Gold collapsing. Bitcoin UP.

[cypherdoc]

oh Lordy  

gold coming up:

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[vokain]

briefly, what would have to happen for silver/gold to go up? it's gone down because of liquidity and deflation, correct? the economy is just so bad that people don't have the cash to spare for gold? I've heard so many reasons, most prominent of which is the market manipulation narrative.

curious, with the supply of dollars increasing day by day and all


Edit: i think I found my answer...do any of us actually want an oz of gold if we don't believe it hedges against inflation? Considering that point and its recent short-term drop in price, I can't do much with it and it's a pain to sell. there are better investments, so buying pressure must be a lot less than selling pressure. is there more to this?

[smoothie]

I don't believe silver is a losing trade if bought with bitcoin profits.

Now that move would be the most tragically epic of all.

Well if I put 100% profits into it then yes.

I think I put maybe 5% into it.

[BitcoinAshley]

Why would you need more than one kind of PM, if cryptocoins succeed and gold doesn't become useless?

And especially, why silver? Why not platinum and palladium? Why?

Good question. Two answers: Gold's limited fungibility compared to silver, and silver's history as a currency (3000 years for silver and 6000 years for gold, IIRC.) compared to platinum and palladium.

A lot of stackers are the tinfoil hat types. So they have bitcoins for the day when the USD collapses, but what about when the "S" REALLY "HTF" and there are widespread power outages? If the USD and other fiat currencies hyperinflate, gold and silver will skyrocket along with BTC. But if you can't use BTC because you don't have power for a month, and the USD is worthless, well, if you want to buy some of your neighbour's emergency grain supply, a gram of gold is going to buy you about 10 times more than he has and it's barely any more fungible than that unless you have "grains" lying around. A few grams or a half an ounce of silver is better for small transactions. 
As for history and familiarity, silver (like gold) is familiar (everyone's grandma has a sterling silver set, they know that silver is valuable) but no one's grandma has a palladium necklace that she inherited from her great grand pa the  palladium explorer.

Obviously that is a really stupid situation that will never happen. But there is a third reason: The folks that think gold and silver prices are actively suppressed by JPM and the like, also have their theories about silver:gold and they argue that "unsuppressed" i.e. without the naked paper markets, silver would provide a much better ROI relative to gold. This is based on the total amount of above-ground gold/silver, etc.

Fourth reason: Arguably, silver has far more industrial uses than gold and therefore more intrinsic value.

One more thing to add, and that is, there are some communities that have businesses that accept PM. Much like there is a city in Germany with the highest concentration of Bitcoin businesses, there are some areas in Texas, Arizona, Utah, etc., where precious metals are seen as more of a currency than a novelty item on its way out. And here the gold fungibility issue rears its head again.

Hopefully I gave good answers to your good question

[BitcoinAshley]

briefly, what would have to happen for silver/gold to go up? it's gone down because of liquidity and deflation, correct? the economy is just so bad that people don't have the cash to spare for gold?

curious, with the supply of dollars increasing day by day and all

Hi Vokain, there is a crazy conspiracy theory regarding central banks, big bankster cartels (JP Morgan etc.) and the paper/physical markets. Put your tin foil hat on and get ready...

Briefly, it goes something along these lines: There is the physical PM market and the paper PM market. The price is coupled - I.E. the price that boullion dealers sell physical PMs for is very close to the price paper PM certificates are sold for, with the understanding that every single certificate corresponds to that exact amount of gold or silver in a vault somewhere. Is this understanding correct? Hmm.

Paper market is buying "certificates" that say you own gold. These are easier to trade because delivery and storage is slow and expensive. Problem is - much of the paper does not actually correlate to real gold/silver and that is in the "fine print" of the contracts. Many of the traders do not even realize this until they request delivery and are sometimes forced to settle in cash. We do not know how much of the paper is "naked shorting" but there are days when the entire above-ground inventory of silver is supposedly traded in a single day. So increased demand in the physical market (though gold/silver bugs are exaggerating just a bit) is unable to drive prices up because there is this mass of naked shorting taking place.
So because of "naked shorting" en masse by the big banks, this supposedly drives down the prices.

It would be like if I made a bunch of fake paper bitcoins and sold them on MtGox to idiots. It would drive the price down but then when the idiots tried to get bitcoins from me I'd be like "Actually none was specifically allocated to you... here's some fiat money instead." Yes, you're still getting the same "value" back, but the point is that the quantity of metals that are supposedly on the market aren't actually on the market. And of course then it meets the conspiracy theory where the Fed is printing 85 billion dollars a month and giving it interest-free to the big financial corporations to throw it right into the stock market - naturally, some of it finds its way to funding commodities exchange defaults or the euphemism which is "forced cash settlement on margin call."

Edit: i think I found my answer...do any of us actually want an oz of gold? I can't do much with it and it's a pain to sell. there are better investments, so buying pressure must be a lot less than selling pressure. is there more to this?

This is definitely a factor. Gold has certainly retained its value better than any other currency, for longer than any currency in existence, fiat or otherwise, but at the moment it is not very usable as a currency (only certain regions have a decent concentration of businesses that accept precious metals.)
Look at it this way: It's an asset that holds its value remarkably over the long term (decades, centuries, even millenia) and is for those who are invested in the theories regarding price suppression on the part of the big banks using "naked shorts" of paper PM certificates. In addition, there are certain cultures (Chinese, Indian, etc) where it is tradition for the family to purchase gold and give it to the next generation as a "savings account." If neither the conspiracy theory or the ancient cultural tradition doesn't interest you in buying more PMs, that's good, you're probably "sane."

What would have to happen for PM prices to go up? Naked shorts would have to be exposed on mainstream media for a prolonged amount of time, paper price would have to decouple from physical price, and major fiat currencies would have to suffer a significant inflation event beyond what is now occurring.

[vokain]

Thank you BitcoinAshley, my goal is to get to the point,  like you and cypher, where I can impart these things to others that don't know

I guess the better question is, how can I decipher the BS on zerohedge and the many true things they tout hahaha. My only concern is that they know that the doomsday-insider persona they put out gets readership and considering their audience, that they too can be easily manipulated for some ulterior motive.

[oakpacific]

Why would you need more than one kind of PM, if cryptocoins succeed and gold doesn't become useless?

And especially, why silver? Why not platinum and palladium? Why?

Good question. Two answers: Gold's limited fungibility compared to silver, and silver's history as a currency (3000 years for silver and 6000 years for gold, IIRC.) compared to platinum and palladium.

A lot of stackers are the tinfoil hat types. So they have bitcoins for the day when the USD collapses, but what about when the "S" REALLY "HTF" and there are widespread power outages? If the USD and other fiat currencies hyperinflate, gold and silver will skyrocket along with BTC. But if you can't use BTC because you don't have power for a month, and the USD is worthless, well, if you want to buy some of your neighbour's emergency grain supply, a gram of gold is going to buy you about 10 times more than he has and it's barely any more fungible than that unless you have "grains" lying around. A few grams or a half an ounce of silver is better for small transactions.  
As for history and familiarity, silver (like gold) is familiar (everyone's grandma has a sterling silver set, they know that silver is valuable) but no one's grandma has a palladium necklace that she inherited from her great grand pa the  palladium explorer.

Obviously that is a really stupid situation that will never happen. But there is a third reason: The folks that think gold and silver prices are actively suppressed by JPM and the like, also have their theories about silver:gold and they argue that "unsuppressed" i.e. without the naked paper markets, silver would provide a much better ROI relative to gold. This is based on the total amount of above-ground gold/silver, etc.

Fourth reason: Arguably, silver has far more industrial uses than gold and therefore more intrinsic value.

One more thing to add, and that is, there are some communities that have businesses that accept PM. Much like there is a city in Germany with the highest concentration of Bitcoin businesses, there are some areas in Texas, Arizona, Utah, etc., where precious metals are seen as more of a currency than a novelty item on its way out. And here the gold fungibility issue rears its head again.

Hopefully I gave good answers to your good question

Answer 2, as you have pointed out, is an apocalyptic situation when guns and ammunition are likely to worth more than anything else, and answer 4 still cannot explain why silver is a more ideal investment then many other metals which arguably have even more industrial uses than silver. Answer 1, 3, and 5 concentrate on the belief that silver should worth something more than its industrial value, which maybe held by some groups of people with a certain outlook of the world, which is not my outlook and doesn't make sense to me. The funny fact is: I can already buy way more things with Bitcoin then with PMs, especially after the Webmoney support adds steam  and dealextreme to the places I can buy from. Gold certainly still worth something as a sign of wealth and dowry/bride price, but is accepted nearly nowhere as a currency where I live(its fungiblity is actually quite poor compared to any currency other than metals) . Silver? Come on.

What I would like to argue is: globally, less and less people will share the kind of faith in PMs with rednecks, thus the price of silver will continue to decline.

[vokain]

I guess the biggest thing is that, gold and silver aren't what they used to be. Gold's utility has definitely decreased after the decoupling of gold-pegged fiat, but even more so compared to before we had fiat at all. Back then, it was common would trade a grain or three of gold for a cow or whatever. Who does that now? It truly does look like Bitcoin and gold are reversing.

[BitcoinAshley]

Thank you BitcoinAshley, my goal is to get to the point,  like you and cypher, where I can impart these things to others that don't know

I guess the better question is, how can I decipher the BS on zerohedge and the many true things they tout hahaha. My only concern is that they know that the doomsday-insider persona they put out gets readership and considering their audience, that they too can be easily manipulated for some ulterior motive.

Yes, they tend to exaggerate a lot. And remember, their goal is to make you think the financial apocalypse is right around the corner so you keep reading. IMO, they are correct about what's going to happen, but they have no idea WHEN it's going to happen, so in the meantime they are just exaggerating.

The bit about physical demand is interesting. ZeroHedge, Max Keiser, and every website/blog like it are screaming about chinese housewives loading up on gold, traffic jams on the streets in front of coin dealers in Asia, dealers out of stock and unable to find anything, etc, etc.
Here's what I've noticed: My dealer went from having most of its coins available for same-week shipping about a month or so ago, to now having 90% of its coins with a 14-21 day delay time. Similar dealers have same issue. However, there are still places you can get metals, there are even still coins at my dealer that will be shipped same week, and I doubt there's traffic jams in front of coin shops in India. It's just that prices are getting to the point where miners and wholesalers are really feeling the squeeze. They're taking a gamble - sell now and risk the market returning to where it was a month ago, or hold a lot of their inventory only to have prices fall further.

I think the effect on the market of the naked paper shorts is not to be underestimated and that is why I personally hold PMs. I don't think, as many "BTC bugs" do, that we are going to instantly transition to a world where BTC is used for every single transaction, fiat completely disappears, and PMs instantly drop in value.

Oakpacific, I've heard the "guns and ammo are the only thing that will be important in that SHTF scenario" argument many times and I don't believe it one bit. Sure, there are situations like all-out wars and massive civil unrest where you won't even have a chance to make a transaction. But that is not the only possible iteration of such a scenario, and I'd rather have a chance to buy something off my neighbour than shoot him for it and steal it, does that make sense? In the same way that we tell even the most butthurt bears to keep just one bitcoin in cold storage "Just in case," I think even the most anti-PM "BTC bugs" should keep at least a little physical around in case it's the best way to buy a train ticket to "get out of dodge" during the economopocalypse or whatever it is the blogsters are preaching these days. And in that "manufactured single-iteration of SHTF scenario where only guns and ammo matter," how are you going to buy more ammo from the redneck in the trailer park after you run out from defending your family against the an-cap looter gang? Oh right, shoulda brought some gold Even that scenario used as an argument in the "that will never happen" category ends up defeating itself.

I should mention that I was comparing the fungibility of silver to gold, not to other currencies. I think it's safe to assume that most people realize PMs aren't too gifted in the fungibility department when compared to other currencies.

I guess the biggest thing is that, gold and silver aren't what they used to be. Gold's utility has definitely decreased after the decoupling of gold-pegged fiat, but even more so compared to before we had fiat at all. Back then, it was common would trade a grain or three of gold for a cow or whatever. Who does that now? It truly does look like Bitcoin and gold are reversing.

Yes, there is no doubt in my mind that if we see any massive shift in the dominant world currencies, PMs will take a backseat to cryptocurrencies. In fact it is more likely they'll be stuffed into the trunk or the roof rack. I've no problem with that. So long as fiat gets run over, hit reverse, run over again, etc, then dragged from the back bumper by a chain on the pavement for 5 miles and thrown into an abandoned coal mine - I'll be a rich motherfucker and the world will be a better place

[cypherdoc]

This market is hilarious.

i have never seen so many people so happy to lose money.

[smoothie]

This market is hilarious.

i have never seen so many people so happy to lose money.

Well technically it isn't losing money if you buy something with a small % of your overall huge profits.

It is essentially free. The other side of the coin is lost opportunity cost. But when in done with small overall % it really isn't a huge deal.

But anyways see you at over $266 by year end for bitcoin 

[oakpacific]

Oakpacific, I've heard the "guns and ammo are the only thing that will be important in that SHTF sencario" argument many times and I don't believe it one bit. Sure, there are situations like all-out wars and massive civil unrest where you won't even have a chance to make a transaction. But that is not the only possible iteration of such a scenario, and I'd rather have a chance to buy something off my neighbour than shoot him for it and steal it, does that make sense? In the same way that we tell even the most butthurt bears to keep just one bitcoin in cold storage "Just in case," I think even the most anti-PM "BTC bugs" should keep at least a little physical around in case it's the best way to buy a train ticket to "get out of dodge" during the economopocalypse or whatever it is the blogsters are preaching these days.

I consider it as another way of saying: "You would have bigger things to worry."

And if it turns out the price suppression theories are correct, my gold will double in value and my silver will triple in value. Not bad. Don't underestimate the Power of Paper Like Goat I have around 5% of my portfolio in PMs and will keep it that way. No reason to put all my eggs in one basket or even 2-3 baskets.

If you are in this for speculation, it's important to think why the PMs price went up so much in the last 10 years and how much of it was real, is it really "cheap" now?

Here's what I've noticed: My dealer went from having most of its coins available for same-week shipping about a month or so ago, to now having 90% of its coins with a 14-21 day delay time. Similar dealers have same issue. However, there are still places you can get metals, there are even still coins at my dealer that will be shipped same week, and I doubt there's traffic jams in front of coin shops in India. It's just that prices are getting to the point where miners and wholesalers are really feeling the squeeze. They're taking a gamble - sell now and risk the market returning to where it was a month ago, or hold a lot of their inventory only to have prices fall further.

I think the effect on the market of the naked paper shorts is not to be underestimated and that is why I personally hold PMs. I don't think, as many "BTC bugs" do, that we are going to instantly transition to a world where BTC is used for every single transaction, fiat completely disappears, and PMs instantly drop in value.

Now I am in China and here is what I will tell you: the banks are pimping the PMs to the grannies, and they have hardly ever sold anything really worthwhile throughout their whole history: why do you not keep something for yourself if you consider it really worthwhile and act as if you can't wait to get rid of it? And the young people hardly give a dime, the real estates are what really matter after all.

[smoothie]

This market is hilarious.

i have never seen so many people so happy to lose money.

Well technically it isn't losing money if you buy something with a small % of your overall huge profits.

It is essentially free. The other side of the coin is lost opportunity cost. But when in done with small overall % it really isn't a huge deal.

But anyways see you at over $266 by year end for bitcoin 

I don't think he's referring to us

Ohh lol...my mistake?

[BitcoinAshley]

If you are in this for speculation, it's important to think why the PMs price went up so much in the last 10 years and how much of it was real, is it really "cheap" now?

Ahh yes, you mean the part where they finally caught up to 75 years of US Dollar inflation
You can only repeat "1.5%" for so many years in a row before people catch on.

i have never seen so many people so happy to lose money.

Well, if I really cared so much about the top fraction of a percent of my entire portfolio which is invested in a crazy novelty that people only invest in for dogmatic reasons, I guess I'd be pretty unhappy to lose that money.

Truth is, I saw thousands of percents of gain on my BTC and LTC investments and threw a tiny piece of that into precious metals. On the pie chart, it's smaller than that piece of pie you cut for the fat lady that's like "... oh, just a sliver for me, I'm on a diet." It's enough to satisfy the Stacy Herbert in me but not so much that gold at $1344 and silver at $21 makes me stay up all night in front of a calculator tearing my hair out.

It's like when my DEVCOIN investment 'tanks' lol. I have, like what, $87 worth of Devcoin? A non-issue for sure.

And the young people hardly give a dime, the real estates are what really matter after all.

It is sad that the young people are so interested in buying real estate that no one will be able to afford due to being in the same spot of the "bubble" of all the middle-aged men in my town that bought $450,000 single family homes a few years ago and are now living in the center of town in tiny apartments, having learned their lesson about real estate bubbles

[marcus_of_augustus]

What would have to happen for PM prices to go up? Naked shorts would have to be exposed on mainstream media for a prolonged amount of time, paper price would have to decouple from physical price, and major fiat currencies would have to suffer a significant inflation event beyond what is now occurring.

A free market for currencies where private issuers of digital gold-backed crypto currencies would go a long way towards restoring gold as a useful money.

But the central banks would never allow that right now (think e-Gold, Liberty dollar, etc) and since you need centralised clearing houses to prove gold-backing of digital certificates (blinded gold-cash etc) then they are an easy target. If there was a way to P2P gold-backed crypto-currencies into the market they would give bitcoin a run for its money (pun intended).

[oakpacific]

If you are in this for speculation, it's important to think why the PMs price went up so much in the last 10 years and how much of it was real, is it really "cheap" now?

Ahh yes, you mean the part where they finally caught up to 75 years of US Dollar inflation
You can only repeat "1.5%" for so many years in a row before people catch on.

Yup, so they will rise and fall together, either the old system prevails or the PMs will fall further.

And the young people hardly give a dime, the real estates are what really matter after all.

It is sad that the young people are so interested in buying real estate that no one will be able to afford due to being in the same spot of the "bubble" of all the middle-aged men in my town that bought $450,000 single family homes a few years ago and are now living in the center of town in tiny apartments, having learned their lesson about real estate bubbles

It's another kind of false belief, like those held by the PM bugs. Nevertheless real estates always have some practical values for nearly anyone, not just industries. And yeah, the land supply in America is far more abundant than that of China.

[vokain]

What would have to happen for PM prices to go up? Naked shorts would have to be exposed on mainstream media for a prolonged amount of time, paper price would have to decouple from physical price, and major fiat currencies would have to suffer a significant inflation event beyond what is now occurring.

A free market for currencies where private issuers of digital gold-backed crypto currencies would go a long way towards restoring gold as a useful money.

But the central banks would never allow that right now (think e-Gold, Liberty dollar, etc) and since you need centralised clearing houses to prove gold-backing of digital certificates (blinded gold-cash etc) then they are an easy target. If there was a way to P2P gold-backed crypto-currencies into the market they would give bitcoin a run for its money (pun intended).

isn't bitcoin just kind of backed by everything we trade for it, including gold? Anyone can use Bitcoin to do what you propose with gold, no? At least, it's the only way you can back a cryptocurrency with gold, as far as my reactionary-response to your message can surmise.

[wachtwoord]

What would have to happen for PM prices to go up? Naked shorts would have to be exposed on mainstream media for a prolonged amount of time, paper price would have to decouple from physical price, and major fiat currencies would have to suffer a significant inflation event beyond what is now occurring.

A free market for currencies where private issuers of digital gold-backed crypto currencies would go a long way towards restoring gold as a useful money.

But the central banks would never allow that right now (think e-Gold, Liberty dollar, etc) and since you need centralised clearing houses to prove gold-backing of digital certificates (blinded gold-cash etc) then they are an easy target. If there was a way to P2P gold-backed crypto-currencies into the market they would give bitcoin a run for its money (pun intended).

isn't bitcoin just kind of backed by everything we trade for it, including gold? Anyone can use Bitcoin to do what you propose with gold, no? At least, it's the only way you can back a cryptocurrency with gold, as far as my reactionary-response to your message can surmise.

No, just like gold is backed by gold, Bitcoin is backed by Bitcoin. It doesn't matter Bitcoin isn't physical (in fact that's one of its main differentiators).

[vokain]

I suppose defining "backed" as being pegged is different than defining it as being backed by the market


The definition in my head involved the idea that bitcoin was fully transparent and free-market based to allow the market to fully assign its worth:

Bitcoin’s geopolitical independence makes it perfect for trading since it can achieve what other currencies cannot; a purely market-driven currency free from political intervention by the states it is backed by. There is nothing to stop the USD being replaced by a crypto currency as a reserve currency.

[humanitee]

Surprise this hasn't been bumped yet. Metals having an interesting day.