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Author Topic: Gold: I smell a trap  (Read 78356 times)
cypherdoc
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August 10, 2011, 02:23:45 AM
 #61

NO.  what we're looking at is Phase 2 of the same story which will be worse and much more brutal to everything including gold.

The influence the US wields in the global arena has diminished. It has become much more difficult to manipulate circumstances for its own benefit.

Precious metals downside is limited. Imminent re-inflation efforts, whether publicized or surreptitious, will continue propping up equities at the expense of the dollar.

its clear you're an inflationist and i a deflationist.  this is a very common debate and distinction.  i think we're at a fundamental turning point in history.  you linearly extrapolate from the past.  thats ok.  we'll see.
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August 10, 2011, 02:25:41 AM
 #62

Oh lord the deflationist, inflationist arguement.

 Roll Eyes
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August 10, 2011, 02:30:44 AM
 #63

Defining inflation as an increase in the supply of money, I just don't see how inflation won't be smacking US residents hard, and soon (as if it already hasn't been affecting us!)

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The idea that deflation causes hoarding (to any problematic degree) is a lie used to justify theft of value from your savings.
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August 10, 2011, 02:32:24 AM
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its clear you're an inflationist and i a deflationist.  this is a very common debate and distinction.  i think we're at a fundamental turning point in history.  you linearly extrapolate from the past.  thats ok.  we'll see.

Agreed. Maybe were both right?! Maybe deflation near term and inflation after 1 or 2 yrs? Maybe were both predicting same scenarios but different times?

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August 10, 2011, 02:43:47 AM
 #65

We've discussed my stance elsewhere, notably that there will be overall deflation in certain asset classes and inflation in others. I apply what is relevant based on underlying aspects, especially capital flows.

There is no one-size-fits-all definition. I agree that we may not be on the same page. Best of luck with your trading - be nimble.

Maybe deflation near term and inflation after 1 or 2 yrs? Maybe were both predicting same scenarios but different times?

All economies and societies are dynamic. Inflation and deflation can occur concurrently across disparate asset classes and at various scales. We just tend to limit our perspectives by thinking in terms of static snapshots and linear projections.
cypherdoc
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August 10, 2011, 02:51:09 AM
 #66

We've discussed my stance elsewhere, notably that there will be overall deflation in certain asset classes and inflation in others. I apply what is relevant based on underlying aspects, especially capital flows.

There is no one-size-fits-all definition. I agree that we may not be on the same page. Best of luck with your trading - be nimble.

Maybe deflation near term and inflation after 1 or 2 yrs? Maybe were both predicting same scenarios but different times?

All economies and societies are dynamic. Inflation and deflation can occur concurrently across disparate asset classes and at various scales. We just tend to limit our perspectives by thinking in terms of static snapshots and linear projections.

its pretty clear the last 2 cycles down from 10/07 to 3/09 and up from 3/09 to now EVERYTHING moved inversely to the USD.  and if you pull out further and look from 1913 to now with the 98% or so loss in value of the USD EVERYTHING else has moved up in price?
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August 10, 2011, 03:01:10 AM
 #67

i need to clarify.  yes at transition pts btwn cycles at peaks and troughs, deflation and inflation can be seen across diff asset classes but when the swings get in gear to either the upside or downside, inverse correlations to the USD and an all one market effect gets well established.   as a believer in boom bust cycles i see this in most  recent past cycles.
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August 10, 2011, 03:45:27 AM
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We've discussed my stance elsewhere, notably that there will be overall deflation in certain asset classes and inflation in others. I apply what is relevant based on underlying aspects, especially capital flows.

There is no one-size-fits-all definition. I agree that we may not be on the same page. Best of luck with your trading - be nimble.

Maybe deflation near term and inflation after 1 or 2 yrs? Maybe were both predicting same scenarios but different times?

All economies and societies are dynamic. Inflation and deflation can occur concurrently across disparate asset classes and at various scales. We just tend to limit our perspectives by thinking in terms of static snapshots and linear projections.

you've said a coupla times that foreigners are much less dependent on the USD.  explain this:

http://www.businessinsider.com/fed-swap-lines-european-banks-2011-6

also explain why most of the TARP funds back in 2008 were extended to foreign banks, esp European to bailout their individual overleveraged banks.  

i'll tell you why.  the USD is and remains the reserve currency of the world upon which other foreign central banks leverage their own currencies.  its like a reverse pyramid with the USD at the bottom and extending outward to foreign currencies.  60% of loans worldwide are denominated in USD's.  when the shit hits the fan all these foreign banks need USD swap lines to cover the imploding assets debt.  

we are now entering phase 2 of the crisis and you're going to see demand for USD increase significantly from here as Europe starts to implode.  

edit:  did June's swap lines have anything to do with stocks starting their roll in May?  i think so.
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August 10, 2011, 04:14:47 AM
 #69

Imminent re-inflation efforts, whether publicized or surreptitious, will continue propping up equities at the expense of the dollar.

would you care to bet 100 BTC or $1000 that the Dow will be lower one year from now than it is today?

edit:  to be held in escrow of course.
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August 10, 2011, 04:23:21 AM
 #70

its my feeling that we're going to do a Japan.  we're going to push on a string for the foreseeable future not getting anywhere with 0% interest rates which effectively kills all markets and savers/producers.  all productive capital gets siphoned off to the elites who are well connected to their bought off politicians who keep passing bills in their favor.  banks will be allowed to the extent possible to mark to model their rotting assets dangling a permanent cloud over our economy.  our stock mkt will erode just like the Nikkei as long standing deflation sets in.  not much will do well.  perhaps bitcoin can save us.
cypherdoc
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August 10, 2011, 05:14:16 AM
 #71



this is the silver daily chart for the past year.  as i've said, i think its rolling over to the downside.

i'm not your financial advisor and i'm just a voice on the internet and i wouldn't want to be responsible for any bad advice.

what i can tell you is what i've done.  i started buying bags of junk silver back btwn 2005-7 btwn $9-$12.  i sold them 2 mo ago btwn $38-$48.  for me it was a nice profit and i think i pretty much top ticked it.  i took the funds and started buying BTC at $1.60.  this has REALLY worked out well for me.

you gotta make your own decisions man.
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August 10, 2011, 05:16:32 AM
 #72

sorry for the size of the photos.  anyone care to tell me how to downsize them?  they're screenshots from my computer.
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August 10, 2011, 05:19:31 AM
 #73

If you don't need the cash and don't have debt, I'd say to hold on to them.

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August 10, 2011, 05:21:01 AM
 #74

An interesting audio interview: Why are people so eager to make predictions?  because there's no consequence for making wrong predictions.

http://marketplace.publicradio.org/display/web/2011/08/09/pm-freakonomics-why-are-we-so-bad-at-predicting-the-future/
cypherdoc
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August 10, 2011, 05:23:08 AM
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An interesting audio interview: Why are people so eager to make predictions?  because there's no consequence for making wrong predictions.

http://marketplace.publicradio.org/display/web/2011/08/09/pm-freakonomics-why-are-we-so-bad-at-predicting-the-future/


did you not notice that i'm willing to bet him 100 BTC or $1000 to be held in escrow that the Dow will be lower one year from now than today?
bitcool
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August 10, 2011, 05:28:52 AM
 #76

An interesting audio interview: Why are people so eager to make predictions?  because there's no consequence for making wrong predictions.

http://marketplace.publicradio.org/display/web/2011/08/09/pm-freakonomics-why-are-we-so-bad-at-predicting-the-future/


did you not notice that i'm willing to bet him 100 BTC or $1000 to be held in escrow that the Dow will be lower one year from now than today?
I noticed. yes, it's a prediction. I don't bet on coin flips.
cypherdoc
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August 10, 2011, 05:32:07 AM
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An interesting audio interview: Why are people so eager to make predictions?  because there's no consequence for making wrong predictions.

http://marketplace.publicradio.org/display/web/2011/08/09/pm-freakonomics-why-are-we-so-bad-at-predicting-the-future/


did you not notice that i'm willing to bet him 100 BTC or $1000 to be held in escrow that the Dow will be lower one year from now than today?
I noticed. yes, it's a prediction. I don't bet on coin flips.

yes but it has a consequence. and i didn't ask you.  the offer was to miscreanity.
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August 10, 2011, 05:52:36 AM
 #78

An interesting audio interview: Why are people so eager to make predictions?  because there's no consequence for making wrong predictions.

http://marketplace.publicradio.org/display/web/2011/08/09/pm-freakonomics-why-are-we-so-bad-at-predicting-the-future/


did you not notice that i'm willing to bet him 100 BTC or $1000 to be held in escrow that the Dow will be lower one year from now than today?
I noticed. yes, it's a prediction. I don't bet on coin flips.

yes but it has a consequence. and i didn't ask you.  the offer was to miscreanity.
it's not a "consequence", statistically you got 50% chance to be right.
cypherdoc
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August 10, 2011, 12:42:10 PM
 #79

An interesting audio interview: Why are people so eager to make predictions?  because there's no consequence for making wrong predictions.

http://marketplace.publicradio.org/display/web/2011/08/09/pm-freakonomics-why-are-we-so-bad-at-predicting-the-future/


did you not notice that i'm willing to bet him 100 BTC or $1000 to be held in escrow that the Dow will be lower one year from now than today?
I noticed. yes, it's a prediction. I don't bet on coin flips.

yes but it has a consequence. and i didn't ask you.  the offer was to miscreanity.
it's not a "consequence", statistically you got 50% chance to be right.


do you have any idea how ridiculous what you just said is? 
miscreanity
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August 10, 2011, 02:39:30 PM
 #80

We both have an interest in Bitcoin (my main hobby at the moment) and I offered a suggestion regarding precious metals based on years of experience. Your choice was to take it or leave it rather than start a public crusade from a private conversation. Hopefully at least some readers will benefit. Now for a long, consolidated reply...

would you care to bet 100 BTC or $1000 that the Dow will be lower one year from now than it is today?

Why? I already told you I'm not interested in a pissing contest. When I trade, it's generally for the long-haul and on my own terms. Being right and doing nothing until the market shifts can be extremely difficult, as it involves ignoring the noise.

If you're feeling threatened or intimidated, reply to some of the detailed comments I've made on a rational basis instead of making challenges and wild speculation. For instance, your first post for this thread included a good rationale and enumerated your reasoning. Let's get back to the economics of the matter before this gets moved to the speculation sub-thread.

No printing necessary for monetary inflation
https://bitcointalk.org/index.php?topic=35956.msg443739#msg443739

Paper vs. Physical
https://bitcointalk.org/index.php?topic=35956.msg444903#msg444903

After whatever temporary correction occurs, gold is going to continue higher to breach $2,000/oz. Obviously nothing goes in a straight line and there's going to be unbelievable resistance, but that doesn't change the long-term uptrend. I don't know how much farther it'll go beyond $2,000, but I assume that it'll be about double from the prior channel breakout of around $1,600-1,650. Meanwhile, I'll be glad to sell you Silver Wheaton when you've had enough red and decide to cover at a real high.

you've said a coupla times that foreigners are much less dependent on the USD.  explain this:

http://www.businessinsider.com/fed-swap-lines-european-banks-2011-6

also explain why most of the TARP funds back in 2008 were extended to foreign banks, esp European to bailout their individual overleveraged banks.  

i'll tell you why.  the USD is and remains the reserve currency of the world upon which other foreign central banks leverage their own currencies.  its like a reverse pyramid with the USD at the bottom and extending outward to foreign currencies.  60% of loans worldwide are denominated in USD's.  when the shit hits the fan all these foreign banks need USD swap lines to cover the imploding assets debt.  

we are now entering phase 2 of the crisis and you're going to see demand for USD increase significantly from here as Europe starts to implode.  

edit:  did June's swap lines have anything to do with stocks starting their roll in May?  i think so.

Please provide an exact quote regarding the statement of foreigners being "less dependent" on dollars. I'd like to know where I wrote that; I believe my statement was that the world has shrinking desire to hold USD - nothing to do with dependency. If anything, the US is dependent upon the rest of the world to keep the game going.

There is no definitive profit incentive with the established swap lines. They are necessary to facilitate liquidity and an attempt to reduce volatility in exchange rates occurring due to large capital flows from one region to another. If you see this differently, please elaborate.

Whether you view the USD-based global economy as an inverted pyramid or bubbles on top of bubbles, either way failure above leads to increasing deflationary pressure further down. Think about the implications of a collapse - the US has the most to lose and would be severely crushed, hence the strong incentive to prop the entire world up. This is being done by monetizing debt without actual realization of the expected value, so the entire system will become incredibly fragile. I find it very improbable that a system of such magnitude will be able to hold together with a skeletal support racked by osteoporosis.

The consequence of monetization is inflation even as many tangible goods experience deflation. Be careful not to mistake velocity of US dollars for demand; volume (quantity) does not equal quality. Again, ensure that you understand the concept of bad money driving out good money.

its my feeling that we're going to do a Japan.  we're going to push on a string for the foreseeable future not getting anywhere with 0% interest rates which effectively kills all markets and savers/producers.  all productive capital gets siphoned off to the elites who are well connected to their bought off politicians who keep passing bills in their favor.  banks will be allowed to the extent possible to mark to model their rotting assets dangling a permanent cloud over our economy.  our stock mkt will erode just like the Nikkei as long standing deflation sets in.  not much will do well.  perhaps bitcoin can save us.

Agreed. There are some key differences, but overall it's a similar path. Japan's currency inflated while the real economy deflated. I don't know if Bitcoin will save so much as provide an escape.

this is the silver daily chart for the past year.  as i've said, i think its rolling over to the downside.

All you're looking at is one year? Are you aware of seasonality? For the past few years, the start has been marked by a decline and slow rise to the middle of the year. During the latter half of the year, the precious metals tend to take off without looking back. Are you suggesting that the world's problems have gone away and that this pattern is irrelevant? I don't see how anything has changed - in fact, things seem to have gotten worse.

Since you're analyzing charts, it should be obvious that the high at the end of April was followed by tests of support around $32. After that, there was a higher low followed by a higher high. It could also be argued that the consolidation pattern is in a rising channel. I don't see any long-term trend lines to mark major support points, nor moving averages. Where is the 50-day moving average, or the 200-dma? MACD? Fibonacci levels? Negative divergences? Index ratios?

Are you taking into account anything behind the scenes? Capital flows? Warehouse supply levels? Cost of manufacturing or mining? Corporate hedging on future returns? Political environments, worker strikes and nationalization efforts? International demand outside of the US and Europe?

Daily gyrations do not make a trend.

do you have any idea how ridiculous what you just said is? 

Take ten deep breaths and go grab a beer.
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