Assuming the clearinghouses are reliable, that's plausible. HNW entities either know, or are realizing that they are not - in large part due to USD degradation.

Millionaires may accept dollars while they still hold value, but increasingly as a means to acquire real assets, leaving the currency structure hollow. China has been doing is for a decade.

The dollar is numeraire so long as it maintains integrity. Investment demand will leave (already is moving away) when that no longer holds true.

There are shortages of nearly all real assets, not just precious metals. Separation of financial instruments from underlying elements is happening now.

You could think of it as such: the body of the western world is dead; the mind is simply hallucinating on its way out. And its progeny are too young to rise yet.


Permanency doesn't exist, of course.

Who will gladly settle for dollars? An unemployed couple with a young child, or China's government? The former doesn't have a choice, but will not contribute strength to the currency and won't be happy about it. The latter has already rejected the dollar and is growing even stronger for it.

While the USD will not disappear, it certainly will not hold its own against any independent asset. Physical gold is the ultimate independent asset short of Bitcoin. It is far from an ordinary commodity, and it will be long after the current economic crisis subsides before its properties are no longer highly valued.

The paper/physical rift is widening. If ongoing ejection of western banks from commodity exchanges continues, a full separation might not occur. That means paper will have to match physical or become irrelevant - not the other way around.

If the USD were a dead currency with no issuing authority, I would be more inclined to agree that the dollar might be accepted more easily. It is not, and that would open up enormous potential for fraud anyway. Instead, it is self-destructive and the rats (Bernanke, et al.) are fleeting a sinking ship.

DrGregMulhauser's answer in the linked thread is as eloquent as it gets.

I haven't bothered reading the filling, but I would not discount the inclination of retail investors to buy a fad without understanding it. As  Zangelbert points out, institutional investors could easily kick up the price, attracting attention, then reap the reward of a saturated order book.

For the Twinklevii, fees are collected either way, so the ETF being proposed as an attack vector is ambiguous. Shares of the ETF would take on sort of a life of their own in the sense that they are largely separate from the actual bitcoins they represent.

While the fund can then be wielded as a leveraged tool, there is no way to stop the flow of wealth - it can only be accelerated or delayed. In other words: if Bitcoin usage continues to demonstrate benefits and garner new users, all the suppressing power of the ETF would only serve to allow more entrants and wider adoption at a faster rate.

I think it's more of an effort to diversify revenue-generating ventures. When a business is self-sustaining, starting another is a prudent step; the twins now hold a huge sum of bitcoins and may soon be pulling a commensurately large flow of fiat, and flow of funds is as important as reserve.

The real asset is all that matters in the end, though. Bitcoin will thrive or fail based on its own merits.

I see this as very responsible and long-term beneficial. Colonial-style wealth extraction bleeds the source dry, while this form of pseudo-partnership compounds growth and success over time.

Looking for a floor sub-$50, possibly back-filling to the breach of ~$31. Sellers may find it hard to get back in depending on position size; probably better to accumulate at lows.

ASIC profitability will start to narrow around that price level as well, based on combining rough initial outlay with ongoing costs. Difficulty doubling from the current ~21mm would put an ASIC return at about 12 months with $30 rates. Any miners that hadn't broken even at that point would be operating at an overall net loss for a time, and would be more likely to hold than sell - very similar to 2011, but different enough that such lows might not be reached.

As difficulty approaches 100mm, the exchange price should double based on the same assumptions. With the rate things are changing in the Bitcoin economy, that could happen by year end if no other major financial events occur first. A bail-in scenario might send Bitcoin to high triple, or even quadruple digits.

I'm still watching gold (as much as can be gleaned about physical through paper proxies) for hints on what may happen with Bitcoin; strongly suspecting we may be (un)pleasantly surprised by geopolitical circumstances. Whichever takes off first could very well be an early indicator for the other.

In order to accumulate as much gold as possible in as short a time as possible, enlisting the citizenry this way is no different than 20th century war propaganda.

Death by 1,000 cuts.

Great charts in this article from Tocqueville's Hathaway.

Especially important is the chart of premiums:


Keep in mind those are wholesale premiums. That will accelerate very quickly as physical shortages become more apparent, starting with Asia and India.

The news is that SD is hiring dooglus.

Yes, demand is as fickle as fashion. I have no doubt gold will fall out of favour in time; when the uniformity you describe has returned.


Well said. Perhaps Bitcoin holders will see free zones spring up that encourage crypto use and effect better exchange value.

Pay attention, chodpaba...

The USD is not the primary concern among the savviest of HNW entities: it is the accelerating decay of our entire monetary system. They seek vehicles that will bridge the gap from the existing system to the next iteration. This is why many luxury assets have been rising.

As usage of the present system grinds down, wealth held within it will deteriorate at a blistering pace while the new system receives that outflow. Whatever forms the foundation of the new system will be fought over like a natural resource until transition volatility has subsided.

There is no universally-accepted asset capable of acting as the basis of a new monetary system other than gold. No paper contract, asset exchange, or altruistic dogma suffices. Nations have the same concerns an individual has: possession is 9/10ths. If an asset is within your dominion, it is yours.

China can physically relocate precious metals. It cannot do so with productive farmland located outside of its borders, or machinery used worldwide. Nations need a stable, immutable asset with no dependence upon foreign support.

While Bitcoin fits the bill, it is not pervasive enough yet. Gold is the transitional asset for at least the next few years, with other monetary metal playing lesser roles. By 2020 this may shift in favor of crypto.

Bitcoin is a new form of preservation, unproven to many but rapidly gaining acceptance and viewed as a place to park a small percentage of wealth.

Edit: fixed quote, added final statement.

Same here. Perhaps znort or dooglus might be interested in analyzing capital flows, although without associated exchange information on fiat movement, I don't think there's much to be gleaned.

Anecdotal information has been fairly indicative, but the Bitcoin environment has grown to a point where any such information is a quickly shrinking sample. Still, I think high net worth entities are continuing to test the waters and may be looking to accumulate on dips. So sub-$100 prices are unlikely to sick around for very long in my view.

Gold is the prime commodity candidate for monetary use. It is not sought for its investment potential so much as for its stability in terms of wealth storage. The western perspective views it as any other asset, and that's part of the reason why the west is failing.

Pricing of physical monetary metals will continue to rise as the illusion of fiscal accounting machinations recede, being exposed as a fraud of epic proportions.

The elementary basis of supply and demand hold true over MMT abstractions. Marginal increase in annual PM supply availability against the fiat supply growth which is orders of magnitude greater means that, barring an immediately viable alternative, precious metals will rise in value by comparison. Any rush to accumulate amplifies such an effect.

Those principles hold true for Bitcoin as well. The limiting factor is propagation and active use, which makes it a potential alternative, but not a fully viable one as yet. Even if it can work technically, Bitcoin still has a ways to go.

Of sorts

The risks of remaining in the system exceeded my threshold late last year.

I strongly suspect another Lehman event took place at the end of May. If the effects of whatever occurred had not been temporarily averted, I believe we would've seen a widespread banking failure. Since that has been averted, there must have been a heavy cost - far greater than that of 2008 was. The results cannot be far off.

Because of that, squeezing an extra 10-20% or more out of the short paper play simply doesn't hold greater weight than the danger of unrealized gains being frozen and potentially lost entirely if left in the system. Deteriorating trust at the highest levels trickles down - those lower down may be trapped if they remain connected.

I should've added that I'd be removing profits by acquiring physical metals, bitcoins, and as many real assets as I could get my hands on that have as little contractual necessity as possible between myself and direct possession.

Passing a claim on to the next trader is a hot potato scenario. Redeeming  those claims for physical would be like a bank calling in outstanding loans.

Any other asset would simply stick the holder with an item that would have to be traded, i.e. less liquid. Gold is effectively cash when other forms of money fail to maintain that purpose.

While the dollar still works fine for the average person, it is not for kings (institutional class entities). Gold is returning to a metric of value among the largest pools of wealth, and therefore increased liquidity.

Edit: corrected hot potato reference.

Mañana? Before June 28th.

If you think of paper gold as a form of credit, the collapse in prices means that credit is drying up. Nobody wants to lend their asset out anymore.

For the record, if I held DZZ or other good short positions, I would liquidate all of them tomorrow.

Securitization.

Not quite the same, more like an alloy, but still a transformative effect.

England didn't just go away, but others rose to squeeze out it's dominance.

Who benefits from dropping stocks and bonds?

Kings (institutional-scale entities) use gold as cash.

Crypto is a replacement, but isn't big enough yet.

Bitcoin price is stagnant; dark pools are back in vogue. We are seeing a two-tier value structure emerge just as there exists with gold. Observe the former to understand the mature market of the latter.

What you see and latch onto in the paper markets is the wading pool, not the ocean. Unrealized profits and losses are transitory concerns when dealing with the real, underlying assets.

The pain of paper is simply too much for anyone without the fortitude and/or resources to simply sit tight and be right. I keep tabs, but have moved on from both Bitcoin and gold, because trading is not a lasting form of wealth: creating markets is.