Martin Armstrong Discussion

[OROBTC]

...

sidhujag

Forgive me but I did not understand your above comment.  

I still think gold will not fall too much anytime in the near future.  Not much below cost of production (varies company to company, and "cost of production" as I mentioned before is a slippery term).

EDIT: But I will give credit where credit is due: Bitcoin has been on a complete tear recently, gold has gone down slightly.

*  *  *

Armstrong is perhaps even more dubious on the future of Europe even with Macron winning in France:

https://www.armstrongeconomics.com/international-news/politics/macrons-victory-may-be-disaster-for-merkel/

Europe is primed for social unrest as their governments do not care about their people, uncontrolled immigration, etc.

For those in the USA (like me), I would hesitate to invest any money in Europe now.

I'm just saying that production cost is around $700 so theres the magnet for gold and where its headed and also my friend gatorinla on Forexfactory has been saying it for years it needs to touch some bear targets down around 500ish.. looking likely now few years ago he was laughed at those numbers usually are respected though ive seen it first hand... i havent done an analysis on gold technically but makes sense based on our other views that its likely to go down and not up (remember I said next time btc breached gold its gonna be for good)

Well certainly over the last few weeks Bitcoin has way outperformed gold.  I wish I had bought a lot more BTC over the years....

IMO, gold's main function is protection is somewhat akin to financial insurance with teh very real possibility of a huge price rise if there are certain kinds of financial crises that come to pass (very possible).

I would appreciate receiving any links you have that average production cost of gold would be lower than $1000 / toz, I have read some articles (most recently at "American Hard Assets" magazine (now defunct) which had a great article on how complex gold production cost calculations are).
 
SRSrocco closely follows energy and gold.  I referenced his article a page or two back re costs of Barrick and Newmont, two major gold miners.  Their costs are not too much lower than current market price, and there have been very few new gold discoveries of size in recent years.

I follow gold pretty closely (more so than Bitcoin), and $700 gold production cost seems very wrong.  "They" would be producing A LOT more were that true.

[1714864795]

1714864795

[1714864795]

1714864795

[1714864795]

1714864795

[Risk Mgmt]

Hello everyone,
I just joined this wonderful forum because I found the conversations are very interesting. I have been studying BTC for quite a while and finding the latest price increase is simply nuts! Why is it going up so much so fast? Anyone got a sensible answer?

Think of it like a tech stock.

Current Market Cap (billion USD)

Twitter         13.4

Snapchat      26.4

Bitcoin           28.7

Yahoo          47.7

Facebook      438.5

Market has decided Bitcoin is no longer equals a Twitter. Now it is about a Snapchat in value.

Given the underlying potential of the technology it is entirely possible that some large institutional investors have decided that it may be worth a Yahoo which if true bodes well for gains in the future.  

If MA is teaching me something  - its this -- QUESTION: Why is it going up so much so fast? Anyone got a sensible answer?

ANSWER:  Government Regulations on capital flows or Gold Imports/Exports of each respective Country and value of US$...all this maybe shifting those who can -- into bitcoin to preserve their wealth as their home currency sinks in purchasing power relative to US$ 
What we should also  ask -- which Country  or who is the primary buyer of Bitcoin ...is that possible to answer?

- IF I AM WRONG OR WAY OFF....PLS BE KIND TO HELP ME BETTER UNDERSTAND.  THANK YOU

[sidhujag]

...

sidhujag

Forgive me but I did not understand your above comment.  

I still think gold will not fall too much anytime in the near future.  Not much below cost of production (varies company to company, and "cost of production" as I mentioned before is a slippery term).

EDIT: But I will give credit where credit is due: Bitcoin has been on a complete tear recently, gold has gone down slightly.

*  *  *

Armstrong is perhaps even more dubious on the future of Europe even with Macron winning in France:

https://www.armstrongeconomics.com/international-news/politics/macrons-victory-may-be-disaster-for-merkel/

Europe is primed for social unrest as their governments do not care about their people, uncontrolled immigration, etc.

For those in the USA (like me), I would hesitate to invest any money in Europe now.

I'm just saying that production cost is around $700 so theres the magnet for gold and where its headed and also my friend gatorinla on Forexfactory has been saying it for years it needs to touch some bear targets down around 500ish.. looking likely now few years ago he was laughed at those numbers usually are respected though ive seen it first hand... i havent done an analysis on gold technically but makes sense based on our other views that its likely to go down and not up (remember I said next time btc breached gold its gonna be for good)

Well certainly over the last few weeks Bitcoin has way outperformed gold.  I wish I had bought a lot more BTC over the years....

IMO, gold's main function is protection is somewhat akin to financial insurance with teh very real possibility of a huge price rise if there are certain kinds of financial crises that come to pass (very possible).

I would appreciate receiving any links you have that average production cost of gold would be lower than $1000 / toz, I have read some articles (most recently at "American Hard Assets" magazine (now defunct) which had a great article on how complex gold production cost calculations are).
 
SRSrocco closely follows energy and gold.  I referenced his article a page or two back re costs of Barrick and Newmont, two major gold miners.  Their costs are not too much lower than current market price, and there have been very few new gold discoveries of size in recent years.

I follow gold pretty closely (more so than Bitcoin), and $700 gold production cost seems very wrong.  "They" would be producing A LOT more were that true.

Someone posted $700 which is why I brought it upthread. Yes now that btc has passed gold for good we should start seeing a shift in confidence from gold to btc as a safe haven.. will take a while but we are now on second phase of bitcoin adoption.

[Wekkel]

[...] now that btc has passed gold for good we should start seeing a shift in confidence from gold to btc as a safe haven..

Perhaps a better way is describing Bitcoin as a prospect of a "numeraire". It would quite reverberate with the idea of stock markets signalling the beginning of some king of (mild) hyperinflation of currency. If that is remotely true, hang on to your hats gentlemen 

[OROBTC]

...

sidjuhag, and anyone else interested in gold's production cost.

One main topic discussed re "gold production cost" is the "All-In Production Cost".  While not defined in the below quotation from an article today, the term should be somewhat clear, even if not well-defined by the industry, at least last I heard.

"In the bear market that started in 2011 and continues to this day, gold has plunged from an inflation adjusted 2011 high of $2,081 to today’s price around $1,200, which is close to its average, all-in production cost."

Above snip came from: http://www.silverdoctors.com/gold/gold-news/the-traitors-abetting-the-deep-states-dirty-dying-war-on-gold/

This is about the third article I have read that all state more-or-less the same: that gold's total cost of production, while varying from company to company (how rich the deposits are, transportation costs, wages to miners, etc.) have an approximate median of around $1200.

[OROBTC]

...

Practically all that we hear from France since Macron won is how "relieved" everyone is.  Armstrong believes that Le Pen would have been better for the French people. 

https://www.armstrongeconomics.com/international-news/politics/macron-to-hand-all-sovereignty-to-brussels/

Armstrong writes that Macron will just deliver France into the EU Superstate (my wording).  He takes a nice swipe at Macron's wife too...

It would certainly have been a more interesting France with Le Pen!


IMO Europe as a whole is in deep deep trouble.  "Take your children there to visit before it's too late."

[r0ach]

SRSrocco closely follows energy and gold.  I referenced his article a page or two back re costs of Barrick and Newmont, two major gold miners.  Their costs are not too much lower than current market price, and there have been very few new gold discoveries of size in recent years.

I follow gold pretty closely (more so than Bitcoin), and $700 gold production cost seems very wrong.  "They" would be producing A LOT more were that true.

Of course it's wrong.  Sidjuhag already admitted he doesn't even research the gold market.  Charts do not matter in metals, only cost of production does (which is mostly controlled by oil price).  Just because you make believe there has to be some 50% retrace going from $250 to $1800 doesn't mean that's how the market works in practice.  For example, it requires moving TWICE as much earth in the year 2017 as in the year 2000 to get 1 ounce of silver.  Where does that fit into your chart?  It doesn't.

I think the lowest possible price people are getting gold for is $800, but most are over $1000 now, with some being all the way up to $1200's.  All that really matters is the dollar cost average production price of them all averaged together, not one miner who pulls 3 ounces of gold per year out of the ground at $800.  The cost of production should be over $1000, and silver cost of production is probably around $15-17.  You of course need premiums stacked on top of that for any of these businesses to run.

As I said, the oil price controls most of it, but the oil companies are already bleeding billions and on the verge of collapse, so if oil cratered to something like $20, it would wipe out the entire financial system anyway.  If instead oil went back to it's previous price, well, metals would be going to the moon.  It's slightly annoying, but as long as metals are not used as the main settlement unit or currency, it's price is mostly a derivative of oil.  I expect gold and silver's role to transition back to the main form of money and settlement, though.

[OROBTC]

SRSrocco closely follows energy and gold.  I referenced his article a page or two back re costs of Barrick and Newmont, two major gold miners.  Their costs are not too much lower than current market price, and there have been very few new gold discoveries of size in recent years.

I follow gold pretty closely (more so than Bitcoin), and $700 gold production cost seems very wrong.  "They" would be producing A LOT more were that true.

Of course it's wrong.  Sidjuhag already admitted he doesn't even research the gold market.  Charts do not matter in metals, only cost of production does (which is mostly controlled by oil price).  Just because you make believe there has to be some 50% retrace going from $250 to $1800 doesn't mean that's how the market works in practice.  For example, it requires moving TWICE as much earth in the year 2017 as in the year 2000 to get 1 ounce of silver.  Where does that fit into your chart?  It doesn't.

I think the lowest possible price people are getting gold for is $800, but most are over $1000 now, with some being all the way up to $1200's.  All that really matters is the dollar cost average production price of them all averaged together, not one miner who pulls 3 ounces of gold per year out of the ground at $800.  The cost of production should be over $1000, and silver cost of production is probably around $15-17.  You of course need premiums stacked on top of that for any of these businesses to run.

As I said, the oil price controls most of it, but the oil companies are already bleeding billions and on the verge of collapse, so if oil cratered to something like $20, it would wipe out the entire financial system anyway.  If instead oil went back to it's previous price, well, metals would be going to the moon.  It's slightly annoying, but as long as metals are not used as the main settlement unit or currency, it's price is mostly a derivative of oil.  I expect gold and silver's role to transition back to the main form of money and settlement, though.

Ah!  An SRSrocco fan it would seem.  Most of what you write above is in accord with what I have read elsewhere.  While I am less confident of silver as an investment (central banks do not hold it, etc.), I have some, especially to "cover my ass" in a Big Bad SHTF..., where silver might be better accepted as money for small transactions.  I actually own more $-volume of platinum than silver (it's more portable, and has a different fundamental profile), so I do own all three (along with tiny holdings of Pd and Ir.

Even though I am very much of a FOFOA fan (yes, for various reasons I think gold will go WAY UP, and silver *probably* not), I believe Steve there at SRSrocco is on to something important in the shorter-term: that the price of gold and crude oil have correlated rather well lately.  "Past performance may not be an indicator of future performance though".

Energy costs are the relatively neglected factors that most analysts miss in researching gold.  Nice write up.

[sidhujag]

If all in costs were $1200 or more then we would be in a goldpocalypse by now. The fact that miners are still going means the true number is somewhere way lower. I think $700 is right.. official numbers are around $550 but that may not be all in. Anyways when it hits $300-$500 i might consider allocating some capital aside for it at this time better off in crypto which is exponentially better risk rewards as stated many times last few months and roacb doesnt seem to conmprehend.

[Risk Mgmt]

Hello everybody,

Martin recently made a post where he talks about the ECM, It was the post called "Kim Jong-un The Kid Whose Father Never Spanked – Why 2017 Is The Crisis Year For Korea", and at some point he talks about the three components of his model: the wave frequency based on Pi of 8,6 years, the volatility component and the schema frequency which he does not reveal. I guess that the last one is related to the third dimension which for security reasons he does not reveal (https://www.armstrongeconomics.com/armstrongeconomics101/understanding-cycles/the-schema-frequency/). Also for those who now the new yorker article "The secret cycle" he refers at the end that Pi may be related to dark matter, of which he also never shared.

Well what I would like to know is that if anyone has any ideas regarding that subjects that would like to share, any thoughts would be most welcome!

Thanks,

Dário A.

Dário A. - this may sound really silly -- On few occasions MA has written about "RELIGION" and not from a historical perspective rather - you can sense from such specific posts slight religious notes - that he is Religious person.  Capitalist but also Religious...absurd sure!

Having pointed that out...I believe their are certain other beliefs in other hidden (dark)entities within the BIG THREE RELIGIONS - that suggest they have vast impact on our worldly affairs.      I'm sure by now I will be ridiculed - so I will leave it at that.

Cheers

[r0ach]

Ah!  An SRSrocco fan it would seem.  

I talked to the guy before.  A lot of these people in metals have put a few bucks into bitcoin and I had to explain to him why bitcoin is not actually a store of value:

[OROBTC]

...

r0ach

Well, I myself found Bitcoin to be interesting enough to take a punt.  For me, BTC is really more of an "opportunistic speculation", particularly that there is a low probability it will go to zero, but a reasonable chance it could go way higher.

Nice back & forth with steve.  I ALWAYS like talking with experts, even if their views might be wrong.  Perspective. 

Even if Armstrong winds up being very wrong on predictions (and his record is not that good IMO), I very much value his views.

Perspective.  And he does take a long view, something few others do.


But, I ain't payin' nothin' for his research.

[tabnloz]

...

r0ach

Well, I myself found Bitcoin to be interesting enough to take a punt.  For me, BTC is really more of an "opportunistic speculation", particularly that there is a low probability it will go to zero, but a reasonable chance it could go way higher.

Nice back & forth with steve.  I ALWAYS like talking with experts, even if their views might be wrong.  Perspective. 

Even if Armstrong winds up being very wrong on predictions (and his record is not that good IMO), I very much value his views.

Perspective.  And he does take a long view, something few others do.


But, I ain't payin' nothin' for his research.

i think along the same lines. For anyone around since before the first $1000 spike, Bitcoin has had a very asymmetric risk - defined downside, massive upside potential. It has clear utility and even if it does not eventually fulfill other functions of money, it is well worth the risk. it is highly likely it will never be the new gold standard, but rather more possible that increased adoption leads to a much higher price in the medium term.

This is why I don't understand the vitriol by Roach et al that is so dogmatic on fundamentals, suppression of metals etc etc.

As for MA, take out his ECm & talk of super computers and his overall thesis on the collapse of government is quite common. Many macro guys have similar theories, just packaged differently. But to be fair, MA has been saying it a lot longer.

[Dario A.]

Hello everybody,

Martin recently made a post where he talks about the ECM, It was the post called "Kim Jong-un The Kid Whose Father Never Spanked – Why 2017 Is The Crisis Year For Korea", and at some point he talks about the three components of his model: the wave frequency based on Pi of 8,6 years, the volatility component and the schema frequency which he does not reveal. I guess that the last one is related to the third dimension which for security reasons he does not reveal (https://www.armstrongeconomics.com/armstrongeconomics101/understanding-cycles/the-schema-frequency/). Also for those who now the new yorker article "The secret cycle" he refers at the end that Pi may be related to dark matter, of which he also never shared.

Well what I would like to know is that if anyone has any ideas regarding that subjects that would like to share, any thoughts would be most welcome!

Thanks,

Dário A.

Dário A. - this may sound really silly -- On few occasions MA has written about "RELIGION" and not from a historical perspective rather - you can sense from such specific posts slight religious notes - that he is Religious person.  Capitalist but also Religious...absurd sure!

Having pointed that out...I believe their are certain other beliefs in other hidden (dark)entities within the BIG THREE RELIGIONS - that suggest they have vast impact on our worldly affairs.      I'm sure by now I will be ridiculed - so I will leave it at that.

Cheers

This reply does not ad nothing to what I was asking. Still I would appreciate if someone wanted to share what he/she thinks about the subject.

[miscreanity]

As for MA, take out his ECm & talk of super computers and his overall thesis on the collapse of government is quite common. Many macro guys have similar theories, just packaged differently. But to be fair, MA has been saying it a lot longer.

He has also been exceptionally accurate.

One thing that has disappointed me is his assessment of Bitcoin, and cryptocurrencies in general. His latest post regarding Bitcoin indicates that he considers it to be just like any other single-class asset. I am left wondering whether he has genuinely studied the system to understand the intricacies and how it differs from any other asset, not to mention the scripting capabilities.

[OROBTC]

As for MA, take out his ECm & talk of super computers and his overall thesis on the collapse of government is quite common. Many macro guys have similar theories, just packaged differently. But to be fair, MA has been saying it a lot longer.

He has also been exceptionally accurate.

One thing that has disappointed me is his assessment of Bitcoin, and cryptocurrencies in general. His latest post regarding Bitcoin indicates that he considers it to be just like any other single-class asset. I am left wondering whether he has genuinely studied the system to understand the intricacies and how it differs from any other asset, not to mention the scripting capabilities.

OK, that's interesting.  Armstrong is very up to date on at least some technologies, I suppose that no one can be up to speed on everything.  Still, he writes on money, freedom and history; one would think he would have looked into Bitcoin some more.

Bitcoin is a different asset class, he should be following it more.

[tabnloz]

As for MA, take out his ECm & talk of super computers and his overall thesis on the collapse of government is quite common. Many macro guys have similar theories, just packaged differently. But to be fair, MA has been saying it a lot longer.

He has also been exceptionally accurate.

One thing that has disappointed me is his assessment of Bitcoin, and cryptocurrencies in general. His latest post regarding Bitcoin indicates that he considers it to be just like any other single-class asset. I am left wondering whether he has genuinely studied the system to understand the intricacies and how it differs from any other asset, not to mention the scripting capabilities.

OK, that's interesting.  Armstrong is very up to date on at least some technologies, I suppose that no one can be up to speed on everything.  Still, he writes on money, freedom and history; one would think he would have looked into Bitcoin some more.

Bitcoin is a different asset class, he should be following it more.

MA's latest is on Bitcoin, where he likens the volatility of btc to the crash in mutual funds in the 60's (ie, funds dropped by 80% when the Dow dropped by 25%). He just sees it as an asset with high volatility and not a currency or store of value. But he also says that after the crash, the tech may be the future.

https://www.armstrongeconomics.com/markets-by-sector/foreign-exchange/bitcoin-alternative-currencies/

[miscreanity]

MA's latest is on Bitcoin, where he likens the volatility of btc to the crash in mutual funds in the 60's (ie, funds dropped by 80% when the Dow dropped by 25%). He just sees it as an asset with high volatility and not a currency or store of value. But he also says that after the crash, the tech may be the future.

There will undoubtedly be more rises and falls but overall the cryptocurrency field is an entire ecosystem with myriad uses in so many other industries that looking at it as simply an asset class misses the big picture. The bitcoin unit is only part of the whole; without a thorough understanding of the system it can be difficult to assess it holistically. I think Armstrong may have stopped at a mostly superficial comprehension.

Since Armstrong first started posting about Bitcoin, he seems to have changed his stance. It has been suspected that there wasn't enough data for Socrates to develop a high-confidence forecast. Whether that has changes, who knows?

One thing to note is that Armstrong is calling for the DOW to rise significantly. If anything, crypto would be aligned with private assets and therefore rise along with equities in the near-term.

Additionally, Bitcoin is a politician's wet dream: tracking and control with a keystroke. It appeals to all parties but will eventually trap users.

[tabnloz]

MA's latest is on Bitcoin, where he likens the volatility of btc to the crash in mutual funds in the 60's (ie, funds dropped by 80% when the Dow dropped by 25%). He just sees it as an asset with high volatility and not a currency or store of value. But he also says that after the crash, the tech may be the future.

There will undoubtedly be more rises and falls but overall the cryptocurrency field is an entire ecosystem with myriad uses in so many other industries that looking at it as simply an asset class misses the big picture. The bitcoin unit is only part of the whole; without a thorough understanding of the system it can be difficult to assess it holistically. I think Armstrong may have stopped at a mostly superficial comprehension.

Since Armstrong first started posting about Bitcoin, he seems to have changed his stance. It has been suspected that there wasn't enough data for Socrates to develop a high-confidence forecast. Whether that has changes, who knows?

One thing to note is that Armstrong is calling for the DOW to rise significantly. If anything, crypto would be aligned with private assets and therefore rise along with equities in the near-term.

Additionally, Bitcoin is a politician's wet dream: tracking and control with a keystroke. It appeals to all parties but will eventually trap users.

Yeah, his initial stance seemed to be that government is too powerful and will destroy it when necessary. Now, he seems to think the tech is worthwhile.

But I think there might be a few flaws to his latest post

- BTC is unlike Mutual Funds as it is not an easily obtainable, retail asset

- BTC faces a negative media led narrative

- The volatility of Bitcoin may be a red herring when taken on a risk adjusted return basis (ie the volatility to the downside is dwarfed by returns on price to the upside)

- BTC operates independent of governments, central banks


Looking at 2 scenarios, how will BTC react:

1) Massive economic shock / recession / stock market downturn

Would Bitcoin also see a large selloff as the old 'sell what you can, not what you want' meme is lived out?

Are enough people invested in BTC also heavily invested in the stock market, where a stock margin call would lead to a large dumping of BTC?

Would an initial dip be followed by a massive rise in this case (ala gold in 2008)

Would BTC be seen as a safe haven asset and see a tremendous inflow in during this kind of event? (seems possible based on Brexit, Trump).


2) Crack up boom. Dow hits 40,000 etc

Will this see Bitcoin also rise, as in all boats get floated?

Does BTC see its relevance wane, as the good times are here again?

[miscreanity]

- BTC operates independent of governments, central banks

For now...

Agreed on all points so far.

Looking at 2 scenarios, how will BTC react:

1) Massive economic shock / recession / stock market downturn

Would Bitcoin also see a large selloff as the old 'sell what you can, not what you want' meme is lived out?

Are enough people invested in BTC also heavily invested in the stock market, where a stock margin call would lead to a large dumping of BTC?

Would an initial dip be followed by a massive rise in this case (ala gold in 2008)

Would BTC be seen as a safe haven asset and see a tremendous inflow in during this kind of event? (seems possible based on Brexit, Trump).


2) Crack up boom. Dow hits 40,000 etc

Will this see Bitcoin also rise, as in all boats get floated?

Does BTC see its relevance wane, as the good times are here again?

In a shock, yes I see Bitcoin and crypto being liquidated to some extent. High volatility suggests the swings will be greater.

Also yes in regard to aligning with equities - crypto has aspects of both currency and equities, so it seems very likely that it will perform as such.