The mother of all traps?

[freedomno1]

Well enjoys the nice weather 

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[Zangelbert Bingledack]

It actually makes some sense that Bitcoin would be affected by Fed statements, because many BTC investors are also gold and silver investors. If your gold is going down and you need money, you might rather sell some of your more speculative investment (bitcoins) than part with your golden insurance. This is doubly true if you hold physical gold or silver, since trading physical around gets you eaten alive by the spread and fees.

Once Bernanke squeals "QE!" again, your gold is now rising so you don't worry as much about getting squeezed, so you can let your bitcoin bets ride. That means any Fed-based rise or fall in precious metals can be expected to be positively correlated with the BTC price.

[vokain]

Assuming gold isn't overvalued and bitcoin isn't undervalued

[freedomno1]

Assuming gold isn't overvalued and bitcoin isn't undervalued

Golds been dropping like a tank though but who knows maybe a bounce is in store
But +1 

[Its About Sharing]

Assuming gold isn't overvalued and bitcoin isn't undervalued

Golds been dropping like a tank though but who knows maybe a bounce is in store
But +1 

Let me comment about gold as I used to be quite the gold expert. Without a doubt, gold has been manipulated in the paper markets by some very big banks and hedge funds (if not countries). When Bernanke said he would raise interest rates it hit gold hard but his backing off those comments have caused a bounce in gold. Consider these prices a sale that no one knows about. They are just trying to get interest out of gold and silver due to financial problems all over the world, but it isn't working.

A few interesting points:
 
Central banks all over the world are buying up gold right now. Why? (Notice that Cypress got 400 million Euros of gold taken from them for the paper printout, I mean loan, they received.)
Even with the drop in the paper price, the demand has not diminished. This is pretty good proof of a manipulated market. Also, find out more about that at Gata.org . In many places you can't even buy gold - Asian countries are having big problems. Japan comes to mind.
China and Russia are huge importers, don't even think they export anything.

[molecular]

Assuming gold isn't overvalued and bitcoin isn't undervalued

Golds been dropping like a tank though but who knows maybe a bounce is in store
But +1 

Let me comment about gold as I used to be quite the gold expert. Without a doubt, gold has been manipulated in the paper markets by some very big banks and hedge funds (if not countries). When Bernanke said he would raise interest rates it hit gold hard but his backing off those comments have caused a bounce in gold. Consider these prices a sale that no one knows about. They are just trying to get interest out of gold and silver due to financial problems all over the world, but it isn't working.

A few interesting points:
 
Central banks all over the world are buying up gold right now. Why? (Notice that Cypress got 400 million Euros of gold taken from them for the paper printout, I mean loan, they received.)
Even with the drop in the paper price, the demand has not diminished. This is pretty good proof of a manipulated market. Also, find out more about that at Gata.org . In many places you can't even buy gold - Asian countries are having big problems. Japan comes to mind.
China and Russia are huge importers, don't even think they export anything.

Wouldn't demand increase with falling price?

[Spaceman_Spiff]

Even with the drop in the paper price, the demand has not diminished. This is pretty good proof of a manipulated market. Also, find out more about that at Gata.org . In many places you can't even buy gold - Asian countries are having big problems. Japan comes to mind.
China and Russia are huge importers, don't even think they export anything.

Wouldn't demand increase with falling price?

Are talking about demand in ounces or in dollars here?

[molecular]

Even with the drop in the paper price, the demand has not diminished. This is pretty good proof of a manipulated market. Also, find out more about that at Gata.org . In many places you can't even buy gold - Asian countries are having big problems. Japan comes to mind.
China and Russia are huge importers, don't even think they export anything.

Wouldn't demand increase with falling price?

Are talking about demand in ounces or in dollars here?

Law of Demand
In economics, the law states that, all else being equal, as the price of a product increases, a lower quantity will be demanded; likewise, as the price of a product decreases, a higher quantity will be demanded.

so "quantity" (ounces) it is. Although demand might of course increase so much that even measured in USD it's an increase.

[solex]

why does 2013 have to follow 2011? making a proportional overlay is one thing, assuming that it's the same bubble dynamic is another fundamental leap in logic

Agreed. Two bubbles can deflate differently, and by the following metric 2013 has already deflated proportionally more than 2011 did:

2011 Peak
Low, 10 weeks before,  $0.56
Lowest post-peak        $1.994        
Increase = 3.56x

2013 Peak
Low, 10 weeks before,  $15.39
Lowest post-peak        $50.01
Increase = 3.25x

[Its About Sharing]

Assuming gold isn't overvalued and bitcoin isn't undervalued

Golds been dropping like a tank though but who knows maybe a bounce is in store
But +1 

Let me comment about gold as I used to be quite the gold expert. Without a doubt, gold has been manipulated in the paper markets by some very big banks and hedge funds (if not countries). When Bernanke said he would raise interest rates it hit gold hard but his backing off those comments have caused a bounce in gold. Consider these prices a sale that no one knows about. They are just trying to get interest out of gold and silver due to financial problems all over the world, but it isn't working.

A few interesting points:
 
Central banks all over the world are buying up gold right now. Why? (Notice that Cypress got 400 million Euros of gold taken from them for the paper printout, I mean loan, they received.)
Even with the drop in the paper price, the demand has not diminished. This is pretty good proof of a manipulated market. Also, find out more about that at Gata.org . In many places you can't even buy gold - Asian countries are having big problems. Japan comes to mind.
China and Russia are huge importers, don't even think they export anything.

Wouldn't demand increase with falling price?

It depends on the product and situation, doesn't it? And which came first, the falling price or falling demand? I'm talking manipulation, both physically (gold) and psychologically (trying to lower demand in gold from people.) With gold, they dropped the price in the paper markets to lower the price.

There are plenty of things that don't sell well (falling demand) so they drop the price but demand doesn't necessarily go up. When demand starts to rise, supply can go down (if demand can't be met, as with gold) and prices increase. The gold supply can't meet the gold demand right now and prices are dropping (even in an inflationary environment). (Funny thing - The Indian government has actually tried to get their people to stop buying so much gold but can't stop them while the Chinese government encourages gold purchases - go figure. Hmmm, maybe China owning so many USD's is protecting itself...)
Gold has seen a shrinking supply, increasing demand AND a drop in price for years now.

The gold price has been related to dollar strength historically (and also to the times - when things are tough, people buy precious metals). When the dollar fell in price it was due to inflation and that meant it required more dollars to buy the same amount of gold, so gold went up - basic math. That had never changed, until the US's new strong dollar policy came into effect a few decades ago (Maybe around Reagan but don't quote me on that). Starting then, the inverse relationship was halted. What the banks devised was brilliant (and very manipulative). They "leased" gold out of the central banks (at 1/2% interest rate!) to make up the difference between growing demand and shrinking supply. The problem is, that gold was essentially sold, never to come back (they used the term "lease" to get around the law). Now we see the suppression of prices continuing while countries like Germany have asked for their gold back (50% in January of this year) only to be told it will take till 2020 to get it back. This is a confirmation of sorts that the gold is not there. So, banks (maybe even China) are continuing to sell gold futures (puts) to keep the price down so they can start building up reserves. Basically the banks want to keep the price down to buy back what they have "leased" and should be in their vaults (as it is on their books as an asset).

So, with demand rising as much as it has, with inflation rising for years now, we should definitely have not seen a drop in the gold price (and silver.) I can't elaborate this as well as some and if you care to look further into it there are some people out there who really can break it down for you. Start with Gata.org. I think Max Keisser even got into this quite a few times on his show, not to mention other economists have brought it up.

[rpietila]

I feel that the Fibonacci levels hold true here also. After a sizable runup from $66 to $104, there should be retracement. If we dip down to any of the retracement levels and keep above the last week bottom, I will start to believe we are going up next.

The following 6-12 months will likely not see new highs, the infrastructure and sentiment are both currently so damaged. But bitcoin is antifragile, and I would not sell at these levels. I bought in at exactly these kind of general feelings after the bubble pop in 2011, and have not regretted it. The following 12 months will be the opportunity for the "1%" to buy into bitcoin. They already know, based on the events of 2013.

[Zangelbert Bingledack]

Wouldn't demand increase with falling price?

It depends on the product and situation, doesn't it? And which came first, the falling price or falling demand? I'm talking manipulation, both physically (gold) and psychologically (trying to lower demand in gold from people.) With gold, they dropped the price in the paper markets to lower the price.

Aren't you basically saying that the demand did go up as the price fell but that they (the bankers, etc.) pulled out all the stops to sell the gold-demanders ETFs, futures, and other substitutes to satisfy them? In other words, they got people to stop demanding gold and start demanding "gold or substitutes," so the supply effectively grew, resulting in a lower price, or lack of price rise.

That would mean that the COMEX and ETFs are stretched even thinner than they were before, which could signal a major breakdown imminent; however, who knows how far they can stretch it?

Jim Rogers, whose opinion isn't one to take lightly, thinks things will come unraveling after the summer elections. He also very recently, after many months, finally changed gold from HOLD to (timid) BUY. Here's Max Keiser and Jim Rogers, with Jim explaining this very issue of paper inflating the supply:

http://www.youtube.com/watch?v=nwhzHy7FlEw

[vokain]

i prefer bitcoin to gold, it's a bit lighter in me pockets  

[molecular]

why does 2013 have to follow 2011? making a proportional overlay is one thing, assuming that it's the same bubble dynamic is another fundamental leap in logic

Agreed. Two bubbles can deflate differently, and by the following metric 2013 has already deflated proportionally more than 2011 did:

2011 Peak
Low, 10 weeks before,  $0.56
Lowest post-peak        $1.994        
Increase = 3.56x

2013 Peak
Low, 10 weeks before,  $15.39
Lowest post-peak        $50.01
Increase = 3.25x

close enough.

are you calling $50 the bottom based on this?

[molecular]

good to hear from you again, rpietila.

I feel that the Fibonacci levels hold true here also. After a sizable runup from $66 to $104, there should be retracement. If we dip down to any of the retracement levels and keep above the last week bottom, I will start to believe we are going up next.

sssshhh. Don't tell anyone... it's obvious the trend has reversed, but we need the bears in denial so we're be able to buy into strength.

It's a bull trap, don't buy!

The following 6-12 months will likely not see new highs, the infrastructure and sentiment are both currently so damaged. But bitcoin is antifragile, and I would not sell at these levels. I bought in at exactly these kind of general feelings after the bubble pop in 2011, and have not regretted it. The following 12 months will be the opportunity for the "1%" to buy into bitcoin. They already know, based on the events of 2013.

You bought in 2011? I thought you said something along the lines of having dismissed Bitcoin back then and regretting it.

[molecular]

Wouldn't demand increase with falling price?

It depends on the product and situation, doesn't it? [...]

thanks for the wrapup, Its About Sharing.

[Its About Sharing]

Wouldn't demand increase with falling price?

It depends on the product and situation, doesn't it? And which came first, the falling price or falling demand? I'm talking manipulation, both physically (gold) and psychologically (trying to lower demand in gold from people.) With gold, they dropped the price in the paper markets to lower the price.

Aren't you basically saying that the demand did go up as the price fell but that they (the bankers, etc.) pulled out all the stops to sell the gold-demanders ETFs, futures, and other substitutes to satisfy them? In other words, they got people to stop demanding gold and start demanding "gold or substitutes," so the supply effectively grew, resulting in a lower price, or lack of price rise.

That would mean that the COMEX and ETFs are stretched even thinner than they were before, which could signal a major breakdown imminent; however, who knows how far they can stretch it?

Jim Rogers, whose opinion isn't one to take lightly, thinks things will come unraveling after the summer elections. He also very recently, after many months, finally changed gold from HOLD to (timid) BUY. Here's Max Keiser and Jim Rogers, with Jim explaining this very issue of paper inflating the supply:

http://www.youtube.com/watch?v=nwhzHy7FlEw

Yes and No to your question. But, it is much much darker than ETF's satisfying the public, as it doesn't. The ETF's are psychologically telling the public "Gold is losing value, is not a valuable store of wealth, etc." (So, you got that part right) And something very serious to consider, what Happens with the Winklevoss twins ETF and BTC. THE SAME THING CAN ATTEMPT TO BE DONE, but I doubt it will have the same affect, at least not for a while. It is why I hate the ETF for BTC. Why have an ETF for a digital currency??? Huh?

ETF's or selling gold puts have become a way of "controlling" the physical gold price. Most "regular people" have no idea about gold ETF's (it satisfies nothing), they just buy gold. But the hedge funds listen to what these people say and if they dump the price of gold, hedge funds add to the selling frenzy. It is quite manipulative and very very successful. It is actually like we have two gold markets, digital and physical and the digital rules. Think about that - a digital market for a physical assit sets the price. There is something very very sick about that.

There is next to NO GOLD in our vaults, it has been leased out. Again, look at Germany, they asked for 50% of their gold back and were told "2020". Can you imagine that!!!

I think I saw that video already. I trust what they (and many many others) have said regarding gold. Don't think of gold as an investment. There may come a time, not too far away, when gold will decouple with the US Dollar (as will BTC.) Runaway inflation and a collapsing currency can cause that, though the Dollar is still the world reserve and isn't crashing bad anytime soon, but it probably will.

[rpietila]

good to hear from you again, rpietila.

I feel that the Fibonacci levels hold true here also. After a sizable runup from $66 to $104, there should be retracement. If we dip down to any of the retracement levels and keep above the last week bottom, I will start to believe we are going up next.

sssshhh. Don't tell anyone... it's obvious the trend has reversed, but we need the bears in denial so we're be able to buy into strength.

It's a bull trap, don't buy!

The following 6-12 months will likely not see new highs, the infrastructure and sentiment are both currently so damaged. But bitcoin is antifragile, and I would not sell at these levels. I bought in at exactly these kind of general feelings after the bubble pop in 2011, and have not regretted it. The following 12 months will be the opportunity for the "1%" to buy into bitcoin. They already know, based on the events of 2013.

You bought in 2011? I thought you said something along the lines of having dismissed Bitcoin back then and regretting it.

Nice that you care about me Currently the doctor has promised "almost full recovery" by September. I will definitely eat my pills + live a quiet and controlled life from now on.

It is funny that people over-analyze bitcoin, even though it is still in microcap territory. Not now, but until not too many months, it will again rise with leaps and bounds, and still be so very small. The wisest people buy bitcoins now. They are cheap, and survived two bubbles. You can buy with rather big money. Everybody knows, but very few are in yet.

My regret of not buying bitcoin was in 2010. I bought first time near the post-bubble low in 2011.

Btw. Have you seen the silver that I redeemed you?

[Walsoraj]

good to hear from you again, rpietila.

I feel that the Fibonacci levels hold true here also. After a sizable runup from $66 to $104, there should be retracement. If we dip down to any of the retracement levels and keep above the last week bottom, I will start to believe we are going up next.

sssshhh. Don't tell anyone... it's obvious the trend has reversed, but we need the bears in denial so we're be able to buy into strength.

It's a bull trap, don't buy!

The following 6-12 months will likely not see new highs, the infrastructure and sentiment are both currently so damaged. But bitcoin is antifragile, and I would not sell at these levels. I bought in at exactly these kind of general feelings after the bubble pop in 2011, and have not regretted it. The following 12 months will be the opportunity for the "1%" to buy into bitcoin. They already know, based on the events of 2013.

You bought in 2011? I thought you said something along the lines of having dismissed Bitcoin back then and regretting it.

Nice that you care about me Currently the doctor has promised "almost full recovery" by September. I will definitely eat my pills + live a quiet and controlled life from now on.

It is funny that people over-analyze bitcoin, even though it is still in microcap territory. Not now, but until not too many months, it will again rise with leaps and bounds, and still be so very small. The wisest people buy bitcoins now. They are cheap, and survived two bubbles. You can buy with rather big money. Everybody knows, but very few are in yet.

My regret of not buying bitcoin was in 2010. I bought first time near the post-bubble low in 2011.

Btw. Have you seen the silver that I redeemed you?

I concur and further encourage everyone to buy only when they consider prices to be unreasonably high. It is wise to keep doing this until we hit $10,000 per bitcoin.

Why? So you can then brag to all your friends that you bought at a time when the price was considered outrageously high.

Bragging rights = priceless.

[Kazu]

why does 2013 have to follow 2011? making a proportional overlay is one thing, assuming that it's the same bubble dynamic is another fundamental leap in logic

It doesn't it is just in popular demand to compare it, and I thought I at least do it right.
e: I could probably tweak the scaling to come up with a more impressive match (scaling might be closer to 3 than 2.5) but I think everybody gets the point.

SO why exactly is scaling time 2.5/3 to 1 'right' and all other ways 'wrong'? Because sometimes it fits the chart better? And what if it starts going, will you scale it 4-5 to 1 to make it look like the bottom of the bubble? Honestly this comparison is meaningless. THe only way it would make any sense is if instead of randomly scaling the price, use a log scale to render that random scaling irrelevant, and put a 1:1 correspondence along the time axis. Or at least try to scale the time axis in some way thats somewhat meaningful, like the difference between the time from start of bubble (hard to define) to peak.