Gold collapsing. Bitcoin UP.

[Vladimir]

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 - they wont be starving quietly.

This is actually soviet union 2.0. I can tell you from first hand experience of both 1.0 and 2.0.

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[piotr_n]

This is actually soviet union 2.0. I can tell you from first hand experience of both 1.0 and 2.0.

Well.. if it is, then we should be expecting some hyperinflation soon, shouldn't we?
It wont give them food, though - like it didn't back then.

[tvbcof]

...
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.

...

Personally speaking, if I got hungry my BTC would be the first thing on the auction block.  In fairness this is mostly because I have never had any interest in stocks and sold any that I have acquired ASAP.  I also have completely shunned any IRA crap and tend to sit on as little cash as practical.  But I'd certainly hold on to my PM's and property longer than my BTC which I view as highly speculative (but something which I can secure more effectively than almost any other asset which is an unusual and welcome feature among my choices.)

[Vladimir]

The point is whether you have free market that is self regulating or a central planning system. Do you think free markets would give you effectively negative interest rates as you have now?

And do not worry, you will see both deflation and hyperinflation. One after another.

[ElectricMucus]

Real inflation is going up, that's for sure.

(food, gas and housing prices you pay every month.)

[silverbox]

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.

I don't see it.  The Fed can print at any rate they want.

[N12]

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.

My goodness, a Bitcoin bearish Vladimir?

[Vladimir]

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.

My goodness, a Bitcoin bearish Vladimir?

Not necessarily. Bitcoin is cash equivalent, and cash is the only good thing to have in deflationary environment. For example, when S&P falls to 300, your bitcoins would buy you much more of S&P shares than you can buy now. Even if nominally Bitcoin exchange rates fall some too.

[silverbox]

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.

Unlikely we'll go hungry, we have plenty of overcapacity of food production in the US.  In countries that import food, inflation of food prices could cause armed rebellion.

[cypherdoc]

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.

i think this vastly overstates the effect of deflation.  retail investors have largely left the speculative mkts.  the ones who stand to lose the most are the banks, hedge funds, and elitists themselves.  i also think that further sovereign debt destruction is a good thing; it will trim gov'ts down to size. 

if anything, savers stand to benefit.  yeah there will be some pain but i don't think its as bad as you think.

[cypherdoc]

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.

My goodness, a Bitcoin bearish Vladimir?

i think Bitcoin surprises everyone.  look at the last few days since gold has been plummeting.  Bitcoin UP.

[Vladimir]

Here is an idea: create a chart of S&P in bitcoins.

[piotr_n]

Unlikely we'll go hungry, we have plenty of overcapacity of food production in the US.  In countries that import food, inflation of food prices could cause armed rebellion.

Yes, but the industry is driven by the credit money - the same one that would get wiped out by the deflation.
The money is wiped out = the industry is dead = no food, like in Africa
And that is why I think the government, even though it is corrupt, will not let the deflation to happen.

[silverbox]

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.

My goodness, a Bitcoin bearish Vladimir?

i think Bitcoin surprises everyone.  look at the last few days since gold has been plummeting.  Bitcoin UP.

I wouldn't call a drop from 1775 to 1630 a plummet, but it has went down

[Vladimir]

I don't see it.  The Fed can print at any rate they want.

I do not think it is the case. It is debt money. They only can print when someone borrows. However we have fractional reserve, that is already insane. It is simply a question of what's happening quicker new borrowing or defaults. What they do now is they are trying to balance this while hiding true defaults, sooner or later they fail at this "balancing act" and then we have either super inflation or super deflation or most likely both one after another.

As result of it this generation and the next generation will have no any further appetite for debt for quite some time. I think this theory is described reasonably well here http://kondratieffwinter.com/blog/k-wave/kondratieff-summary/

[silverbox]

I don't see it.  The Fed can print at any rate they want.

I do not think it is the case. It is debt money. They only can print when someone borrows. However we have fractional reserve, that is already insane. It is simply a question of what's happening quicker new borrowing or defaults.

The way the Fed creates money is to buy stuff..  They make the money out of thin air and buy stuff...  If they want to put more money into the system, they can just start buying houses, cars, mortgage backed securities, planes, land, T-bills whatever.. Most of the money the fed creates goes to buy T-bills, so the Treasury/Fed Goverment gets first use of the "new" money, at the old rates, then the new money trickles into the system creating inflation..  But if the Fed wants to inject tons of money into the system, they can, at any time, in a variety of ways..

[Vladimir]

lol, that's what they want you to think.

Who will they buy this stuff from once they bought all of it already? You do realise that we are talking about amount of money that is greater then valuation of all the hard assets in existence already.

[N12]

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.

My goodness, a Bitcoin bearish Vladimir?

i think Bitcoin surprises everyone.  look at the last few days since gold has been plummeting.  Bitcoin UP.

Really, I’m not sure on this one.

My fear is that Bitcoin is viewed as such a risky asset that it’ll be the first to be sold off once people really NEED some cash. Also that in times of depression, people won’t have the time and resources to build up the fragile hobbyist thing Bitcoin is atm.

I sure hope it will surprise me though. I’ve always viewed it as the next Gold.

[silverbox]

lol, that's what they want you to think.

Ok, *shrug*.  Don't believe the way it really is..  There will be NO deflation.

[silverbox]

lol, that's what they want you to think.

Who will they buy this stuff from once they bought all of it already?

lol if they try to buy all the stuff they will drive the prices sky high, hyper inflation..  They only have to buy enuf to keep deflation from occuring, its not that much.