Gold collapsing. Bitcoin UP.

[cypherdoc]

Armstrong opened my eyes to reality.

this explains right here why you are such a doom and gloomer.

i used to casually read his writings, especially the ones when he was behind bars.  but ever since he got out, he has been selling his conferences on world collapse in a shameless way.  i've stopped listening.

[Fabrizio89]

Gold up, Bitcoin... well.
Went long on Gold on 1broker anyway, good shit for now.

[Adrian-x]

Agreed with all.

I think it's obvious of the implications of debt based economy if mismanaged.. Although long term it's impossible to manage due to greed and fear. The reason It was done was because economy simply would stagnate and not grow from the 70s on who knows if Internet would have been invented.. Although the system was the best at the time it's not one to look back on and say we totally failed.

Perhaps it was the global roll-out of the telegraph from the 1870s which was the beginning of the end of the gold-standard. Long-distance commerce needed a monetary system which could play out at the same speed, and this transition was complete by 1971. So the debt-money system that resulted was the best that could be done.

It's really interest rate targetting that is the foundation of the system and it's pretty sound according to John Nash although not ideal. Gold standard is less ideal howver Bitcoin seems to be better than both on paper.. In practice who knows. I personally believe nash purposely doesn't acknowldge it because he had a hand in designing it and it may be definition of what he calls ideal money. It would probably result in a big credit crunch lasting years before we prosper so it really depends on if enough people can be convinced of the long term solution giving up some short term pain.

And this is what is failing because it has all but hit the zero-bound and staying there year after year: in the US, Eurosystem, Japan, UK and Switzerland - simultaneously. CBs are tinkering with ideas like negative rates, and want to restrict the use of physical cash to just small transactions, forcing people to stay in electronic money where negative rates might get traction. Desperate stuff. No wonder there are seismic cracks in the credit markets.

And that is why gold as money worked for so long. Yes there were cycles, but since money never extended too far beyond the base money (M0 gold), the busts were relatively small.

With debt money, as you said 95% of money in use isn't even printed yet, and on top of that is further leverage. This means that the bust would be massive and crushing in a manner that could never happen under a gold standard.

What the US traded was a series of small but easily recoverable busts that continuously cleansed out the system, for a system that appears stable but in reality is not, the series of small busts are simply being allowed to build into one massive bust.

Absolutely. However, governments are now such control freaks (unlike in 1907 when the crash then was considered more like a force of nature, and allowed to work itself out), that the one massive bust to come may well be met with one massive bout of money printing!

They exchange function for confidence, the real for the prettier illusion.

I suppose it is a risk...  If you are running such a really long con, even your successors might fall for it.

100 years is such a long time that anyone working at a CB has to believe that they are following tried and tested principles.

All good stuff thanks all involved so concise.

Reading this I couldn't help but relate the idea of demurrage to negative interest rates in practice they are a way to apply demurrage to fiat.

Funny thing is the idea was/ is being tested in one of the first Alts, Peercoin is still doing well in the top 10 Alts.

[Peter R]

Here is nice piece from Brian Forde, director of the MIT Cryptocurrency Initiative.  His article draws our attention to the following four problems with Lawsky's proposed BitLicense regulation:

1. Updates to "apps" would need approval before they could be rolled out.

2. Start-ups would require approval from the NYDFS before they could raise new funds (if a new investor provides an investment for more than 10% of the company).

3.  Companies engaged in money transmission would still need a Money Transmitter License in addition to a BitLicense.

4.  Open-source wallet developers would apparently fall under the regulation as well (even though a wallet like Electrum does not have access to the user's funds). 

[Adrian-x]

Here is nice piece from Brian Forde, director of the MIT Cryptocurrency Initiative.  His article draws our attention to the following four problems with Lawsky's proposed BitLicense regulation:

1. Updates to "apps" would need approval before they could be rolled out.

2. Start-ups would require approval from the NYDFS before they could raise new funds (if a new investor provides an investment for more than 10% of the company).

3.  Companies engaged in money transmission would still need a Money Transmitter License in addition to a BitLicense.

4.  Open-source wallet developers would apparently fall under the regulation as well (even though a wallet like Electrum does not have access to the user's funds). 

Thanks for the summary I was a little to distracted to read it.

[rocks]

Agreed with all.

And that is why gold as money worked for so long. Yes there were cycles, but since money never extended too far beyond the base money (M0 gold), the busts were relatively small.

With debt money, as you said 95% of money in use isn't even printed yet, and on top of that is further leverage. This means that the bust would be massive and crushing in a manner that could never happen under a gold standard.

What the US traded was a series of small but easily recoverable busts that continuously cleansed out the system, for a system that appears stable but in reality is not, the series of small busts are simply being allowed to build into one massive bust.

Absolutely. However, governments are now such control freaks (unlike in 1907 when the crash then was considered more like a force of nature, and allowed to work itself out), that the one massive bust to come may well be met with one massive bout of money printing!

And this already started in 2008 after which we have seen the largest globally coordinated money printing spree in human history.

The thing to remember though, is you can't print money. You can only add units to the ledger, which has the effect of devaluing (I'd call it stealing) current units and replacing them with new units, however the total monetary value of all the units remains the same.

What can happen is people simply lose confidence in the existing monetary system and stop subscribing value to it. When this happens the total value of all the units actually decreases. This is why for example during Germany's hyperinflation no one had money to buy anything despite the fact the government was putting wagons full of money in people's hands. Sure Germany was printing units, but the total value of all units (old and newly printed) crashed.

So governments can be control freaks to whatever extent they want. But once people stop subscribing value to their units of money, their ability to control crashes.

[rocks]

Here is nice piece from Brian Forde, director of the MIT Cryptocurrency Initiative.  His article draws our attention to the following four problems with Lawsky's proposed BitLicense regulation:

1. Updates to "apps" would need approval before they could be rolled out.

2. Start-ups would require approval from the NYDFS before they could raise new funds (if a new investor provides an investment for more than 10% of the company).

3.  Companies engaged in money transmission would still need a Money Transmitter License in addition to a BitLicense.

4.  Open-source wallet developers would apparently fall under the regulation as well (even though a wallet like Electrum does not have access to the user's funds). 

Just the fact that an unelected bureaucrat can propose such sweeping control and power over individuals, without being laughed at and run out of the country, demonstrates that "The People" on which the US was based have failed.

[Wekkel]

Armstrong opened my eyes to reality.

[...] he has been selling his conferences on world collapse [...]

I like his ramblings about history but don' t like his simplifications of opponents or people with a different view. It really went south for me when he avoided a factual debate with Denninger on his 'one dollar of capital' suggestion in relation to fractional reserve banking.

But I guess we are all Marxists... 

[NewLiberty]

To me they seem less depressing and more simply incomprehensible.

Could you be more specific please? Because my posts were very specific. You have not stated what specifically I enumerated which you think is incomprehensible?

And you post the following which supports my thesis:

Yet another escalation in the international War on Cash:
https://www.cryptocoinsnews.com/denmark-central-bank-stop-printing-money-shops-can-refuse-accept-notes-coins/

Incomprehensible likely because I've not yet discovered your thesis.  
Thus, I'm not arguing for or against you.

The war on cash has been long and ongoing.  Bitcoin is as of now the most stalwart defense, but it is in its infancy.

From what I've gleened so far, I would offer this observation:

It fundamentally does NOT require any conspiracy when incentives are naturally aligned, (as they are with the many governments beholden to central banks).  These entities do not even need to collude.  Basic economics and game theory teaches us this, if nothing else.

[cypherdoc]

see last line of slide:



apropo to whether or not our 1MB core devs will allow Bitcoin to develop as mobile money which is necessary for it to develop as digital gold.

[cypherdoc]

real trouble in bond land:

investment grade:



junk:



muni:

[cypherdoc]

everything US turning down:

TLT:



$DXY:

[cypherdoc]

the only thing left is the stock mkt. 

the Transports look like they will crack support.  once that happens, the flood gates should open.  if the $DJI cracks it's secondary low point, we will have confirmation of the long standing multi-month non confirmation which will really open the gates of hell.

sell in May and go away.

[Erdogan]

They exchange function for confidence, the real for the prettier illusion.

I suppose it is a risk...  If you are running such a really long con, even your successors might fall for it.

100 years is such a long time that anyone working at a CB has to believe that they are following tried and tested principles.

What saved the long con for so long was the 20th century population boom and technological revolutions.

Those two factors created wealth at a faster rate than the central banks could destroy it. So much so, that it wasn't apparent to anyone that the central banks were destroying wealth at all.

That no longer appears to be the case.

I like this view.

[NewLiberty]

They exchange function for confidence, the real for the prettier illusion.

I suppose it is a risk...  If you are running such a really long con, even your successors might fall for it.

100 years is such a long time that anyone working at a CB has to believe that they are following tried and tested principles.

What saved the long con for so long was the 20th century population boom and technological revolutions.

Those two factors created wealth at a faster rate than the central banks could destroy it. So much so, that it wasn't apparent to anyone that the central banks were destroying wealth at all.

That no longer appears to be the case.

I like this view.

Its pretty accurate.  In the last decade though, they have been getting pretty greedy.  The TARP bailout sort of broke the model harshly in their favor.  

The age old model is that when the banks get out of control, a few fail (or a few hundred) and it resets as the survivors scoop up the remains.  Now with the use of state power, they have taxpayer funded bailouts, bail-ins and all sorts of new ways to destroy wealth.

The war on cash includes most of the AML powers along with it.  When the reporting requirement of US$10K was enacted in the 70's it was quite a chunk of cash.  Now with a bit of inflation mixed in, it is not an uncommon monthly pay for folks in large US cities.  But that isn't happening fast enough, so banks must keep a record of transactions as small as US$1K cash and report on as small as US$2K transactions.

http://www.fincen.gov/financial_institutions/msb/materials/en/bank_reference.html

Currency Exchanges of More Than $1,000
Currency exchangers must keep a record of each exchange totaling more than $1,000 in either domestic or foreign currency.

How to record a currency exchange:

1. Record customer information.
2. Record transaction information.
3. Keep the record for 5 years from the date of transaction.

Suspicious Activity Reporting Requirements
Certain money services businesses – businesses that provide money transfers or currency dealing or exchange; or businesses that issue, sell, or redeem money orders or traveler’s checks – must report suspicious activity involving any transaction or pattern of transactions at or above a certain amount:

$2,000 or more;
$5,000 or more for issuers reviewing clearance records.
You have 30 calendar days to file a SAR after becoming aware of any suspicious transaction that is required to be reported.

[cypherdoc]

the bond managers are getting desperate.  anything to make their bond portfolio prices go up.  

note that this guy doesn't ever truly think that gvt manipulation of interest rates will ever be to the upside; he knows they're a one trick pony.  it would just be a matter of how negative they want to take them to screw the savers to his benefit:

http://www.telegraph.co.uk/finance/personalfinance/comment/11602399/Ban-cash-end-boom-and-bust.html

[NewLiberty]

the bond managers are getting desperate.  anything to make their bond portfolio prices go up.  

note that this guy doesn't ever truly think that gvt manipulation of interest rates will ever be to the upside; he knows they're a one trick pony.  it would just be a matter of how negative they want to take them to screw the savers to his benefit:

http://www.telegraph.co.uk/finance/personalfinance/comment/11602399/Ban-cash-end-boom-and-bust.html

LOL!  End boom and bust by sticking only to bust?

The more they squeeze though, the more that making a compelling case for Bitcoin to everyone who learns of it becomes easy.

[cypherdoc]

accelerating to the downside now. 

sidhujag, heads up.

[molecular]

real trouble in bond land:

investment grade:

if this was bitcoin I would be shitting my pants now.

[rocks]

The age old model is that when the banks get out of control, a few fail (or a few hundred) and it resets as the survivors scoop up the remains.  Now with the use of state power, they have taxpayer funded bailouts, bail-ins and all sorts of new ways to destroy wealth.

It was the emergence of the "Too Big To Fail" policy which created this and was effectively codified into law with the LTCM bailout in the late 1990s.

To Big To Fail = disabling the clearing mechanism which is necessary for a functioning capitalist society. If you are too big to fail, then you can do anything and be as inefficient as possible, but that inefficiency will never be cleared out of the market.

The creation of the FED in 1913 was essentially to formation of a too big to fail policy at the government level (before the US gov would have to go for bailouts itself). But as you pointed out banks and other industry were still allowed to fail. This stopped in the 1990s and TBTF was extended to corporations, which is why every corporate entity from banks to auto manufactures (i.e. GM/Chrysler) have tried to position themselves as too big to fail.

This will continue until the dollar fails, effectively destroying the too big to fail enabler.