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Author Topic: Gold collapsing. Bitcoin UP.  (Read 1940483 times)
cypherdoc
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September 23, 2014, 02:17:53 AM
 #12541

if i'm right that the digital dollar has already defeated gold as a form of money, then it doesn't seem too far fetched at all that a significant portion of the $8T gold market can come into Bitcoin.  maybe even most of it.

Cool! Thanks for taking the time and effort for sharing your thesis. The digital dollar also doesn't have any annoying little ledger like the blockchain to get in the way of using the <CTL> P key ad infinitum.

i don't know how any gold bug can even argue with me that this defeat hasn't already happened and in fact has been going on for several decades.

gold has never been able to enforce fair interest rates or stop the Fed from printing.  we don't need to know anything else except for the fact that the price of gold has been languishing.  the only means for it to enforce that discipline would be for its price to skyrocket caused by, or as a result of, the masses fleeing to it as a safe haven.

for gold bugs to argue that we should put our hard earned savings into gold in the face of the events of the last few decades is like the NSA saying to trust it with our personal data despite the fact the Eric Snowden just stole all our data.
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September 23, 2014, 02:22:26 AM
 #12542

...
the point i am trying to make is that gold has already been defeated by a digital currency. it's just that the gold bugs can't conceptualize that. they continue to talk in terms of "paper money" and "printing" in relationship to a scarce, heavy, beautiful hunk of metal.  these terms are holdovers from an age gone by.  these physical constructs in their minds serve to embed their misunderstanding of what's been happening.  they misunderstand what's causing their frustrations. digital money is already here folks and it's working; just not ideally.  

when viewed from this perspective, Bitcoin suddenly makes alot of sense.  it is an even better digital money than the digital dollar that is not effected by politics or corruption.  and it can easily compete with the digital dollar through the efficiencies it brings, as it eliminates intermediaries, inflation, and costs.  it even works at the level of the individual where digital dollars can't compete.  and most importantly, it removes the Fed.
....

Thanks for the thesis, its posts like these that make the thread worthwhile. I agree with the above. For me it was the "fiat as technology" discussion earlier in the thread that helped me to start to think along these lines.

Previously I always focused on the "store of value" functionality of money above all other attributes. And in this aspect gold is definitely superior to fiat. But the "fiat as technology" FED comments started to help me see how fiat is in fact superior to gold in many other aspects. It is easier to instantaneously move, easier to protect (for a government), and easier to develop piles of consumer oriented services on top of (think visa, debit cards, etc). I've come to think this is what was originally meant by the "gold is a barbaric relic" comment. That comment says gold was something we had to use in ancient times, but we can improve on gold.

Yes the ultimate failing of fiat is the store of value component, but fiat is superior to gold in possibly all other aspects. And this is probably why the dollar defeated gold and why the gold bugs' "bank run on gold" vision never happened. Fiat is simply easier to use and so most people keep using it and so dollars defeated gold.

This line of thinking has made me even more bullish on bitcoin. If bitcoin is better than fiat on all the other attributes where fiat is better than gold, and then you add on Store of Value, then this experiment might be for real.
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September 23, 2014, 02:30:53 AM
 #12543

QE is primarily used to keep the banks afloat. Ostensibly the trillions the Fed hands over to the banks is supposed to be injected into the economy via business loans etc, but most of it is immediately loaned back to the Fed for which the Fed pays the banks interest. It's a neat system for the banks who would otherwise just die and it also allows the execs' bonuses to be paid. Some of the money also goes into the stock markets in order to maintain an appearance that the economy is something other than a complete trainwreck. But if any of the QE fake dollars were to go into the actual economy then it would be inflationary. Fundamentally the economy can't improve until the zombie banks die a natural death but the Fed won't let the banks die. Catch 22 limbo.
This.
Privatize the profits socialize the losses, Lemon socialism.
HeliKopterBen
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September 23, 2014, 03:01:38 AM
 #12544





I would take it a step further and say that most wealth storage and transfer is now digital.  Commodities can be owned through ETFs and futures contracts.  Stocks ownership is digital.  The problem is that this ownership is built on legacy systems and horribly insecure because of centralization, no backing collateral, and no smart contract enforcement.

Any attempts to digitize gold thus far have been crushed (egold).  The best we have now is the GLD ETF but it doesn't act as a currency.  In fact, as far as wealth storage is concerned, it is not very difficult to move between the GLD and spendable dollars and vice versa.  It just takes a few days once accounts are set up.  Unfortunately, the GLD is centralized and subject to counterparty risk.  If the GLD were to start acting as a currency it would probably have the same fate as egold.  The next best thing we have is bitcoin as money and services built on top of and around bitcoin that provide collateralized cryptographic proof of ownership of the physical world.

Counterfeit:  made in imitation of something else with intent to deceive:  merriam-webster
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September 23, 2014, 03:02:06 AM
 #12545

Quote
QE is primarily used to keep the banks afloat.

Great big neon sign on this one, government benefits massively.    Can they pay the interest on their debt at higher rates, not really
cypherdoc
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September 23, 2014, 03:07:57 AM
 #12546

it's really sad to listen to the die hard gold bugs frustration.  i can hear the heaviness and fatigue in Eric King's voice in all his interviews nowadays.  they are truly confused.

http://www.kingworldnews.com/kingworldnews/Broadcast/Entries/2014/9/21_Bill_Fleckenstein_files/Bill%20Fleckenstein%209%3A21%3A2014.mp3
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September 23, 2014, 03:09:54 AM
 #12547

Quote
QE is primarily used to keep the banks afloat.

Great big neon sign on this one, government benefits massively.    Can they pay the interest on their debt at higher rates, not really

but they don't have to.  the Fed keeps buying their bonds and shoving rates lower.  you know; black hole sh*t.

this is another sign of golds defeat.
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September 23, 2014, 03:16:05 AM
 #12548

if i'm right that the digital dollar has already defeated gold as a form of money, then it doesn't seem too far fetched at all that a significant portion of the $8T gold market can come into Bitcoin.  maybe even most of it.

Agreed. Gold has already failed us. It has failed because it was so easily supplanted by [digital] dollars and the powers behind them.

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September 23, 2014, 03:17:07 AM
 #12549

it's really sad to listen to the die hard gold bugs frustration.  i can hear the heaviness and fatigue in Eric King's voice in all his interviews nowadays.  they are truly confused.

http://www.kingworldnews.com/kingworldnews/Broadcast/Entries/2014/9/21_Bill_Fleckenstein_files/Bill%20Fleckenstein%209%3A21%3A2014.mp3

So true. It's only a matter of time. They either join us or become extinct...
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September 23, 2014, 03:18:05 AM
 #12550

Quote
QE is primarily used to keep the banks afloat.

Great big neon sign on this one, government benefits massively.    Can they pay the interest on their debt at higher rates, not really
Why should they care, there's always a group of suckers call taxpayers (aka the working class) who is responsible for this.
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September 23, 2014, 03:21:52 AM
 #12551

Excellent interview of Thomas Piketty, author on wealth inequality. He received quite a bit of criticism on this work but only because the book was so popular and threatening to the financial elite.

http://www.econtalk.org/archives/2014/09/thomas_piketty.html

He is a marxist, he wants to control everyone, be careful who you admire

George Reisman rips Picketty:

http://georgereismansblog.blogspot.de/2014/07/pikettys-capital-wrong_28.html

Reisman was a student of Mises and wrote the tome "Capitalism" although he still has some minarchist beliefs. Don't let that stop you from reading "Capitalism" - it is a superb explanation of Capitalism and a severe criticism of Socialism. His expose of how most environmentalist arguments are anti-human and anti-life is classic stuff.


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September 23, 2014, 04:32:29 AM
 #12552

yee haw!

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September 23, 2014, 05:26:41 AM
 #12553

https://twitter.com/zerohedge/status/514226342142156800
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September 23, 2014, 06:23:29 AM
 #12554

yee haw!



Great, we have the plane, now we need bombs to bomb Washington and liberate the world. Maybe Silkroad can help us Grin (hi, NSA)

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September 23, 2014, 06:53:04 AM
 #12555

I don't think that Gold's role has been played out yet. Taking Cypherdoc's essay as a reference point, all this bailout activity has given market players a tremendous faith in TPTB that the system will continue to survive. This belief is clearly visible in the stock market with very levitated prices and bond yields that make old widows cry.

As for gold, captain FIAT just hasn't lost enough control yet for the passengers to freak out. The concept of digital dollars probably has a significant impact on calming the passengers. Since Gold's tremendous run up from 2001 until 2011, the FED is simply winning this round's perception play. But there will be a final round that will be kind to anything not written on a piece of paper (or centrally stored on a computer).

The smartest are usually way ahead of their time. Just be patient and accumulate in the meantime.


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September 23, 2014, 07:57:06 AM
 #12556

if i'm right that the digital dollar has already defeated gold as a form of money, then it doesn't seem too far fetched at all that a significant portion of the $8T gold market can come into Bitcoin.  maybe even most of it.

Agreed. Gold has already failed us. It has failed because it was so easily supplanted by [digital] dollars and the powers behind them.


It failed because it went digital with the ETF invention.  Wonder what effect bitcoin ETF will be?  There may be a few large bitcoin ETF failures in the future as a learning process.
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September 23, 2014, 08:24:47 AM
 #12557

if i'm right that the digital dollar has already defeated gold as a form of money, then it doesn't seem too far fetched at all that a significant portion of the $8T gold market can come into Bitcoin.  maybe even most of it.

Cool! Thanks for taking the time and effort for sharing your thesis. The digital dollar also doesn't have any annoying little ledger like the blockchain to get in the way of using the <CTL> P key ad infinitum.

i don't know how any gold bug can even argue with me that this defeat hasn't already happened and in fact has been going on for several decades.

gold has never been able to enforce fair interest rates or stop the Fed from printing.  we don't need to know anything else except for the fact that the price of gold has been languishing.  the only means for it to enforce that discipline would be for its price to skyrocket caused by, or as a result of, the masses fleeing to it as a safe haven.

for gold bugs to argue that we should put our hard earned savings into gold in the face of the events of the last few decades is like the NSA saying to trust it with our personal data despite the fact the Eric Snowden just stole all our data.

This only says that the fiat is disconnected from gold, not that gold is not money.

The paper gold is inflating gold. Paper gold might go down the toilet, real gold still valuable. In fact, gold may have a renaissance with the rise of bitcoin; in a world of private, sound money, some may want to hold gold, and use bitcoin as change. Pay for something with gold, get some bitcoin in exchange, if you collect too much bitcoin to your liking, sweep up the change and buy back a gold coin. The characteristics of gold is sufficiently different from bitcoin that they may be used side by side.

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September 23, 2014, 09:32:38 AM
 #12558

Peter Schiff still coming out very strongly against Bitcoin: https://www.youtube.com/watch?v=lMfoFlJhcck&list=UUIjuLiLHdFxYtFmWlbTGQRQ

No valid arguments in the whole thing, but it does show his mindset pretty clearly.

Quote from: Peter Schiff
If you're still holding these bitcoins, DO NOT GO DOWN WITH THE SHIP. Go to my gold company, Schiff Gold... if you've got 30 or 40 bitcoins you can buy a few ounces of gold. At some point you may not be able to buy a pack of chewing gum with those bitcoins.
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September 23, 2014, 12:20:31 PM
 #12559

The situation we have, with hundreds of different fiat money, all sharing the same traits: Easy to expand base, controlled by politicians, tradable between them,  is inherently instable, IMO.  Due to speculation, they will all converge to one, probably USD.



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September 23, 2014, 02:55:24 PM
 #12560

Peter Schiff still coming out very strongly against Bitcoin: https://www.youtube.com/watch?v=lMfoFlJhcck&list=UUIjuLiLHdFxYtFmWlbTGQRQ

No valid arguments in the whole thing, but it does show his mindset pretty clearly.

Quote from: Peter Schiff
If you're still holding these bitcoins, DO NOT GO DOWN WITH THE SHIP. Go to my gold company, Schiff Gold... if you've got 30 or 40 bitcoins you can buy a few ounces of gold. At some point you may not be able to buy a pack of chewing gum with those bitcoins.

LOL,

Keep in mind who is on the other side of that trade for our "chewing gum money".
(He is)

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