Topic: Gold collapsing. Bitcoin UP. - page 1196. (Read 2032266 times)

1 huge bonfire.

Some several hundred percent.

I don't think (non-financial) stocks will lose value as they'll continue to accumulate value. I think gold will definitely lose A LOT of value to crypto, at least pushed back to where silver is today (and silver moving down a slot too) and possibly much more than that.

Gold will take at least 1% of the pie when people finally all agree it's better money than gold. If it takes the global money supply because it takes over as a global currency this is improved a lot (USD money supply is ~$50T or something right?). It's kind of useless to estimate these things in detail as no-one will get this right. Gold might end up going up even if Bitcoin beats it because of a devaluation of the importance of fiat to everyone in the world (learned from the rise of crypto).

25%-50% as one of many mediums of exchange / store of value?  That seems extreme.  What would litecoin be at another 10%?

Gold is currently about 1.5% of the value of the world (6T/400T), and Bitcoin is 0.0%.

Where do you (and the others) think that these figures will stabilize?

I think Bitcoin can at most become valued at 25-50% of the world, and that gold should stay about where it is now. The great losers will be all the current financial products, mainly fiat, bonds and stocks.

I think crypto will cause PMs to lose tremendous value yes.

hmmm, I see your point, rational and well expressed

but I'm not quite ready to abandon a substance that has been money since the dawn of human economies

Yes, gold's fiat value has indeed gone wayyy up since convertibility was ended. But why? Essentially, the reasons I outlined: historical inertia in terms of being thought of as an inflation hedge, and lack of alternative similar vehicles. That's all fine, of course. I believe it's short-lived (in the grand scheme, so to speak).

My point is that the things that have historically anchored gold to value that was easy to intellectually see and justify are no longer present. Convertibility held gold's status as money in place, if only in a 2nd order sort of way (since gold hasn't actually meaningfully circulated for day-to-day needs in over a century).

With that link to direct moneyness severed, and a new thing emerging which completely solves the reason why gold needed transactable surrogates (fiat) in the first place, the intellectual value case for gold is much more difficult.

Again, I think there are quite a few people who see the problems with fiat as obvious, but who are also uneasy with gold for the reasons I outline (intellectually difficult to justify). These people are increasingly happy to support bitcoin because it solves the fiat issues without having the problems that gold does in modern times.

Stupefied to find a financial engineer ignorant about escrowing.

Seriously, I have heard enough of that same bullshit, customers must be protected(read: spoiled) with the right to call back a transaction whenever they want blahblahblah, Chinese people have never had a proper credit card system, yet their online C2C industry alone creates 20 million jobs and processing trillions each year, upon a payment system designed around escrowing. In fact, chargeback spares not only  fraudulent buyers but fraudulent sellers as well(those it is designed to punish), because it makes seller fraud indistinguishable from buyer fraud.

I'd set up a an account with Simple because I heard they are bitcoin friendly.

I've had accounts mysteriously close at very large bank just because I linked them to Coinbase via ACH.  Banks are allowed to close an account for any reason and don't need to tell you why, just like you don't have to tell them why you close your account.
I have accounts at a number of banks, but I won't use them with Coinbase anymore.  I will use Simple for that.

When your money is in a bank, it isn't your money.  It's the banks.  So when they decide to arbitrarily close your account, you can expect to wait quite a while for them to mail you a check.
And if the word gets out, you may not be able to deposit that check elsewhere...  Banks can boycott you, and they don't need a reason.
Of course if you take them to court, you might win, but in the mean time it can make things difficult.

I'm looking forward to a more broad acceptance of bitcoin.  Spend it with those that accept it, and keep this project going.

I've heard a saying about when someone starts believing his company's marketing.  "Smoking your own exhaust"

yup, I am "lacking a fundamental understanding of the role and function of central banking."

quite sure of it

Not gold related but a renewed angle from a silicon valley position pushing fiat.

An interesting rant from Alex Payne a key engineer of Simple the new banking product.

 
Bitcoin, Magical Thinking, and Political Ideology

It's just different communities.  In urban areas they sometimes don't want cash and just CC.  In rural areas there might be cash only.  In different countries it's official fiat only and that's by force.  Bitcoin is simply a different choice.  It's an unforced choice, which is a pleasant in today's world.

I was in Austin @ a Bitcoin meeting a few months back and people there said they regularly pay for things in silver coins.

Besides that, gold can always be exchanged to currency, just not at a constant rate. Which is fine because this means the price (expressed in fiat) will go up as fiat money inflates. The explicit convertibility between fiat and gold added value to fiat NOT gold.

Fiat is easier to convert into food and shelter at this point. If you can't find somebody to convert your gold into fiat, what can you convert it into?

It's fiat not gold that lost the guaranteed convertibility

Anyway, I do agree the emergence of crypto is a huge game changer and will be a huge drag (at least) on gold.

Now the news starts summing about the new debt ceiling again. I have skimmed about 5 articles, but the current ceiling and the current debt is not mentioned. Conspiracy? Do I really have to dig down to level 2 to find this info?

The old world will still eye gold in case of panic. It is easy to safeguard $10.000 from paper money collapse. It's not so easy with $10,000,000,000. Gold will have its days again, although it may take years and years.

Really? Nothing has changed? Granted, it's early in the crypto-game, but it's an enormous change.

The case for gold post-1971 has been dubious and based on historical inertia. Obviously people want a "safe" inflation-hedge as part of their portfolio, and gold was the go-to for a lot of people, but again, mostly based on inertia and lack of alternatives.

At least for people like me, I only ever grudgingly thought of gold as a decent place to park capital. It has no yield, no guaranteed convertibility anymore, no real direct usability as money for decades if not a century or two... Historical inertia isn't an easy justification to invest on.

Enter bitcoin. Now we have all the properties of gold, with functionality as effective money for our current times added in. Well, that's a proposition I can get behind without many intellectual leaps of faith. I think there are probably a lot of people who think like this. Instead of grudgingly accepting gold as an inflation-hedge investment, we can enthusiastically accept bitcoin.

That's a huge change.

Granted, bitcoin has only barely (if at all, really) been tested, but the intellectual difference in core justification as to where the ROI should come from is enormous. If and when bitcoin has some stability behind it, the case for gold will be pretty weak. They ARE substitutes, and outside of historical-inertia, bitcoin is superior.