential for a significant panic and stampede if/when there are supply-side problems for physical.  Timing things to capitalize on such an event while avoiding the ill effects of the inevitable capital control mechanisms implemented by TPTB will be, I'm suspecting, quite tricky.  Could be Bitcoin to the rescue at that point.  Hard to know.

While I'm here, let me clarify or correct my statement.  I would expect a person like Summers to be more turned on by Bitcoin's ability to help transfer wealth rather than store or increase it.  Just like Rickards statement that Bitcoin is a good exchange currency and a poor reserve currency.


That I doubt.  I would not expect Summers to discuss Bitcoin with Obama or anyone else besides a close group of like-minded friends.  Obama is certainly got a lot more on his plate than some fringe internet related money thing and even if he did not, it is an unusual person who takes an interest in Bitcoin anyway.  I know this from experience in the tech sector.

I suspect that a handful of people (e.g., Summers, Rickards) have a certain combination of understanding just how fucked we are with our current monetary system and understand the likely trajectories, and an interest in technology that allows them to have their interest sparked by Bitcoin.  I just wonder if and how much they actually play with it.


I remain shocked that Bitcoin has not 'caught fire' more than it has and the interest has not already translated into lower BTC/USD ratios.  Time will tell if this ever transpires.  My second best hypothesis is that those who are interested in Bitcoin's true strengths simply have no compelling need to put them to use as this time.  I'm in that camp personally.  (My first best hypothesis is that I am simply wrong in my estimates of how the currency would be used, when, and by whom.)