Topic: Gold collapsing. Bitcoin UP. - page 617. (Read 2032266 times)

Oh well, always next year...

You may want to look up in these matters:
  - Nixon's shock and aftermath
  - so-called petrodollar system (not limited to oil)
  - US bonds flows (or the lack of)

It will be very interesting to you.

For close 100 years getting to safety has meant running to the US dollar. It is how the federal government has been able to thrive and grow the way it has. Every time there is a crisis the US government has never lacked for funding because the world runs into its debt, because of this it has been able to fund itself freely during every crisis, without care or worry.

Most sane organizations would never consider creating the massive number of obligations the US government has, obligations the must continue to be paid no matter the current environment. This includes a massive global military presence that requires funding every day, a massive welfare state that requires funding every day, a massive number of unfunded social liabilities that require funding every day. Without continuous funding our military overseas would stave for oil in a matter of weeks and over a hundred million in the US would suffer dramatically.

If at some point the market does not run to dollars in a crisis, the US government would find itself is a horrific situation from which there is no escape. A situation that was of it's own making but one it is completely unprepared to handle.

Luckily (or unluckily) I believe this end point is still a ways away. The Keynesian central banking model still has more tricks to utilize and I suspect the next upcoming crisis will play out the same as in 2008/09, the central banks will first allow the markets to crash, then create money out of thin air at public demand, then give that money to their own first to buy up assets cheap, then create more money and let that trickle into the economy so the public can re-buy at higher "recovered" prices.

So the question is which "safety" have you run to? Bitcoin, dollars, hard assets, Pb?

this is encouraging from Google and Yahoo:

http://googleonlinesecurity.blogspot.co.uk/2014/12/an-update-to-end-to-end.html

“We couldn’t imagine what’s happening in our worst nightmare even a year ago,” Shvetsov, who oversees financial markets at the central bank, said yesterday.

http://mobile.bloomberg.com/news/2014-12-16/russia-crisis-hits-pimco-fund-wipes-out-options-as-ruble-sinks.html

I've been warning  about this shit for months now right here.  The charts have been forecasting this. Get yourselves to safety.

It is a combination that is deeply threatening to people whose entire livelihood depends on individuals and businesses not having those capabilities.

Even under the gold standard, bank notes were significantly more useful than physical coins in terms of the ability to transfer and move money around (that is provided the bank did not fail). Under the gold standard banks could provide useful value-add functionality and services, and this is what drove some demand into holding bank notes over physical gold. Yes lots of people still held physical metal directly as "cold hard cash" for security, but there was demand for both mechanisms.   


With bitcoin none of this applies. Bitcoin has built into its protocol all the functionality anyone could need for transacting directly with the base asset. With bitcoin you can transfer funds anywhere instantaneously. If you need services beyond the base protocol, you can run software on your own computer/phone.

I think this is what Satoshi meant when he said bitcoin enables "individuals to be there own bank". Bitcoin enables an individual to have the security of holding physical metal, with the functionality of bank notes and services. It is a killer combination and one that not all VCs into bitcoin understand yet I think.

Currency Dangers

While unwilling to draw up a blacklist for now, he says exchange rates reveal emerging-market dangers. Russia’s ruble, Brazil’s real, Mexico’s peso, Turkey’s lira, the South African rand and Indonesian rupiah have all hit the skids.

http://www.bloomberg.com/news/2014-12-16/this-hedge-fund-manager-who-remembers-1998-says-prepare-for-pain.html

Thanks for letting us see this.

I can agree with Rickards: May the best form of money win!

http://www.bloomberg.com/video/microsoft-partners-with-bitpay-to-accept-bitcoin-payments-Co2fBb3_REu6ZYOYzLfo5A.html

yes, or else bitcoin would just be PayPal2.0.

So much VC money is going into the wrong paradigms because they misunderstand the fundamental technological advantages of Bitcoin when applied to the social science of money .... the intersection of understandings in these two critical areas is still tiny, imho.

This supports the idea that fractional reserve banking, and money substitutes, and even storing money for safety reasons, will not be demanded as much as it was with gold:


"... customers, most of whom aren't interested in having third parties manage their bitcoin holdings."



http://www.coindesk.com/falcon-global-fund-closure-sign-declining-bitcoin-demand/

I did my first purchase up in the $16-ish range on it's way down to $2.  I had to wait a fair bit of time before I even got into the black.  I'm not saying that the current crop of 'suckers' will ever see black.  I simply don't know.  I'd say there is a much better chance that they will see black than there was when I was in the situation, but that's actually not saying much.

I do have high confidence in two things:

1)  anyone who put in more than they can walk away from at any point in Bitcoin's lifetime would probably have been separated from their wealth by some means or another anyway, and

2)  liquidating at a loss turns the potential for a loss into the certainty of a loss.

Personally I think looking at bitcoin interest during the quiet non-speculative bubble periods is a good representation on how the bitcoin ecosystem is growing.

Looking at the Google trend link above you can see the bubbles from June 2011, April 2013 and December 2013. Between these peaks you can see bitcoin interest during the "steady state" when the price was relatively stable and bitcoin is used more as a currency than as a speculative asset. Here is Google's bitcoin interest during these 3 steady state periods (relative to the peak during Dec 2013 as 100)
- August 2012 -> 4
- August 2013 -> 16
- August 2014 -> 23

We had huge growth from 2012 to 2013 in bitcoin interest (4x), but over the past year bitcoin interest less than doubled. Still up, but not the exponential growth you'd expect. Of course there could be other factors at work such as more bitcoin news aggregation sites that people go to by default instead of searching google (i.e. going to redit /r/bitcoin instead Google search)

Not sure what to make of this, but thought it was interesting regardless. Google is only one data point, # of transactions and # of companies offering products are others.

It's quite likely growth will not be steady, but come in spurts.

there's been several articles the past few days indicating fleeing.

Is there any actual fleeing into the USD going on right now, or are we seeing the debt repayment-induced deflation, that had been previously masked by QE?

Yeah, unfortunately I spent most of my pre-2012 BTC on pizza 

i can tell you're a newb.

most of us in this thread bought well before 2012.  sorry dude.

from zerohedge:

this might be getting serious

i think this is a new Wences video:

http://www.academybridge.org/?video_listing=bitcoin-risk