Gold collapsing. Bitcoin UP.

[cypherdoc]

looks like we're gonna put in an inverted hammer on AAPL today.  get out.

[Transisto]

Thanks to keep reminding me why I got you ignored Cypherdoc.

Hint : No sense of scale.

linear thinkers like you should be buying gold right now.  are you?  how about silver?

edit:  how about pm mining stocks?

linear

I was commenting on your title,

Gold cannot "collapse", and bitcoin is too small to have anything to do with it.

Scale = 0.000004  (~10 trillion vs ~40 million)

Edit: Fixed

[cypherdoc]

last one out the door is a rotten egg!

[labestiol]

Scale = 0.000004  (~10 trillion vs ~40 million)

FTFY

[tvbcof]

I believe that we've had significant deflation for a few years and...

deflation would cause a huge public unrest; bankruptcies, unemployment, foreclosures, wiping out of all the pension funds...

...all of the above (the pension funds being gone already but just not really widely understood.)  To my surprise, PM's have held up fairly well in this environment.  As awareness of the magnitude of the problems becomes more widely understood is when PM's (and hopefully also Bitcoin) will start to take off.

I believe that all current monetary systems, and most throughout history, have a built in life expectancy defined by mathematics.  And that we are nearing the end of the one which is currently dominant and, by virtue of globalization, fairly universally used worldwide.  I could be wrong...I often am.

I see inflation as the only way to go from here.
this, or a war.

I'm sure that we'll see what Sinclair calls 'cost push inflation'.  I am also betting on war as a time-tested way for the leadership of nations to deal with such problems.

but in any case, gold is a good place to store the savings.
and I mean physical gold - toilette paper is cheaper than the future contracts

I only ever started buying PM's as a break-even way of storing value, and that remains my philosophy.  I do, however, allow for the possibility that they are undervalued through various schemes so I am (or at least have been) obtaining them at bargain rates.  Happy days.

[silverbox]

Exactly what besides housing and electronic devices has deflated??

[cypherdoc]

Exactly what besides housing and electronic devices has deflated??

i specialize in picking corners.  in other words, before all the linear thinkers can see it.  all the signs are here for a reversal.

[silverbox]

uh ok.. I don't see it..

the M1,M2,M3(if they still reported it), the National debt are all rising..  The Fed is pumping out money to keep the rates at zero, with a few extra injections (QE) along the way..

Consumable commodity neccessities are all rising in price..

Where is the evidence of this emminent deflation?

[SkRRJyTC]

uh ok.. I don't see it..

the M1,M2,M3(if they still reported it), the National debt are all rising..  The Fed is pumping out money to keep the rates at zero, with a few extra injections (QE) along the way..

Consumable commodity neccessities are all rising in price..

Where is the evidence of this emminent deflation?

This is relevant to my interests as well.

[cypherdoc]

sorry, i just don't have the time to go thru it all but everything is in my blog and in that gold thread i referenced above.

[piotr_n]

I think cypherdoc is thinking more in terms of technical, rather than fundamental analysis.
I'm guessing our fundamental analysis of the actual global situation is what he calls the linear thinking...

Indeed, if you are a trader, want to earn money on speculating, you want to pick corners.
But still, gold is not collapsing.

[notme]

uh ok.. I don't see it..

the M1,M2,M3(if they still reported it), the National debt are all rising..  The Fed is pumping out money to keep the rates at zero, with a few extra injections (QE) along the way..

Consumable commodity neccessities are all rising in price..

Where is the evidence of this emminent deflation?

This is relevant to my interests as well.

All that printed money has flowed into stocks and commodities, driving up the prices.  But, it was loaned out, so when those loans come due, the stocks/commodities will need to be sold to cover the payments.  Once the general markets realize there is no permanent results from such lending, everybody will be rushing out of equities to cover their asses as their debt skyrockets in value.  Fed has promised to keep things floated at under 0.25% interest until mid 2014, but if there is a big enough "crisis" they could change their tune.

[silverbox]

Analyze it however you want, we are not about to experience a massive deflation in the US.  They will start sending checks to everyone first..  They've done it before....

[notme]

Analyze it however you want, we are not about to experience a massive deflation in the US.  They will start sending checks to everyone first..  They've done it before....

I'd be happy with that outcome as well.

[piotr_n]

All that printed money has flowed into stocks and commodities, driving up the prices.  But, it was loaned out, so when those loans come due, the stocks/commodities will need to be sold to cover the payments.  Once the general markets realize there is no permanent results from such lending, everybody will be rushing out of equities to cover their asses as their debt skyrockets in value....

Agree.
But how can it end?
I see only one way: even after selling all the assets out there to pay off the debts... they will be bankrupt anyway.
And that would be the day when you prefer to be holding a shiny metal, instead of a paper backed by the bankrupt promises.

[2weiX]

I am massively invested in PMs, and I tend to continue buying.
If not for myself, for my children.

[tvbcof]

Exactly what besides housing and electronic devices has deflated??

Debt (aka 'money' under our current monetary system) has deflated in some sectors.  There is a desperate effort to offset this by accounting (FASB rules changes involving mark-to-market for instance) and shifting debt to other sectors (namely the government's balance sheet) but it cannot go on forever.

As always this is just my read of things, and I am by no means an expert.

[Vladimir]

I agree with you that a deflationary event is coming. But do you think central banks won't react ?

the deflation will overwhelm them.  

I am with cypherdoc on this one. To compensate defaults (deflation) they are continuing to reduce bank's reserve requirements. It is effectively 0 or even negative already. The more they reduce reserve requirements the more difficult it is to fight deflation. Given that so many banks and now governments, particularly in Europe, are de facto insolvent right now, while PIIGSominoes  keep falling right on schedule, this is unsustainable. There is data out there that QE's have diminishing effect. The game is up and deflation is upon us. All assets but cash will fall in this scenario, gold and stocks and in most countries housing are the first to the block.

Moreover, the market has a tendency to inflict the maximum possible damage. It's so called "max pain" theory. See how everyone and his mother is into the gold right now and into shorting fiat by borrowing a lot. Everyone is playing the inflation card with ever increasing leverage, which basically means that there will be deflation to hurt the maximum possible number of people.

The worst thing one can do in deflationary environment is to be a debtor whose debts are secured on his real assets.

[cypherdoc]

I agree with you that a deflationary event is coming. But do you think central banks won't react ?

the deflation will overwhelm them.  

I am with cypherdoc on this one. To compensate defaults (deflation) they are continuing to reduce bank's reserve requirements. It is effectively 0 or even negative already. The more they reduce reserve requirements the more difficult it is to fight deflation. Given that so many banks and now governments, particularly in Europe, are de facto insolvent right now, while PIIGSominoes  keep falling right on schedule, this is unsustainable. There is data out there that QE's have diminishing effect. The game is up and deflation is upon us. All assets but cash will fall in this scenario, gold and stocks and in most countries housing are the first to the block.

finally.  someone who understands. 

it'll be an all-one-market effect with USD up and everything else down.  the Fed won't be able to print fast enough and the printing that they do comes with some trepidation b/c if they destroy the USD, their only tool, they then self destruct.

[piotr_n]

finally.  someone who understands.  

it'll be an all-one-market effect with USD up and everything else down.  the Fed won't be able to print fast enough and the printing that they do comes with some trepidation b/c if they destroy the USD, their only tool, they then self destruct.

you obviously don't account, in your forecast, for 200+ million of desperate and hungry people flooding the streets... and each one of them handling a gun...

this is not a soviet union of 1930s - they wont be starving quietly.