Gold collapsing. Bitcoin UP.

[MatthewLM]

If cypherdoc is still short, then that's a shame... not for me though. I knew gold and silver would turn back up eventually. It took a bit longer than expected but it hasn't collapsed. Gold and silver might still come under some strain but ultimately go up from here, me thinks.

[1714259355]

1714259355

[tvbcof]

So despite the pretty nice bounce back from the trendline, the new highs for the month, you still believe it's a fake breakout ?
And all that without Bernanke annoucing any QE   

Time to cover your shorts cypherdoc 

Dont forget the USDX making a new low...

Huh?  81 on the USDX is quite high be recent standards.  IIRC, it's been down to the 72 level in fairly recent times before attention shifted the the ill-health in EU-land.  If/when attention shifts back (or when the US take the actions necessary to drop it) I anticipate significantly higher PM's.  Maybe approaching records in constant $$ terms for the next cycle.  Or maybe not.  Either way, I'm in neither a buying nor a selling mode for probably several years so the spot price only of academic interest to me.  Not unlike Bitcoin in fact (to me.)

[SkRRJyTC]

So despite the pretty nice bounce back from the trendline, the new highs for the month, you still believe it's a fake breakout ?
And all that without Bernanke annoucing any QE   

Time to cover your shorts cypherdoc 

Dont forget the USDX making a new low...

Huh?  81 on the USDX is quite high be recent standards.  IIRC, it's been down to the 72 level in fairly recent times before attention shifted the the ill-health in EU-land.  If/when attention shifts back (or when the US take the actions necessary to drop it) I anticipate significantly higher PM's.  Maybe approaching records in constant $$ terms for the next cycle.  Or maybe not.  Either way, I'm in neither a buying nor a selling mode for probably several years so the spot price only of academic interest to me.  Not unlike Bitcoin in fact (to me.)

http://finviz.com/futures_charts.ashx?t=DX&p=h1
New low on this hourly timeframe
http://finviz.com/futures_charts.ashx?t=DX&p=d1
Under support on this daily timeframe

[silverbox]

This thread was started 3/13:

Bitcoin  5.40

Gold 1690


today 8/31:

Bitcoin 9.76 (up ~80%)

Gold 1692  (even)


BTC is falling from its nearterm high of 15 (~35% drop).

Gold seems to be very much alive and uncollapsed. (Cypher is your target for gold still 400??  https://bitcointalk.org/index.php?topic=68655.msg800017#msg800017)

BTC is still outperforming gold.


GPL 1.97  (Silver lg  @ 1.98)  

[lebing]

I dont see how one can honestly consider a comparison between precious metals and bitcoin from a hedging perspective.

Forget the historical precedent, even from a fundamentals, it just doesnt compute. Reason being, the market for gold and silver have been (and will be) manipulated heavily by nation states and the IMF. The difference with bitcoin is that the market cap is so low that this is simply not a possibility (yet). It's only manipulated at this point by emotional forum dwellers.

Apples and Oranges.

[bitcool]

BTC reacted to Ben's QE speech by going down almost 10%, that's wrong.

[tvbcof]

Dont forget the USDX making a new low...

Huh?  81 on the USDX is quite high be recent standards.  IIRC, it's been down to the 72 level in fairly recent times before attention shifted the the ill-health in EU-land.  If/when attention shifts back (or when the US take the actions necessary to drop it) I anticipate significantly higher PM's.  Maybe approaching records in constant $$ terms for the next cycle.  Or maybe not.  Either way, I'm in neither a buying nor a selling mode for probably several years so the spot price only of academic interest to me.  Not unlike Bitcoin in fact (to me.)

http://finviz.com/futures_charts.ashx?t=DX&p=h1
New low on this hourly timeframe
http://finviz.com/futures_charts.ashx?t=DX&p=d1
Under support on this daily timeframe

Ah.  I forget that I tend to work on longer time spans than lot of people.  Also that I pay little attention to most technical stuff (support levels, heads-n-shoulders, etc.)  My mental picture is reflected here:

  http://finviz.com/futures_charts.ashx?t=DX&p=w1

but indeed as I look at things it is not quite the way I remembered...I'd forgotten that the recent legs down did not get to the 2008 lows of 72-ish, and that the highs were all the way into the high 80's.  Close enough for me to stand by my statement though.  I did sense that it causes great strain on the US when the USDX is to high and the fed will 'rectify' the situation by hook or by crook as needed (which in inevitably good for gold.)

It would be cool to see gold prices overlayed on this (but not cool enough to actually do it.)  I think it will graphically illustrate my point that as the USDX pumps up and down it tends to stair-step gold in a distinctly upward direction.

[molecular]

I don't own enough gold and silver to get excited about this, but it sure looks like a serious breakout to my unschooled eyes.

But of course, in these markets, you never know when someone "hit's the button".

[n8rwJeTt8TrrLKPa55eU]

I don't own enough gold and silver to get excited about this, but it sure looks like a serious breakout to my unschooled eyes.

Agree, this is my impression as well, and that's why I'm currently 100% long gold and miners in my brokerage account.

IMHO the key confirmation will be whether gold can survive its seasonal dip between mid-September and November, without breaking back down below that trendline.  If it survives, I think we'll see a retest of the all time highs by April.

[Dusty]

Some interesting data to ponder via zerohedge: Monetary Endgame Score To Date: Hyperinflations: 56; Hyperdeflations: 0

We won't waste our readers' time with the details of all the 56 documented instances of hyperinflation in the modern, and not so modern, world. They can do so on their own by reading the attached CATO working paper by Hanke and Krus titled simply enough "World Hyperinflations." Those who do read it will discover the details of how it happened to be that in post World War 2 Hungary the equivalent daily inflation rate of 207%, the highest ever recorded, led to a price doubling every 15 hours, certainly one upping such well-known instance of CTRL-P abandon as Zimbabwe (24.7 hours) and Weimar Germany (a tortoise-like 3.70 days). This and much more. What we will point is that at no time in recorded history did a monetary regime end in "hyperdeflation." In fact there is not one hyperdeflationary episode of note. Although, we are quite certain, that virtually all of the 56 and counting hyperinflations in the world, were at one point borderline hyperdeflationary. All it took was central planner stupidity to get the table below, and a paper with the abovementioned title instead of "World Hyperdeflations."

Full table and pdf.

So, the question to the deflationists is always the same: why this time should be different and we should not have an (hyper)inflation but a (hyper)deflation?

[MatthewLM]

We will not have hyper-deflation in the "developed" world.... We will not have hyper-inflation either. Just reasonably high inflation and debt crises.

[molecular]

We will not have hyper-deflation in the "developed" world.... We will not have hyper-inflation either. Just reasonably high inflation and debt crises.

What is "reasonably high" and what measure of inflation would you use?

[MatthewLM]

Reasonably high so that it is on the verge of most people noticing the price rises. So it wouldn't be high enough to cause alarm with most people. Inflation can be high with many prices rising in double annual percentage figures and people will still not care.

So basically the type of inflation we are seeing now but potentially a bit higher until people really start to notice. The central banks will only let inflation go as high so people do not feel disturbed.

So really I'm just talking about inflation as a perception that people have. My mother said the other day that she is clueless about the prices of goods (in the UK). Even though things are going up in price this proves they are not going up fast enough to cause much notice.

People notice fuel prices a lot more though.

[Coreadrin_47]

I believe this would be the most significant section:

A. Zero Percent Risk-Weighted Items

The following exposures would receive a zero percent risk weight under the proposal:

Cash;
Gold bullion;
Direct and unconditional claims on the U.S. government, its central bank, or a U.S. government agency;
Exposures unconditionally guaranteed by the U.S. government, its central bank, or a U.S. government agency;
Claims on certain supranational entities (such as the International Monetary Fund) and certain multilateral development banking organizations
Claims on and exposures unconditionally guaranteed by sovereign entities that meet certain criteria (as discussed below).

Is that a change from current policy? Is gold bullion currently an "item" that's considered 0% risk by the FDIC or not? ... If this *is* a change from existing policy, I consider it a significant one.

aye, fairly certain that gold was NOT listed as qualifying as a Zero Percent Risk-Weighted Item before this update.

It will likely do more for the large holder risk assessment sheets than it will for would be buyers though.

I'm pretty sure that's new, too. Shouldn't we see huge impact on the gold price?

Gold was changed back in June by the FDIC for US banks, and the EU has very recently adopted the same policy.

But there's a cause and effect here.  It's because there is no good collateral left - every dollar has already been leveraged to the hilt, every promise to pay has been levered up multiple times to create new promises to pay backed by existing ones.  Meanwhile all the "good" collateral keeps getting downgrade so that it is no longer "good" anymore.

Plus you have the new collateralization agreements (Basel III) starting to kick in for international banks, which require higher reserves (far too little, too late, and this within the context that non-market banking always eventually fails).  And the banking systems in countries whose sovereign debts are downgraded to dirt cannot access good capital in the first place, because nobody wants to do business with someone that holds a worthless underlying asset as the foundation for their entire operating model (see greek, spanish, italian banks, who are literally bleeding money and have been for many months).

Long run it's great for gold, great for silver, great for anything liquid and not instantly and infinitely replicate-able (owned free and clear).  Short run, since gold collateralization is so new on that level, it will be great for actual cash notes, since all debts are currently denominated in cash, and there are roughly 50x as many promises-to-pay cash notes floating around out there as there are actual cash notes.  The world is overleveraged on a scale that will probably not be seen again for centuries.  Cash is king, and gold will be emperor (and hopefully bitcoin, the "perfect money", along with it, as it solves the problem of a corruptible central depository by overcoming that historically insurmountable element of human nature, which will never, ever change).

[bitcool]

Quietness and humbleness are oozing from thread.

[cypherdoc]

Quietness and humbleness are oozing from thread.

so you've declared victory?  it's all over; gold is going to $30,000/oz?  what is exactly your prediction so we can put it on the record too?

[SkRRJyTC]

Quietness and humbleness are oozing from thread.

so you've declared victory?  it's all over; gold is going to $30,000/oz?  what is exactly your prediction so we can put it on the record too?

I predict that gold will go over $1900 before it goes under $1500.

[adamstgBit]

Quietness and humbleness are oozing from thread.

so you've declared victory?  it's all over; gold is going to $30,000/oz?  what is exactly your prediction so we can put it on the record too?

I predict that gold will go over $1900 before it goes under $1500.

ya but how low will it go when it goes under $1500  

i guess in the long run ( "gold bubble" or not ) you'll beat inflation with gold

but bitcoin... 

[labestiol]

Quietness and humbleness are oozing from thread.

so you've declared victory?  it's all over; gold is going to $30,000/oz?  what is exactly your prediction so we can put it on the record too?

I predict that gold will go over $1900 before it goes under $1500.

Agree, would gladly bet a symbolic 1BTC on that. Deal cypherdoc or adamstgBit ?

[adamstgBit]

Quietness and humbleness are oozing from thread.

so you've declared victory?  it's all over; gold is going to $30,000/oz?  what is exactly your prediction so we can put it on the record too?

I predict that gold will go over $1900 before it goes under $1500.

Agree, would gladly bet a symbolic 1BTC on that. Deal cypherdoc or adamstgBit ?

na i'm not betting on that