Topic: Gold collapsing. Bitcoin UP. - page 985. (Read 2032272 times)

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.

With the yields as they were in the 1980s, there's really no need to sell the bond ever.

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

some may be longer term holders seeking bond appreciation.  don't forget, when a bonds yield drops from 4% to 2%, its price doubles.  and doubles again from 2% to 1%.  and doubles again from 1% to 0.5%.  and doubles again from 0.5% to 0.25%.  nice profit when you know interest rates are going to be continually manipulated down by the Fed and the short term speculators.  Gary Shilling is freaking rich from having bought Treasuries starting back in 1980.  he figured this game out a long time ago.

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. 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.

some may be longer term holders seeking bond appreciation.  don't forget, when a bonds yield drops from 4% to 2%, its price doubles.  and doubles again from 2% to 1%.  and doubles again from 1% to 0.5%.  and doubles again from 0.5% to 0.25%.  nice profit when you know interest rates are going to be continually manipulated down by the Fed and the short term speculators.  Gary Shilling is freaking rich from having bought Treasuries starting back in 1980.  he figured this game out a long time ago.

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.
 

and then there's my newest argument that gold is/has been failing miserably at fulfilling its historical role as a check to rising bond prices. i don't need to know the exact reason why; i just need to know that it's a fact.  and it is.  in that sense, what good is it for the average US citizen and the economy except as a potential speculative vehicle?  all those trillions that have been pumped into Treasury bond prices over the decades since 1980 creating the greatest bull market ever in world history and yet and so little into gold.  gold: the supposed enforcer.  what a failure.

well, i like to think of it as a pullback of 33% for gold since 9/2011 and 61% for silver since 5/2011. those are big pullbacks and suspiciously, those timeframes coincide with the ramp in Bitcoin.  the Gold 2.0 narrative has clearly increased during that time and more and more ppl are converting.  you can see and feel it.  i certainly can.  of course, when you point to the 3000 yr narrative, my arguments sound silly.  that is the ultimate long term chart.  however, i'd like to point out a couple of things.

i think the general public's positive perception of gold peaked not in 2011 but back in 1980.  when Nixon depegged in 1971, the dollar immediately devalued 30% in the 70's which contributed greatly to the inflationary ramp to 800 in 1980.  then began the long grind down to 253 in 1999.  the public forgot about gold for the most part despite the pleas of the gold community b/c the economy actually thrived during those 2 decades. then came the noughts and the NASDAQ crash.  Greenspan cut rates to 1% and stimulated the housing bubble.  everyone was happy again and gold was far from being on their radar.  yet gold started to rise with inflationary expectations by the gold bugs of which i was one.  i remember how hated the gold ramp from 253 in 1999 to 1923 in 2011 was regarded by the general investment community.  i used to watch CNBS regularly during that time and Peter Schiff constantly had acrimonious debates with gold skeptics. of course, he was right in the sense that gold went to 1923 in 2011. yet, i never really knew of many other investors other than myself who rode that train up during that time.  i believe it was solely a speculative ramp with gold never seriously having a chance to regain it's former status as a reserve to the USD.

and then there's my newest argument that gold is/has been failing miserably at fulfilling its historical role as a check to rising bond prices. i don't need to know the exact reason why; i just need to know that it's a fact.  and it is.  in that sense, what good is it for the average US citizen and the economy except as a potential speculative vehicle?  all those trillions that have been pumped into Treasury bond prices over the decades since 1980 creating the greatest bull market ever in world history and yet and so little into gold.  gold: the supposed enforcer.  what a failure.

so i think that gold has been a failure to keep bond prices in check and its thesis is further from the market's mind than you may realize which may be why its dropped so much in the last 3 yrs.  silver and the pm miners are sending a very bad signal, imo, and leading to the downside.

Bitcoin has a much better chance to assume the role of Treasury bond enforcer in the coming years, imo.  but it's very early and requires alot of imagination and optimism

Its not really a shock.  Its in the BASEL iii docs.  They are just surfacing some of the weird evidence of it when exchanges are treating them as a customer.

There are scarier parts, such as the provisions for determining what constitutes minority interests in securitized debt loans constituting the capitalization for the banks, central banks, and "global systemically important financial institutions".  The many loopholes for whether insolvent commercial and sovereign debt instruments be called, and the further secularization of those (which is essentially printing money).

There isn't a better license to steal than being a bank.

well, i like to think of it as a pullback of 33% for gold since 9/2011 and 61% for silver since 5/2011. those are big pullbacks and suspiciously, those timeframes coincide with the ramp in Bitcoin.  the Gold 2.0 narrative has clearly increased during that time and more and more ppl are converting.  you can see and feel it.  i certainly can.  of course, when you point to the 3000 yr narrative, my arguments sound silly.  that is the ultimate long term chart.  however, i'd like to point out a couple of things.

i think the general public's positive perception of gold peaked not in 2011 but back in 1980.  when Nixon depegged in 1971, the dollar immediately devalued 30% in the 70's which contributed greatly to the inflationary ramp to 800 in 1980.  then began the long grind down to 253 in 1999.  the public forgot about gold for the most part despite the pleas of the gold community b/c the economy actually thrived during those 2 decades. then came the noughts and the NASDAQ crash.  Greenspan cut rates to 1% and stimulated the housing bubble.  everyone was happy again and gold was far from being on their radar.  yet gold started to rise with inflationary expectations by the gold bugs of which i was one.  i remember how hated the gold ramp from 253 in 1999 to 1923 in 2011 was regarded by the general investment community.  i used to watch CNBS regularly during that time and Peter Schiff constantly had acrimonious debates with gold skeptics. of course, he was right in the sense that gold went to 1923 in 2011. yet, i never really knew of many other investors other than myself who rode that train up during that time.  i believe it was solely a speculative ramp with gold never seriously having a chance to regain it's former status as a reserve to the USD.

and then there's my newest argument that gold is/has been failing miserably at fulfilling its historical role as a check to rising bond prices. i don't need to know the exact reason why; i just need to know that it's a fact.  and it is.  in that sense, what good is it for the average US citizen and the economy except as a potential speculative vehicle?  all those trillions that have been pumped into Treasury bond prices over the decades since 1980 creating the greatest bull market ever in world history and yet and so little into gold.  gold: the supposed enforcer.  what a failure.

so i think that gold has been a failure to keep bond prices in check and its thesis is further from the market's mind than you may realize which may be why its dropped so much in the last 3 yrs.  silver and the pm miners are sending a very bad signal, imo, and leading to the downside.

Bitcoin has a much better chance to assume the role of Treasury bond enforcer in the coming years, imo.  but it's very early and requires alot of imagination and optimism