2013-04-04 Financial Times - Gold has a rival for Disaffected's affections

[kiko]

http://www.ft.com/cms/s/0/3df01184-9d3d-11e2-88e9-00144feabdc0.html

must have missed this one. It was linked in the 'Editor's must reads' circular email today.

April 4, 2013 9:00 pm
In Bitcoin, a virtual “currency” outside the purview of governments and banks, gold has a rival for the affections of the disaffected.
And while the Bitcoin bubble has inflated since the bailout of Cyprus, gold sold off sharply, heading close to bear market territory. It is down 19 per cent since its September 2011 peak, and accelerating.

Of course, Bitcoin is hardly the culprit, since the currency remains a niche pursuit, to say the least. Large financial forces have combined to sour the outlook for gold, and none seems likely to abate soon.
Even the writers of the GFMS gold survey, which gamely predicted a return to the mid-$1,800s by the end of the year, compared to $1,547 yesterday, gave their prediction an air of a “last hurrah” for the precious metal. Worries over the eurozone, the US fiscal situation and the global economy, all of which have driven gold higher, will abate, GFMS agrees – just not yet.

Sentiment is shifting faster, which is why European brokers in particular seem ready to call time on gold’s bull run. Gold, which trades in dollars, is getting relatively more expensive and that is a trend unlikely to reverse.

The Bank of Japan may have arrived late to the drunken party that is quantitative easing but new governor Haruhiko Kuroda has immediately ripped off his shirt and started dancing on the tables. The European Central Bank and Bank of England governors are hanging around the drinks cabinet, with varying enthusiasm. Federal Reserve chairman Ben Bernanke’s next move, by contrast, will be to dilute the US punch bowl.
That contrast – and the plodding improvement of the US economy – explains why the dollar index is up 5 per cent since the end of January.
Gold traded essentially sideways throughout the Cyprus crisis, a poor show for a supposed haven.
It might not be possible to short Bitcoin, much as you would love to. Gold, however, is a different matter.

Edit: date typo

[n8rwJeTt8TrrLKPa55eU]

A new low for the FT.  Double hit piece on metals and Bitcoin, oveflowing with condescension, belittling, and parroting of establishment memes.  Bitcoin is a niche, and a bubble.  Gold is going down, forever.  Economies are recovering.  Cyprus is inconsequential.

By "dissafected", I guess he means us little people who are not part of the banking and political insider circles, and cannot counter the effects of inflation and confiscation through multimillion bonuses with government backstops.  God forbid that we show a tiny amount of independent thought and start moving our savings away from the parasitic and immoral financial system that provides Mr. Foley his job.

[kiko]

Exactly.

I'm curious about all these wall street types that wanted to short bitcoin on Apr 4; was it theirs or their clients money that they wanted to lose 60% on and counting? Perhaps they were particularly astute and saw the bubble early, shorting at $80, $60, $40? How much money would they have put on this 'no-brainer'? Who knows?

[marcus_of_augustus]

I've recently been wondering about a possible future dynamic. Consider the possibility that bitcoin (or crypto-currencies in general) begin to take an appreciable share of monetary market flows to such an extent that CB's of the world really begin to notice.

What is the one asset that they could use to compete? Gold. The Central Banks still have thousands of tons (30k?) of the stuff and while they may have been abusing that asset by suppressing it's market value to enhance their other less desirable paper and digital crap token products they still do have an affiliation with gold, as a last resort.

Is it it really so inconceivable that the bitcoin phenomena may cause the CB's to start coming in behind gold and supporting gold usage just so that have any kind of relevance in the future? They will end their gold price suppression schemes and actively try to promote it back into the money supply and commercial use or become totally irrelevant. I want to see CB's issuing gold-backed anonymous digital tokens, aka gold digital cash, just to compete.

At that point we will have succeeded anyway. All it needed was a little fair competition to flush out the rats and chumps.  

[Roger_Murdock]

dis·af·fect·ed
/ˌdisəˈfektid/
Adjective
Dissatisfied with the people in authority and no longer willing to support them.

So ... basically everyone who's paying attention.

[Dusty]

Is it it really so inconceivable that the bitcoin phenomena may cause the CB's to start coming in behind gold and supporting gold usage just so that have any kind of relevance in the future? They will end their gold price suppression schemes and actively try to promote it back into the money supply and commercial use or become totally irrelevant. I want to see CB's issuing gold-backed anonymous digital tokens, aka gold digital cash, just to compete.

That's a very interesting theory, and it's exactly why I'm not selling my gold, yet