Confirmed interest payout & principle return.

"We're in a Boom Cycle."

You're missing Sarah Palin's impregnation rate plotted against funny Whitney Houston jokes.

In the OP, I suggested that Bitcoin is experiencing suppression - though not explicitly. Patterns in the leverage games are virtually identical between Bitcoin at Bitcoinica and gold in the major futures markets - the same methods of attempting to squeeze weak, leveraged positions. What made things particularly unsettling was the frequency and similarity, as well as the correlation - until massive physical demand in gold surfaced recently. Keep in mind the similarities have not just been in price movements, but also behind the scenes in volume, stop-hunting probes and forced liquidations; too much to be purely coincidental.

There does seem to be a difference, as you note, between the motive of the Bitcoinica moves and gold's - the former seems to be more profit-oriented than those in the latter. In other words, Bitcoin seems to offer an opportunity to grow wealth while extrication from a bad situation dominates the feel of gold trading. In addition, Bitcoin has far less of a derivative environment clouding its unit value - the equivalent of gold prices being driven by physical metal instead of leveraged positions.

You're right about Bitcoin not being a material threat yet, but it is possible that it could be perceived as one despite deterioration of the existing monetary regime being a greater priority for those institutions built upon it. Whether that perception is the present situation, and whether there's a wait-and-see approach being taken or active attempts at control by more than independent professional traders, I'm not sure.

What I do know is that there has been political attention and banks' traders dabbling with it, so I think it's safe to assume that there's some level of awareness, even if it may not be a priority consideration. The scramble to facilitate mobile payments points to an effort that may have been influenced in part by Bitcoin's potential to dominate that area.

I couldn't resist, cyph - in good fun, because we all win with Bitcoin anyway

From: http://www.jsmineset.com/2012/04/14/in-the-news-today-1162/


To be fair, I was wrong again as well (so far) - gold tested $1650 on the second attempt, not $1630. It was a nice "Fuckjob Candle" though.



Now to see what the rest of April brings...

I won't go into the numbers much for now - the principle concept is more important. Two primary factors need to be acknowledged:

• The dynamics behind Pirate's business result in high demand for bitcoins in relation to other currencies, particularly USD
• Bitcoin's current supply inflation is about 25-30% per year

These are opposing forces that act to restrain the external exchange price rise (assume USD/BTC for this discussion).

What you seem to be concerned with is the internal mechanism. As long as supply is available through either inflation or willing sellers, high BTC/BTC returns are feasible. If the internal demand outpaces available supply, the exchange price will rise; that's the external influence (USD/BTC) which entices existing bitcoin holders to sell, replenishing the supply and allowing the high returns to continue.

At the inflection point where mining rewards are halved as we approach 2013, there may very well be a need to decrease the rates. However, that still leaves another four years of 8-12% base inflation, not including sellers (whether purely BTC sellers from within the system [mining, paid for work, etc] or foreign exchange [USD<->BTC] sellers). So the insanely high returns we're seeing now probably will persist for at least another six months, but will eventually decline as the percentage of total bitcoins held by FPS&T (I'll always think of it as First Pirate, not BS&T ) grows, or if Pirate's external-facing side of the Bitcoin business slows down.

We're witnessing an external speculative wave of wealth escaping overbearing, self-destructing fiat currencies by jumping into safer waters - right now it's only a trickle, and the internal structure is extremely fluid. Still, the signs of basic structures are forming - banking, lending, storage and security, transaction facilitation, etc.

Pirate & Co. may be single-handedly enabling and funnelling external demand into the bitcoin system. If Pirate maintains the present course and quality of service (both inside the Bitcoin community/network and out), I expect no less than two years remain for rapid growth. By then, competition may have solidified and be acting as a limiting factor to enforce more sustainable levels of expansion.


Exactly, and there's no reason to believe principle won't be returned in full - this isn't your daddy's fiat currency: it's a pirate's

There's definitely a STEMI, indicative of MI. I'm sure plenty of people experienced that shortly after buying at $30.

What about blockchain forking in the case of a communication disconnect?

Better that than BPH

That's a great analogy - the wave pattern triggers calcium-induced calcium release, which runs until exhaustion of supply and then reverses.

There are a lot of similarities to physical phenomena, biology in particular.


Mostly like Whitney Houston, a little like Charlie Sheen.

 

Thanks. Too bad I was about 5 months too early when the Gold trap thread was in play. It sucks being early, but it kills being late.


The dynamics I've described are now becoming obvious. Tons of gold are being scooped up while the paper market hurls off weak hands that don't understand the mechanics. Paper/physical separation might happen by July, it could take place on the next cycle swing closer to 2013, or it may never fully occur - it doesn't matter because the effect is still the same: in paper, you don't own what you think you own.

No physical = no savings = you lose.

Also, there's way too much phallic imagery in this thread. I suggest the title be renamed to something like "Sword Fighting".

Four days.

Equities following a move in gold after a brief, yet obvious, decoupling? That couldn't have anything to do with the QE schizophrenia (backed by a hint of HFT dementia), could it? Maybe another paper gold assault to close the week, or early next week before the next CoT cut-off again (making the commercial open interest look like little has changed)?

What I'm waiting for is the dollar rally that has so far failed to materialise (and probably won't). It should've gone to around 81-82 with the drop in equity markets. Certainly the long bond would've risen, yet it dropped as well. Meanwhile the precious metals are up rather sharply. Even with its continued histrionics, the Euro is up. All this because of talk about QE? Where there's smoke, there's fire.

Fixed again. Three days now. Added the dollar, which is down from last week and is still unable to make headway despite an initial exodus from equities - even bonds are struggling. It looks like that flow been going into... gold (in particular - physical). Speaking of which, gold has been following Bitcoin's weekend path.

JP Bitcoinica plays both sides of the field for maximum win.

If you're leveraged, you'll probably lose.

• Ogrr (from my understanding) is a marketplace, not a money transmitter; it'd be like suing Craigslist because you bought an item from another person who posted there
• Porn industry adoption of Bitcoin is only a matter of time; first major studio to use it will experience improved profit margins & others will follow
• Yup: economy can crash, gold will still rise

There are more powerful catalysts:

• Inter-economy lending; e.g. BTC->USD->BTC
• Adoption among the unbanked in developed nations
• Continuing disincentives to use contemporary money instruments; e.g. intrusive reporting through heavy-handed AML/KYC enforcement

On Bitcoinica it looks like shorts started closing out, triggering momentum buying up to the next resistance. What will those free shorts do now?

Interest Rates
Open Interest

To an extent. A sequence is one factor; nothing happens in isolation.

If a pot of boiling water is stirred, the bubbling will subside briefly. The more vigorously it is stirred, the longer the bubbling will be stalled. That's a very simple example, so you can imagine various possibilities - what happens if salt was dissolving in the water, what if the pot is oddly-shaped or made from tungsten instead of steel, etc.

Exactly. Major players don't broadcast their moves...


Again, exactly. If you broadcast your move, it's like talking a position. What would happen if a nation's silver were stolen? Silver buying takes off.

With unlimited short ammunition, the price can still be managed. Once buying tires itself out after being capped for a while, the real pressure hits. The hope there is that additional longs will decide to dump their holdings in addition to the fresh ones as the price dips again. It's the same thing that's happened at Bitcoinica this month so far.

I suspect today's spike was short covering designed to free up some ammo. If so, $1630 probably hasn't been tested for the last time.

Hold up - what happens in Bitcoin over one or two days should take longer in gold. There might be another day or three of pressure and decline in gold. Today has a good chance of being just the first test of the $1630 level. I'd give it until the end of the week to be sure.

You're right on needing to assess additional factors. I think the percentage delta could narrow with regard to the magnitude/time element above. Then the psychology and social awareness notions come into play - Bitcoin doesn't seem to be viewed as savings yet (which would help improve the stock to flow ratio), and there's a disproportionate number of aggressive traders and (I think) sophisticated manipulation.

If you think of any other major factors, I'm all ears.