Gold collapsing. Bitcoin UP.

[cypherdoc]

stocks turning down.  Transports following Russell.

[1713879149]

1713879149

[1713879149]

1713879149

[cypherdoc]

can it stay over?

back under

[HeliKopterBen]

interesting article by Edmund Moy:

http://www.moneynews.com/Ed-Moy/Fort-Knox-gold-bar-audit/2014/06/06/id/575519/

Completed in 1936 on land transferred from the U.S. Army, it took more than 500 train cars to deliver the existing gold bullion, newly made bullion bars from the melted coins and some gold coins. They came mostly from Philadelphia and the New York Assay Office.

Bitcoin?  Quicker?  Cheaper?  Less of a pain in the a$$?

The gold at Fort Knox is stored in one of the most secure facilities in the world. It is surrounded by an active U.S. Army fort, guarded by the U.S. Mint Police and protected by layers of security measures, including a blast proof 22-ton door, 16,000 cubic feet of granite, 4,200 cubic yards of concrete, 750 tons of reinforcing steel and 670 tons of structural steel. The gold has remained in deep storage and has been mostly undisturbed through the decades.

Bitcoin provides a method of security that is arguably just as secure and MUCH CHEAPER.  Just use m of n keys generated offline, encrypted with AES-256, 3 copies made of each n key and stored in separate geographic locations.  The fact that 3*m separate geographic locations AND AES-256 will have to be compromised eliminates the need for a U.S. Mint Police force and layers of security measures, including a blast proof 22-ton door, 16,000 cubic feet of granite, 4,200 cubic yards of concrete, 750 tons of reinforcing steel and 670 tons of structural steel. 

To satisfy critics, a new audit would document each bar like the 1953 audit and assay 100 percent of the gold bars. That would require 400 people working full-time for six months to drill holes in each bar, test them for purity and document properly. The cost would range between $15 million and $60 million. The vaults would be sealed again until another public outcry.

Making pubic keys available and signing a message from each key to prove ownership would be much more transparent and MUCH CHEAPER.


This article is a bitcoin endorsement if I have ever seen one.  However, to be fair, bitcoin is still technically in beta and untested for such a large operation, but the fed could start by converting a very small portion of gold to bitcoin to test.

[rocks]

what i failed to do is distinguish btwn pre 2008 and post 2008.  knowledge is gained thru experience; lots of honest traders and in fact the entire world, were flabbergasted by the extent of the moral hazard inflicted on our money supply to bail out the criminals in 2008. there's no way that could've been predicted, let alone know that it would work.

Libor effects everything; it is the cost of money.  mind you, it wasn't the only thing being manipulated. but it was one of the key metrics whose manipulation prevented a total meltdown of the banks.  a great example of the direct fleecing was the interest rate hedges sold to municipalities pre 2008.  several of them went bankrupt as interest rates have continued to go down instead of up as they were advised to bet by their Wall St advisors.  many had to cough up billions to cover interest rate swap losses.  they are still trying to recover.

Glad you pointed this out. What many seemed to miss in 2008 was the ultimate perversion was not only the moral hazard that rewarded criminals, but also the fact that those who made conservative and/or "correct" choices were in fact punished. This was the ultimate fleecing that transferred money from true market participants to politically connected large banks.

Today when reading the FED's comments they seem confused at how the market ignores true economic fundamentals and instead only tracks FED policy. Yet this is exactly what the FED trained everyone to do.

[cypherdoc]

It is too early to predict that Bitcoin will succeed as a parallel currency, but it is also too early to predict that it will fail. In any case, governments can fail, too.


Networks and Hierarchies

http://www.the-american-interest.com/articles/2014/06/09/networks-and-hierarchies/

[cypherdoc]

Bitcoin isn't going anywhere:

[tvbcof]

Bitcoin isn't going anywhere:

That certainly seems to be the case so far in 2014.  Oh well.

[cypherdoc]

Bitcoin isn't going anywhere:

That certainly seems to be the case so far in 2014.  Oh well.

plenty of time left.

[cypherdoc]

continued fallout from 2008:

The real reason Fannie and Freddie don't do principal modifications

http://www.housingwire.com/blogs/1-rewired/post/30824-the-real-reason-fannie-and-freddie-dont-do-principal-modifications#.U9hNuU5K6I0.twitter

[STT]

That certainly seems to be the case so far in 2014.  Oh well.

The exact same time last year I thought the same thing and I sold some in August, I was ever so slightly wrong.  Lucky when I shuttered things off, I kept a balance.
Really cant tell, we have the FED taper going on and the conclusion to that should come sometime this year.   If they do fail to taper or in some small way alter their policy from expectations now then all sorts of things can happen with secondary drastic horizon altering events, it really is a snake in the grass a whole colony of them really

Think of it as ironic, the less fear the more apprehension is justified and any stability BTC can add could be valuable to some especially outside USA yet principally using dollars

the fed could start by converting a very small portion of gold to bitcoin to test.

That would be radical, they have bought things worth far less.   Its unlikely as it is they would increase their gold holdings which should have been done many years ago and certainly now.  Its not on their politically biased radar to even consider such things, if bitcoin were related to solar power projects or hosuing initatives with some kind of political kudos then maybe but it does not key into the system at present. 
  You might hope some kind of wild card hedge fund might consider and as their funds relate to QE it would be part of Fed policy indirectly

[tabnloz]

A day or two old, but shows that many CB's are stockpiling gold reserves.

http://investmentwatchblog.com/russia-buys-18-6-tonnes-of-gold-in-june-currency-wars-intensify/

BRIC bank, gold reserves, direct swap lines: small steps toward a decoupling from the USD.

[tvbcof]

That certainly seems to be the case so far in 2014.  Oh well.

The exact same time last year I thought the same thing and I sold some in August, I was ever so slightly wrong.  Lucky when I shuttered things off, I kept a balance.
Really cant tell, we have the FED taper going on and the conclusion to that should come sometime this year.   If they do fail to taper or in some small way alter their policy from expectations now then all sorts of things can happen with secondary drastic horizon altering events, it really is a snake in the grass a whole colony of them really

Think of it as ironic, the less fear the more apprehension is justified and any stability BTC can add could be valuable to some especially outside USA yet principally using dollars

Just FTR, I'm 'hodling like a boss.'  I'll probably do so for at least another year before I sell at this price (assuming no bothersome changes crop up...when I'm paying attention which I've not been recently.)  Happily (and by design) I'm in a situation where my sales are driven largely by cash flow needs and I can easily do without for years long periods.

I just felt an itch to try to annoy cypherdoc is all.  Been busy with completely unrelated things.  Alas, they involve attorneys so I may need cash-flow more quickly than I had hoped.

[Erdogan]

I think this is important, change of derivatives contracts:

http://www.bloomberg.com/news/2014-07-29/ending-too-big-to-fail-could-rest-on-obscure-contract-language.html

The purpose of the change appears in the article:

"The new terms for the ISDA contracts would bar a firm from ending swap trades with a bank being put into liquidation for 24 or 48 hours, depending on which country’s laws apply. That would give regulators time to move the contracts to a new company, limiting contagion to the larger financial system. "

... a new company, that is a company that is allowed to go bust, meaning that the holders of those contracts does not get a piece of the cake.

[cypherdoc]

I think this is important, change of derivatives contracts:

http://www.bloomberg.com/news/2014-07-29/ending-too-big-to-fail-could-rest-on-obscure-contract-language.html

The purpose of the change appears in the article:

"The new terms for the ISDA contracts would bar a firm from ending swap trades with a bank being put into liquidation for 24 or 48 hours, depending on which country’s laws apply. That would give regulators time to move the contracts to a new company, limiting contagion to the larger financial system. "

... a new company, that is a company that is allowed to go bust, meaning that the holders of those contracts does not get a piece of the cake.

This is, on the face of it, a good thing.

Don't forget that this has been a major criticism of the doom and gloom crowd for years;  that the big boys could get out of their derivative contracts at a failing firm while everyone else gets stuck and left behind in their more traditional vehicles.

[cypherdoc]

This is huge :

https://twitter.com/cypherdoc2/status/494481085775233024

[cypherdoc]

https://twitter.com/cypherdoc2/status/494482769993809921

[justusranvier]

https://twitter.com/cypherdoc2/status/494482769993809921

It means their underwriters are getting more impatient to collect bitcoins.

First step is lowering processing fees to 0%.

Next step is when they start offering increasingly favourable exchange rates to encourage even more spending.

[cypherdoc]

https://twitter.com/cypherdoc2/status/494482769993809921

It means their underwriters are getting more impatient to collect bitcoins.

First step is lowering processing fees to 0%.

Next step is when they start offering increasingly favourable exchange rates to encourage even more spending.

to be followed by merchant discounts.

ah, the never ending spiral: UP.

[cypherdoc]

Uberred

U·berred  verb-as in, to be "Uberred"

- to be undercut in a financial sense; massively.  as in a reduction in fees, be they transactional, fares, or otherwise.                      
- derived from the San Francisco based company name "Uber".
- effects can be predicted to be massive; resulting in exponential growth which overwhelms all competition.  
- resistance to curb such activity should be considered futile as they rely on Internet "network effects"
- these strategies have been shown to be viral in nature; as in mutatable; bacterial; highly resistent; contagious
- analogous to bacterial growth in a petri dish.

ex:  1. BitPay massively undercutting existing legacy payment processors such as Visa, Mastercard, Paypal or AMEX.
       2. Uber slashing taxi fares to 20% less than Yellow cab in major cities such as New York and San Francisco.

outcome: highly unpredictable for legacy financial systems.

[Erdogan]

I think this is important, change of derivatives contracts:

http://www.bloomberg.com/news/2014-07-29/ending-too-big-to-fail-could-rest-on-obscure-contract-language.html

The purpose of the change appears in the article:

"The new terms for the ISDA contracts would bar a firm from ending swap trades with a bank being put into liquidation for 24 or 48 hours, depending on which country’s laws apply. That would give regulators time to move the contracts to a new company, limiting contagion to the larger financial system. "

... a new company, that is a company that is allowed to go bust, meaning that the holders of those contracts does not get a piece of the cake.

This is, on the face of it, a good thing.

Don't forget that this has been a major criticism of the doom and gloom crowd for years;  that the big boys could get out of their derivative contracts at a failing firm while everyone else gets stuck and left behind in their more traditional vehicles.

Getting the priorities right would be a good thing, but this equals to running away without paying legit debt. Anyway, I should say that the apparent objective is to reduce systemic contagion. I think it would do nothing to reduce systemic contagion.