Gold collapsing. Bitcoin UP.

[rocks]

Dow diving now.  feels like deflation.

There will also be "up" days again. As if the thing cannot stay down any more.

To rocks point earlier I'm in total agreement, QE is just locking in past inflation.

Deflation should refer to the money supply but is largely measured in consumer prices.

When I here deflation I have a hard time relating it to falling stock prices and other investment assets, although consumer prices and investment assets may be correlated.

Where I see the deflation happening I see it in consumer value judgments. Here is a distressing story my wife told me.

The dentist visits schools in Canada part of oral hygiene education, while my wife was talking the dentist expected concern, that many children aren't getting the calcium they need in there diet. Many kids don't eat cheese anymore, why, the feedback to the dentist is my mom says it's too expensive.

That's feedback I'd expect from  people living in poverty not middle class kids. The thing debt purchase like a car a house (even a cellphone believe it or not) are being serviced (creating monetary inflation) while at the same time many of the same people are foregoing basis like nutrition causing consumer deflation.

That is a sad anecdote Adrian, but one that I think points to just how horrific the current debt-money system is. Hyper-financialization of basic goods required to live has resulted in massive debt payments that must be paid before anything else, including food.

When central banks enable free debt and leverage, it raises the price of everything people need to live, right up to the level where the public can just barely afford interest payments.

Take housing for example, without mortgages housing would be much cheaper and affordable. However with all the free leverage (30-45 year mortgages, ARMs, interest-only terms, 3% down, etc), the price of housing rises due to people bidding with leverage until no one can afford any higher interest payments. Same is true with education, health care, etc., these are all examples of necessary goods bid up due to hyper-financialization of the economy.

What is evil about this is it creates a form of debt-based serfdom for everyone. Where before your average person could save and buy a house outright in mid-life, today people can "buy" a house earlier in life, but then are locked into large debt payments that extract a significant portion of ones lifetime income potential. And there is no way to opt-out of this system, even if you choose to rent and not buy, rent prices go up with housing.

Debt serfdom is exactly what it is. We are all required to pay a significant portion of our life's labor to banks to support debt payments for basic goods that would never be priced so high without the free leverage offered.
 
So here we are today, where families skip basic food for children because they have to make the mortgage payment, school payment, healthcare payment, etc. It is scarily similar to the feudal system where people had to pay a portion of their labor to work the land to the people who inherited that land, now we have a system where people have to pay a portion of their labor to financial institutions to people who inherited financial wealth. The mechanism has changed, but the result has not.

Sorry if this is too negative or OT, comes from reading ZH for many years.

[1714000417]

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[cypherdoc]

I was on the fence about buying a new Xbox.

This settles it.  Merry Christmas!

I didn't have a console, ever. I quit playing computer games at some point.

I think I might get a TV or projector and a steam box.

When is steam going to accept Bitcoin? Now that would imply a rocket.

(I know one can buy steam games with bitcoin through 3rd parties, that's not what I mean).

I quit years ago as well. But I still have one teenager left at home. But who knows? Maybe I'll start again just because of Microsoft. Just to support the cause. A part of me wonders just how much the tech has come along.

Your teenagers will use you as a punching bag.
I used to think I was good at a few games until I had a son.
It will be humbling, but you will have new things to talk about with them.

Cypher one suggestion if you get the XBONE get Forza 5 racing sim. with force-feedback wheel and pedals.  My teenage son and daughter both use me as a punching bag with all games but this one.  I can get cocky and say "who's your daddy" with wheels and pedals but not those thumb sticks.  A low latency tv is a must.

Merry Christmas

lol, this is great!

is XBoxOne, the one i should be looking at?  there are all sorts of bundles.  is there one for Forza?

i've been thinking about the differences in eye hand coordination btwn adults and kids all day.  for instance, while my kids can pown me all day with video games which require fine motor skills of just the fingers, they still can't beat me with more gross, larger muscle activities like ping pong, fooz ball, pool, or shooting baskets.  which tells me their neural linkages leading from their retinas to optic nerves to crossing at the optic chiasm to the synapse at their geniculate nuclei and then to their occipital cortex to the motor centers of the brain and then on down to their fingers are highly developed at a young age.  it's just the large muscle groups for old guys like me that aren't fully there yet and why i have a chance!

Forza sounds good!

[cypherdoc]

When central banks enable free debt and leverage, it raises the price of everything people need to live, right up to the level where the public can just barely afford interest payments.

Take housing for example, without mortgages housing would be much cheaper and affordable. However with all the free leverage (30-45 year mortgages, ARMs, interest-only terms, 3% down, etc), the price of housing rises due to people bidding with leverage until no one can afford any higher interest payments. Same is true with education, health care, etc., these are all examples of necessary goods bid up due to hyper-financialization of the economy.

What is evil about this is it creates a form of debt-based serfdom for everyone. Where before your average person could save and buy a house outright in mid-life, today people can "buy" a house earlier in life, but then are locked into large debt payments that extract a significant portion of ones lifetime income potential. And there is no way to opt-out of this system, even if you choose to rent and not buy, rent prices go up with housing.

Debt serfdom is exactly what it is. We are all required to pay a significant portion of our life's labor to banks to support debt payments for basic goods that would never be priced so high without the free leverage offered.
 
So here we are today, where families skip basic food for children because they have to make the mortgage payment, school payment, healthcare payment, etc. It is scarily similar to the feudal system where people had to pay a portion of their labor to work the land to the people who inherited that land, now we have a system where people have to pay a portion of their labor to financial institutions to people who inherited financial wealth. The mechanism has changed, but the result has not.

Sorry if this is too negative or OT, comes from reading ZH for many years.

this is great once again, rocks. 

you are young enough to have the energy to post like i used to here back in 2011 at the beginning of the Gold: I Smell a Trap thread.  thanks for this.  everybody should pay attention.

yes, the key thing is that young ppl, even secretaries and plumbers, get into the speculation game by leveraging up to buy all sorts of expensive assets like stocks, houses, condos, or commercial RE they have no business getting into b/c of lack of income.

and we know this is a real problem b/c average incomes for middle and even upper class non financial Americans has stagnated for years now. the only ones whose incomes have skyrocketed are the well connected in the financial industry.  i've never seen such hypocrisy and levels of effort by our conflicted politicians to bailout a particular industry.  and this just exacerbates the problem b/c those same ppl know that it has to be pedal to the metal while the going is good.  if you've ever visited Wall St or known ppl in the industry, there is a sense of urgency to make hay while they can as they know it won't last forever.

the key thing here is that, as you say, the banks will never let you off the debt you owe to them.  there's 2 sets of rules; one for their own debt forgiveness aka bailouts and the other for pleebs like you.  we are fast approaching the point where the debt can't be financed any longer.  here's another chart that shows something has changed:

http://www.macrotrends.net/1381/debt-to-gdp-ratio-historical-chart 

[xcrabber]

I was on the fence about buying a new Xbox.

This settles it.  Merry Christmas!

I didn't have a console, ever. I quit playing computer games at some point.

I think I might get a TV or projector and a steam box.

When is steam going to accept Bitcoin? Now that would imply a rocket.

(I know one can buy steam games with bitcoin through 3rd parties, that's not what I mean).

I quit years ago as well. But I still have one teenager left at home. But who knows? Maybe I'll start again just because of Microsoft. Just to support the cause. A part of me wonders just how much the tech has come along.

Your teenagers will use you as a punching bag.
I used to think I was good at a few games until I had a son.
It will be humbling, but you will have new things to talk about with them.

Cypher one suggestion if you get the XBONE get Forza 5 racing sim. with force-feedback wheel and pedals.  My teenage son and daughter both use me as a punching bag with all games but this one.  I can get cocky and say "who's your daddy" with wheels and pedals but not those thumb sticks.  A low latency tv is a must.

Merry Christmas

lol, this is great!

is XBoxOne, the one i should be looking at?  there are all sorts of bundles.  is there one for Forza?

i've been thinking about the differences in eye hand coordination btwn adults and kids all day.  for instance, while my kids can pown me all day with video games which require fine motor skills of just the fingers, they still can't beat me with more gross, larger muscle activities like ping pong, fooz ball, pool, or shooting baskets.  which tells me their neural linkages leading from their retinas to optic nerves to crossing at the optic chiasm to the synapse at their geniculate nuclei and then to their occipital cortex to the motor centers of the brain and then on down to their fingers are highly developed at a young age.  it's just the large muscle groups for old guys like me that aren't fully there yet and why i have a chance!

Forza sounds good!

Yeah xbox one is the latest and greatest, not sure about Forza bundle.  I've been looking at getting a couple Polaris RZR's for Christmas to get my kids off the video games and maybe get me away from the charts a little bit.  If I had your amount of coins it would be a no brainer.

[cypherdoc]

If I had your amount of coins it would be a no brainer.

i don't have any coins 

[BlindMayorBitcorn]

If I had your amount of coins it would be a no brainer.

i don't have any coins 

Lovely endorsement

[xcrabber]

If I had your amount of coins it would be a no brainer.

i don't have any coins 

Yeah I have just one question, more or less than 100,000?

[cypherdoc]

If I had your amount of coins it would be a no brainer.

i don't have any coins  

Yeah I have just one question, more or less than 100,000?

hey, Emin Gun Sirer is a computer science researcher.  he says he knows everything.

he says guys like me can't have more than 100 BTC.  who are you to disagree with him?  he's worked it out mathematically.  

[xcrabber]

If I had your amount of coins it would be a no brainer.

i don't have any coins  

Yeah I have just one question, more or less than 100,000?

hey, Emin Gun Sirer is a computer science researcher.  he says he knows everything.

he says guys like me can't have more than 100 BTC.  who are you to disagree with him?  he's worked it out mathematically.  

Did he say you can't or shouldn't have more than 100k?  Just the few I have I feel guilty going thru a ramp up like 11/13 much less having 100k.  More power to someone who has the fortitude to hold thru the massive ramp ups and dips. 

[cypherdoc]

The value of gold will drop to nearly zero because of the amount of gold it will deposit in its aftermath.
“The only reason why gold is so valuable is because it is so rare. When this asteroid hits, gold will be more plentiful than iron. It will be worthless!” Said global economy expert Gig Young from his Manhattan office.

https://aceflashman.wordpress.com/2009/10/27/solid-gold-asteroid-head-for-earth-world-economy-in-peril/

[Erdogan]

Warning: Inflated ego:

http://panampost.com/belen-marty/2014/12/12/juan-llanos-bitcoin-was-born-regulated/

[tvbcof]

Warning: Inflated ego:

http://panampost.com/belen-marty/2014/12/12/juan-llanos-bitcoin-was-born-regulated/

I'd say (and have said) that the guy is pretty much spot on.  It will be more or less trivial to regulate Bitcoin at this point thanks to the idiots who want to take it mainstream in native form (cough...cypherdoc...cough.)  I've also described how simple and effective it would be to modulate through {choose-color}listing.  The fact that it has not happened yet is a testament to how much more useful it is alive than dead, and that is probably largely due to the number of moron semi-crooks who use it.

Now sidechains using Bitcoin as a reserve backing could, and hopefully will, change the dynamics significantly.  That is not to say that the same attacks on Bitcoin would not be possible, and that they would probably not have some grievous impacts on the userbase, but the attacks would be much more difficult to pull off and there would be a lot more flexibility in fighting them off.

Bitcoin in it's present form has one and basically only one major advantage over most other instruments.  No counter-party risk.  That's really about it IMHO.

[Melbustus]

If I had your amount of coins it would be a no brainer.

i don't have any coins  

Yeah I have just one question, more or less than 100,000?

hey, Emin Gun Sirer is a computer science researcher.  he says he knows everything.

he says guys like me can't have more than 100 BTC.  who are you to disagree with him?  he's worked it out mathematically.  

I missed that...where does he talk about people's holdings?

[Melbustus]

...
Bitcoin in it's present form has one and basically only one major advantage over most other instruments.  No counter-party risk.  That's really about it IMHO.

A few others, but that's the big one, yes.

[cypherdoc]

If I had your amount of coins it would be a no brainer.

i don't have any coins  

Yeah I have just one question, more or less than 100,000?

hey, Emin Gun Sirer is a computer science researcher.  he says he knows everything.

he says guys like me can't have more than 100 BTC.  who are you to disagree with him?  he's worked it out mathematically.  

I missed that...where does he talk about people's holdings?

https://twitter.com/el33th4xor/status/543456323749564416

[msin]

That is a sad anecdote Adrian, but one that I think points to just how horrific the current debt-money system is. Hyper-financialization of basic goods required to live has resulted in massive debt payments that must be paid before anything else, including food.

When central banks enable free debt and leverage, it raises the price of everything people need to live, right up to the level where the public can just barely afford interest payments.

Take housing for example, without mortgages housing would be much cheaper and affordable. However with all the free leverage (30-45 year mortgages, ARMs, interest-only terms, 3% down, etc), the price of housing rises due to people bidding with leverage until no one can afford any higher interest payments. Same is true with education, health care, etc., these are all examples of necessary goods bid up due to hyper-financialization of the economy.

What is evil about this is it creates a form of debt-based serfdom for everyone. Where before your average person could save and buy a house outright in mid-life, today people can "buy" a house earlier in life, but then are locked into large debt payments that extract a significant portion of ones lifetime income potential. And there is no way to opt-out of this system, even if you choose to rent and not buy, rent prices go up with housing.

Debt serfdom is exactly what it is. We are all required to pay a significant portion of our life's labor to banks to support debt payments for basic goods that would never be priced so high without the free leverage offered.
 
So here we are today, where families skip basic food for children because they have to make the mortgage payment, school payment, healthcare payment, etc. It is scarily similar to the feudal system where people had to pay a portion of their labor to work the land to the people who inherited that land, now we have a system where people have to pay a portion of their labor to financial institutions to people who inherited financial wealth. The mechanism has changed, but the result has not.

Sorry if this is too negative or OT, comes from reading ZH for many years.

Well explained and so very true.  Just look the quotes from Chenault (AMEX CEO) on the Coindesk article. Home ownership has become a consumer nightmare, rarely does one pay off home debt anymore, they just upgrade based on income status, never obtaining ownership and perpetuating the cycle as you described.  One thing we can all count on is that we always repeat our financial mistakes, and each time the consequences are worse.  This is why I believe Bitcoin will be successful. 

[Melbustus]

Well... Mauldin seems to have a new obsession:

http://www.mauldineconomics.com/lg/bitcoin

(In that video, I count 5 visionary optimists, and one small-minded pessimist with the typical yawn-inducing criticisms)

[Melbustus]

If I had your amount of coins it would be a no brainer.

i don't have any coins  

Yeah I have just one question, more or less than 100,000?

hey, Emin Gun Sirer is a computer science researcher.  he says he knows everything.

he says guys like me can't have more than 100 BTC.  who are you to disagree with him?  he's worked it out mathematically.  

I missed that...where does he talk about people's holdings?

https://twitter.com/el33th4xor/status/543456323749564416

Heh. You should point him to your sold-all-my-gold post from 2012.

[cypherdoc]

Storage problem? What storage problem?

http://techcrunch.com/2014/12/10/new-shingled-hard-drives-hold-terabytes-for-pennies-a-gig/?ncid=rss&utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+Techcrunch+%28TechCrunch%29

[picolo]

Warning: Inflated ego:

http://panampost.com/belen-marty/2014/12/12/juan-llanos-bitcoin-was-born-regulated/

I'd say (and have said) that the guy is pretty much spot on.  It will be more or less trivial to regulate Bitcoin at this point thanks to the idiots who want to take it mainstream in native form (cough...cypherdoc...cough.)  I've also described how simple and effective it would be to modulate through {choose-color}listing.  The fact that it has not happened yet is a testament to how much more useful it is alive than dead, and that is probably largely due to the number of moron semi-crooks who use it.

Now sidechains using Bitcoin as a reserve backing could, and hopefully will, change the dynamics significantly.  That is not to say that the same attacks on Bitcoin would not be possible, and that they would probably not have some grievous impacts on the userbase, but the attacks would be much more difficult to pull off and there would be a lot more flexibility in fighting them off.

Bitcoin in it's present form has one and basically only one major advantage over most other instruments.  No counter-party risk.  That's really about it IMHO.

Gold could go down 20% or maybe 30% but it can go up 50%, 100% or a lot more so it seems like a good investment especially since you can have Gold without much third party risk.