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Author Topic: Gold collapsing. Bitcoin UP.  (Read 1808617 times)
Erdogan
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July 20, 2014, 11:11:12 PM
 #9741

I just want to remind that the rentenmark, created during the weimar hyperinflation, was peddled as stable money, and people belived it and started to hold, and the value was stabilized, even though the printing  continued.

There can never be an absolute connection between supply and value, because the tendency to hold is in the minds of everybody, and it is impossible to know.

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July 20, 2014, 11:12:31 PM
 #9742

The reason I missed the btc boat by about 18 months was that I'd become so jaded and worn out by reading the crap financial news that I totally ignored everything for a couple of years. But I used to work with crypto and I'd always had an interest in gold, and so when I finally did stumble across it, it was an immediate lust at first sight. I'm still gobsmacked at just what a brilliant innovation bitcoin is. But somehow I doubt Satoshi is ever going to get a nomination for the nobel prize in economics.
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July 20, 2014, 11:38:35 PM
 #9743

"Because anyone with large supplies has to store it at centralized locations, true supply can never be known or verified and therefore is subject to govt manipulation via gold derivatives or GLD. This is a problem gold bugs won't acknowledge. "

I think the problem of manipulation is acknowledged by gold bugs - take a look at any ZH comments thread - but the mainstream analysts (true of any market and not just gold) mainly ignore or deny it because their funding comes from analyzing the market trends and fundamentals, which in this day and age is pure BS. Once the various funds and other investment vehicles roll out in force in the bitcoin sphere, BTC may also suffer from the same fate and I'm sure there is some tweaking going on even now, especially in terms of FUD spread by various vested interests. But for now, BTC still feels like the closest thing we have to a market price primarily set by supply and demand.

yeah, I probably should have said that the gold bugs know it and complain about it all the time but fail to realize that Bitcoin is gold's Black Swan in that it performs all the functions of gold and more.

This whole dynamic interplay btwn the 2 is so fundamental and important to Bitcoins future success which is why I posted this thread in the first place, not to troll like I presented to tvbcof.

Ah, maybe for a little trolling.

A little trolling never hurt anyone. I'm on the fence about how quickly (the monetary characteristics of) gold will be subsumed/replaced by BTC. It's like living through the demise of vinyl records as CDs, and later MP3s, made their way into the world. And if you go to Japan it's amazing to see that CDs are still hugely popular. I can't remember the last time I bought a CD.

"Japan is the second-biggest music market in the world, but an unusual one where digital has barely taken hold; 80 percent of sales there are still physical CDs."
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July 21, 2014, 03:21:06 AM
 #9744

The trend for gold and bitcoin will probably reverse as bitcoin is getting regulated.

All exchanges now operate aboard due to unfavorable law, it won't be too long before all pools will face similar fate.

Losing bitcoin infrastructure in the US is a big deal as the ecology system (consumer, producer and speculator) balance is being "rocked".
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July 21, 2014, 04:30:12 AM
 #9745

From

http://www.telegraph.co.uk/finance/comment/liamhalligan/10978178/The-dollars-70-year-dominance-is-coming-to-an-end.html

Within a decade or so, a “reserve currency basket” may emerge, with central banks storing wealth in a mix of dollars, yuan, rupee, reals and roubles, as well as precious metals. Perhaps some kind of synthetic bundle of the world’s leading currencies will be developed, with emphasis placed, after years of western money-printing, on assets backed by commodities and other tangibles.


Using some new commodity-backed asset for CB reserves would be terrible (though I agree it might happen). There'd have to be some sort of implicit (if not explicit) redemption/convertibility for it to have any meaning, and then you're opening the door for all sorts of ugly manipulation or demand transfer to/from this new asset and the industrially useful commodities that "back" it. This has already happened with gold; ie, our electronics would be cheaper if humanity didn't still insist on paying so darn much for gold due to its history as money/financial-asset. Do we really want to introduce that dynamic into commodities that are far more industrially important (oil, copper, wheat, etc)?

No, we don't. The ideal reserve asset is scarce, like gold, but actually has zero "intrinsic" (as measured by industrial usefulness, as so many gold-bugs insist) value. Anybody know of anything scarce, fungible, transferable, recognizable, and durable, but *not* industrially useful?

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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July 21, 2014, 05:15:57 AM
 #9746

"Because anyone with large supplies has to store it at centralized locations, true supply can never be known or verified and therefore is subject to govt manipulation via gold derivatives or GLD. This is a problem gold bugs won't acknowledge. "

I think the problem of manipulation is acknowledged by gold bugs - take a look at any ZH comments thread - but the mainstream analysts (true of any market and not just gold) mainly ignore or deny it because their funding comes from analyzing the market trends and fundamentals, which in this day and age is pure BS. Once the various funds and other investment vehicles roll out in force in the bitcoin sphere, BTC may also suffer from the same fate and I'm sure there is some tweaking going on even now, especially in terms of FUD spread by various vested interests. But for now, BTC still feels like the closest thing we have to a market price primarily set by supply and demand.

yeah, I probably should have said that the gold bugs know it and complain about it all the time but fail to realize that Bitcoin is gold's Black Swan in that it performs all the functions of gold and more.

This whole dynamic interplay btwn the 2 is so fundamental and important to Bitcoins future success which is why I posted this thread in the first place, not to troll like I presented to tvbcof.

Ah, maybe for a little trolling.

A little trolling never hurt anyone. I'm on the fence about how quickly (the monetary characteristics of) gold will be subsumed/replaced by BTC. It's like living through the demise of vinyl records as CDs, and later MP3s, made their way into the world. And if you go to Japan it's amazing to see that CDs are still hugely popular. I can't remember the last time I bought a CD.

"Japan is the second-biggest music market in the world, but an unusual one where digital has barely taken hold; 80 percent of sales there are still physical CDs."
Interesting observation.  It's like the old saying that new ideas don't really assimilate it's that the people who don't believe them simply die out eventually.
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July 21, 2014, 07:55:34 AM
 #9747

"It's like the old saying that new ideas don't really assimilate it's that the people who don't believe them simply die out eventually."

Probably true. 95%+ of people stop learning in their teens, even though they carry on being educated. 95% of people are similarly scared shitless of any change, however much they think they voted for it. The other 5% are called contrarian thinkers. 95% of people probably think they belong to that 5%. But in reality they don't. Religion and politics, not to mention, global warming, low fat, high fiber  foods et al are all still around even though they're way past their due dates. That's mostly why I think gold will stick around for a while longer. But I've been wrong about more things in my life than I care to remember.
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July 21, 2014, 08:30:25 AM
 #9748

"It's like the old saying that new ideas don't really assimilate it's that the people who don't believe them simply die out eventually."

Probably true. 95%+ of people stop learning in their teens, even though they carry on being educated. 95% of people are similarly scared shitless of any change, however much they think they voted for it. The other 5% are called contrarian thinkers. Neophiles

FTFY


It's all bullshit. But bullshit makes the flowers grow and that's beautiful.
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July 21, 2014, 10:10:55 AM
 #9749

From

http://www.telegraph.co.uk/finance/comment/liamhalligan/10978178/The-dollars-70-year-dominance-is-coming-to-an-end.html

Within a decade or so, a “reserve currency basket” may emerge, with central banks storing wealth in a mix of dollars, yuan, rupee, reals and roubles, as well as precious metals. Perhaps some kind of synthetic bundle of the world’s leading currencies will be developed, with emphasis placed, after years of western money-printing, on assets backed by commodities and other tangibles.


Using some new commodity-backed asset for CB reserves would be terrible (though I agree it might happen). There'd have to be some sort of implicit (if not explicit) redemption/convertibility for it to have any meaning, and then you're opening the door for all sorts of ugly manipulation or demand transfer to/from this new asset and the industrially useful commodities that "back" it. This has already happened with gold; ie, our electronics would be cheaper if humanity didn't still insist on paying so darn much for gold due to its history as money/financial-asset. Do we really want to introduce that dynamic into commodities that are far more industrially important (oil, copper, wheat, etc)?

No, we don't. The ideal reserve asset is scarce, like gold, but actually has zero "intrinsic" (as measured by industrial usefulness, as so many gold-bugs insist) value. Anybody know of anything scarce, fungible, transferable, recognizable, and durable, but *not* industrially useful?


Yep. No intrinsic value is a great advantage for bitcoin as money.
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July 21, 2014, 02:18:53 PM
 #9750

This is the second time in a few days that I read this. Could you point to studies on the matter? I like that not even Austrians seem to be aware of this.

It's going to have to be forced down there throats, it shakes Mises's regression theorem at the core. At first I couldn't accept it but the earlier linked video sugar coats it and makes it taste nice.

The regression theorem is on shaky feet since bitcoin anyway.

Actually the regression theorem has nothing to do with Bitcoin. The regression theorem is about physical object substitutes for ledger systems, a.k.a. media of exchange. Bitcoin is not a medium of exchange; it obviates (makes unnecessary) the need for media of exchange. Media of exchange are a low-tech hack for doing what Bitcoin does.

Hence the Austrian economists are technically correct when they say that Bitcoin isn't money and that it doesn't satisfy the regression theorem. It isn't money as they define it - that is, it isn't a medium of exchange. Again, it obviates the need for media of exchange. In Austrian parlance, then, it obviates the need for "money."

Money in the Austrian sense is just a stopgag measure to deal with the technical difficulties of maintaining large accounting ledgers. That is a result of their starting definitions, though they may want to revise them now that Bitcoin exists. Bitcoin bypasses the entire Regression Theorem framework. Like someone said, Bitcoin and the Regression Theorem gaze at each other knowingly over a chasm. The one has nothing to say about the other.

The Austrians who haven't come around yet because of the Regression Theorem are simply getting tripped up by their definitions, as well as by the way the Bitcoin has been marketed so far with the focus on "coins" rather than on the ledger.

Thank your for this viewpoint. I will make it my own. Makes loads of sense.

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July 21, 2014, 02:53:07 PM
 #9751

This is the second time in a few days that I read this. Could you point to studies on the matter? I like that not even Austrians seem to be aware of this.

It's going to have to be forced down there throats, it shakes Mises's regression theorem at the core. At first I couldn't accept it but the earlier linked video sugar coats it and makes it taste nice.

The regression theorem is on shaky feet since bitcoin anyway.

Actually the regression theorem has nothing to do with Bitcoin. The regression theorem is about physical object substitutes for ledger systems, a.k.a. media of exchange. Bitcoin is not a medium of exchange; it obviates (makes unnecessary) the need for media of exchange. Media of exchange are a low-tech hack for doing what Bitcoin does.

Hence the Austrian economists are technically correct when they say that Bitcoin isn't money and that it doesn't satisfy the regression theorem. It isn't money as they define it - that is, it isn't a medium of exchange. Again, it obviates the need for media of exchange. In Austrian parlance, then, it obviates the need for "money."

Money in the Austrian sense is just a stopgag measure to deal with the technical difficulties of maintaining large accounting ledgers. That is a result of their starting definitions, though they may want to revise them now that Bitcoin exists. Bitcoin bypasses the entire Regression Theorem framework. Like someone said, Bitcoin and the Regression Theorem gaze at each other knowingly over a chasm. The one has nothing to say about the other.

The Austrians who haven't come around yet because of the Regression Theorem are simply getting tripped up by their definitions, as well as by the way the Bitcoin has been marketed so far with the focus on "coins" rather than on the ledger.

Thank your for this viewpoint. I will make it my own. Makes loads of sense.
Great insight indeed.

Zangelbert, I don't know if you have read Cursed money! from F. Bastiat but in case you didn't you may appreciate it (it's a quick read).

I think he was the first author to conceptualize accurately what is money. He didn't employ the terms ledger and memory, but he clearly understand the fact that money is a social debt and works as a memory.

Which is sad is that Austrians who otherwise love him dismiss his sole essay on money because it doesn't fit their views of money as a commodity.
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July 21, 2014, 03:34:00 PM
 #9752

This is the second time in a few days that I read this. Could you point to studies on the matter? I like that not even Austrians seem to be aware of this.

It's going to have to be forced down there throats, it shakes Mises's regression theorem at the core. At first I couldn't accept it but the earlier linked video sugar coats it and makes it taste nice.

The regression theorem is on shaky feet since bitcoin anyway.

Actually the regression theorem has nothing to do with Bitcoin. The regression theorem is about physical object substitutes for ledger systems, a.k.a. media of exchange. Bitcoin is not a medium of exchange; it obviates (makes unnecessary) the need for media of exchange. Media of exchange are a low-tech hack for doing what Bitcoin does.

Hence the Austrian economists are technically correct when they say that Bitcoin isn't money and that it doesn't satisfy the regression theorem. It isn't money as they define it - that is, it isn't a medium of exchange. Again, it obviates the need for media of exchange. In Austrian parlance, then, it obviates the need for "money."

Money in the Austrian sense is just a stopgag measure to deal with the technical difficulties of maintaining large accounting ledgers. That is a result of their starting definitions, though they may want to revise them now that Bitcoin exists. Bitcoin bypasses the entire Regression Theorem framework. Like someone said, Bitcoin and the Regression Theorem gaze at each other knowingly over a chasm. The one has nothing to say about the other.

The Austrians who haven't come around yet because of the Regression Theorem are simply getting tripped up by their definitions, as well as by the way the Bitcoin has been marketed so far with the focus on "coins" rather than on the ledger.

I'm starting to see now how Bitcoin, in a parallel universe, would have been adopted a lot more quickly if it was called "Bitledger" and just referred to as a ledger from the start. Who knows... but the ledger paradigm really makes it all very clear in my opinion.
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July 21, 2014, 03:35:10 PM
 #9753

http://www.zerohedge.com/news/2014-07-21/china-sends-surveillance-ship-hawaii-retaliation-us-navy-build-its-back-yard


U.S losing it's grip

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July 21, 2014, 03:50:38 PM
 #9754

Zangelbert, I don't know if you have read Cursed money! from F. Bastiat but in case you didn't you may appreciate it (it's a quick read).

I think he was the first author to conceptualize accurately what is money. He didn't employ the terms ledger and memory, but he clearly understand the fact that money is a social debt and works as a memory.

Which is sad is that Austrians who otherwise love him dismiss his sole essay on money because it doesn't fit their views of money as a commodity.

Thanks for that. It was a great essay and suspiciously absent of mention in the Austrian circles I frequent. This passage seems most relevant:

This is the time, then, to analyse the true function of cash, independently of mines and importations. You have a crown. What does it imply in your hands? It is, as it were, the witness and proof that you have, at some time or other, performed some labour, which, instead of profiting by it, you have bestowed upon society in the person of your client. This crown testifies that you have performed a service for society, and, moreover, it shows the value of it. It bears witness, besides, that you have not yet obtained from society a real equivalent service, to which you have a right. To place you in a condition to exercise this right, at the time and in the manner you please, society, by means of your client, has given you an acknowledgment, a title, a privilege from the republic, a counter, a crown in fact, which only differs from executive titles by bearing its value in itself; and if you are able to read with your mind’s eye the inscriptions stamped upon it you will distinctly decipher these words: – “Pay the bearer a service equivalent to what he has rendered to society, the value received being shown, proved, and measured by that which is represented by me.” Now, you give up your crown to me. Either my title to it is gratuitous, or it is a claim. If you give it me as payment for a service, the following is the result: – your account with society for real satisfactions is regulated, balanced, and closed. You had rendered it a service for a crown, you now restore the crown for a service; as far as you are concerned, you are clear. As for me, I am just in the position in which you were just now. It is I who am now in advance to society for the service which I have just rendered it in your person. I am become its creditor for the value of the labour which I have performed for you, and which I might devote to myself. It is into my hands, then, that the title of this credit – the proof of this social debt – ought to pass. You cannot say that I am any richer; if I am entitled to receive, it is because I have given. Still less can you say that society is a crown richer, because one of its members has a crown more, and another has one less. For if you let me have this crown gratis, it is certain that I shall be so much the richer, but you will be so much the poorer for it; and the social fortune, taken in a mass, will have undergone no change, because as I have already said, this fortune consists in real services, in effective satisfactions, in useful things. You were a creditor to society, you made me a substitute to your rights, and it signifies little to society, which owes a service, whether it pays the debt to you or to me. This is discharged as soon as the bearer of the claim is paid.

It reminds me of reddit user Capt_Roger_Murdock's excellent succinct explanation of Bitcoin:

Quote
The reason it's so hard for most people to understand Bitcoin is that most people don't really understand money. Money isn't wealth. It's an accounting system used to facilitate the exchange of wealth. (The paradox of money is that while everyone wants it, no one actually wants it - they want the stuff they can buy with it!) Many people are put off by the fact that bitcoins are "just data." But that's what ALL money is, information! More precisely, money is a means for credibly conveying information about value given but not yet received (or at least not yet received in a form in which it can directly satisfy a person's wants or needs).

To put it yet another way, money is a ledger. With fiat currencies like the dollar, that ledger is centralized. And that gives the central authority responsible for maintaining that ledger tremendous power, power that history has proven will inevitably be abused. With Bitcoin, the ledger is decentralized. And that means that no one individual or entity has the power to arbitrarily create new units (thereby causing inflation), freeze (or seize) your account, or block a particular payment from being processed. We've had decentralized money before. After all, no one can simply print new gold into existence. And the "ledger" of gold is distributed because the physical gold itself (the "accounting entries" in the metaphor) is distributed. But with gold, that decentralization comes at a heavy price (literally). The physical nature of gold makes it hugely inefficient from a transactional perspective.

Enter Bitcoin.

It is the first currency in the world that is BOTH decentralized AND digital. It is more reliably scarce than gold, more transactionally efficient than "modern" digital banking, and enables greater financial privacy than cash. It could certainly still fail for one reason or another, but if it doesn't, it has the potential to be very, VERY disruptive.
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July 21, 2014, 04:08:22 PM
 #9755

I'm starting to see now how Bitcoin, in a parallel universe, would have been adopted a lot more quickly if it was called "Bitledger" and just referred to as a ledger from the start. Who knows... but the ledger paradigm really makes it all very clear in my opinion.

I'm guessing it was due to the past attempts at "e-cash" that had already framed the endeavor. Satoshi achieved the goal via a ledger system, but didn't call it "BitLedger" presumably because Bitcoin sounded more enticing given he was up against a bunch of people who couldn't see the point. Much of the early days were spent just convincing people it had any value at all, and admittedly the name BitLedger doesn't exactly scream "money" at a visceral level. However, several years of history with a liquid market demonstrating that the units are at all times very much redeemable for goods, services, and fiat money should have long since dispelled such concerns - assuming they were ever really stopping anyone anyway.

In my own case, if I had run across "BitLedger" I would have at least had to think a bit before initially dismissing it. It's a whole new idea. I'm inclined to think I'd reach the obvious conclusion: being essentially a community norm, it's going to be as valuable as the community that adopts it, and it's a chicken-and-egg thing. Which is true.
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July 21, 2014, 04:10:40 PM
 #9756

Over and over and over again

http://m.bbc.com/news/business-28405777?ocid=socialflow_twitter
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July 21, 2014, 04:54:02 PM
 #9757

https://twitter.com/coindesk/status/491249473319096320

Isle of Man welcomes Bitcoin.
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July 21, 2014, 05:16:40 PM
 #9758


Been a while coming. I'm guessing not much will happen. A fine perhaps?

I feel Taibbi is the standout reporting on this stuff: LIBOR, forex, Gold, Energy....

http://www.rollingstone.com/politics/news/everything-is-rigged-the-biggest-financial-scandal-yet-20130425
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July 21, 2014, 05:35:37 PM
 #9759


hehe it reminds me putin's balls of steal completing a south america tour lately:
http://www.dailymotion.com/video/x21cv4k_rt-poutine-efface-la-dette-de-cuba-s-t_news?start=1
Grin
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July 21, 2014, 06:00:54 PM
 #9760


Been a while coming. I'm guessing not much will happen. A fine perhaps?

I feel Taibbi is the standout reporting on this stuff: LIBOR, forex, Gold, Energy....

http://www.rollingstone.com/politics/news/everything-is-rigged-the-biggest-financial-scandal-yet-20130425

yeah, he's been really great since 2007
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