Gold collapsing. Bitcoin UP.

[cypherdoc]

Interesting... does this mean that if they somehow do manage to deleverage it could release all that cash back into the system (i.e. inflation)?

theoretically.  but banks are facing all sorts of increased regulatory scrutiny and aren't just going to lend to anyone at this standpoint.  the only loans they've given out the last 4 yr are those backed by the taxpayer or student loans which are non-dischargeable in a bankruptcy. now that lending is getting pulled back as student loan defaults have gone over 20% recently.  

and then you need to think like a criminal.  if you were a bank, why would you want to buy any assets after a 4 yr runup from the March 09 lows and after a doubling of the stock market.  why not just let the whole thing deflate and then swoop in and buy for pennies on the dollar?

[1714971300]

1714971300

[silverbox]

Yup for the last year or so Cypher has been saying that gold and the stock market are about to implode and collapse due to deflation.  I've been saying that it isn't..  Whose been right so far??

A broken old school analog clock is right twice a day.. Eventually the market will go down and Cypher will point to it and say see I was right!!  

I'll say Cypher was right when we have $800 dollar gold (his target is 400) and the Dow drops to 7000 or so.  Till then we haven't had the massive collapse he claims is coming.

Oh and btw, a collapse is sudden, like 6 months or less.  So Cypher was wrong 12 months ago when he said we were about to collapse, yet he persists in saying that its about to happen, mhmm.

this thread started in March.  12 months?  we got a big dip into June with a bounce.  we are now lower than we were in stocks when this thread started.

btw, how wrong have you been with your gold stocks?  massively wrong.  and we have the data to prove it.  and the other miners you bought in 2011 have to be way down as well.

i know my accounts are way up in Bitcoin and stocks.  and that's having been on the short side for stocks.  nice try.  

Oh you two....


But in all seriousness any of you has balls to show trade logs?

well i just showed you a screenshot of my GG short a page or so back.  why doesn't silverbox show us a screenshot of his for GPL?

lol I publicly stated that I bought at 1.98, on a day when it was in fact 1.98.  

I can edit up a screenshot to show anything about the past.

Your screenshot doesn't mean anything.  If your going to make a call, state it at the time of initiating the position, not months after the fact.

The only time in this thread you made a call you lost on it.

https://bitcointalk.org/index.php?topic=68655.msg991631;topicseen#msg991631

Right here, you stated you shorted GLD at 152.17.  Later you stated that you covered, at a LOSS.

This is the only trade you've disclosed on this thread with concrete numbers at the TIME YOU MADE IT, not after the fact.

The only trade I've disclosed at the time I made it, was to purchase GPL @ 1.98  and yes I'm losing money on it, I have traded around a core position, so I'm not losing as much as it would seem based on today's close of 1.65, however just to make the math simple count my initial position as 1.98.    It's been as high as 2.40 or so since I bought at 1.98.  Its a very small volatile silver miner it goes up and down 5-10% a day all the time.

its really tough to argue with a guy that throws around figures and accusations so loosely like saying i said stocks would collapse 12 mo ago.  that was Dec 2011.  i was in fact bullish on stocks at that time.  this is from my blog back then.  read thru all the posts in Dec 2011: http://financialriskanalytics.weebly.com/1/previous/15.html

its laughable that you would make a claim that the only public trade i've made on this thread is one i lost on.  its clear you've made it your mission to try and make me look bad with your insulting behavior.  i'm constantly having to provide proof to you of what i've said and when.  it's tiring.

here's the thing.  i continually present reasoned economic arguments about what i think is going on.  this thread would not be so popular if i at the very least wasn't stimulating everyone to think about the world a little differently.  i present charts and figures and attempt to explain the logic and reasoning behind them.  i present links to articles i deem important for everyone to be aware of.  i try to share my experiences and insights that others on this forum might not have had the chance to go thru. i present anecdotes and trends and data.  i back alot of my claims to links of posts i've made other places on this forum.  i even share a screenshot of my GG short that is clearly not mocked up (yet you insinuate i would have the gall to do that).  

what do you contribute?  answer:  nothing.  you're just a troll who loves to criticize, insinuate, and accuse ppl of dishonesty.  go away from this thread or put me on ignore.

Yup nothing.  Cept to call out your BS about how everything is about to collapse.  If you wouldn't make such ridiculous calls, that don't come true, then act as if they had, I wouldn't have to post here to state how your wrong, everything isn't about to collapse, were not about to have massive deflation, just like we weren't in march when you started this thread and I called BS then, just like I am now.

[cypherdoc]

Yup for the last year or so Cypher has been saying that gold and the stock market are about to implode and collapse due to deflation.  I've been saying that it isn't..  Whose been right so far??

A broken old school analog clock is right twice a day.. Eventually the market will go down and Cypher will point to it and say see I was right!!  

I'll say Cypher was right when we have $800 dollar gold (his target is 400) and the Dow drops to 7000 or so.  Till then we haven't had the massive collapse he claims is coming.

Oh and btw, a collapse is sudden, like 6 months or less.  So Cypher was wrong 12 months ago when he said we were about to collapse, yet he persists in saying that its about to happen, mhmm.

this thread started in March.  12 months?  we got a big dip into June with a bounce.  we are now lower than we were in stocks when this thread started.

btw, how wrong have you been with your gold stocks?  massively wrong.  and we have the data to prove it.  and the other miners you bought in 2011 have to be way down as well.

i know my accounts are way up in Bitcoin and stocks.  and that's having been on the short side for stocks.  nice try.  

Oh you two....


But in all seriousness any of you has balls to show trade logs?

well i just showed you a screenshot of my GG short a page or so back.  why doesn't silverbox show us a screenshot of his for GPL?

lol I publicly stated that I bought at 1.98, on a day when it was in fact 1.98.  

I can edit up a screenshot to show anything about the past.

Your screenshot doesn't mean anything.  If your going to make a call, state it at the time of initiating the position, not months after the fact.

The only time in this thread you made a call you lost on it.

https://bitcointalk.org/index.php?topic=68655.msg991631;topicseen#msg991631

Right here, you stated you shorted GLD at 152.17.  Later you stated that you covered, at a LOSS.

This is the only trade you've disclosed on this thread with concrete numbers at the TIME YOU MADE IT, not after the fact.

The only trade I've disclosed at the time I made it, was to purchase GPL @ 1.98  and yes I'm losing money on it, I have traded around a core position, so I'm not losing as much as it would seem based on today's close of 1.65, however just to make the math simple count my initial position as 1.98.    It's been as high as 2.40 or so since I bought at 1.98.  Its a very small volatile silver miner it goes up and down 5-10% a day all the time.

its really tough to argue with a guy that throws around figures and accusations so loosely like saying i said stocks would collapse 12 mo ago.  that was Dec 2011.  i was in fact bullish on stocks at that time.  this is from my blog back then.  read thru all the posts in Dec 2011: http://financialriskanalytics.weebly.com/1/previous/15.html

its laughable that you would make a claim that the only public trade i've made on this thread is one i lost on.  its clear you've made it your mission to try and make me look bad with your insulting behavior.  i'm constantly having to provide proof to you of what i've said and when.  it's tiring.

here's the thing.  i continually present reasoned economic arguments about what i think is going on.  this thread would not be so popular if i at the very least wasn't stimulating everyone to think about the world a little differently.  i present charts and figures and attempt to explain the logic and reasoning behind them.  i present links to articles i deem important for everyone to be aware of.  i try to share my experiences and insights that others on this forum might not have had the chance to go thru. i present anecdotes and trends and data.  i back alot of my claims to links of posts i've made other places on this forum.  i even share a screenshot of my GG short that is clearly not mocked up (yet you insinuate i would have the gall to do that).  

what do you contribute?  answer:  nothing.  you're just a troll who loves to criticize, insinuate, and accuse ppl of dishonesty.  go away from this thread or put me on ignore.

Yup nothing.  Cept to call out your BS about how everything is about to collapse.  If you wouldn't make such ridiculous calls, that don't come true, then act as if they had, I wouldn't have to post here to state how your wrong, everything isn't about to collapse, were not about to have massive deflation, just like we weren't in march when you started this thread and I called BS then, just like I am now.

lol!  yup, as long as your GPL keeps collapsing i'll be satisfied. 

[DoomDumas]

Using a biological analogy ...

Over the past few years, organs have begun shutting down and irreversible damage has occurred. Falling blood pressure (dropping velocity) means loss of consciousness is imminent.

... indication of impending mortality.

When a sociological organism begins to lose consciousness, it panics just like a biological one. With M2 velocity collapsing, the sociorg is no longer able to take actions that could right itself - like playing Tetris at a level too fast to move blocks into position. If M1 takes a nosedive, it's all over - that's where day-to-day activities fail to happen on a cohesive level.

Very interesting analogy which I think fits into the general thesis of The Great Credit Contraction where capital burrows down the liquidity pyramid into safer more liquid assets.

But even with the massive damage being done by the State humanity is still on an upward trajectory with advancements happening in science, math, computers, etc. and all of that is capital accumulation.



One thing that is so exciting about Bitcoin is its censorship resistant properties. The main problem from the State's interference in money and currency is its massive interference in the pricing mechanism. With a censorship resistant currency the economy will be able price much more efficiently by being able to route around the State imposed damage from monetary and financial regulation.

This will allow economic calculation to happen on a scale never before seen in human history and is extremely bullish for the generation and creation of wealth on a ginormous scale.

who's Trace Mayer?  

seriously though, a couple of comments.  first, the bad debt needs to be cleared to allow us to evolve to the next level using all this great technology being developed.  for that to happen, we are going to have more than a few years of rough times ahead as the dredge gets cleaned out (bad businesses and corruption).  only then yes, society can move forward otherwise the weight of irredeemable debt payments will continue to suffocate us.  Greece and Europe are great examples of how its impossible to solve a debt problem with more debt.

Bitcoin is going to help in this regard by causing widespread deflation aka price discovery.  look around you; everything is overpriced.  this has occurred b/c of 40 yrs of widespread debt expansion that has provided the vast majority of the money supply.  this debt is in the process of actively defaulting decreasing the money supply and causing a scramble for the remaining currency to pay this debt off.  thus the USD should rise as it has already lost all its value since 1913 helping to create this mess.  those who don't understand the primacy of debt expansion are doomed to make a huge investment mistake assuming that inflation is inevitable.  its that same linear thinking i've talked about that will get you.

I agree, and I dont see any reversal in the tendency of debt expansion.. Instead, growing debt seems to accelerate exponentialy.  IMO, the problem will still get wrost for several years.. Gold will go up to such inimaginable high, bitcoin too anyway.. But fiat debt creation seems to accelerate.. make me think that the entire world is pushing the fake to the limit and further..

Like I often say : guns, dry food and a shack deep into the forest !!!

[cypherdoc]

Update:

silverbox's long GPL:  -17%  (let's see a screenshot silverbox!)

cypher's GG short:  

Bitcoin:  +148

Gold:  0%

Difference:  +148% advantage Bitcoin (destroying gold and silver)

silverbox, i'll never forget when Bitcoin went from $5.40 to $4.50 and you were thrilled to see that just so you could whoop it up that i was wrong despite everyone else's disappointment in the price drop.  

[Melbustus]

and then you need to think like a criminal.  if you were a bank, why would you want to buy any assets after a 4 yr runup from the March 09 lows and after a doubling of the stock market.  why not just let the whole thing deflate and then swoop in and buy for pennies on the dollar?

Except that if they let the whole thing deflate, doesn't that wipe themselves out in the process (as you noted a few posts up)?

[miscreanity]

Hmm... I think you're saying (for instance) that if there was a sudden mass loss of confidence in silver (for example ) as money, then the other forms of money would have to cover all the economic activity that silver originally handled -- there would be a scarcity of currency resulting in deflation.  So since the debt was monetized, it behaves in this manner.  Fascinating!

Generally, yes. The deflation would be of asset values, because there is less currency available. Securitised debt is treated as money at an institutional level; most individuals don't have access to it.

By comparison to the amount of debt being written off, there is much more being created at the same time.

you are wrong.  the net difference btwn shadow banking credit and traditional bank credit is shrinking.  this is a much bigger problem than you realize:

There's a fly in your assertion: is that nominal or real GDP? The former is a reflection of an expanding monetary system, the latter is real growth. The chart is also a year out of date, do you know of a more recent one?

It's important to note that in order to keep the system afloat, it isn't necessary for the Fed to inflate from the GDP level to the derivative level. Inflation only has to keep the derivatives parallel to GDP. What's difficult about this is that the financial arena is struggling to prevent any contraction on itself, and that means continuing growth irrespective of GDP, whether nominal or real.

At the level of disparity between financial and real, a 1% relative rate of growth in each is vastly different from their absolute rates.

... the bank then becomes insolvent and the rating agencies have to adjust down the ratings causing stock investors to sell or short. banks would be forced to sell assets or raise more equity through stock dilutions as they scramble for cash.  this is deflationary and drives up the USD.  this is why banks so strongly resist taking the writedowns as it would wipe them out.

...

it isn't sustainable as you can't solve a debt problem with more debt.

The USD is effectively the fund for the USA, which is being run like the banks mentioned, at perhaps 100:1 leverage or greater. The rush to dollar cash post-2008 was an initial reaction. As the realisation set in that the dollar (and all other fiat) is in the same over-leveraged situation, there has been a tidal shift toward debt-free assets.

Everything is being done to accumulate these protective forms of wealth so that the institutions might survive, and there's a lot of competition among these institutions for a limited set of available resources.

A debt problem cannot be solved with more debt, but if the debt issuance can be slowed, recovery is possible. The problem is, we've passed that point and now nations will have to renege on their promised obligations - with disastrous results.

theoretically.  but banks are facing all sorts of increased regulatory scrutiny and aren't just going to lend to anyone at this standpoint.  the only loans they've given out the last 4 yr are those backed by the taxpayer or student loans which are non-dischargeable in a bankruptcy. now that lending is getting pulled back as student loan defaults have gone over 20% recently.  

Banks are effectively living hand-to-mouth. Funds must be used, as cash-flow is more important than reserves. If the precarious flow is not sustained, reserves rapidly deplete and banks start to default.

Since this flow is barely enough to sustain the financials, they can only scale down or grow. Citi laying off another 11,000 employees is a sign of this - the weaker scale down, the stronger grow or consume their opposition. Any negative disruption to the flow will accelerate these actions.

I realise that your tendency is toward flipping properties, but that isn't what the banks are interested in - they look for revenue streams; cash-flow. It's like oxygen to them. While you may look for a property that can be increased in value for a small investment, the financials look for multiple properties that are net cash-flow positive. The two courses of thought are fundamentally very different.

and then you need to think like a criminal.  if you were a bank, why would you want to buy any assets after a 4 yr runup from the March 09 lows and after a doubling of the stock market.  why not just let the whole thing deflate and then swoop in and buy for pennies on the dollar?

You might have missed this:

deflation sounds good, everything gets cheaper, whats the problem?

Societal collapse, supply chain failures, war, famine, death. Sound good now?

It's important to understand the criminal mindset, but also the survival perspective; especially a criminal trying to survive. This is not business-as-usual, it's survival of the fittest. Any firm that doesn't play the game will fall and be devoured - they're all in survival mode, striving to see which will survive best.

[cypherdoc]

and then you need to think like a criminal.  if you were a bank, why would you want to buy any assets after a 4 yr runup from the March 09 lows and after a doubling of the stock market.  why not just let the whole thing deflate and then swoop in and buy for pennies on the dollar?

Except that if they let the whole thing deflate, doesn't that wipe themselves out in the process (as you noted a few posts up)?

they know that not all of them will survive.  just like they threw Lehman overboard when it came right down to it.  and Merrill and Bear.  the point is, they know the irrationality can only go on so long.  at some point no one makes a stupid investment based on a White Horse.

[cypherdoc]

miscreanity:

you are incorrect about securitization as well.

as of April 2012:  http://www.newyorkfed.org/research/staff_reports/sr559.pdf



securitization has not increased; in fact, its terribly impaired:

as of Dec 2012:  https://www.imf.org/external/pubs/ft/sdn/2012/sdn1212.pdf



finally, this is the graph i meant to put up above.  the drop in shadow debt is greater than the rise of traditional debt

[Melbustus]

did you bother to look at misreality's graph a few posts back?  that's called hoarding.  they are doing a little bit of lending but no where near what they've done in the past.  they know consumers are tapped out and poor credit risks at this point.

securitization has not increased; in fact, its terribly impaired:

...and those two make a pretty good case that the current printing is NOT being leveraged to cancel out the structural deflation that's taking place. The old "pushing on a string" analogy....(which is actually a Keynes quote, isn't it?).

Cypher - it seems you agree pretty closely with Kyle Bass (ie, the endpoint does not trigger lots of society-wide inflation, it triggers deflationary collapse).

[silverbox]

Update:

silverbox's long GPL:  -17%  (let's see a screenshot silverbox!)

cypher's GG short:  

Bitcoin:  +148

Gold:  0%

Difference:  +148% advantage Bitcoin (destroying gold and silver)

silverbox, i'll never forget when Bitcoin went from $5.40 to $4.50 and you were thrilled to see that just so you could whoop it up that i was wrong despite everyone else's disappointment in the price drop.  

I'll never forget when you bet me 10 BTC that AAPL would drop to 500 in 2 months and lost.  (Thanks for the 10 BTC)

I'll also never forget when you said that you were putting on a massive short in GLD at 152 and to put this on the record!, then promtly lost your ass and had to cover.  Why did you cover if your certain gold is about to deflate?

Lets see you disclosing your positions on the day you start them, not cherry picking the winners  (like you did with your GLD short, which you lost money on)

I'll also never forget how you crow about selling silver at the peak, but you neglect to mention that you bought into BTC at 20+ with those funds and it promptly crashed to 2.

[cypherdoc]

Update:

silverbox's long GPL:  -17%  (let's see a screenshot silverbox!)

cypher's GG short:  

Bitcoin:  +148

Gold:  0%

Difference:  +148% advantage Bitcoin (destroying gold and silver)

silverbox, i'll never forget when Bitcoin went from $5.40 to $4.50 and you were thrilled to see that just so you could whoop it up that i was wrong despite everyone else's disappointment in the price drop.  

I'll never forget when you bet me 10 BTC that AAPL would drop to 500 in 2 months and lost.  (Thanks for the 10 BTC)

I'll also never forget when you said that you were putting on a massive short in GLD at 152 and to put this on the record!, then promtly lost your ass and had to cover.  Why did you cover if your certain gold is about to deflate?

Lets see you disclosing your positions on the day you start them, not cherry picking the winners  (like you did with your GLD short, which you lost money on)

I'll also never forget how you crow about selling silver at the peak, but you neglect to mention that you bought into BTC at 20+ with those funds and it promptly crashed to 2.

this is a forum for christs sake.  ppl post their opinions on where they think this or that investment is gonna go all the time with collapse or rocket descriptions.  who do you think you are coming in here and laying down "ground rules" for everyone's opinions as to what they think is gonna happen with this or that?  i don't see you asking for "evidence" as to exactly when other ppl stake their positions.  what's wrong with you?  is it perhaps that you're suffering from the permabull gold/silver religion that has afflicted so many?  are you afraid that they are reallly going to collapse?  i truly do see this as a possibility and you should respect my opinion just as i respect yours even though we disagree.  give me a 6 mo projection as to where gold and silver are going.

you asked me for transparency and i provided it in the form of a screenshot that i've posted on my GG position for all to see.  you know its valid as i announced it publicly here on this thread in Sept and in my updates to my subs.  you even questioned me about it at the time.  there is a date of 9/28/12 when i staked the position and you whooped it up assuming i established it before it went over $46.  so why do you have the audacity to claim i did a mockup based on exactly zero evidence?  so Mr. Transparency, where is your screenshot of GPL?  is it that the losses are way greater than 17%?

as you can see i'm a patient man with my investments and do not let emotions get involved in my trading.  many of my short positions on stocks, like Apple, were established initially back in the Spring.  waiting has been profitable.  you're clearly an impatient individual.  tops and bottoms are processes and the whole point of technical analysis is to call things before they happen to allow time for investors to prepare.  the analogy would be if you worked in the Twin Towers.  would you want to be warned a few days before or after the planes hit the buildings?  

here's where i got short initially.  yes, rode the thing down and then up.  hedging along the way has protected part of the profits.  hit some major homeruns along the way with PCLN, CMG, BBBY, WU, and now Apple.  i don't consider that a failure at all.  in fact, i'm having a great year by my measures.  a collapse is a collapse whether it slow or fast.  i'll take my shorts down if i'm proven wrong but not until then.

and yes, Bitcoin is destroying your precious gold and silver and GPL:

[cypherdoc]

did you bother to look at misreality's graph a few posts back?  that's called hoarding.  they are doing a little bit of lending but no where near what they've done in the past.  they know consumers are tapped out and poor credit risks at this point.

securitization has not increased; in fact, its terribly impaired:

...and those two make a pretty good case that the current printing is NOT being leveraged to cancel out the structural deflation that's taking place. The old "pushing on a string" analogy....(which is actually a Keynes quote, isn't it?).

Cypher - it seems you agree pretty closely with Kyle Bass (ie, the endpoint does not trigger lots of society-wide inflation, it triggers deflationary collapse).

i like Kyle Bass. i really like him. but i see things differently on 2 points:

1.  he's stacked a crapload of gold i'm sure.  probably the same as i had relative to my net worth (i'm nowhere near in his category).  i don't think he knows about Bitcoin.  i think that's a problem given what you know my opinion on the metals is at this point.

2.  i understand he's constructed a huge fortified ranch somewhere in Texas i believe?  complete with jeeps and men armed with AK-47's.  probably with rocket launchers, etc?.    i'm more of an optimist in that regard.  although, i think things will get very rough when the collapse comes, i think it will mostly hurt Wall St as most retail investors have left the stock mkt knowing how crooked it is.  at least i'm hoping so.  i think Bitcoin will grind this corruption down into the ground over several years.  perhaps fast, perhaps slow, i don't know for sure.  but i think we'll all come out of this much better for it in the end so in that sense i'm very optimistic for myself and my family.

[cypherdoc]

in case anyone wants proof of my assertions about who's getting the lending.  this is not a sustainable solution:

[cypherdoc]

i heard a great argument the other nite about why everyone should not be buying into this rally off the March 09 lows.  and it applies to housing, stocks, metals, all risk assets.  it goes like this:

"its been an exceeding poor quality rally".

yes, that's it.   most of you guys don't really follow financial markets like i do and it helps to be a technician who listens to the news.  reasons for "poor quality":

1.  low volume
2.  its been based on QE1, QE2, operation twist, QEternity.
3.  we've had to double the national debt in 4yr just to accomplish it.  
4.  we've allowed the corruption to continue and in fact get worse.  no one has gone to prison esp. the CEO's of the investment banks.  thus they will continue their illicit activity until someone or something does something about it.
5.  retail investors have continued to bailout in record numbers
6.  insider sales have been at record levels
7.  if you borrowed to invest in risk what happens when rates go up?
8.  personal income is going down
9.  total debt levels and securitization is coming down
10. excess reserves are being hoarded
11. the student loan bubble is coming to an end.
12. Europe is in a depression.  we're all connected.
13. the China miracle is coming to an end.
14. mark to model still reigns
15. how is the Fed ever possibly gonna sell off it assets?  answer:  it can't.

i could go on but thats enough for now.

[kakobrekla]

Theres a simple answer to this mess - open a Bitcoin denominated forex account and short whatever is going to shit the most. 

[Melbustus]

i like Kyle Bass. i really like him. but i see things differently on 2 points:

1.  he's stacked a crapload of gold i'm sure.  probably the same as i had relative to my net worth (i'm nowhere near in his category).  i don't think he knows about Bitcoin.  i think that's a problem given what you know my opinion on the metals is at this point.

2.  i understand he's constructed a huge fortified ranch somewhere in Texas i believe?  complete with jeeps and men armed with AK-47's.  probably with rocket launchers, etc?.    i'm more of an optimist in that regard.  although, i think things will get very rough when the collapse comes, i think it will mostly hurt Wall St as most retail investors have left the stock mkt knowing how crooked it is.  at least i'm hoping so.  i think Bitcoin will grind this corruption down into the ground over several years.  perhaps fast, perhaps slow, i don't know for sure.  but i think we'll all come out of this much better for it in the end so in that sense i'm very optimistic for myself and my family.

Yeah, he can be a little apocalyptic sounding, though he does often state something along the lines of "well, the world is not gonna end, but it'll be difficult for a while".

With regard to:

1) Yes, he certainly holds gold. As he does various equities, debt, real-estate, etc. He's just also very nicely hedged via hugely asymmetrical positions that'll payoff by orders of magnitude if massive dislocations do end up occurring. Japan is obviously his big hedge here... Though I still don't understand how he can bet that JGB yield will rise when the BoJ has shown that they're fully willing to buy all the bonds (probably forever); thus, they can keep yield stupid low forever. Started a thread on this here.

2) Heh... Yeah, sounds about right. I guess you can really insulate against tail risk when you're worth a couple $B and feel like it might come down to having to physically protect it...

[miscreanity]

miscreanity:

you are incorrect about securitization as well.

as of April 2012:  http://www.newyorkfed.org/research/staff_reports/sr559.pdf

...

securitization has not increased; in fact, its terribly impaired:

as of Dec 2012:  https://www.imf.org/external/pubs/ft/sdn/2012/sdn1212.pdf

...

finally, this is the graph i meant to put up above.  the drop in shadow debt is greater than the rise of traditional debt

Pay attention to the chart titles:
US Securitization Issuance
US Private Label Securitization Market

As I said earlier, there's an entire world outside of the US, much of which is beginning to exceed North America in every way. With that in mind, let's take a look at global derivatives and securitisation.


Source: IMF Global Financial Stability Report

It's apparent that Canada, Europe, and Japan are on the upswing related to contract creation. It will be interesting to see the IMF's 2012 data, as it should show a continued resurgence. It would be even more interesting to see this type of information on a wider scope.

When looking at the following chart, keep in mind that the BIS simply changed its calculation on outstanding derivatives a few of years ago, cutting the notional value from over a quadrillion USD to around $700 trillion. The notional amount of outstanding derivatives by the BIS calculations has remained consistent since 2008, so the implication for the actual amount is intentionally obscured.



The next chart includes the number of exchange-traded contracts. Privately negotiated contracts are not captured in this data.


Source: Bank for International Settlements

The 'shadow debt' declined, but traditional debt is far above the 2008 peak. Again, is this US data alone, or global?

in case anyone wants proof of my assertions about who's getting the lending.  this is not a sustainable solution:

Once more, US exclusive information. This also does not capture entire segments of data. As you mentioned earlier - financial obscurity is the norm. Why do you not account for the unseen?

"its been an exceeding poor quality rally".

Absolutely.

2.  its been based on QE1, QE2, operation twist, QEternity.

And you think this will just stop? Large ships take miles to turn around. Large economies with significant momentum would tear themselves apart by doing a 180 in a few years.

3.  we've had to double the national debt in 4yr just to accomplish it.  

All that in order to stay in place. How much more will be needed to continue to remain stable and not collapse?

4.  we've allowed the corruption to continue and in fact get worse.  no one has gone to prison esp. the CEO's of the investment banks.  thus they will continue their illicit activity until someone or something does something about it.

They won't allow themselves to be brought down, yet you think that they'll voluntarily resign themselves to a deflationary environment without a fight?

7.  if you borrowed to invest in risk what happens when rates go up?

Exactly, which means rates won't go up. They will be maintained at marginal levels using whatever means necessary, even if the result is a complete fabrication (like mark-to-model listed below).

9.  total debt levels and securitization is coming down
10. excess reserves are being hoarded

See the charts and commentary above. The US is not an island.

11. the student loan bubble is coming to an end.

What do millions of disillusioned, unemployed students do? Foment rebellion. The loan bubble will also be sustained at all costs.

12. Europe is in a depression.  we're all connected.
13. the China miracle is coming to an end.

So why such exclusive focus on the US? Charts, statistics, trends - all US-centric so far. That's very short-sighted.

Statistics can only assess information that is captured. There are plenty of segments that either have no information available, or are so obscured that they are inaccessible.

14. mark to model still reigns
15. how is the Fed ever possibly gonna sell off it assets?  answer:  it can't.

Then how can the debt be deleveraged? Either the Fed takes on the role of 'bad bank' and implodes with all of the toxic assets, causing massive disruption in the financial system, or inflation continues and accelerates to higher levels to maintain relative stability.

[cypherdoc]

i like Kyle Bass. i really like him. but i see things differently on 2 points:

1.  he's stacked a crapload of gold i'm sure.  probably the same as i had relative to my net worth (i'm nowhere near in his category).  i don't think he knows about Bitcoin.  i think that's a problem given what you know my opinion on the metals is at this point.

2.  i understand he's constructed a huge fortified ranch somewhere in Texas i believe?  complete with jeeps and men armed with AK-47's.  probably with rocket launchers, etc?.    i'm more of an optimist in that regard.  although, i think things will get very rough when the collapse comes, i think it will mostly hurt Wall St as most retail investors have left the stock mkt knowing how crooked it is.  at least i'm hoping so.  i think Bitcoin will grind this corruption down into the ground over several years.  perhaps fast, perhaps slow, i don't know for sure.  but i think we'll all come out of this much better for it in the end so in that sense i'm very optimistic for myself and my family.

Yeah, he can be a little apocalyptic sounding, though he does often state something along the lines of "well, the world is not gonna end, but it'll be difficult for a while".

With regard to:

1) Yes, he certainly holds gold. As he does various equities, debt, real-estate, etc. He's just also very nicely hedged via hugely asymmetrical positions that'll payoff by orders of magnitude if massive dislocations do end up occurring. Japan is obviously his big hedge here... Though I still don't understand how he can bet that JGB yield will rise when the BoJ has shown that they're fully willing to buy all the bonds (probably forever); thus, they can keep yield stupid low forever. Started a thread on this here.

2) Heh... Yeah, sounds about right. I guess you can really insulate against tail risk when you're worth a couple $B and feel like it might come down to having to physically protect it...

1.  yes, no doubt along with Hugh Hendry, Nassim Taleb and several others.  there is an argument that the yen is going to weaken starting right about now.  but i'm not betting on it.  i actually shorted UST's over the last month for a nice profit using TBT but closed it out last week fearing another rush to safety.    i'm diversified as well:  still have my small RE portfolio which i never sold b/c of the trouble (could regret this if they start raising property taxes), still hold my 24 1 oz gold coins, have a load of Bitcoin, plenty of cash, and plenty of shorts. 

2.  don't get me wrong.  i've also bought all my guns and bullets along with freeze dried food so i'm ready if the SHTF too.  i just don't have armed guards patrolling my property.

[cypherdoc]

miscreanity:  first of all, you need to back those graphs out another 10 yrs like the one's i've presented.   and then you'll see a topping pattern if not an outright decline in the charts you've presented.  and the other major problem is that you're forgetting that the USD is the world's reserve currency.  these countries aren't going anywhere in terms of credit creation if the US isn't providing it.  remember Triffin's Dilemma?