rpietila Wall Observer - the Quality TA Thread ;)

[zimmah]

Monetary base is expanded but liquidity is siphoned out from the masses.

http://www.zerohedge.com/news/2014-06-02/ecuador-transfers-half-its-gold-reserves-goldman-sachs-exchange-liquidity

Ecuador agreed to transfer more than half its gold reserves to Goldman Sachs Group Inc. for three years as the government seeks to bolster liquidity.
 
The central bank said it will send 466,000 ounces of gold to Goldman Sachs, worth about $580 million at current prices, and get the same amount back three years from now.

Wow.  They really haven't been paying attention very much have they.

Ecuador:  Let me help you.  You're never getting that gold back.

I don't think ecuador has a lot of choice, the deal is probably done by some kind of blackmail or threat

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[BitDreams]

For some sexy chart animation, click the forward arrow at this link: https://www.tradingview.com/v/vdW6XF5v/

My projection is a rest @ 700-730, which is near the base before breakdown in January 2014.

[BitchicksHusband]

Monetary base is expanded but liquidity is siphoned out from the masses.

http://www.zerohedge.com/news/2014-06-02/ecuador-transfers-half-its-gold-reserves-goldman-sachs-exchange-liquidity

Ecuador agreed to transfer more than half its gold reserves to Goldman Sachs Group Inc. for three years as the government seeks to bolster liquidity.
 
The central bank said it will send 466,000 ounces of gold to Goldman Sachs, worth about $580 million at current prices, and get the same amount back three years from now.

Wow.  They really haven't been paying attention very much have they.

Ecuador:  Let me help you.  You're never getting that gold back.

I don't think ecuador has a lot of choice, the deal is probably done by some kind of blackmail or threat

Yeah, probably.  But they have to find some way to get Germany's gold back.

[isov]

über bullish case for bitcoin: Will we stay in this range?

Bitstamp 3d chart:

No, we are going to break out of it...
Upside...

[donut]

No, we are going to break out of it...
Upside...

That's what happened last time:

[Pruden]

Monetary base is expanded but liquidity is siphoned out from the masses. So there is money inflation at the top and deflation of  income at the bottom. This prevents prices in retail from skyrocketing as people can't really spend and merchants have to keep prices low - despite inadequate profit margins.

You seem to imply that corporate profit margins are low while they are at the highest level in history, which is the other side of the huge government and household deficits. Merchants can keep revenues and lower wages because the rest of the economy is taking money from the future.




For further reading: http://www.hussmanfunds.com/wmc/wmc130311.htm

[sidhujag]

reading the btce chart looks like we testing $620 then $600

[rpietila]

You seem to imply that corporate profit margins are low while they are at the highest level in history, which is the other side of the huge government and household deficits. Merchants can keep revenues and lower wages because the rest of the economy is taking money from the future.

The higher corporate profits, the less functional the economy. In a frictionless economy, the corporate profits would be in rapid tending towards zero. What we currently see is the opposite. The guardians of liberty have failed big time.

[ArticMine]

Monetary base is expanded but liquidity is siphoned out from the masses.

http://www.zerohedge.com/news/2014-06-02/ecuador-transfers-half-its-gold-reserves-goldman-sachs-exchange-liquidity

Ecuador agreed to transfer more than half its gold reserves to Goldman Sachs Group Inc. for three years as the government seeks to bolster liquidity.
 
The central bank said it will send 466,000 ounces of gold to Goldman Sachs, worth about $580 million at current prices, and get the same amount back three years from now.

Wow.  They really haven't been paying attention very much have they.

Ecuador:  Let me help you.  You're never getting that gold back.

I don't think ecuador has a lot of choice, the deal is probably done by some kind of blackmail or threat

Yeah, probably.  But they have to find some way to get Germany's gold back.

This situation with the German gold illustrates the massive advantage Bitcoin has over precious metals. It is way easier to take delivery of Bitcoin than of gold silver etc. When things get tough this can be critical.

My personal experience lies in comparing my dealings with both e-gold and MtGox. In both cases I got out with no loss of funds before the collapse. The difference is how I managed to get out. In the case of e-gold I had to convert my gold into CAD and take delivery of the CAD. In the case of MTGox I had to convert my CAD to BTC and take delivery of my BTC. In both cases I ended up keeping the "delivered" form of money, CAD for e-gold, BTC for MTGox.

[findftp]

My personal experience lies in comparing my dealings with both e-gold and MtGox. In both cases I got out with no loss of funds before the collapse. The difference is how I managed to get out. In the case of e-gold I had to convert my gold into CAD and take delivery of the CAD. In the case of MTGox I had to convert my CAD to BTC and take delivery of my BTC. In both cases I ended up keeping the "delivered" form of money, CAD for e-gold, BTC for MTGox.

Yeah, just like I got my bitcoin out of bitcoin-24.com when they collapsed.
People who were in FIAT are still waiting for their money. (after more than a year).

[ArticMine]

My personal experience lies in comparing my dealings with both e-gold and MtGox. In both cases I got out with no loss of funds before the collapse. The difference is how I managed to get out. In the case of e-gold I had to convert my gold into CAD and take delivery of the CAD. In the case of MTGox I had to convert my CAD to BTC and take delivery of my BTC. In both cases I ended up keeping the "delivered" form of money, CAD for e-gold, BTC for MTGox.

Yeah, just like I got my bitcoin out of bitcoin-24.com when they collapsed.
People who were in FIAT are still waiting for their money. (after more than a year).

The crucial point here is that gold is far worse than fiat in this context. So for ease of taking delivery we have

Best: Bitcoin and other crypto-currecnies
Middle: Fiat currencies USD, CAD, EUR etc.
Worst: Precious metals, gold, silver etc.

There is a reason why fiat was invented in the first place.

This is one of the reasons I expect both a very strong bull market in Bitcoin combined with a brutal bear market in gold and other precious metals. So we could see BTC / USD in the 100,000 to 1 million range or higher and 1 oz of gold dropping to 500 USD or even below 100 USD. In effect a major transfer of wealth from gold to Bitcoin, kind of like the move from horse powered transportation to motor transportation 110 years ago.

[tabnloz]

My personal experience lies in comparing my dealings with both e-gold and MtGox. In both cases I got out with no loss of funds before the collapse. The difference is how I managed to get out. In the case of e-gold I had to convert my gold into CAD and take delivery of the CAD. In the case of MTGox I had to convert my CAD to BTC and take delivery of my BTC. In both cases I ended up keeping the "delivered" form of money, CAD for e-gold, BTC for MTGox.

Yeah, just like I got my bitcoin out of bitcoin-24.com when they collapsed.
People who were in FIAT are still waiting for their money. (after more than a year).

The crucial point here is that gold is far worse than fiat in this context. So for ease of taking delivery we have

Best: Bitcoin and other crypto-currecnies
Middle: Fiat currencies USD, CAD, EUR etc.
Worst: Precious metals, gold, silver etc.

There is a reason why fiat was invented in the first place.

This is one of the reasons I expect both a very strong bull market in Bitcoin combined with a brutal bear market in gold and other precious metals. So we could see BTC / USD in the 100,000 to 1 million range or higher and 1 oz of gold dropping to 500 USD or even below 100 USD. In effect a major transfer of wealth from gold to Bitcoin, kind of like the move from horse powered transportation to motor transportation 110 years ago.

I agree that bitcoin wins out in this sense.

I have read though, in Rickards The Death of Money, that the gameplan of the big power blocs seems to be to drive down the price of PM's. One benefit of this is that the China's & Russia's can cheaply increase their gold holdings. Once it gets to 2.7 - 3 % of GDP, then, barring any kind of market crisis, the stage is set for the IMF to introduce SDR's which will include gold in the basket of currencies it is based on. This would significantly increase the fiat price of gold. Implicit to this is that the USD will cede its status as reserve currency.

In this case it might be gold up, bitcoin up?

[BBmodBB]

My personal experience lies in comparing my dealings with both e-gold and MtGox. In both cases I got out with no loss of funds before the collapse. The difference is how I managed to get out. In the case of e-gold I had to convert my gold into CAD and take delivery of the CAD. In the case of MTGox I had to convert my CAD to BTC and take delivery of my BTC. In both cases I ended up keeping the "delivered" form of money, CAD for e-gold, BTC for MTGox.

Yeah, just like I got my bitcoin out of bitcoin-24.com when they collapsed.
People who were in FIAT are still waiting for their money. (after more than a year).

The crucial point here is that gold is far worse than fiat in this context. So for ease of taking delivery we have

Best: Bitcoin and other crypto-currecnies
Middle: Fiat currencies USD, CAD, EUR etc.
Worst: Precious metals, gold, silver etc.

There is a reason why fiat was invented in the first place.

This is one of the reasons I expect both a very strong bull market in Bitcoin combined with a brutal bear market in gold and other precious metals. So we could see BTC / USD in the 100,000 to 1 million range or higher and 1 oz of gold dropping to 500 USD or even below 100 USD. In effect a major transfer of wealth from gold to Bitcoin, kind of like the move from horse powered transportation to motor transportation 110 years ago.

^isnt gold used on the computer boards that support bitcoin?...hmmm =O

[smoothie]

This ^ is awesome! CHOO CHOO TO DA MOOON!

[Wary]

there is nothing wrong with hoping you will live on bitcoin for the rest of your live. I would be fully availible for the cause: I would spread anarchism and try to code/help with projects. Try to increase adoption, etc.

+1

[ArticMine]

My personal experience lies in comparing my dealings with both e-gold and MtGox. In both cases I got out with no loss of funds before the collapse. The difference is how I managed to get out. In the case of e-gold I had to convert my gold into CAD and take delivery of the CAD. In the case of MTGox I had to convert my CAD to BTC and take delivery of my BTC. In both cases I ended up keeping the "delivered" form of money, CAD for e-gold, BTC for MTGox.

Yeah, just like I got my bitcoin out of bitcoin-24.com when they collapsed.
People who were in FIAT are still waiting for their money. (after more than a year).

The crucial point here is that gold is far worse than fiat in this context. So for ease of taking delivery we have

Best: Bitcoin and other crypto-currecnies
Middle: Fiat currencies USD, CAD, EUR etc.
Worst: Precious metals, gold, silver etc.

There is a reason why fiat was invented in the first place.

This is one of the reasons I expect both a very strong bull market in Bitcoin combined with a brutal bear market in gold and other precious metals. So we could see BTC / USD in the 100,000 to 1 million range or higher and 1 oz of gold dropping to 500 USD or even below 100 USD. In effect a major transfer of wealth from gold to Bitcoin, kind of like the move from horse powered transportation to motor transportation 110 years ago.

I agree that bitcoin wins out in this sense.

I have read though, in Rickards The Death of Money, that the gameplan of the big power blocs seems to be to drive down the price of PM's. One benefit of this is that the China's & Russia's can cheaply increase their gold holdings. Once it gets to 2.7 - 3 % of GDP, then, barring any kind of market crisis, the stage is set for the IMF to introduce SDR's which will include gold in the basket of currencies it is based on. This would significantly increase the fiat price of gold. Implicit to this is that the USD will cede its status as reserve currency.

In this case it might be gold up, bitcoin up?

This assumes that gold would be included in the SDR. The SDR is defined in terms of fiat currencies and does not include a gold component. In any case I just do not see the "big power blocks" or "gold is a barbarous relic" school of thought suddenly embracing gold.  The real demand for gold has been from the Austrian / Libertarian or "real money" school of thought not the Keynesian / central banker side. The trouble for gold is that Austrian / Libertarian or "real money" capital could very easily flee en mass to Bitcoin. In addition there is the indication that gold is due for a big correction, without even considering Bitcoin. If one takes a look at the inflation adjusted price of gold over the last 100 years http://inflationdata.com/Inflation/images/charts/Gold/Gold_inflation_chart.htm one sees a double top developing. If one puts all of this together one has the perfect storm for a brutal bear market in precious metals.

As for industrial uses of gold such as circuit boards yes it exists, but it is very small compared to the monetary value of gold. I lived through  the gold bear market of 1980 - 2000, which coincided with the rise of personal computer and the Internet. Still gold went from over 800 USD per ounce to close to 200 USD per once in 20 years, and this is in terms of the depreciating USD. The next gold bear could be worse.

[Chalkbot]

This ^ is awesome! CHOO CHOO TO DA MOOON!

Glad to see this one still popping up from time to time. 

[shmadz]

I have read though, in Rickards The Death of Money, that the gameplan of the big power blocs seems to be to drive down the price of PM's. One benefit of this is that the China's & Russia's can cheaply increase their gold holdings. Once it gets to 2.7 - 3 % of GDP, then, barring any kind of market crisis, the stage is set for the IMF to introduce SDR's which will include gold in the basket of currencies it is based on. This would significantly increase the fiat price of gold. Implicit to this is that the USD will cede its status as reserve currency.

In this case it might be gold up, bitcoin up?

sorry for barging in but I just wanted to address this part.


I agree that it appears that china, russia, many countries are buying - or foolishly trying and waiting to repatriate - gold.

but I don't think gold will save them. we don't need gold, and we don't need them.

what we need is an open and honest currency.

https://www.youtube.com/watch?v=KR3MgIPxb38

*edit, how do you rate Death of Money on a scale of 1 to 5? is it a good book? I like to read people that can write really well, and engage your imagination, so is it worth reading?

[MahaRamana]

My personal experience lies in comparing my dealings with both e-gold and MtGox. In both cases I got out with no loss of funds before the collapse. The difference is how I managed to get out. In the case of e-gold I had to convert my gold into CAD and take delivery of the CAD. In the case of MTGox I had to convert my CAD to BTC and take delivery of my BTC. In both cases I ended up keeping the "delivered" form of money, CAD for e-gold, BTC for MTGox.

Yeah, just like I got my bitcoin out of bitcoin-24.com when they collapsed.
People who were in FIAT are still waiting for their money. (after more than a year).

The crucial point here is that gold is far worse than fiat in this context. So for ease of taking delivery we have

Best: Bitcoin and other crypto-currecnies
Middle: Fiat currencies USD, CAD, EUR etc.
Worst: Precious metals, gold, silver etc.

There is a reason why fiat was invented in the first place.

This is one of the reasons I expect both a very strong bull market in Bitcoin combined with a brutal bear market in gold and other precious metals. So we could see BTC / USD in the 100,000 to 1 million range or higher and 1 oz of gold dropping to 500 USD or even below 100 USD. In effect a major transfer of wealth from gold to Bitcoin, kind of like the move from horse powered transportation to motor transportation 110 years ago.

I agree that bitcoin wins out in this sense.

I have read though, in Rickards The Death of Money, that the gameplan of the big power blocs seems to be to drive down the price of PM's. One benefit of this is that the China's & Russia's can cheaply increase their gold holdings. Once it gets to 2.7 - 3 % of GDP, then, barring any kind of market crisis, the stage is set for the IMF to introduce SDR's which will include gold in the basket of currencies it is based on. This would significantly increase the fiat price of gold. Implicit to this is that the USD will cede its status as reserve currency.

In this case it might be gold up, bitcoin up?

This assumes that gold would be included in the SDR. The SDR is defined in terms of fiat currencies and does not include a gold component. In any case I just do not see the "big power blocks" or "gold is a barbarous relic" school of thought suddenly embracing gold.  The real demand for gold has been from the Austrian / Libertarian or "real money" school of thought not the Keynesian / central banker side. The trouble for gold is that Austrian / Libertarian or "real money" capital could very easily flee en mass to Bitcoin. In addition there is the indication that gold is due for a big correction, without even considering Bitcoin. If one takes a look at the inflation adjusted price of gold over the last 100 years http://inflationdata.com/Inflation/images/charts/Gold/Gold_inflation_chart.htm one sees a double top developing. If one puts all of this together one has the perfect storm for a brutal bear market in precious metals.

As for industrial uses of gold such as circuit boards yes it exists, but it is very small compared to the monetary value of gold. I lived through  the gold bear market of 1980 - 2000, which coincided with the rise of personal computer and the Internet. Still gold went from over 800 USD per ounce to close to 200 USD per once in 20 years, and this is in terms of the depreciating USD. The next gold bear could be worse.

I see it as very unlikely that the bear market in gold will continue for much longer. The bull market was reversed only through blatant manipulation with the help of derivatives. Part of the Quantitative Easing money created is used to short gold. Gold as the ultimate physical store of value will not lose its status and will rise in fiat terms when the fiat ponzi starts crashing - yet most likely much less than BTC.
Real money thinking will move to Bitcoin, but Keynesian thinking will flee en masse to real money thinking when their views dissolve.
Most of the world still sees gold as the ultimate representation of wealth. A big proportion of the people will not shift so easily from a physical store of value conception to a digital store of value conception. People like gold, especially more so outside the western world.
Gold can easily do x10 (1000%) within the next 10 years - depending on the geopolitical and monetary unfolding.
Silver can do x50
Bitcoin can do x1000 (100,000%)

[MahaRamana]

I have read though, in Rickards The Death of Money, that the gameplan of the big power blocs seems to be to drive down the price of PM's. One benefit of this is that the China's & Russia's can cheaply increase their gold holdings. Once it gets to 2.7 - 3 % of GDP, then, barring any kind of market crisis, the stage is set for the IMF to introduce SDR's which will include gold in the basket of currencies it is based on. This would significantly increase the fiat price of gold. Implicit to this is that the USD will cede its status as reserve currency.

In this case it might be gold up, bitcoin up?

sorry for barging in but I just wanted to address this part.


I agree that it appears that china, russia, many countries are buying - or foolishly trying and waiting to repatriate - gold.

but I don't think gold will save them. we don't need gold, and we don't need them.

what we need is an open and honest currency.

https://www.youtube.com/watch?v=KR3MgIPxb38

Countries might benefit more if they would invest today in BTC rather than gold, but we are quite far from there imho.
Still countries will benefit more from investing in gold today rather than investing in US treasuries.
About your "we don't need them" - I don't know what group of people this "we" refers to so I cannot comment.

Humans love gold since as far as history can see - it will not change.
Humans need an open and honest currency, and gold.