Gold collapsing. Bitcoin UP.

[miscreanity]

It has been months and during those months the trend has been down in both stocks and PMs.

That trend has been repeatedly rebuffed and also shows signs of slowing into a reversal.

how bout this?  i will admit i'm wrong if the Dow gets back up over the 5/1/12 high or gold gets back up over the 2/28/12 high by the end of the year.

Noted. Since you stated with an or, I assume that a collapsing Dow and rising gold would meet that measure.

The bears are still expecting people to stop eating, and machinery to run on air.

You can ignore reality, but you can’t ignore the consequences of ignoring reality. ~Ayn Rand

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[1713991478]

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[Vladimir]

As zerohedge crowd have been absolutely correctly commenting on recently. Prices of equities and bonds and many other asset classes do not trade based on fundamentals but based on current level of central bank insanity.

Dow, for example, these days has nothing to do with number of cars, potash, iphones or CPU's or other goods and services produced and consumed. It has, however, everything do to with and only with how much QE Ben and Marv have pushed out of their wasoo during every given week. Trade that. Or alternatively, just buy some bitcoins and you can start ignoring reality for the next decade or so.  

[cypherdoc]

It has been months and during those months the trend has been down in both stocks and PMs.

That trend has been repeatedly rebuffed and also shows signs of slowing into a reversal.

how bout this?  i will admit i'm wrong if the Dow gets back up over the 5/1/12 high or gold gets back up over the 2/28/12 high by the end of the year.

Noted. Since you stated with an or, I assume that a collapsing Dow and rising gold would meet that measure.

The bears are still expecting people to stop eating, and machinery to run on air.

You can ignore reality, but you can’t ignore the consequences of ignoring reality. ~Ayn Rand

nothing's noted unless one of you guys go on record yourselves and make some commitments like i have so i can call you wrong as well.  what do you think this is, a one way street?

i just heard some lady crying (literally) on an interview with Jim Puplava on how she's lost $100,000 on mining stocks since the top.  of course he said "hang on, you're closer to a bottom than a top".  it's irresponsible advice like this from guys like you that have cost alot of ppl alot of money.

[miscreanity]

... just buy some bitcoins and you can start ignore manufactured reality for the next decade or so. 

nothing's noted unless one of you guys go on record yourselves and make some commitments like i have so i can call you wrong as well.  what do you think this is, a one way street?

i just heard some lady crying (literally) on an interview with Jim Puplava on how she's lost $100,000 on mining stocks since the top.  of course he said "hang on, you're closer to a bottom than a top".  it's irresponsible advice like this from guys like you that have cost alot of ppl alot of money.

I don't have to worry - I'm not mistaken. It's simple: paper gold can go to zero, but physical gold cannot. The same applies to all real assets.

Anecdotes do not change the fundamentals. No amount of 'crying ladies' paraded as intentional misinformation can either. With their lack of understanding that their 'losses' are unrealized, and often accompanied by a confusion about why the investment was undertaken in the first place if it was even entered for the right reasons, people sadly succumb to their own ignorance of the financial system.

It's amusing to hear people saying that gold holders will become millionaires when that status is relative - sure, you might become a millionaire, but a millionaire in 2020 who lives the same as an average middle class wage earner of ~$50,000 in 2010 is not necessarily someone who is financially 'rich'. It's simply someone who hasn't had to chase corners and trade their way to maintaining the same lifestyle he has now.

You can earn all you want in paper, but when the time comes to revalue assets, paper will be drawing the short straw. It's the same thing as being in the wrong asset when the Russel index is rebalanced every year. All of your gains could easily amount to the equivalent of treading water, or drowning.

It has to be said again:

[cypherdoc]

No amount of 'crying ladies' paraded as intentional misinformation can either. With their lack of understanding that their 'losses' are unrealized, and often accompanied by a confusion about why the investment was undertaken in the first place if it was even entered for the right reasons, people sadly succumb to their own ignorance of the financial system.

what the hell are u talking about?  she was probably listening to your bullshit here at the top:

Gold mining stocks break out relative to S&P. Unbelievable strength in the face of unprecedented deflation: not something to stand against.

https://bitcointalk.org/index.php?topic=35956.msg522374#msg522374

[cypherdoc]

Here's the problem.  Cypher claims things are about to implode, then justifys it with the minor downtrend we have had in the last 3 months as if somehow he made a great call.  Its a minor downtrend..  So he got the minor downtrend right, yippie, its a tiny move, it could have easily gone the other way.  Here's a chart to put it in perspective.

i just wanted to point something out.  the move down in May, 19/23 days straight down, was a move not seen since 1972 (quote Bill Fleckenstein podcast interview, FSO or KWN interview).  that's 40 f*ckin years.

now how the hell does Cypher get that lucky?

edit: btw, my subs know exactly how i did it as i walked them thru the logic step by step.

[miscreanity]

Gold mining stocks break out relative to S&P. Unbelievable strength in the face of unprecedented deflation: not something to stand against.

https://bitcointalk.org/index.php?topic=35956.msg522374#msg522374

Maybe you forgot that I don't advocate trading in traditional markets for that reason. As soon as a breakout begins, the weight of the entire financial system is brought to bear on real assets. Financial paper "assets" drown perceived value until we arrive at sentiment like there is now. Last September, gold related assets were a reasonable bargain. Now, they're being thrown away.

The paper depiction of value in regard to real assets does not describe their actual worth. You might as well tell me that a 70kg adult male only needs 1ml of water and 5g of rice per day. Try to do that in reality and he'll die within a fortnight. Dumping gold and related shares at current valuation is like giving away Bentleys because you don't like the style.

Keep playing the paper game. You can move your legs as fast as you can, and it might een seem like you're getting somewhere, but you're still standing in quicksand.

[cypherdoc]

Gold mining stocks break out relative to S&P. Unbelievable strength in the face of unprecedented deflation: not something to stand against.

https://bitcointalk.org/index.php?topic=35956.msg522374#msg522374

Maybe you forgot that I don't advocate trading in traditional markets for that reason. As soon as a breakout begins, the weight of the entire financial system is brought to bear on real assets. Financial paper "assets" drown perceived value until we arrive at sentiment like there is now. Last September, gold related assets were a reasonable bargain. Now, they're being thrown away.

The paper depiction of value in regard to real assets does not describe their actual worth. You might as well tell me that a 70kg adult male only needs 1ml of water and 5g of rice per day. Try to do that in reality and he'll die within a fortnight. Dumping gold and related shares at current valuation is like giving away Bentleys because you don't like the style.

Keep playing the paper game. You can move your legs as fast as you can, and it might een seem like you're getting somewhere, but you're still standing in quicksand.

there you go again.  "the price is not real."  then what is real?  what's the true price right now?

i keep offering you 22 oz at a bargain price of $2800 each which is a bargain if you truly believe they are going to $35,000 each.  why won't you take me up on them?  take out a loan.

[miscreanity]

i just wanted to point something out.  the move down in May, 19/23 days straight down, was a move not seen since 1972 (quote Bill Fleckenstein podcast interview, FSO or KWN interview).  that's 40 f*ckin years.

now how the hell does Cypher get that lucky?

edit: btw, my subs know exactly how i did it as i walked them thru the logic step by step.

Historical volatility extremes are indicative of either accelerating growth or failure. Either gold or the financial system are failing, not both. Look around at the banking crises (plural) and tell me it's gold that's failing.

Playing the paper game doesn't require any more luck than card counting at a casino. It's knowing when the casino can't pay out that's important. I'd rather be early than lucky - you can try to catch the last corner.

[miscreanity]

there you go again.  "the price is not real."  then what is real?  what's the true price right now?

i keep offering you 22 oz at a bargain price of $2800 each which is a bargain if you truly believe they are going to $35,000 each.  why won't you take me up on them?  take out a loan.

How's this: 1 troy ounce of gold is worth 1 troy ounce of gold. Value needs to be measured in a consistent medium. The USD is not remotely consistent. Transparency is critical as well, and gold is far more transparent than paper, except when obscured by that paper.

Gold is only volatile in terms of fiat. It is stable within a consistent range relative to real assets. The problem is in the financial system, not gold and real assets.

If I were to take a loan, I would buy at the best bargain I could obtain. You aren't offering that.

[cypherdoc]

there you go again.  "the price is not real."  then what is real?  what's the true price right now?

i keep offering you 22 oz at a bargain price of $2800 each which is a bargain if you truly believe they are going to $35,000 each.  why won't you take me up on them?  take out a loan.

How's this: 1 troy ounce of gold is worth 1 troy ounce of gold. Value needs to be measured in a consistent medium. The USD is not remotely consistent. Transparency is critical as well, and gold is far more transparent than paper, except when obscured by that paper.

Gold is only volatile in terms of fiat. It is stable within a consistent range relative to real assets. The problem is in the financial system, not gold and real assets.

If I were to take a loan, I would buy at the best bargain I could obtain. You aren't offering that.

i'm not offering a bargain price?  why not?  i thought you said gold was going to the moon or a fully fiat valued $35,000?  $2800 is clearly a bargain given that metric.  or perhaps you really don't believe what you're saying do you?

if not $2800, then what IS a bargain price?  might it be......wait for it........$1575?  will you buy from me at that price?  but, but that's the PAPER price!  i'll be damned.  that's what i can buy it for down at the local coin shop.  i'll bet you won't even buy from me at that price.

and if you think that's a bargain price then why wouldn't every other rational actor in the market place agree with you?  or perhaps they do?  but then that's a problem too b/c then what does that do to your theory?

answer:  the theory is BS.

[miscreanity]

If I were to take a loan, I would buy at the best bargain I could obtain. You aren't offering that.

i'm not offering a bargain price?  why not?  i thought you said gold was going to the moon or a fully fiat valued $35,000?  $2800 is clearly a bargain given that metric.  or perhaps you really don't believe what you're saying do you?

if not $2800, then what IS a bargain price?  might it be......wait for it........$1575?  will you buy from me at that price?  but, but that's the PAPER price!  i'll be damned.  that's what i can buy it for down at the local coin shop.  i'll bet you won't even buy from me at that price.

Pay attention to the bolded sections. Keep your 24 ounces. You'll thank me later.

and if you think that's a bargain price then why wouldn't every other rational actor in the market place agree with you?  or perhaps they do?  but then that's a problem too b/c then what does that do to your theory?

answer:  the theory is BS.

So you say.

'Rational' does not guarantee 'informed'. If someone were to start trading today without understanding how the financial system works at all, what is rational for that person would likely be naively irrational to an experienced trader. It's the same concern with insider information, wherein the rational decision made by those with said information is different from actions pursued by those without the information.

What's different here is that the insider information has been played on for so long that clues about it have 'leaked' out over the years, allowing for extensive investigation to reproduce the framework of that information. Filling in the details is a simple matter from that point.

I hope this visual helps with further explanation below.



The relational values are my educated guess as to how each of several different types of value apply to each of the assets presented. Subjective is obviously from the subjective theory of value, just as intrinsic infers the intrinsic theory of value. Production value is the input cost, or the labor theory of value.

Producing a dollar requires almost no effort, and the more produced, the lower the overall cost. This is especially true when considering what it is used for. Its intrinsic value is negligible at best, being mere fabric and ink. The value is almost entirely subjective.

Gold has a much greater production cost, making its initial market price alone much higher. If its minor intrinsic value for use in industry and research were the only determinant, the total value would be much less. Speculation rests mostly in the subjective value region (also when ratio shifts occur), which is not very big in comparison to the sheer cost to produce it. This is why large price swings can't do much to keep the exchange value low. It is also why, no matter how much naked shorting pressure is exerted, it will always have value. This is particularly important as gold regains a greater monetary role.

* Paper gold is equivalent to the dollar: negligible production cost and intrinsic value resulting in purely subjective value, easily dominated by speculation. It is not gold.

Bitcoin is interesting, because any of its purely abstract, mathematical units basically has zero intrinsic value. The production cost includes the hardware and energy required to secure the blockchain, and that maybe amounts to half of the current market rate if considering GPUs only. That probably drops to as little as 10-20% when including FPGAs. All that's really left after hardware and energy input is subjective, involving speculation and practical usage demand.

None of these valuations take into account supporting infrastructure outside of creating the initial availability for each unit. That would change the ratios, in some situations drastically. For instance, the USD requires expansive and pervasive infrastructure both to secure and manage its units. Gold doesn't need much infrastructure at all, since each unit of gold can generally be judged by appearances. Bitcoin infrastructure lies somewhere in between, needing more active components than gold, but being much less expensive than that necessary for the USD.

The absolute values in terms of different units (XAU, USD, BTC) shows a different picture, one that is incapable of delineating the separation between the above types of value.



When calculating 'price', the denominational unit simply acts as the proxy between whatever items are being exchanged. Therefore, a medium of exchange is virtually inconsequential except to provide a reference point. I could compare the price of dollars to the price of gold in terms of bitcoins, or the price of corn to the price of bonds in terms of gold. The absolute value cannot break down the types of value combined within an item.

Some traders and investors seem to have an instinctual understanding of these concepts, but I have yet to come across any texts which explicitly outline the interplay between different types of value.

[cypherdoc]

Gold down, Bitcoin UP.

[cypherdoc]

The Silverbox Update:

Stocks:  -7%

Gold:  -8%

Bitcoin:  +22%

Gold/Bitcoin Difference:  30%

silverbox's GPL:  -15%

cypher's shorts:  GLD: +1.24%, SLV:  +5.86%, SLW: +4.36%, RGLD: +2.46$, GG:  +5.8%

edit:  you can already adjust those #'s higher.

[cypherdoc]

miscreanity:  do you understand the meaning of "Nein"?

[dopamine]

I'm a buyer below 1560 short term. got to love bitdaytrade that allows 50:1 leverage . Not so happy that bitcoinica still has not return any of my bitcoins yet anything lower than 1550 and we will be oversold

[cypherdoc]

It's TIME for all pm bulls to step and BUY.

Never mind that SLV has broken the Dec lows and is going to plunge.

[MatthewLM]

The relational values are my educated guess as to how each of several different types of value apply to each of the assets presented. Subjective is obviously from the subjective theory of value, just as intrinsic infers the intrinsic theory of value. Production value is the input cost, or the labor theory of value.

In the last one I think you mean the cost theory of value?

Well prices are determined through the subjective valuations of market participants. The production cost comes into it because if the price falls below the production cost then producers that produce at this cost will no longer be profitable. With less supply from production because of less profitability then there is an upward pressure on prices. This is due to markets tending towards equilibrium where supply and demand meet. When selling something, you do not want to run out of stock, so if there is less supply, the demand will be greater for the sellers that continue to exist and hence they can raise prices which will lower the actual demand because higher prices removes willing buyers.

All simple economics.

[cypherdoc]

Cypher's Rerack:

Stocks:  -7%

Gold: -9%

Bitcoin:  +21%

Diff:  30%

silverbox's GPL:  -18%

cypher shorts:  GLD: +1.74%, SLV:  +5.82%, SLW: +5.19%, RGLD: +3.51%, GG: +6.4%

[cypherdoc]

 i forgot my ZSL and DZZ!!!  but they're in separate retirement accts where the gains aren't easily accessed.