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Author Topic: Gold collapsing. Bitcoin UP.  (Read 1804667 times)
silverbox
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March 22, 2012, 05:36:25 PM
 #281

The fed didn't stop printing Wink.  The National Debt isn't shrinking.  The Deficit spending isn't receeding..

Gold and Silver are pulling back atm, but they can only go higher in the Long term given the above things.  This has happened before.  When gold hit 1000, significant correction..

1225 significant correction.  now its 1900 significant correction.  The bull market isn't over.

When the fed stops printing, the Nat debt starts shrinking, and there is no deficit spending, I'll sell all my gold and silver Wink.
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cypherdoc
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March 22, 2012, 05:45:43 PM
 #282

The fed didn't stop printing Wink.  The National Debt isn't shrinking.  The Deficit spending isn't receeding..

Gold and Silver are pulling back atm, but they can only go higher in the Long term given the above things.  This has happened before.  When gold hit 1000, significant correction..

1225 significant correction.  now its 1900 significant correction.  The bull market isn't over.

When the fed stops printing, the Nat debt starts shrinking, and there is no deficit spending, I'll sell all my gold and silver Wink.

so, in other words, you can't lose be it inflation OR deflation!  you've solved it; the perfect investment!  Wink
silverbox
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March 22, 2012, 05:50:40 PM
 #283

Not really, cause about the best you can expect is to not lose your ass vs REAL inflation.  Its more like a safe haven store of value, that is at least somewhat Shenanigans proof.


REAL Inflation=cost of necessities (food/Energy), not the CPI (which is basically the cost of a new TV)


If you want to actually have wealth appreciation gold and silver won't do it.  Unless you can pick the ups and downs.  I have no idea when it will turn back up, I just know that it will because of the forces in place.
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March 22, 2012, 05:57:50 PM
 #284

here's 4 yr food ETF DBA:



here 4yr oil futures price /QM:



i really don't see the inflation.

Apple breaks $600.
silverbox
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March 22, 2012, 06:01:10 PM
 #285

So your saying 10 years ago I paid the same or more for a gallon of gas and a loaf of bread then I do today.. Wink

And your saying 10 years from now I'm going to pay less for a gallon of gas and a loaf of bread?


If you really believe that, I have this bridge I want to sell you..
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March 22, 2012, 06:05:31 PM
 #286

So your saying 10 years ago I paid the same or more for a gallon of gas and a loaf of bread then I do today.. Wink

And your saying 10 years from now I'm going to pay less for a gallon of gas and a loaf of bread?


If you really believe that, I have this bridge I want to sell you..

you're absolutely right.  but they've been pumped up by the same debt as everything else.  that debt is CONTRACTING as we speak.  remember; the money supply is money plus debt.  last time you  only threw up the chart of M2.  thats dwarfed by the amount of debt in the system.

Greece was just round one of the upcoming sovereign debt destruction PLUS the CDS implosion that will accompany it.
silverbox
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March 22, 2012, 06:08:25 PM
 #287

You didn't answer the question.

I just want to know if you think in 10 years I will pay less USD for a gallon of gas and a loaf of bread then I do today Smiley
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March 22, 2012, 06:16:01 PM
 #288

You didn't answer the question.

I just want to know if you think in 10 years I will pay less USD for a gallon of gas and a loaf of bread then I do today Smiley

yes i do.  i think we have entered the Age of Deleveraging and with new currencies like Bitcoin there is going to be shift toward real value and not speculation.

we've been seeing price devaluations in the tech space for over a decade now b/c the information arbitrage is much less in this area as opposed to other sectors of the economy.  with the advent of the Internet, we see this deflation spreading.  the curtain is being pulled back.
silverbox
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March 22, 2012, 06:20:25 PM
 #289

You didn't answer the question.

I just want to know if you think in 10 years I will pay less USD for a gallon of gas and a loaf of bread then I do today Smiley

yes i do.  i think we have entered the Age of Deleveraging and with new currencies like Bitcoin there is going to be shift toward real value and not speculation.

we've been seeing price devaluations in the tech space for over a decade now b/c the information arbitrage is much less in this area as opposed to other sectors of the economy.  with the advent of the Internet, we see this deflation spreading.  the curtain is being pulled back.

Ok.  I do not agree with you Wink.  I firmly believe that in 10 years a gallon of gas and a loaf of bread will cost me more then I pay for them today Wink.  If what I believe holds true PM's will be up in 10 years. 

Time will tell Wink
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March 22, 2012, 06:22:07 PM
 #290

The fed didn't stop printing Wink.  The National Debt isn't shrinking.  The Deficit spending isn't receeding..

Gold and Silver are pulling back atm, but they can only go higher in the Long term given the above things.  This has happened before.  When gold hit 1000, significant correction..

1225 significant correction.  now its 1900 significant correction.  The bull market isn't over.

When the fed stops printing, the Nat debt starts shrinking, and there is no deficit spending, I'll sell all my gold and silver Wink.

so, in other words, you can't lose be it inflation OR deflation!  you've solved it; the perfect investment!  Wink

In recent historic times, that seems to have been the case.  I'm surprised and delighted.

As for the actual spot price, it effects me on two occasions.  When I buy and when I sell.  Between those points (which I anticipate to be decades apart) the spot price has not an iota of impact on me.  What's even nicer is that I don't have to think about or manage it at all, nor do I have to pay fees to someone else to do the thinking for me.

Here is what blows me away.  Everyone seems to believe the line that we were on the brink of a total financial calamity in 2008.  If that is true, and it seems fairly plausible, then everyone's paper assets would have gone poof (instead of simply being cut in half.)  If anything the conditions seem to be even more ripe for such an implosion now, and there is much less appetite for the peeps to put up with another TARP style robbery.  So, it seems to me that any paper assets are in great danger and PMs, even if they were not performing well, would be a pretty desirable thing to be sitting on (as would Bitcoin.)  But most people don't seem to see it that way I guess.  Oh well.  It's a free country...sorta...for now...


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March 22, 2012, 06:36:48 PM
 #291

do you hear that hissing sound?  its called Apple.
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March 22, 2012, 06:48:00 PM
 #292

oh my.
silverbox
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March 22, 2012, 08:18:33 PM
 #293

It does look like its rolling over, but not very fast..  iPHAD here we come!! Wink
tvbcof
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March 22, 2012, 10:00:40 PM
 #294

oh my.

Looks like Gold outperformed today.  Bitcoin...well...not so much.

...
What a Bum Bum
   Bam Bam Dilla!
...


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March 23, 2012, 06:07:22 AM
 #295

do you guys realize just how inane the gold/silver argument has become?  one year ago:

1.  of course the miners are up; they represent leveraged plays on the gold price and why wouldn't you want to own ounces in the ground.  its free money.
2.  of course GLD/SLV are up.  even though its paper gold, they allow the avg investor to own gold with just a click of the button.
3.  the official price is up.  of course it is dummy, the price is rising and just reflects the devaluing USD.

now:

1.  of course the miners are down; all they represent is paper gold.  they don't provide any value since you are subject to poor management and expense costs due to energy expenses.
2.  of course GLD/SLV are down; they're just paper gold in baskets.  they really don't have any gold in their vaults.
3.  of course the official price is down.  in fact, who cares if it crashes?  what REALLY matters is the street price plus the huge premium that will overall add up to over $2400 in value and much higher.

that last one is really insane.   when i cashed out my pm's last yr the coin dealer checked his computer screen on Kitco and offered me the official price minus 4%.  i then received a 1099 last month on the cash i received on which i will have to pay ordinary income taxes on, not capital gains.  truly sucks.  the illiquidity of pm's is a big problem as well.

For one year ago:
  • The miners were rising despite being under immense pressure. The reasoning is still sound; price movement does not change fundamentals.
  • GLD/SLV will track whatever the official prices do.
  • That sums it up: USD debasement means other currencies will rise, including gold.

For now:
  • They're still being pressured, that's all. Quality has always varied.
  • GLD/SLV will track whatever the official prices do.
  • Where is the retail buyer? The average westerner still hasn't come to grips with what's happening. That's when premiums rise wildly.

For the last point, the paper/physical disparity is all that matters. Retail metal has not experienced shortages the way high-volume, large bar capacities have. Retail liquidity will remain good until insufficient bullion is available to produce individual ounce and gram pieces. Central banks and other large financial institutions do not buy by the ounce, nor are they fond of publicising their purchases. This "shadow demand" is massive and grinding away while the public lacks understanding. Why do you think the official line is negative on gold while official actions consist of scrambling for metal? Paying exclusive attention to the retail side is like deciding to hop on the Bitcoin bandwagon when it's accepted in as many places as MasterCard & Visa.

Deflationary forces cause asset depreciation, which should include gold by contemporary logic. Let's take a look at this with approximate gold and USDX values from the first trading day of this January to yesterday's close:

DateGoldUSD
Jan157579.6
Now164579.7
+4.4%+0.1%

This very well may be due to nuances in the basket that the USDX is composed of, although the dollar has been rather strong against everything recently. Maybe there's more than meets the eye here, or in this case price. Remember, housing is dropping again. Hint: look at gold in all currencies, not just USD.

So why hasn't gold taken off like a rocket? Simple: fiat liquidity.

It boils down to this: for every dollar on the buy side, a multiple of dollars has to be used to slam precious metal prices and cover underwater shorts so the banks don't instantly implode. That money initially comes from the Fed, which is levered up by banks. The sideways chop between ~$1600-$1900 is being used to clear out the shorts as much as possible so as to not be overrun. Then the banks will join the momentum. Whether that happens at another breach of $1900 or above $2100 or even higher, I don't know - it does make sense for the banks to fight things off until their lackey is re-elected in America and key positions at other institutions have been established.

In any case, physical metal cannot be conjured any more than Bitcoins can be counterfeited. Likewise, contracts for delivery of gold would work the same way as contracts for delivery of Bitcoins, as would the above dynamics. For this reason, physical gold is independent of illusory pricing established through trading of contracts - it will just take more of a shortage for that to become apparent enough for everyone to understand. By then, the supply will probably be nothing but scraps because it's being obscured to the extent that Bitcoin's supply is transparent.

Contracts for gold are just like a hosted Bitcoin wallet - not truly under your control and potentially vapor. MF Global, anyone?

so, in other words, you can't lose be it inflation OR deflation!  you've solved it; the perfect investment!  Wink

For now. When a ranged equilibrium is attained, it'll be back to normal. It's kind of like an asteroid being caught in a star's gravity well and settling into a stable orbit.

...

Greece was just round one of the upcoming sovereign debt destruction PLUS the CDS implosion that will accompany it.

The implosion already occurred, and the reaction was exactly the same as in other instances of deflationary deleveraging. It may have been executed via differing means, but the end result is still at least $1 trillion (that we know of) in liquidity dumped into the same type of financial shell structures that we see in JPM, et al.

Do you really think further defaults will be met with the restraint that was so lacking this time around?

...

As for the actual spot price, it effects me on two occasions.  When I buy and when I sell.  Between those points (which I anticipate to be decades apart) the spot price has not an iota of impact on me.  What's even nicer is that I don't have to think about or manage it at all, nor do I have to pay fees to someone else to do the thinking for me.

Right there - no need to chase yield like a bullsh*tting Buffett.

I've used this comparison:

Contemporary finance looking for yield is like older nuclear reactors, such as the Fukushima Daiichi plant, which require active safety measures.

Gold is like thorium reactors which use much safer passive methods that generally require neither power, nor direct intervention (and doesn't offer much in the way of weapons-grade material).

Looks like Gold outperformed today.  Bitcoin...well...not so much.

Still pretty good for currently having ~25% annual inflation... and you can't really naked short Bitcoin yet Smiley
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March 23, 2012, 06:57:47 AM
 #296

If the price of gold is falling, why do Monster cable's HDMI cables keep getting more expensive?

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tvbcof
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March 23, 2012, 07:02:59 AM
 #297


I like and hold both Bitcoin and PMs.  I expect that it is more likely than not that both will at least hold their own over the coming few years.

I think that if either 'takes off' to insane levels, the other probably will as well since such an event would likely be triggered and driven by an extreme loss of confidence and usefulness of more traditional (recent-ish-ly traditional) monetary instruments.

Mainly I want to elaborate on one of the things that drew me to Bitcoin in a big way earlier.  That is that PMs and Bitcoin can really complement one another.  They can address certain weaknesses in the other.  PMs are a real misery to move around.  Bitcoin is a joy in this respect.  Bitcoin is new, poorly understood, and not trusted by the masses where PMs have an ancient history in this respect.

What I would like to see evolve, and something which seems to me to have a fighting chance, is a situation where Bitcoin is used as a trusted transfer mechanism allowing parties to trade ownership of physical PMs on a global basis.

The level of animosity between PM bugs and Bitcoiners has always kind of surprised me.  Mainly the PM->Bitcoin animosity.  I guess it's mainly that each fears the other robs 'customers' and brings the price down.  Given the sizes of the economies I doubt that that is particularly true, but even if it is, I see it as a good thing.  Lower prices simply let more new interest obtain a larger share of the pie (Bitcoin or PMs) as I see it.


cypherdoc
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March 23, 2012, 02:14:19 PM
 #298

do not get trapped into buying pm's on today's bounce.  stocks are continuing their downturn which is the beginning of a new primary downtrend which will take them way lower than anyone expects.

pm bounce today was expected and could continue very short term but then will turn down viciously again.  deflation is here.
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March 23, 2012, 03:06:21 PM
 #299

Apple slowly getting ground down.  expect an acceleration at some point soon.
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March 23, 2012, 03:11:14 PM
 #300

LOL.  if you think you're not being manipulated by HFT's in Apple, look at this spike down to 590 that was immediately "caught" and jammed back up:

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