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Author Topic: Gold collapsing. Bitcoin UP.  (Read 1807329 times)
notme
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May 22, 2012, 11:10:25 PM
 #1521



So long as there is a mechanism to take delivery expeditiously at the stated rates of exchange, then its not fractionalized.  

there is no way to take delivery of pm's on a global scale expeditiously.  that's the point.

We run out of cargo jets or sumpin??

Are you really going to mail in gold coins to pay your gas bill?

Is someone from Algeria really going to DHL gold to Chicago to pay the rent on their oil tanker?

lol, what you want every transaction to be in physical?  You can't have some in physical and some in paper??  Roll Eyes

I believe the topic was international settlements.  The problems with paper in this area have been addressed.

Settle up every few weeks with cargo jets.  *shrug*  In WW2 they used boats filled with gold and silver, but its the modern age, jets will work just as well..

As soon as a default risk appears, people won't do business with them unless they can settle on the spot.  If this means moving gold across the globe their cost of doing business skyrockets.  Can you imagine the newsmakers spreading rumors and forcing countries to go bankrupt even when they were fine before business became prohibitively expensive?  I can.

https://www.bitcoin.org/bitcoin.pdf
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miscreanity
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May 22, 2012, 11:10:53 PM
 #1522

there is no way to take delivery of pm's on a global scale expeditiously.  that's the point.

How much gold do you need? How many gold dealers are there around the world? Don't they generally have several dozen to a few hundred ounces available most of the time, even in poorer countries?

Do you walk around with wads of cash in your pocket, just in case you need to buy a condo on a whim? Why would you have to do the same with gold?

If I want to transfer my gold assets from Calgary to Quito, I can contact my gold dealer and have him get in touch with a Quito dealer. If he has a contact there already, great - there's a trusted network already set up. If not, he can inform the Quito dealer how much I purchased and then digitally exchange the balance using a contemporary currency.

When I go to Quito, I can either pick up my metal from the dealer there or keep it there in storage for a fee if that service is offered. Either way, my gold has moved without moving. If I need to move tons at a time, there would simply have to be larger nodes involved as close as possible to the destination.

In a stable worldwide economy, moving that much around would be exceedingly rare, especially with gold revalued into the tens of thousands of dollars level. How often would most people need to transfer an ounce at a value of an average American's yearly salary. Using Bitcoin instead of fiat for transfer would be more reliable, safer, and definitely faster for large amounts.

A global financial system with gold integrated into it is viable now just using gold dealers - not even banks. The physical asset doesn't have to move but locally!
silverbox
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May 22, 2012, 11:11:53 PM
 #1523



That's the thing though. Once you add that abstraction layer you can not prevent it from becoming fractionalized.


We been over this, of course you can, so long as a good chunk of the peeps keep the majority of their assets in physical.  It's all a matter of whether you trust the bank more, or your neighbors.. Wink

Back around again... They won't. History is a remarkably consistent guide on this matter.

So then the peeps have made their beds Smiley  and the goose has been cooked, some peeps are on top, some are in the in the middle, some are at the bottom..

Nothing to see here move along Wink.  The people can't learn from history Wink
tvbcof
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May 22, 2012, 11:13:04 PM
 #1524

In a nutshell, yup.  That would be at the root of the problems I would expect.

Ok, and Bitcoin is susceptible to the same type of concentration. That comes back to what we were discussing as the potential for merged mining blockchains to develop into a "lateral reserve" system. By using merged mining, an alt chain can start at nearly full-strength by utilizing the same processing for security and stability as Bitcoin. Adoption of the alternative could follow rather than be a pre-requisite for growth. Try that with fiat Smiley

Ya.  In my dream fantasy-land, a multitude of crypto-currencies are constantly growing, shrinking, being born, dying, and most importantly, evolving.

The peeps choose freely what they want to uses.  Cornering and abuse of a particular crypto-currency would hasten it's demise into the dustbin of history, and the a-holes who ruined it would be out whatever it cost them to get in in the first place.

Merged mining could tie the crypto-currencies together tightly enough so that they all realized certain benefits complements of the group, but not so tightly than any one really effected any other in a tangible way.

This is the picture I was trying to paint with the 'bakcoin' idea.


miscreanity
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May 22, 2012, 11:17:24 PM
 #1525

lol, what you want every transaction to be in physical?  You can't have some in physical and some in papar??  Roll Eyes

That's the thing though. Once you add that abstraction layer you can not prevent it from becoming fractionalized.

This is where Bitcoin comes in. Rather than being restrained in the physical space but unrestricted in the financial arena (leading to fractionalization), with Bitcoin there are limits in both the physical and finance. Fractionalization can then only occur outside of Bitcoin, allowing for a steady ratio between gold and Bitcoin, unfettered by fiat issues.
silverbox
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May 22, 2012, 11:17:55 PM
 #1526



So long as there is a mechanism to take delivery expeditiously at the stated rates of exchange, then its not fractionalized.  

there is no way to take delivery of pm's on a global scale expeditiously.  that's the point.

We run out of cargo jets or sumpin??

Are you really going to mail in gold coins to pay your gas bill?

Is someone from Algeria really going to DHL gold to Chicago to pay the rent on their oil tanker?

lol, what you want every transaction to be in physical?  You can't have some in physical and some in paper??  Roll Eyes

I believe the topic was international settlements.  The problems with paper in this area have been addressed.

Settle up every few weeks with cargo jets.  *shrug*  In WW2 they used boats filled with gold and silver, but its the modern age, jets will work just as well..

As soon as a default risk appears, people won't do business with them unless they can settle on the spot.  If this means moving gold across the globe their cost of doing business skyrockets.  Can you imagine the newsmakers spreading rumors and forcing countries to go bankrupt even when they were fine before business became prohibitively expensive?  I can.

The cost of moving gold isn't very high, international wires aren't free either..  I can't imagine that at all, if you can't settle up on the spot, then you probably shouldn't be making the purchase..  
notme
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May 22, 2012, 11:19:33 PM
 #1527



So long as there is a mechanism to take delivery expeditiously at the stated rates of exchange, then its not fractionalized.  

there is no way to take delivery of pm's on a global scale expeditiously.  that's the point.

We run out of cargo jets or sumpin??

Are you really going to mail in gold coins to pay your gas bill?

Is someone from Algeria really going to DHL gold to Chicago to pay the rent on their oil tanker?

lol, what you want every transaction to be in physical?  You can't have some in physical and some in paper??  Roll Eyes

I believe the topic was international settlements.  The problems with paper in this area have been addressed.

Settle up every few weeks with cargo jets.  *shrug*  In WW2 they used boats filled with gold and silver, but its the modern age, jets will work just as well..

As soon as a default risk appears, people won't do business with them unless they can settle on the spot.  If this means moving gold across the globe their cost of doing business skyrockets.  Can you imagine the newsmakers spreading rumors and forcing countries to go bankrupt even when they were fine before business became prohibitively expensive?  I can.

The cost of moving gold isn't very high, international wires aren't free either..  I can't imagine that at all, if you can't settle up on the spot, then you probably shouldn't be making the purchase..  

Quote
You can't have some in physical and some in paper??  Roll Eyes

What do you think paper is?  It's a promise to settle later.

https://www.bitcoin.org/bitcoin.pdf
While no idea is perfect, some ideas are useful.
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silverbox
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May 22, 2012, 11:24:56 PM
 #1528



Settle up every few weeks with cargo jets.  *shrug*  In WW2 they used boats filled with gold and silver, but its the modern age, jets will work just as well..

As soon as a default risk appears, people won't do business with them unless they can settle on the spot.  If this means moving gold across the globe their cost of doing business skyrockets.  Can you imagine the newsmakers spreading rumors and forcing countries to go bankrupt even when they were fine before business became prohibitively expensive?  I can.

The cost of moving gold isn't very high, international wires aren't free either..  I can't imagine that at all, if you can't settle up on the spot, then you probably shouldn't be making the purchase..  

Quote
You can't have some in physical and some in paper??  Roll Eyes

What do you think paper is?  It's a promise to settle later.

ok??  and how does that mean that if your a default risk you shouldn't be required to settle on the spot??

Go lend Dank some BTC if you think everyone should be given credit..
miscreanity
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May 22, 2012, 11:27:28 PM
 #1529

there is no way to take delivery of pm's on a global scale expeditiously.  that's the point.

How much gold do you need? How many gold dealers are there around the world? Don't they generally have several dozen to a few hundred ounces available most of the time, even in poorer countries?

Do you walk around with wads of cash in your pocket, just in case you need to buy a condo on a whim? Why would you have to do the same with gold?

If I want to transfer my gold assets from Calgary to Quito, I can contact my gold dealer and have him get in touch with a Quito dealer. If he has a contact there already, great - there's a trusted network already set up. If not, he can inform the Quito dealer how much I purchased and then digitally exchange the balance using a contemporary currency.

When I go to Quito, I can either pick up my metal from the dealer there or keep it there in storage for a fee if that service is offered. Either way, my gold has moved without moving. If I need to move tons at a time, there would simply have to be larger nodes involved as close as possible to the destination.

In a stable worldwide economy, moving that much around would be exceedingly rare, especially with gold revalued into the tens of thousands of dollars level. How often would most people need to transfer an ounce at a value of an average American's yearly salary. Using Bitcoin instead of fiat for transfer would be more reliable, safer, and definitely faster for large amounts.

A global financial system with gold integrated into it is viable now just using gold dealers - not even banks. The physical asset doesn't have to move but locally!

The scale you are talking about is personal spending, not large-scale international commerce.

See the bolded parts.

Using gold as a reference/reserve and marking to market daily as the Euro does, trends can be spotted quickly. It isn't necessary to transfer gold back and forth constantly, only at thresholds - e.g. BoP settlement is initiated at 5% of GDP. That could take months or even years. With daily feedback, the sample size should be great enough for financial firms to take rapid corrective action by slowing investments in less effective ventures while increasing others.

In concert with Bitcoin, balance of payments transactions could actually be conducted daily. This way, there would be an imbalance in the ratio of Bitcoin to gold present between two separate entities (banks, corporations, nations, etc). Failure of a cryptocurrency is necessarily greater than that of gold (at present), so there would be a somewhat greater risk to holding Bitcoins over gold. This incentive would spur the primary Bitcoin holder to acquire more gold.
silverbox
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May 22, 2012, 11:29:14 PM
 #1530


I believe the topic was international settlements.  The problems with paper in this area have been addressed.

Settle up every few weeks with cargo jets.  *shrug*  In WW2 they used boats filled with gold and silver, but its the modern age, jets will work just as well..

Since that time energy costs, and the size of economies accross the globe have skyrocketed. It's not the same anymore.

Now, if you really want to scale back to WW2 levels of global development...

So kick up the value of gold to match the worldwide economy/developement level...  Its just a means to keep score, if that much weight of gold is required to settle up for smaller transactions obviously the value of gold is too low..  Oh wait we have.. gold is 1600 an ounce now, not 30.. Wink
cypherdoc
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May 22, 2012, 11:35:49 PM
 #1531



The cost of moving gold isn't very high, international wires aren't free either..  I can't imagine that at all, if you can't settle up on the spot, then you probably shouldn't be making the purchase..  

have you ever heard of pirates?
notme
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May 22, 2012, 11:38:23 PM
 #1532



Settle up every few weeks with cargo jets.  *shrug*  In WW2 they used boats filled with gold and silver, but its the modern age, jets will work just as well..

As soon as a default risk appears, people won't do business with them unless they can settle on the spot.  If this means moving gold across the globe their cost of doing business skyrockets.  Can you imagine the newsmakers spreading rumors and forcing countries to go bankrupt even when they were fine before business became prohibitively expensive?  I can.

The cost of moving gold isn't very high, international wires aren't free either..  I can't imagine that at all, if you can't settle up on the spot, then you probably shouldn't be making the purchase..  

Quote
You can't have some in physical and some in paper??  Roll Eyes

What do you think paper is?  It's a promise to settle later.

ok??  and how does that mean that if your a default risk you shouldn't be required to settle on the spot??

Go lend Dank some BTC if you think everyone should be given credit..

Markets sometimes follow rumors more than reality... Should your cost of doing business really be exposed to a 10% rise if someone plants a few false seeds in the media?  Sure, it's no worse than the current situation, I'm just saying Bitcoin would be superior and thus eventually it will win out as long as the internet and globalized trading continue.

https://www.bitcoin.org/bitcoin.pdf
While no idea is perfect, some ideas are useful.
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miscreanity
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May 22, 2012, 11:41:04 PM
 #1533

So kick up the value of gold to match the worldwide economy/developement level...  Its just a means to keep score, if that much weight of gold is required to settle up for smaller transactions obviously the value of gold is too low..  Oh wait we have.. gold is 1600 an ounce now, not 30.. Wink

Right now the battle is to control the majority of all available gold supply. As long as there is still physical present that can be extracted from current holders, and no other catastrophic catalysts occur, the game continues. Basically, anyone who can be persuaded or forced to sell his physical holdings is a target and will be squeezed until there is barely any but direct mine supply available from mining operations that can't be nationalized.

That's when revaluation is guaranteed. It's a possibility at any point from now until then - the probability just increases until that limit is reached.

The concern that tvbcof expressed about excessive concentration is real and valid. If there is too great a centralized holding of gold, whatever authority has it will wield an undue amount of influencing power. Yet again, that's where Bitcoin comes in Smiley
silverbox
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May 22, 2012, 11:42:19 PM
 #1534



The cost of moving gold isn't very high, international wires aren't free either..  I can't imagine that at all, if you can't settle up on the spot, then you probably shouldn't be making the purchase..  

have you ever heard of pirates?

yup.. Have you ever heard of identity theft, chargebacks, wire fraud??
silverbox
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May 22, 2012, 11:44:16 PM
 #1535



Settle up every few weeks with cargo jets.  *shrug*  In WW2 they used boats filled with gold and silver, but its the modern age, jets will work just as well..

As soon as a default risk appears, people won't do business with them unless they can settle on the spot.  If this means moving gold across the globe their cost of doing business skyrockets.  Can you imagine the newsmakers spreading rumors and forcing countries to go bankrupt even when they were fine before business became prohibitively expensive?  I can.

The cost of moving gold isn't very high, international wires aren't free either..  I can't imagine that at all, if you can't settle up on the spot, then you probably shouldn't be making the purchase..  

Quote
You can't have some in physical and some in paper??  Roll Eyes

What do you think paper is?  It's a promise to settle later.

ok??  and how does that mean that if your a default risk you shouldn't be required to settle on the spot??

Go lend Dank some BTC if you think everyone should be given credit..

Markets sometimes follow rumors more than reality... Should your cost of doing business really be exposed to a 10% rise if someone plants a few false seeds in the media?  Sure, it's no worse than the current situation, I'm just saying Bitcoin would be superior and thus eventually it will win out as long as the internet and globalized trading continue.

10% rise?? wtf it doesn't cost $2000 to airmail 1 lb... 
tvbcof
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May 22, 2012, 11:50:33 PM
 #1536



The cost of moving gold isn't very high, international wires aren't free either..  I can't imagine that at all, if you can't settle up on the spot, then you probably shouldn't be making the purchase..  

have you ever heard of pirates?

yup.. Have you ever heard of identity theft, chargebacks, wire fraud??

All of these enumerated problems and many more can go out the window with a well regulated cashless one-world currency and adequate biometric and individual tracking solutions.

I'm looking forward (with horror) to these selling points to be massively popular with a majority of my fellow peeps.  And those who are in need of corp/gov assistance for their basic necessities of life probably won't even need to have an opinion on the matter.


cypherdoc
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May 22, 2012, 11:51:54 PM
 #1537

So kick up the value of gold to match the worldwide economy/developement level...  Its just a means to keep score, if that much weight of gold is required to settle up for smaller transactions obviously the value of gold is too low..  Oh wait we have.. gold is 1600 an ounce now, not 30.. Wink

Right now the battle is to control the majority of all available gold supply. As long as there is still physical present that can be extracted from current holders, and no other catastrophic catalysts occur, the game continues. Basically, anyone who can be persuaded or forced to sell his physical holdings is a target and will be squeezed until there is barely any but direct mine supply available from mining operations that can't be nationalized.

That's when revaluation is guaranteed. It's a possibility at any point from now until then - the probability just increases until that limit is reached.

The concern that tvbcof expressed about excessive concentration is real and valid. If there is too great a centralized holding of gold, whatever authority has it will wield an undue amount of influencing power. Yet again, that's where Bitcoin comes in Smiley

my point is you don't need gold.  Bitcoin can serve as a reserve standard beneath a fiat system.

chodpaba's point about an abstraction layer wouldn't apply to Bitcoin b/c settlement could occur instantaneously btwn countries.
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May 23, 2012, 12:02:00 AM
 #1538

Okay, you're starting to make some sense. So, you propose that Bitcoin and PM's should be a high-volume trading pair.

Effectively. Gold as a relatively stationary reserve distributed globally; Bitcoin as a trinary money.

I use the term trinary because Bitcoin satisfies Triffin's dilemma, acting simultaneously and indefinitely as a Store of Value and Means of Exchange, with the resulting effect of being a reliable Metric of Value.
miscreanity
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May 23, 2012, 12:08:16 AM
 #1539

my point is you don't need gold.  Bitcoin can serve as a reserve standard beneath a fiat system.

chodpaba's point about an abstraction layer wouldn't apply to Bitcoin b/c settlement could occur instantaneously btwn countries.

I agree that gold wouldn't be necessary, but it provides that final bit of protection. One of Bitcoin's main vulnerabilities is the communications infrastructure. If that's incapacitated in a major way, even temporarily, transactions using Bitcoin would be burdensome at best without some system developed for easy offline non-digital exchange.

Having gold available would be the safety net that allows things to keep going more smoothly and reliably than any centrally managed interim solution. We all grumble about saving for a rainy day when we could make use of it now, but we're awfully glad we have it when it's needed.
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May 23, 2012, 12:10:12 AM
 #1540

my point is you don't need gold.  Bitcoin can serve as a reserve standard beneath a fiat system.

chodpaba's point about an abstraction layer wouldn't apply to Bitcoin b/c settlement could occur instantaneously btwn countries.

I agree that gold wouldn't be necessary, but it provides that final bit of protection. One of Bitcoin's main vulnerabilities is the communications infrastructure. If that's incapacitated in a major way, even temporarily, transactions using Bitcoin would be burdensome at best without some system developed for easy offline non-digital exchange.

Having gold available would be the safety net that allows things to keep going more smoothly and reliably than any centrally managed interim solution. We all grumble about saving for a rainy day when we could make use of it now, but we're awfully glad we have it when it's needed.

how likely is it for the Internet to go down?  wasn't it designed to withstand a nuclear war?

a gold layer adds too much complexity, ironically.
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