Think outside the interest rate circle-jerk

Interesting for the element of resistance but still very risky, as you remain in the confines of the federal gov't. It's like doing your banking at an uptown branch of Citi instead of the downtown branch: you're still banking with Citi.

This does have the potential to eventually cause fragmentation among major nation-states, though. Can you imagine a United States without Texas, a Japan without Shikoku, or a China without Taiwan? Oh, wait...


Wow - thanks for sharing that. I had to watch it twice because I was distracted by Lauren's legs...

It took me almost 2 years to piece together all of the mechanics and potential consequences, and here everything is presented within 20 minutes! There's literally nothing to add.


Don't be coy

The US (bank-owned) government, likely in coordination with a number of other (bank-owned) governments and (bank-owned) international organisations. Banks are, after all, the epitome of concentrated power - with governments as their tools of control and manipulation.

I think it's a combination of profit & testing, maybe even with an intent to suppress. Bitcoin is immensely appealing across multiple levels of the global economy; anyone with a reasonably deep understanding of finance can connect the dots and realise the potential threat Bitcoin poses to the existing paradigm.

Thanks for bringing up truncated waterfalls (indicative of probing) - I have seen them, but haven't compared much with gold because of the difficulty in connecting smaller moves; it's the major flows that have been predictive, not so much probing action. When something finally breaks a major level of support or resistance, then it's time to pay attention.

The ratio isn't a hard rule: most times gold has followed Bitcoin within a 24 hour period, but the timing for certain period expirations is different; e.g. CoT reporting periods, options expiration & delivery notification dates, etc. With Bitcoin, there are no such periods as of yet. It's been an elastic range, but so far the longest I've noticed (again, unscientifically) has still been within 3 days.

Part of my intention for starting this thread was to have solidified documentation to ascertain the validity of the correlation. For a while, it was like seeing a shape in the dark - I didn't know if it was real or not, but lately the moves have been growing much more obvious. Due to other obligations, I have yet to run a direct comparison using hard data.

Also: the additional decline in Bitcoin to a low of $4.66 over the past few hours approximates $1525-1530 in gold.

There's a very cursory contrasting of Bitcoin weekly and gold yearly.

Jesse (Arthur) on Blythe Masters on silver manipulation.

It's only Saturday, so we'll have to see whether there's more pressure on Sunday. I expect nothing less, along with a round of HFT traders committing murder from London on Bitcoinica longs with forced margin calls.



Another weekend assault, once again beginning at midnight UTC; almost exactly the same pattern and motive as is present with gold price manipulation. The London & Wall Street junkies get to keep playing even on the weekends these days. Why should the leverage game be any different just because it's Bitcoin? That's a rhetorical question.



If the correlation holds as well as it has in past weeks, gold will be hit heavily for a decline into the mid-$1500s - possibly even a short stint to or below the $1525 level. The amount of new shorts piling in would be unbelievable; watch for the COMEX open interest to absolutely explode. I wouldn't put 500,000 out of range. I'll be keeping a close eye on the commercial shorts as well; any sign of significant covering would suggest preparation for an epic upward move. As always, the CoT cut-off should stand as the time target for the $1500s push to be complete, allowing nearly a full week to cover shorts (and tracks).

This is exactly the kind of action that would occur during a paper/physical separation - the only problem is that it's virtually impossible to know precisely where they rupture. It's like ripping a sheet of paper in half: you know approximately where it's going to tear, but it's almost impossible to pick the actual starting point.



When the opposition starts catching onto your strategy & tactics, it's time to change your methods - if you can change the rules, so much the better (think FrankenDodd). There will always be a tell somewhere, though. I think it's blindingly obvious that the banks' own traders are making use of the same methods in Bitcoin as they are in traditional markets, front-running grander moves.

For however long this pattern maintains, I'll be making use of it. Any means of forewarning is a powerful weapon in a trader's arsenal, and dismissing any possible advantage without first-hand experience reeks of arrogance and a dinosaur destiny. If these forced margin call tactics continue to work, we may be greeting JP Bitcoinica in the near future instead of a free market.

Bingo!

"Controlled chaos is better than uncontrolled chaos."

Certainly - from a different view, taxes are just bills for services rendered. What you mention about shirking responsibility and misappropriation of tax funds digs to the heart of the matter: a great deal of the global cultural mindset has shifted from one believing that, instead of taking part in a mutually-beneficial arrangement and paying for services we find valuable, we are obligated to pay no matter what quality of service is provided - or even if that service is detrimental to us. That trivial semantic twist was enough to create servile behaviour over a few generations; a conservative or liberal stance makes no difference in this matter.

This is just my objective observation: the final sentence (bolded) is very similar to battered wife syndrome. Continuous (financial) abuse and beatings are tolerated because the repercussions of fighting back (fines, imprisonment) are worse than the existing level of suffering.

What the abused usually doesn't realise is that the abuse almost invariably escalates over time to a point where serious injury or death (theft, enslavement) becomes a very real possibility. If the victim quietly seeks outside help, there are many sources of support, both to escape from the negative situation and to remain safe afterward.

I understand the objections to this, including familial obligations, job security, asset ownership, etc. Regrettably, these are the very things that are preyed upon by greed. Owning a house means you have an investment in where you are - it's very unlikely you'll simply up and move because you're attached to it financially and sentimentally. The same goes for family - unless every member is physically capable of leaving and agrees to do so, it can be difficult to move. Jobs or careers have the same effect - there are many that can't be taken with you, or have no equivalent elsewhere.

Yet the consequences of staying can be revolting, if not absolutely horrific. For those who can find freedom, the future is far brighter than that of those left behind. I personally would rather be free to grow than trapped in a gilded cage, at almost any cost.


The bolded section is key. Ideally, you'd be able to do the legwork to find reputable private storage locations (like monthly storage lockers, not safe deposit boxes) in stable regions that have a solid respect of private property. Since that's unrealistic for most, some custodial compromises have to be made. At the very least, having just a handful of gold and/or silver outside of the country you're located in could easily be the difference between living on the streets and getting back on your feet.


Absolutely, although the limitations on travel will probably be more restrictive of what you take with you than being able to move yourself. Even if travel quotas are instituted, you might have to wait a month or even a year to leave, but you'll have something on the outside waiting for you. Soon, it may be very unlikely that you'll be able to take any gold or silver with you when crossing borders; imagine the horror of precious metal confiscation by customs vs. the comparatively simple struggle of getting to where you stashed it.


Yup! Why wait to scale the buying, unless you've got several hundred ounces of gold? Convert before leaving, make your move, then withdraw at your destination and exchange for metals again (or keep some/most as Bitcoins). One of my ridiculously long replies in the Gold: I smell a trap thread touched on this, and I'm sure others have as well.


The risk that needs to be managed is with the exchanges. It may be possible that some of the major exchanges *cough* Gox *cough* might freeze Bitcoin holdings at the bequest of certain governments *cough* US *cough*. System D-style exchange transactions would definitely help.

Updated chart:



In mid-February, a lower threshold of $4.33 was broken. Because my system is based on the weighted price, the move wasn't strong enough to trigger a buy signal. For now, it looks like there's still going to be a little while doing a whole lot of nothing.

Not yet, at least that's visible to us mortals. The separation occurs suddenly and is closer than you think.


It's funny you mention taxes - that's effectively a premium paid to government (funding your own oppression?). If you have to pay a 28% tax on an inert chunk of metal that doesn't produce anything, it suggests that the price according to gov't is at least a third higher than official valuation. Of course, that might only be the tax rate necessary to keep the oil bill current. Have you noticed the scramble to close tax haven loopholes in recent years? Watch for governments to bring precious metal into the fold with incentives like they're doing with corporate profits held overseas, then raise taxes...

"Sure, we'll throw out all the back taxes on those billions we wanted - now just step into my lair... closer..."


Smart. Good to keep some gold outside of your home country as well - just in case.

HFT algos don't do anything other than shuffle numbers around. If Apple puts out a crappy product and the bots still push the price up, that has nothing to do with the fundamentals - it's just vapour. The game is still zero-sum, no matter how much the notional values rise.

Currently, the only place you would be able to find the real price of gold is interbank (even then, not easily - oil producing nations were the only ones demanding gold for their product, which meant that the real value would only apply there and anything else didn't matter) and at the LBMA good delivery bar size - about 400oz. The official public price is like the gold standard was - (relatively) static until the system breaks and gold is publicly revalued.

He who holds the gold makes the rules, and the means of production determines what it will accept in exchange for its product, not the buyer. If the producer will only accept gold for his goods, then he will accumulate gold and therefore wield increasing power. For most of the 20th century, the oil producing powers have made the rules.

However, because oil is a consumable and finite resource, its producers needed a pool to store their accrued wealth that wouldn't go up in smoke. These oil producers already understood that paper currencies didn't store wealth reliably over long periods, particularly having witnessed multiple instances of inflationary wealth destruction. So they demanded a real asset, in this case the most reliable and easily transferred one in history: gold. Others have done extensive research, finding that there has long been a flow of gold to Middle East oil producing nations.

Essentially, there is a black market for gold that is more powerful than the official markets. It is off-limits unless you are a producer on a global scale. No gold, no oil.

A similar scenario (not exactly the same) is playing out as occurred in the 1970s: the financial system has over-extended itself on multiple fronts and the asset demanded for payment is in short supply. America and most other Western nations have put themselves into a dangerous position wherein they're dependent upon external resources and don't have enough of what the externals want to be paid in to keep acquiring those resources.

Let's say you want potable water for your farm, but you're unable to acquire it yourself; I have clean water in excess.

You suggest an exchange, but you have USD and I want rhodium; since rhodium is very limited, we come to an agreement in which you pay me 90% in USD and 10% in rhodium.

Over time, you start paying with greater than 90% USD and I call you on it by halting the water supply; without water, you risk your crops and even your own death, so you quickly start supplying the 10% rhodium agreed upon again.

More time goes by and you've saved a bundle in USD, which you've convinced everyone to readily accept (except for me); with all of your USD savings, you retire from farming and import much of what you need, still paying me rhodium for water.

A generation later with a dwindling pile of USD supporting a growing family, your children decide they want to keep the party going by making more USD.

Again the water payments start to be made with >90% USD, but this time the rhodium supply is almost gone; when I demand a resumption of the 10% rhodium payments, you (your children) have the arrogance to threaten me; I sell the water I was selling to you, to someone else; you panic and start paying again, but now I'm stockpiling guns & ammo while brushing up on my CQC & Krav Maga.

Once more, you start missing rhodium payments and I'm tired of getting piles of USD that are rapidly depreciating; the price of water is now rising and you're almost out of rhodium, so you try throwing your weight around but find you can't subdue me that easily; it's now getting to a point where others are fed up with your USD as well, so it buys even less water than before.

Since you're out of rhodium and I don't want USD in exchange but recognise the potential danger of your whole family coming after me, I offer a compromise: I'll accept your USD but only provide a bare minimum trickle of water; you will be too weak to fight me head-on if you barely have enough water to survive, and more so if others stop accepting your USD for their resources while I sell them my excess water.

If you go back to working your own farm, you might survive or you might not have enough resources now to live through a full cycle of seasons; your decision now is: try forcing myself and everyone else to keep supporting you, or do work that you barely even remember and consider beneath you.

... WWIII

Rhodium could be held by everyone, but the only place where the true value is realised is in exchange for water. The question then is: how many have enough productive capacity and are asking for rhodium? It's vitally important that the dollar be accepted everywhere. You can imagine the results if it isn't - an arrogant, dying superpower will almost certainly make a final do-or-die effort at maintaining its domination over the world rather than humble itself and suffer some painful introspection.

A movie that portrays the mechanics properly is Rollover. While Western nations view gold as an archaic lump of metal, much of the world sees it as protection from risk in the West.

America needs an intervention. Gold is its cure (with a side of Bitcoin).

(The problem is that the cure will probably kill the patient at this point.)

USD up to ~80, gold grinding against $1630, Bitcoin holding near $4.90.

USD seems to be straining, gold is showing its perennially gradual ascent, Bitcoin is Bitcoin.

It still looks like the dollar is in danger, gold is hitting discount buying, and Bitcoin is along for the ride. I don't see any earth-shattering changes in the fundamentals. Even the technicals are lacking momentum.

That first point is critical. You don't have to actually meet, either - a publicly-located physical drop box or drop point works; e.g. ask a reliable coffee shop employee to hold the flash drive for a person buying a particular drink - not only is it a fun bit of pseudo-clandestine excitement for all involved, but it introduces another layer of protection; and be sure to leave a nice tip.

It really works only after establishing a reliable relationship, but it's worthwhile.


You should only send the encryption passphrase after the exchange, not before. Maintain control at all times, especially for large amounts and/or high volume. If you've done a few small-ish transactions already, the buyer should have no problem with this.

Another technique that can be used is to create an empty or partial wallet, ship or drop it at a specified exchange location, then transfer the rest of the purchase upon receipt of payment.

HipSwap is cool, if pricey. Also, the delivery service is only available in Los Angeles for now. Other courier services would work as well, or even hiring a kid with a bike or car if the price is right. Even a UPS driver delivered a flash drive once (gave a few dollars and it was in the area), after I received payment of course.

This made me think of the "Fuckjob Candle" from a while back...

Not in the same manner, no. Remember that this is a seemingly strong correlation, not a hard rule.

On April 1st, Bitcoin had approximately a ~3.5% drop - gold then experienced about a 2.5% decline from high to low on the 3rd, with additional pressure on the 4th marking nearly 4% so far this week.



See any similarities between the Bitcoin waterfalls on April 2nd & 3rd and the gold waterfalls from November through December 2011? The patterns are evident on Bitcoin dailies also.



What's interesting to note is that Bitcoin trades 24/7/365 and the initial Sunday waterfall attack took place just prior to Asian markets opening.

An additional note is that the attack on gold occurred on the Commitment of Traders reporting day, right after the period cut-off.

Finally, the "First Waterfall Attempt" happened at midnight UTC - very similar to the patterns from March 28th (after another apparent effort at creating a bull trap) and on April 1st where the pressure visibly began. I've noticed these "midnight strikes" occur frequently, and there are other patterns of time-based moves as well.

Pay attention to the shaped wave oscillation from March 28th to April 1st where the price jumps up, stabilises, then drops the same magnitude as the rise. That happens with extremely tight supply and is indicative of a concentrated interest attempting to exert control for gain. What gets me going is that this is exactly the same method used in gold futures trading.

When comparing the Bitcoin hourly chart to the gold daily, the patterns are visibly similar - not exact, but similar. There is an issue of market scale, Bitcoin being microscopic next to gold (the entire Bitcoin market is worth only 26,000 troy ounces of gold - less than 1 metric ton). Therefore, it makes sense that patters we see in Bitcoin on a shorter time-frame would take somewhat longer to emerge in gold.

The percentage changes are still similar, though. At least with initial moves. As can be seen with the multiple waterfall attempts in Bitcoin, that happens with far greater effect in gold. This is only possible because of the complete fabrication of supply in gold via derivative contracts - Bitcoin's equivalents are minute by comparison.

We would have to see options and mining contracts traded widely, and directing price action more than actual Bitcoin trading in order to have the same situation as gold. If gold contracts and derivatives disappeared, causing gold trading to be done exclusive with the physical supply available and verifiable, we would have Bitcoin's charts in gold.

Key here is the separation of the trading instrument versus the underlying asset: Bitcoin trades as itself; IOU paper contracts trade for gold. Removing Bitcoins from trade would cause immediate and powerful distortions in related markets; removing physical gold from trade and nobody is the wiser so long as the underlying asset is not sought. Bitcoin is currently free from such obfuscations, but could easily develop that kind of shell structure within the next few years. Bitcoin: accept nothing less.

I would be willing to bet putting my head in a crocodile's maw that very same financial lineage is attempting to game the Bitcoin system as is doing so in precious metals and various other markets. Even without the time yet to analyse data sets, the markets feel too alike for it to be mere coincidence. Having called the major bottoms in both gold and Bitcoin, they were again too similar to be chance.

No hate - credit where due

Now you just have to make the distinction in dynamics between paper & physical

For several months now, I've been suspicious of Bitcoin's price movements in relation to precious metals futures - particularly gold & silver. With the recent Reuters story "Bitcoin, the City traders' anarchic new toy", the alarms have grown even louder.

Time permitting, I'll have a more in-depth analysis of the large price moves that seem to occur in Bitcoin within one day prior to major moves in gold and silver. The correlation has been highly predictive for months now.

In conjunction with more long-term analysis and indicators, it seems to be very possible to front-run the market manipulation. Since both Bitcoin and the precious metals are inevitably constrained by a limited supply, this should be no surprise.

This connection may remain for a long time. Maybe a fund could be implemented to capitalise on the pattern?

A wallet has been encrypted using the GUI client, bitcoin-qt. I've been having an issue where I can unlock the wallet using bitcoin-qt normally, but not at the command line with bitcoind.

Example:

The password has been entered using escape characters, but error -14 persists. Both versions have been compiled from the latest git.

Recently, I contacted GoldMoney with a few questions. Here are the interesting bits:

Concerning Bitcoin:
Sad, but things change.

About delivery and the risk involved with fractional bar ownership:
Very good should a situation arise where it's undesirable to transfer your holdings to your home country.

On asset seizure and/or forced repatriation as occurred with the Netherlands:
Nice to have diverse locations, but it's the legal issues that are more concerning - pressure can be exerted. GoldMoney has to protect itself and its clients as best it can, yet there's only so much it can do.

Regarding production sources:
No direct relationships can mean a few different things. As far as I'm concerned, it would be better to have established lines for sourcing metal in case of a supply squeeze, but there may be other contingencies in place for that event.

I knew I should've hopped on this earlier...

Do reliable, long-term GPUMAX miners get a rep waiver?