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Author Topic: Gold collapsing. Bitcoin UP.  (Read 2032125 times)
zeetubes
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September 01, 2014, 05:26:52 PM
 #11461

"Which bring us to the dumbest idea from last week: the UK's push to exclude Russia from SWIFT... and in the process accelerate the demise of the dollar as the world's reserve currency.

Asked about the idea that Russia could be cut off from the international money transfer system known as SWIFT, one diplomat said the idea had been floated several months ago, but that there was opposition to it among several EU countries.
 
"The problem is that while it would probably work well in the short-term, as in the case of Iran, in the long-term it would trigger the creation of an alternative system to SWIFT and the setting up of two alternative world transaciotn systems and nobody wants that," the diplomat said.
It appears not everyone in Europe is an idiot."

http://www.zerohedge.com/news/2014-09-01/more-sanctions-europe-will-ban-purchase-russian-bonds-however-russian-gas-exports-re

totally agree ... if you're looking at it from the 99.9% point of view. If otoh you're looking at it from a dying empire/central bank perspective, it is the only realistic move left for them to try before they are forced to default on  - or forgive - all of the world's debt. Is there any other viable option for them? The current outstanding debt can't ever be repaid, in much the same way that a worker at McDonalds couldn't ever pay back a ten billion dollar mortgage. So perhaps they are trying to do the same with Putin as they did with Japan towards the end of the 2nd WW and force them into a corner. These fuckers are desperate but they are certainly not dumb and all out war will be a nice scapegoat for their failure.
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cypherdoc (OP)
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September 01, 2014, 05:29:08 PM
 #11462

In the mean time, new wave of money is being handled to the worsts.

'Too big to fail' hands big banks $4.5 billion subsidy

The big four banks receive an annual subsidy of up to $4.5 billion from being perceived as "too big to fail" which should be paid for by a levy or increased capital charge, the Customer Owned Banking Association said in its second submission to the financial system inquiry.

The issue of how to reduce moral hazard when failing banks receive government support has been a hot-button issue for David Murray's inquiry. Ending the perception of "too big to fail" is also a key agenda item for the Brisbane G20 leaders summit in November.

COBA's submission attached analysis from modelling firm Macroeconomics quantifying the annual average value of the subsidy to the big four from being seen as too big to fail as between $2.9 billion and $4.5 billion, as funding costs were reduced by between 22 and 34 basis points. A separate submission by the regional banks quantified the subsidy at about $2 billion a year, using IMF assumptions.



this is all part of "Financial Repression" which they don't even bat an eye anymore talking about.  or "the financialization of the economy" is another one.  this is deflationary as it sucks capital and wealth away from productive portions of the economy into these black holes.
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September 01, 2014, 05:34:15 PM
 #11463

Now I get it -it's been staring in my face for weeks:

You use the word deflation in an unconventional third way, not the economic sense of shrinking money supply, not in the populist sense of shrinking prices, but generally as shrinkage.

Shrinking real wages, shrinking house building, shrinking GDP, shrinking dicks.

Makes sense, although it should be properly agreed upon during a discussion.
 

altho it is still probable that my definition fits the traditional definition of shrinking money supply (monetary base+credit). the problem is i can't find any reliable figures on total aggregate debt over time, including shadow banking, and whether it is shrinking or not.  that chart above of net shadow banking liabilities is a big hint as to what is going on, the question being, whether or not it is being adequately offset by increasing gvt debt and monetary base.

anyone?
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September 01, 2014, 05:57:38 PM
 #11464

simply amazing.  eventually, some of the money plowing into mining has to be redirected into the price:

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September 01, 2014, 06:04:41 PM
 #11465

simply amazing.  eventually, some of the money plowing into mining has to be redirected into the price:

https://i.imgur.com/C5VW9G3.png

Soon, probably early 2015. Hosting fees are running 30-40% for a lot of miners.

Buy & Hold
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September 01, 2014, 06:11:21 PM
 #11466

simply amazing.  eventually, some of the money plowing into mining has to be redirected into the price:

Why?  That is lost money likely only discouraging the participants who lost it.  The next wave up will be when the ASIC roll out ends.  That's when every device mines less then electricity costs.  BTW you sure are buying a lot of coins under $500.
 Shocked

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September 01, 2014, 06:23:06 PM
Last edit: September 01, 2014, 06:59:45 PM by cypherdoc
 #11467

simply amazing.  eventually, some of the money plowing into mining has to be redirected into the price:

Why?  That is lost money likely only discouraging the participants who lost it.  The next wave up will be when the ASIC roll out ends.  That's when every device mines less then electricity costs.  BTW you sure are buying a lot of coins under $500.
 Shocked

 Huh

ppl are always saying this kinda stuff at the end of a long bear cycle.  and then the price ramps and miners suddenly find themselves profitable from saved coins.  sure, it doesn't have to happen this way yet again, but i see no reason why it won't.  infrastructure has only grown stronger in almost all areas.

at some point that exponential curve has to flatten out and maybe even retrace w/o it even being a bad thing.  but how long have ppl been saying that? ans: years.
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September 01, 2014, 06:40:53 PM
 #11468

actually, this is lame as hell, lol!

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September 01, 2014, 06:45:18 PM
 #11469

I. e., the price will converge to 100 USD (the nominal value) when the interest tends to zero.  This is not an exponential rise as you describe it.

I guess that this is either a misunderstanding or I'm wrong in what I think about bonds - please point out where my mistake is.

If it is a perpetual bond, such as the U.K. "consol", then cypherdoc's explanation is correct.

In practice, USA bonds are limited maturity, and can only go over the nominal value if the interest goes below zero, which has happened in other places for short times, short maturities.

Realizing that you can buy $1000 in 30 years for $4 now seems good, but you never know - dollar could have taken the way of all other fiat currencies and depreciated much more. You really needed to have foresight on the U.S. gov't ability to subdue the country and the entire world to take that bet really.

Cause it can never be paid back. Not then, not now. The bond prices are guaranteed by aircraft carriers and DU.

I was talking about selling bonds prior to maturity on the open market.

Even then, without the using of derivatives, a 30-yr at 1% rate is priced at 0.740. If the rate drops to 0.5%, it is 0.860. You can only get double or more for your money if you buy at significantly higher rates, such as 10% dropping to 5% means that your 30-year bond goes up in value: 0.042->0.215.

A linear relationship where bond value doubles with interest rate halving only exists with perpetuals.


Actually can you link to the table for these values please? Aren't the bond prices not formulaic but set by free market trade when sold prior to maturity?
A bond has a price that corresponds to a yield. Say I want a 1-year, $1000 bond to yield 1% at least. That's the same as saying I would be willing to pay $990.10 at most (1000/101) for it. The same is valid in the secondary market, it's always the same. Accepting lower yield is simply the act of paying more.

The formulas are somewhat complicated because some long-term bonds have anual payments (coupons) with a fixed yield. That's another case when a bond can be worth more than its principal: If it pays 4%/year but the market settles for 2%, the price of the bond can very well be above the promised final payment, without the need for negative interest rate.
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September 01, 2014, 06:55:27 PM
 #11470

I. e., the price will converge to 100 USD (the nominal value) when the interest tends to zero.  This is not an exponential rise as you describe it.

I guess that this is either a misunderstanding or I'm wrong in what I think about bonds - please point out where my mistake is.

If it is a perpetual bond, such as the U.K. "consol", then cypherdoc's explanation is correct.

In practice, USA bonds are limited maturity, and can only go over the nominal value if the interest goes below zero, which has happened in other places for short times, short maturities.

Realizing that you can buy $1000 in 30 years for $4 now seems good, but you never know - dollar could have taken the way of all other fiat currencies and depreciated much more. You really needed to have foresight on the U.S. gov't ability to subdue the country and the entire world to take that bet really.

Cause it can never be paid back. Not then, not now. The bond prices are guaranteed by aircraft carriers and DU.

I was talking about selling bonds prior to maturity on the open market.

Even then, without the using of derivatives, a 30-yr at 1% rate is priced at 0.740. If the rate drops to 0.5%, it is 0.860. You can only get double or more for your money if you buy at significantly higher rates, such as 10% dropping to 5% means that your 30-year bond goes up in value: 0.042->0.215.

A linear relationship where bond value doubles with interest rate halving only exists with perpetuals.


Actually can you link to the table for these values please? Aren't the bond prices not formulaic but set by free market trade when sold prior to maturity?
A bond has a price that corresponds to a yield. Say I want a 1-year, $1000 bond to yield 1% at least. That's the same as saying I would be willing to pay $990.10 at most (1000/101) for it. The same is valid in the secondary market, it's always the same. Accepting lower yield is simply the act of paying more.

The formulas are somewhat complicated because some long-term bonds have anual payments (coupons) with a fixed yield. That's another case when a bond can be worth more than its principal: If it pays 4%/year but the market settles for 2%, the price of the bond can very well be above the promised final payment, without the need for negative interest rate.

thanks.  the other interesting point about the never ending interest rate death spiral is that existing entities that previously financed at fixed higher rates, think mortgages and corporations, develop an increasing debt burden with time that can hamper their growth.
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September 01, 2014, 06:56:23 PM
 #11471

actually, this is lame as hell, lol!



note there is nothing in there about innovation.
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September 01, 2014, 07:08:30 PM
 #11472

"The world banking system has always been messy," Obama said, speaking at a barbecue for Democratic donors in Purchase, New York. "In part, we’re just noticing now because of social media and our capacity to see in intimate detail the hardships that people banks are going through."

http://mashable.com/2014/08/30/obama-messy-world-social-media/
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September 01, 2014, 07:09:44 PM
 #11473

sh*ts gettin real:

http://www.zerohedge.com/news/2014-09-01/putin-celebrates-groundbreaking-russia-china-gas-pipeline-worlds-longest
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September 01, 2014, 07:11:21 PM
 #11474

actually, this is lame as hell, lol!



note there is nothing in there about innovation.

Certainly not pro innovation.

But I read (5) as anti innovation.

I've heard it many times off lazy people, "why reinvent the wheel", to which I always reply "because it's not round enough for me".

EDIT: gas news is BIG news.
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September 01, 2014, 07:11:58 PM
 #11475

more gold failure:



http://www.zerohedge.com/news/2014-09-01/deja-vu-someone-tell-gold-manipulating-machines-markets-shut
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September 01, 2014, 07:35:58 PM
 #11476

In the mean time, new wave of money is being handled to the worsts.

'Too big to fail' hands big banks $4.5 billion subsidy

The big four banks receive an annual subsidy of up to $4.5 billion from being perceived as "too big to fail" which should be paid for by a levy or increased capital charge, the Customer Owned Banking Association said in its second submission to the financial system inquiry.

The issue of how to reduce moral hazard when failing banks receive government support has been a hot-button issue for David Murray's inquiry. Ending the perception of "too big to fail" is also a key agenda item for the Brisbane G20 leaders summit in November.

COBA's submission attached analysis from modelling firm Macroeconomics quantifying the annual average value of the subsidy to the big four from being seen as too big to fail as between $2.9 billion and $4.5 billion, as funding costs were reduced by between 22 and 34 basis points. A separate submission by the regional banks quantified the subsidy at about $2 billion a year, using IMF assumptions.



this is all part of "Financial Repression" which they don't even bat an eye anymore talking about.  or "the financialization of the economy" is another one.  this is deflationary as it sucks capital and wealth away from productive portions of the economy into these black holes.

BIS also excludes the "systemically important" (their term for TBTF) banks from some provisions and gives special accommodation.

FREE MONEY1 Bitcoin for Silver and Gold NewLibertyDollar.com and now BITCOIN SPECIE (silver 1 ozt) shows value by QR
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September 01, 2014, 08:38:35 PM
 #11477


this is all part of "Financial Repression" which they don't even bat an eye anymore talking about.  or "the financialization of the economy" is another one.  this is deflationary as it sucks capital and wealth away from productive portions of the economy into these black holes.


Don't forget talent. A number of the brightest minds end up in finance because it's so fantastically lucrative, with far far less risk than, say, a tech startup. A lot of those people are smart in ways that could be extremely valuable to society overall; eg, simultaneously technically/mathematically talented, *plus* rare creativity. Quite a shame that their most rational self-interested action is to devote decades to exploiting the details of centrally manipulated markets.

Bitcoin is the first monetary system to credibly offer perfect information to all economic participants.
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September 01, 2014, 09:33:21 PM
 #11478


this is all part of "Financial Repression" which they don't even bat an eye anymore talking about.  or "the financialization of the economy" is another one.  this is deflationary as it sucks capital and wealth away from productive portions of the economy into these black holes.


Don't forget talent. A number of the brightest minds end up in finance because it's so fantastically lucrative, with far far less risk than, say, a tech startup. A lot of those people are smart in ways that could be extremely valuable to society overall; eg, simultaneously technically/mathematically talented, *plus* rare creativity. Quite a shame that their most rational self-interested action is to devote decades to exploiting the details of centrally manipulated markets.


Yes, they become very adept at finding the most efficient forms of corruption possible, at high frequency trading speeds no less ... sad waste of talent, time and resources, many call themselves "quantitative analysts" or 'quants'

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September 01, 2014, 10:17:30 PM
 #11479

Once you correct for pricing of risk, it looks like investors have been anticipating a negative real rate well into the future ever since the end of the recession. Expectations lifted in the first half of 2013, but have been falling sharply this year.

http://econbrowser.com/archives/2014/08/bond-market-conundrum-redux

confusion reigns:

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September 02, 2014, 01:37:13 AM
 #11480


for the same reasons i argue that Bitcoin will win the altcoin space as ppl gravitate to one currency for efficiency reasons and the network effect, i think that Bitcoin wins over gold.  as long as Bitcoin can remain secure, there is every reason to like it better than gold.  definitive fixed supply, portable, divisible, transportable, room for growth, intangible, not encumbered by a paper market (yet), unreachable by gvt, etc.  so no, i don't think they will go up together.  for the last 3 yrs, we've already seen them go in opposite directions.  gold has failed in its historical role as an enforcer to UST's.

Gold will have to compete against crypto, that's an excellent point. I wonder, however, if the baby boomers will feel comfortable investing in bitcoin as a safe haven. There's a lot of old people with a lot of money that would not touch bitcoin even if they think it might be a good bet, just out of fear of the unknown / technological illiteracy, don't you think?

http://elbitcoin.org - Bitcoin en español
http://mercadobitcoin.com - MercadoBitcoin
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