Gold collapsing. Bitcoin UP.

[oakpacific]

finally got around to finding it:

Thanks. You should've had way more upvotes.

miscreanity,

is it time yet?:

If you hold dividend-paying stocks for the long-term, the price doesn't matter very much. If you trade for a living, price is all that matters. Either way, there's some level of exposure to the cannibalistic system.

So I don't care

A few months ago, I suggested that the USD$1k level might be the point where war would be declared on Bitcoin. It's starting to look like it has been. Both banks and gov't will protect their routes to conquest -- Bitcoin is finally being seen as a legitimate threat to their highly controlled regime of fiat and gold. Those plans will not endure intact, but having been laid down over decades there is a lot of interest in preserving those investments in time and resources.

I think it maybe quite the opposite:the fact that the banks and gov't resort to fight a dorky online interwebz currency with regulatory means, rather than allowing the investors to make decisions for themselves, shows how unconfident they are with those "investments" themselves. Smart investors will take note and start exiting.

[1714251247]

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[1714251247]

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[1714251247]

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[NewLiberty]

To the extent that Bitcoin takes the role of gold, we have this to look forward to:



How will we know when bitcoin is an asset class?
When cryptocurrency gets mentioned in the BASEL Accords.

Proper price of gold currently: around 1600.

Proper price of bitcoin?  A lot more...

[cypherdoc]

To the extent that Bitcoin takes the role of gold, we have this to look forward to:



How will we know when bitcoin is an asset class?
When cryptocurrency gets mentioned in the BASEL Accords.

Proper price of gold currently: around 1600.

Proper price of bitcoin?  A lot more...

that's a very crude attempt at a correlation.  and potentially very misleading.

[NewLiberty]

that's a very crude attempt at a correlation.  and potentially very misleading.

And yet a very common one that is relied on by many...

Would you aver that the relative value of commodities is independent of the dilution of fiat currencies in which they are measured?  The chart starts at where they diverge at the closing of the gold window.  
If the dollar were still a hard money currency, rather than backed by debt only, the commodity fluctuations would be more dependent on things like industrial demand and supply and less the devaluation of the dollar.

The point of the chart is that once BTC is mainstream, it ought also follow a valuation based on fiat debts.
It may have the ability to encourage honest money from the governments of the world as a global settlement mechanism.

This is the role that gold once had.

[Melbustus]

that's a very crude attempt at a correlation.  and potentially very misleading.

And yet a very common one that is relied on by many...

Would you aver that the relative value of commodities is independent of the dilution of fiat currencies in which they are measured?  The chart starts at where they diverge at the closing of the gold window.  
If the dollar were still a hard money currency, rather than backed by debt only, the commodity fluctuations would be more dependent on things like industrial demand and supply and less the devaluation of the dollar.

The point of the chart is that once BTC is mainstream, it ought also follow a valuation based on fiat debts.
It may have the ability to encourage honest money from the governments of the world as a global settlement mechanism.

This is the role that gold once had.

I agree with Cypher that the chart is extremely crude. Specifically because it's just showing debt, not actual money supply. Yes, the Fed is horrifically increasing M2. But M3 is likely still collapsing at a greater rate (though it's a bitch to measure). Hence, no inflation.....yet. I think we'll get nasty, or at least double-digit sustained inflation over the long-haul, but the underlying M3 deflationary dynamics will continue to be dominant for a while longer (years).

I think this is something that a lot of gold-bugs don't understand; they just look at new base-money entering the economy and think it'll insta-spike nominal commodity prices. But fiat money creation and supply is much more complicated.

[NewLiberty]

I agree with Cypher that the chart is extremely crude. Specifically because it's just showing debt, not actual money supply. Yes, the Fed is horrifically increasing M2. But M3 is likely still collapsing at a greater rate (though it's a bitch to measure). Hence, no inflation.....yet. I think we'll get nasty, or at least double-digit sustained inflation over the long-haul, but the underlying M3 deflationary dynamics will continue to be dominant for a while longer (years).

I think this is something that a lot of gold-bugs don't understand; they just look at new base-money entering the economy and think it'll insta-spike nominal commodity prices. But fiat money creation and supply is much more complicated.

Yes it is more complicated.  Such is true of everything.

So go ahead and complain, but make a chart that shows something you see as meaningful, instead of just saying that it is more complicated.


The M3 decline from the banks scooping up all the money and not loaning is more of a retracement toward the norm, but it is also (as I think you intimated) like a rubber-band being pulled back.

The gold price is deeply manipulated, as are the inflation metrics.  I don't know many gold-bugs so I will have to take your word on what they don't understand.

[Wekkel]

Yes it is more complicated.  Such is true of everything.

I think this recent article sums up the relationship between QE1 to QE3, Taper and M1 quite eloquently. Nevertheless, the world is full of opinions on Gold's trajectory.

I think it makes the most sense to carefully watch the general opinion on investing in paper and other assets and monitor if and to which degree trust in the system starts to wane. Then and only then, PM's will have their finest moments. This moment could still be years away.

[NewLiberty]

Yes it is more complicated.  Such is true of everything.

I think this recent article sums up the relationship between QE1 to QE3, Taper and M1 quite eloquently. Nevertheless, the world is full of opinions on Gold's trajectory.

I think it makes the most sense to carefully watch the general opinion on investing in paper and other assets and monitor if and to which degree trust in the system starts to wane. Then and only then, PM's will have their finest moments. This moment could still be years away.

Agreed.
I'd wager the trajectory is downward until Germany has their gold back.

[wachtwoord]

Yes it is more complicated.  Such is true of everything.

I think this recent article sums up the relationship between QE1 to QE3, Taper and M1 quite eloquently. Nevertheless, the world is full of opinions on Gold's trajectory.

I think it makes the most sense to carefully watch the general opinion on investing in paper and other assets and monitor if and to which degree trust in the system starts to wane. Then and only then, PM's will have their finest moments. This moment could still be years away.

Agreed.
I'd wager the trajectory is downward until Germany has their gold back.

2020?

[NewLiberty]

Yes it is more complicated.  Such is true of everything.

I think this recent article sums up the relationship between QE1 to QE3, Taper and M1 quite eloquently. Nevertheless, the world is full of opinions on Gold's trajectory.

I think it makes the most sense to carefully watch the general opinion on investing in paper and other assets and monitor if and to which degree trust in the system starts to wane. Then and only then, PM's will have their finest moments. This moment could still be years away.

Agreed.
I'd wager the trajectory is downward until Germany has their gold back.

2020?

Sooner.  US said 7 years, but we won't be informed until after it occurs, which will expected to be ahead of that time.
They could do it in 2 Jet loads, (as soon as they buy the physical from driving down the price of the paper gold).
It could be happening now, I doubt security will allow any advance notice.

[wachtwoord]

Yes it is more complicated.  Such is true of everything.

I think this recent article sums up the relationship between QE1 to QE3, Taper and M1 quite eloquently. Nevertheless, the world is full of opinions on Gold's trajectory.

I think it makes the most sense to carefully watch the general opinion on investing in paper and other assets and monitor if and to which degree trust in the system starts to wane. Then and only then, PM's will have their finest moments. This moment could still be years away.

Agreed.
I'd wager the trajectory is downward until Germany has their gold back.

2020?

Sooner.  US said 7 years, but we won't be informed until after it occurs, which will expected to be ahead of that time.
They could do it in 2 Jet loads, (as soon as they buy the physical from driving down the price of the paper gold).
It could be happening now, I doubt security will allow any advance notice.

Wow, you actually believe the US has the gold? The gold belonging to gold was supposedly stored in >20 storage bunkers but German representatives were only allowed to look in one :rolleyes:

[jojo69]

Wow, you actually believe the US has the gold?

no, he said they will have to purchase the physical

[wachtwoord]

Wow, you actually believe the US has the gold?

no, he said they will have to purchase the physical

But he seems to focus on transportation and also seems to think this will happen fast.

[jojo69]

Clearly, whether the physical is even still on planet is an open question, granted.

[NewLiberty]

Wow, you actually believe the US has the gold?

no, he said they will have to purchase the physical

But he seems to focus on transportation and also seems to think this will happen fast.

"Fast"?  Well, before 7 years is up, if you call that fast.
It is in the bullion bank's interest to drive the price down as quickly as they can to get it done, but the faster they go the more expensive it will be.

Logistically, it could be done in a week if they had the gold at hand.
The point is I dont know when.  You don't know, and we shouldn't expect to be told ahead of delivery.
Someone will know, but that isn't us.

[miscreanity]

Never trust a proudhon.

Price can't go much below USD$200 now without starting to squeeze margins on a large portion of miners. The next wave of input cost pressure should hit at around 50-100,000,000,000 difficulty, just as it helped kick off the price rise after the 100-200,000,000 level. As long as we get back to business as usual after a few more bouts of panic selling, that is.

War is on, got popcorn?

[notme]

Never trust a proudhon.

Price can't go much below USD$200 now without starting to squeeze margins on a large portion of miners. The next wave of input cost pressure should hit at around 50-100,000,000,000 difficulty, just as it helped kick off the price rise after the 100-200,000,000 level. As long as we get back to business as usual after a few more bouts of panic selling, that is.

War is on, got popcorn?

2011->GPU saturation, available now
Difficulty even declined for several adjustment periods.

April 2013->ASIC adoption beginnings
Difficulty continued to climb until price caught back up.

Now->ASIC nearing saturation?  Available now.

[Adrian-x]

Never trust a proudhon.

Price can't go much below USD$200 now without starting to squeeze margins on a large portion of miners. The next wave of input cost pressure should hit at around 50-100,000,000,000 difficulty, just as it helped kick off the price rise after the 100-200,000,000 level. As long as we get back to business as usual after a few more bouts of panic selling, that is.

War is on, got popcorn?

2011->GPU saturation, available now
Difficulty even declined for several adjustment periods.

April 2013->ASIC adoption beginnings
Difficulty continued to climb until price caught back up.

Now->ASIC nearing saturation?  Available now.

This is a face flag event, not that proudhon isn't trust worthy, he is testing people's trust in Bitcoin.

ASIC saturation is a point to keep an eye out for but I don't think it is here yet. 

This is all rather fascinating, lots of main stream media calling Bitcoin a scam yet this stuff doesn't filter through the Bitcoin blogosphere..

Note following the link, Mark Williams is under the impression Bitcoin is a hot potato and is oblivious to the reasons most have invested in the first place.

[tvbcof]

Thanks heavens I took enough out to do next year's projects rather than waiting to start until the turn of the year to use the capital gains tax scam (perfectly legal, but still a scam imho.)  $1000/BTC this year is equiv to $750/BTC next year if I can fit into the 0% capital gains keyhole.  Roughly.  My last bunch of withdraws were at over $1000/BTC but I usually didn't get near Mt. Gox pricing at Coinbase.  Now I can rest on my heels and see if it looks like this collapse will blow over.  Didn't convert any BTC into PM's as I'd hoped though.

[NewLiberty]

Thanks heavens I took enough out to do next year's projects rather than waiting to start until the turn of the year to use the capital gains tax scam (perfectly legal, but still a scam imho.)  $1000/BTC this year is equiv to $750/BTC next year if I can fit into the 0% capital gains keyhole.  Roughly.  My last bunch of withdraws were at over $1000/BTC but I usually didn't get near Mt. Gox pricing at Coinbase.  Now I can rest on my heels and see if it looks like this collapse will blow over.  Didn't convert any BTC into PM's as I'd hoped though.

http://en.wikipedia.org/wiki/Wash_sale