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Author Topic: Gold collapsing. Bitcoin UP.  (Read 1806429 times)
oakpacific
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December 21, 2013, 10:38:56 AM
 #7241

Not gold related but a renewed angle from a silicon valley position pushing fiat.

An interesting rant from Alex Payne a key engineer of Simple the new banking product.

 
Bitcoin, Magical Thinking, and Political Ideology


I've heard a saying about when someone starts believing his company's marketing.  "Smoking your own exhaust"

Stupefied to find a financial engineer ignorant about escrowing.

Seriously, I have heard enough of that same bullshit, customers must be protected(read: spoiled) with the right to call back a transaction whenever they want blahblahblah, Chinese people have never had a proper credit card system, yet their online C2C industry alone creates 20 million jobs and processing trillions each year, upon a payment system designed around escrowing. In fact, chargeback spares not only  fraudulent buyers but fraudulent sellers as well(those it is designed to punish), because it makes seller fraud indistinguishable from buyer fraud.

https://tlsnotary.org/ Fraud proofing decentralized fiat-Bitcoin trading.
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December 21, 2013, 08:32:47 PM
 #7242


At least for people like me, I only ever grudgingly thought of gold as a decent place to park capital. It has no yield, no guaranteed convertibility anymore, no real direct usability as money for decades if not a century or two... Historical inertia isn't an easy justification to invest on.


It's fiat not gold that lost the guaranteed convertibility Wink

Anyway, I do agree the emergence of crypto is a huge game changer and will be a huge drag (at least) on gold.

Fiat is easier to convert into food and shelter at this point. If you can't find somebody to convert your gold into fiat, what can you convert it into?

I was in Austin @ a Bitcoin meeting a few months back and people there said they regularly pay for things in silver coins.

Besides that, gold can always be exchanged to currency, just not at a constant rate. Which is fine because this means the price (expressed in fiat) will go up as fiat money inflates. The explicit convertibility between fiat and gold added value to fiat NOT gold.


Yes, gold's fiat value has indeed gone wayyy up since convertibility was ended. But why? Essentially, the reasons I outlined: historical inertia in terms of being thought of as an inflation hedge, and lack of alternative similar vehicles. That's all fine, of course. I believe it's short-lived (in the grand scheme, so to speak).

My point is that the things that have historically anchored gold to value that was easy to intellectually see and justify are no longer present. Convertibility held gold's status as money in place, if only in a 2nd order sort of way (since gold hasn't actually meaningfully circulated for day-to-day needs in over a century).

With that link to direct moneyness severed, and a new thing emerging which completely solves the reason why gold needed transactable surrogates (fiat) in the first place, the intellectual value case for gold is much more difficult.

Again, I think there are quite a few people who see the problems with fiat as obvious, but who are also uneasy with gold for the reasons I outline (intellectually difficult to justify). These people are increasingly happy to support bitcoin because it solves the fiat issues without having the problems that gold does in modern times.


Bitcoin is the first monetary system to credibly offer perfect information to all economic participants.
But Bitcointalk & /r/bitcoin are heavily censored. bitco.in/forum, forum.bitcoin.com, and /r/btc are open.
Best info on Casascius coins: http://spotcoins.com/casascius
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December 21, 2013, 10:28:48 PM
 #7243

hmmm, I see your point, rational and well expressed

but I'm not quite ready to abandon a substance that has been money since the dawn of human economies

This is not some pseudoeconomic post-modern Libertarian cult, it's an un-led, crowd-sourced mega startup organized around mutual self-interest where problems, whether of the theoretical or purely practical variety, are treated as temporary and, ultimately, solvable.
Censorship of e-gold was easy. Censorship of Bitcoin will be… entertaining.
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December 21, 2013, 10:39:52 PM
 #7244


At least for people like me, I only ever grudgingly thought of gold as a decent place to park capital. It has no yield, no guaranteed convertibility anymore, no real direct usability as money for decades if not a century or two... Historical inertia isn't an easy justification to invest on.


It's fiat not gold that lost the guaranteed convertibility Wink

Anyway, I do agree the emergence of crypto is a huge game changer and will be a huge drag (at least) on gold.

Fiat is easier to convert into food and shelter at this point. If you can't find somebody to convert your gold into fiat, what can you convert it into?

I was in Austin @ a Bitcoin meeting a few months back and people there said they regularly pay for things in silver coins.

Besides that, gold can always be exchanged to currency, just not at a constant rate. Which is fine because this means the price (expressed in fiat) will go up as fiat money inflates. The explicit convertibility between fiat and gold added value to fiat NOT gold.


Yes, gold's fiat value has indeed gone wayyy up since convertibility was ended. But why? Essentially, the reasons I outlined: historical inertia in terms of being thought of as an inflation hedge, and lack of alternative similar vehicles. That's all fine, of course. I believe it's short-lived (in the grand scheme, so to speak).

My point is that the things that have historically anchored gold to value that was easy to intellectually see and justify are no longer present. Convertibility held gold's status as money in place, if only in a 2nd order sort of way (since gold hasn't actually meaningfully circulated for day-to-day needs in over a century).

With that link to direct moneyness severed, and a new thing emerging which completely solves the reason why gold needed transactable surrogates (fiat) in the first place, the intellectual value case for gold is much more difficult.

Again, I think there are quite a few people who see the problems with fiat as obvious, but who are also uneasy with gold for the reasons I outline (intellectually difficult to justify). These people are increasingly happy to support bitcoin because it solves the fiat issues without having the problems that gold does in modern times.



I think crypto will cause PMs to lose tremendous value yes.

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December 22, 2013, 10:08:41 AM
 #7245

I think crypto will cause PMs to lose tremendous value yes.

Gold is currently about 1.5% of the value of the world (6T/400T), and Bitcoin is 0.0%.

Where do you (and the others) think that these figures will stabilize?

I think Bitcoin can at most become valued at 25-50% of the world, and that gold should stay about where it is now. The great losers will be all the current financial products, mainly fiat, bonds and stocks.

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December 22, 2013, 10:37:17 AM
 #7246

I think crypto will cause PMs to lose tremendous value yes.

Gold is currently about 1.5% of the value of the world (6T/400T), and Bitcoin is 0.0%.

Where do you (and the others) think that these figures will stabilize?

I think Bitcoin can at most become valued at 25-50% of the world, and that gold should stay about where it is now. The great losers will be all the current financial products, mainly fiat, bonds and stocks.
25%-50% as one of many mediums of exchange / store of value?  That seems extreme.  What would litecoin be at another 10%?
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December 22, 2013, 10:45:38 AM
 #7247

I think crypto will cause PMs to lose tremendous value yes.

Gold is currently about 1.5% of the value of the world (6T/400T), and Bitcoin is 0.0%.

Where do you (and the others) think that these figures will stabilize?

I think Bitcoin can at most become valued at 25-50% of the world, and that gold should stay about where it is now. The great losers will be all the current financial products, mainly fiat, bonds and stocks.

I don't think (non-financial) stocks will lose value as they'll continue to accumulate value. I think gold will definitely lose A LOT of value to crypto, at least pushed back to where silver is today (and silver moving down a slot too) and possibly much more than that.

Gold will take at least 1% of the pie when people finally all agree it's better money than gold. If it takes the global money supply because it takes over as a global currency this is improved a lot (USD money supply is ~$50T or something right?). It's kind of useless to estimate these things in detail as no-one will get this right. Gold might end up going up even if Bitcoin beats it because of a devaluation of the importance of fiat to everyone in the world (learned from the rise of crypto).

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December 22, 2013, 02:09:48 PM
 #7248

What is the current value of all fiat?

Some several hundred percent.

First they ignore you, then they laugh at you, then they keep laughing, then they start choking on their laughter, and then they go and catch their breath. Then they start laughing even more.
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December 22, 2013, 04:26:24 PM
 #7249

What is the current value of all fiat?

1 huge bonfire.

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December 22, 2013, 04:27:56 PM
 #7250


I tried going to a store and people still agreed to exchange it for goods and services. Suckers! Wink

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December 22, 2013, 04:38:21 PM
 #7251


On a side-note: since I cashed out some fiat to be able to settle possible tax liabilities (in case my bitcoin gains tax scheme is rejected or interpretation of tax regulation in germany changes and at the same time bitcoins fails hard) I came to the conclusion that stuff is really hard to secure: I just don't know where to put the crap! Don't want to leave it in my bank account (that's an investment in the bank or at least a 3rd party rsik), don't want to stuff it under the mattress (risk of theft and fire) and I can't seem to figure out a way how to make a fiat brainwallet.

I think I'll settle for some kind of distributive strategy. Any ideas? Dig a hole in the woods?

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wachtwoord
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December 22, 2013, 04:50:18 PM
 #7252


On a side-note: since I cashed out some fiat to be able to settle possible tax liabilities (in case my bitcoin gains tax scheme is rejected or interpretation of tax regulation in germany changes and at the same time bitcoins fails hard) I came to the conclusion that stuff is really hard to secure: I just don't know where to put the crap! Don't want to leave it in my bank account (that's an investment in the bank or at least a 3rd party rsik), don't want to stuff it under the mattress (risk of theft and fire) and I can't seem to figure out a way how to make a fiat brainwallet.

I think I'll settle for some kind of distributive strategy. Any ideas? Dig a hole in the woods?


A locker in a bank building perhaps?

Bagatell
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December 22, 2013, 04:56:03 PM
 #7253

Take it to Japan. Build a house with it. Hide it in plain sight.
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December 22, 2013, 04:56:44 PM
 #7254


On a side-note: since I cashed out some fiat to be able to settle possible tax liabilities (in case my bitcoin gains tax scheme is rejected or interpretation of tax regulation in germany changes and at the same time bitcoins fails hard) I came to the conclusion that stuff is really hard to secure: I just don't know where to put the crap! Don't want to leave it in my bank account (that's an investment in the bank or at least a 3rd party rsik), don't want to stuff it under the mattress (risk of theft and fire) and I can't seem to figure out a way how to make a fiat brainwallet.

I think I'll settle for some kind of distributive strategy. Any ideas? Dig a hole in the woods?


A locker in a bank building perhaps?

<10k should be safe in a bank and there are many banks so you can diversify.

A small safe costs only about 500€ or less.

Or buy something that is convertible to fiat at about predictable rate.

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December 22, 2013, 05:05:55 PM
 #7255



Or buy something that is convertible to fiat at about predictable rate.

Some people use Lambo's for this sort of thing  Wink

Not recommended unless your cock's golden like Goat's.

rpietila
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December 22, 2013, 06:00:32 PM
 #7256



Or buy something that is convertible to fiat at about predictable rate.

Some people use Lambo's for this sort of thing  Wink

Well, I also have a Rolex which is under "cash equivalents", also a 5,000oz silver lot is there.

Lambo liquidity is poor in Finland... Tongue

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December 22, 2013, 06:28:28 PM
 #7257



Or buy something that is convertible to fiat at about predictable rate.

Some people use Lambo's for this sort of thing  Wink

Well, I also have a Rolex which is under "cash equivalents", also a 5,000oz silver lot is there.

Lambo liquidity is poor in Finland... Tongue

Especially if the Lambo is in the US Wink

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December 22, 2013, 06:35:01 PM
 #7258

Ferraris abound here, I could buy one tomorrow. Lambo is very rare.

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December 22, 2013, 06:38:40 PM
 #7259

My neighbour used his Lambo to rotovate my garden..
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December 22, 2013, 06:39:10 PM
 #7260

 ... just give all your fiat to your wife, I'm sure she'll find something to do with it Sad

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