These updates:


152-157=-5

Claiming the -5 doesn't count because you held GDXJ doesn't change the GLD holding. There's nothing wrong with hedging, but it's erroneous to compare a single instrument position to a hedged position out of context. Doubling up on the GLD short stays within GLD and remains valid for comparison with the information above.

If you want to add GDXJ to the list on its own and derive values from that, go ahead.

Date	GLD(S)	GDXJ(L)
5/31	152.00	19.00
6/4	157.00	21.00
	-5.00	+2.00
	-3.2%	+10.5%

So from that, you would've had to hold ~1/3rd of your GLD position in GDXJ to offset the GLD short, unless you were trading options; not a clean apples to apples comparison.

Yes.

First, funds are loaned via swap agreements:
Fed($)->Banks

Banks on the receiving end lever up through FRB:
Banks($)*X->($$$$$$$$$$)

Then initial funds are returned, but the levered funds remain:
(X)Banks($)->Fed

The difference between the two can be multiples of the initial funding made available:
(X)=($$$$$$$$$$)-($)

The end result is that fractional reserve fuel is provided for local/regional currency inflation (e.g. Euros):
Banks($$$$$$$$$)->Euros

The process begins all over again from the swap agreements. As the world ramps up its base monetary supply, the dollar remains relatively stable by comparison because the same amount of dollars are repeatedly lent out, so dollar value rises versus other currencies. That keeps going until strain develops at a sufficient level and the dollar finally has to be eased, which is where we are now.

This indirect form of QE has been continuously ongoing, and even accelerating. It's hard to say what form of direct QE we'll see, but it will be before the end of the year. The dollar will then sharply decline relative to other currencies and the inflationary cycle will repeat again.

Hedging has not been part of the updates, as they've been using unary pricing based in USD, not aggregate positions. Otherwise, it could be said that Bitcoin or gold prices haven't moved because a sufficient holding of dollars offset their declines.

Your GLD short as stated in this thread is in the red, sans hedging. Adding hedging changed the accounting rules in your favor. That's what bankers & politicians do to cover their asses, so don't be a bankstertician.

Established governments are in danger of being pared back, but the benefits are enormous. It's just a shame they're so hard to recognize from within traditional systems.

• Reduction or elimination of expenditure for currency management
• Increased transactional currency stability
• Preservation of purchasing power
• Long-term stability and viability

It is impossible to legislate anything out of existence, especially anything making use of advanced technology. What you're describing is a smear campaign, which must be maintained and increased in proportion to the elimination target's growth. Because of this, the resources thrown at a 'problem' can rise to exhaust the ability of a government to manage it; time is not a factor in any centralised government's favor.

Currency exchanges are currently the weakest link, but that does nothing to stop internal growth in the Bitcoin economy - in fact, it paradoxically hastens the growth of Bitcoin. Increasing disincentives in fiat systems spur users to flee to alternatives. If the fiat restrictions are great enough, users may completely switch to selected alternatives instead of remaining exposed to liabilities in the former.

Enforcement of Bitcoin prohibition is completely laughable. This would be akin to attempting to directly control every cell in your body all the time using conscious thought. Growth in use can by slowed, much like an infection. If a finger is gangrenous, it can be amputated, but would you incarcerate one of your arms by tying it behind your back or losing it altogether? Both arms? A leg?


Not yet, but the transfer to/from banks becomes irrelevant when internal Bitcoin economy growth expands. As payment in BTC is accepted more readily, there is no need for conversion to fiat. This transition is all but guaranteed now.

Familiarity with the operation of precious metals as currencies lays the groundwork for comprehension of Bitcoin. By the end of this decade, prices might be primarily denominated in bitcoins and gold/silver grams instead of fiat; one-world currencies completely different from the totalitarian fears imagined during the 20th century.

Changing the rules/terms to suit your position? Bankertician

Use caution or a new thread might be created, making this one irrelevant

Intersango has had some delays also, but smaller transfers (<$1k) still go through within a couple of days. From the CampBX FAQ:


The 4 hour estimate is unreliable at best. I'm assuming the 30 day delay is exclusively on the Dwolla side, not CampBX waiting 30 days from receiving a transfer request. Your best option may be to open a support ticket to inquire.

Getting throttled by the Bitcoin Billionaires

Meanwhile, Turk is right on with gold when he suggests that we're facing more than a liquidity or insolvency crisis.

Lastly, I haven't weighed in on the equities decline because it hasn't had the ring of true concern; it's been more like a toddler's temper tantrum than a genuine emergency situation. This has been highlighted nicely by Eric De Groot.

It has very little to do with stupidity, and a lot to do with practicality. Storage and maintenance costs are a multiple of that for gold, as are shipping costs; silver also "flows" much more than gold in that warehouses will move more volume of silver for industrial purposes than gold, which can sit indefinitely as a financial instrument.

For those reasons, silver may not be used as a reserve by the majority of national governments, but it will retain a de facto currency status among many populations around the world. Next to gold, silver is the most available and stable commodity currency in existence - that isn't changing anytime soon.

This.

And a little more of this, that, and another thing.

Both Armstrong and Sinclair have long track records of making macro claims, sticking by them unwaveringly, and seeing them come to pass with impressive accuracy.

Armstrong has numerous documented claims that were proven accurate, including the failure of LTCM. His analyses are generally based on time scales from multiple months to decades, having studied cycles throughout thousands of years of economic history and patterns.

In 2001, Sinclair had called for $1650 to be reached by gold in January 2011, or a significantly higher level several months after that point. The first number didn't hit in January, but August saw $1650 breached and a 15% greater run to just over $1900.

The statement to end naysayers' arguments

I view Bitcoin as part of a greater whole, a good amount of which has recently been outlined on Cryptum.

In Borrowing from the Rich, Martin Armstrong projected a major economic event to occur on June 6th, 2012. Jim Sinclair has stated that gold is replacing the US dollar by June 28th.

We're about to see whether those prognostications hold true. My money is on gold. Get your phyzzz.

A few possibilities that might trigger Armstrong's major economic event:

• A bank holiday in Europe
• EU gold bond issuance to stem capital outflows
• US Fed announces some form of monetary inflation
• COMEX declares cash settlement in lieu of delivery
• Declaration of emergency by a major nation
• Break out of war in the Middle East
• Virulent disease outbreak in a major city
• "Terror" attack in populated area

There are dozens of others that are easily within the realm of possibility; no need for aliens or a new technology that transmutes lead into gold.

A possibility, but not if a Euro gold bond is approved. That may be a primary reason for such extreme, rapid movement to the short side of the dollar.

Another 26% increase in the ICE commercials' USD short position, on top of last week's 71.8% increase - that's more than double the dollar short positioning of the big boys from a scant two weeks ago; sheer madness. The dollar will retest and possibly breach the highly significant 72-73 level soon - later this year if not early 2013.

Yes, on gold he's laughably wrong; at least he's consistent about it and is also a signal for when to sell 10% of my holdings   On overwhelming deflation, he'll be right... eventually.

Early on, Prechter states that he thinks it would be a different situation if governments were dictatorships. Cue the NDAA and changes to the EU constitution. Dictatorial powers have effectively been granted to the collective leadership at the highest levels in both the EU and US. I'm not as aware of such legislation in Japan or other western nations, though there has been plenty to be concerned about from the bits I've read.

The Greek debt has effectively been defaulted on, but that hasn't eliminated confidence in the Euro as a currency. Paper is still viewed as legitimate when it is the core of the problem. This debt supporting paper currencies is what thins the entire structure until it's too weak to stand on its own. However, even after the collapse is underway, familiarity with fiat can sustain the illusion while gold continues rising.

Banks, like the cliff climbing analogy I used earlier, will keep going until the system is at a point of complete failure before deploying their golden parachute. Once they do that, it means the status quo is being upended. Human collectives are incredibly resilient and stubborn even under extreme duress - what we've seen so far has been getting close to an enormous breaking point, but it's still a ways off.

There are some good things that he points out:


From 18-20 minutes in, what Prechter says is absolutely correct:


Beating HFT is a heart-attack waiting to happen. On your scales, playing the turns is great until the rules are changed overnight. There could be another MF Global on Monday, or worse - a bank holiday. Without gold, Bitcoin, or a select few other assets, capital controls could castrate you. Discarding the phyzzz means you have one less option when there are so few to begin with.

In the discussion about GoldMoney, the entire notion of being able to manage your physical metal assets easily and efficiently without having to carry it around touched on the very mechanism by which gold is headed toward reintegration with the monetary system. During that process, gold reasserts its function as money and stands with currencies - the only one that can't be directly mismanaged by authorities, and the only currency that rises when all of the others are falling (notable exceptions being Bitcoin, silver, etc).

So he didn't die by choking on his own phlegm and embarrassment...

What the 2011 bounce highlights is a potentially strong technical level based on a trading perspective, not much more.

As for the video - there was nothing in it to suggest the poster had any fundamental understanding of the Bitcoin network, only it's behavior in relation to other traditional investments. The whole rehash of early adopter 'unfairness' sob story is immature and naive.

Regarding value, the argument of bitcoins not having any value is also a load of ignorant claptrap. There is no universal interpretation of value. A number like 7610598101114116121 has no more meaning than 自由 to anyone who doesn't have a reference point, and so might be claimed as 'valueless'. Yet with an appropriate understanding, both communicate information. Without context, their value is unknowable.

What is worthwhile is the suggestion that volume is as important as price, if not more so. The differences are more pronounced on a weekly scale, and it can be seen that large outflows of USD in the mtgoxUSD charts are often met with an even greater shift in bitcoin holdings. To me, that suggests there is an interest in accumulation of bitcoins, outweighing the preference for USD. This is especially evident from late 2011 to now, where relatively small shifts in exchange rates result in comparatively large transfers of bitcoin holdings.


Fools fade fast

Yep, Pirate lent me his time machine

So central banks will stand idly by as economies crumble, financial systems catastrophically fail, and riots or potentially civil wars break out?

Which route destroys the central banks sooner: crushing deflation into guaranteed chaos or continued inflation toward an indeterminate breaking point (after which crushing deflation ensues)? Both destroy banks, but the latter delays the inevitable for a longer period than the former. Banks will not be suicidal; they'll try to survive in any way they can.

I like analogies. Imagine you've decided to climb a 100m vertical cliff. From the top there's a gradual descent on the other side to ground level. Half-way up, you're exhausted. Do you:

• A. Keep climbing no matter what, hoping that your body doesn't give out before reaching the top or;
• B. Give up and let go, falling to your death

If you've ever tried to climb down from a rockface (without abbing), you know that can be as difficult, or even more so than continuing up.

Remember when I suggested that you call the tops and I call the bottoms?


FOFOA has ruminated on the possibility of distressed and under-capitalized mining companies issuing shares in excess, diluting share value as fiat printing dilutes the respective currency. A warning well worth heeding.

Gold - accept no substitute... except maybe bitcoins and silver

The center cannot hold.

A solid futures gaming explanation and analysis by TF. Technicals aren't worth a damn in this situation - reliability here lies only with the fundamentals. Also, some very interesting charts.

Martin Armstrong's analysis during the past couple of months pointed to one of two possibilities:

• An approach of the recent highs in May, then a return to the lows in June
• A low in May, followed by a retest or breach of the high in June

To my recollection, there was also a section about gold continuing on to make new highs later in the year, all in the midst of increasing volatility.

You can certainly make a killing by trading the turns in relatively short time-frames. However, what you hold your profits in matters greatly.

What you describe would be like making a profit in Bitcoin trading, but keeping your winnings in Euro or USD when Bitcoin is rising against all currencies. By the same token, gold is rising against all currencies. The only distinction is that, right now, gold is rising against the USD more slowly than it is rising against the Euro.

I'll say it again: a separation between paper and physical gold (and silver, other precious metals, commodities, etc) will lead to you being correct on the dollar rising against prices quoted in paper gold, yet blind to the physical metal's value.

Say I build a house using $500,000 worth of materials and try to sell it for $550,000 - a 10% gain. The problem is that buyers don't bite at that level because the neighborhood is not highly desirable, and the only offer I receive is $300,000 - a 40% discount just on the materials. If I had no choice and was forced to sell, the real value of the property based on the underlying materials would still be $500,000 despite the fact that the contract sale was for 40% less. The buyer (shark) got an absolute steal in regard to the physical product.

A house is not mobile - gold is. If I can't buy or sell gold at a price I want, there are literally thousands of markets I can try at varying scales of accommodation, so your arguments about lack of liquidity in gold are erroneous. If a contract for the house in the example above were selling at $10,000 there would be unbelievable demand, but only after it's discovered. Until that point, I might not be able to give the house away even though it's worth 50x that amount for the parts alone. Gold doesn't need to be parted out - it is the part, the underlying component. It is the foundational financial unit in the same way Bitcoin is proving itself to be.

Physical reality is not going away anytime in our foreseeable future. Therefore, gold is not going away, no matter how many paper obfuscation games are played. That's also why I see gold and Bitcoin working well together for a long time to come.