Topic: Gold collapsing. Bitcoin UP. - page 989. (Read 2032270 times)

If you think gold will suffer under this scenario, you're kidding yourself.  Whether Bitcoin will outperform gold is another matter.

Bitcoin is holding just fine as far as i'm concerned.

The Greater Depression

http://www.project-syndicate.org/commentary/j--bradford-delong-argues-that-it-is-time-to-call-what-is-happening-in-europe-and-the-us-by-its-true-name?utm_source=MadMimi&utm_medium=email&utm_content=Project+Syndicate's+Economics+Update&utm_campaign=20140827_m121884278_Project+Syndicate's+Economics+Update&utm_term=The+Greater+Depression

who knows for sure? 

http://www.zerohedge.com/news/2014-04-16/fed-fabricating-loan-data

of course you can never rule it out.  but i really don't think so.

first off, both Weimar Germany and Zimbabwe did not have functioning bond markets.  Germany was just coming off the war and really had no infrastructure so the only way they could get money out to its citizens and to pay off war reparations was to print.  the massive potential for all the US debt build to deflate thru defaults is likely to win in the medium to long term.  after a big washout, maybe hyperinflation is possible.  but not until then.  also, the monetary velocity chart is going nowhere but down right now along with interest rates.  that's deflation.  if ppl were dumping their cash as fast as possible, it would be going up instead.  what ppl are doing is saving like crazy.  banking deposits are way up and ppl are clinging to what cash they have.  i know this from my own accounts.  i've pulled out of the stock mkt and my deposit accounts are brimming.  i'm expecting some bank trouble again so i've spread them out in multiple bank accounts trying to keep them close to the $250,000 limit.  also saving in Bitcoin obviously.  as long as the USD remains the petrocurrency and our military remains strong the USD is likely to go up in a deflationary event as it did in 2008.  the good news for most Americans is that our price of goods and services has not gone up significantly.  sure, in some areas it has, like student tuitions and healthcare premiums.  but even $4 gas hasn't been too bad and food is relatively inexpensive.  in short, i don't see the USD plummeting just yet and the charts i've been putting up indicate we may be starting a major rally.

for the same reasons i argue that Bitcoin will win the altcoin space as ppl gravitate to one currency for efficiency reasons and the network effect, i think that Bitcoin wins over gold.  as long as Bitcoin can remain secure, there is every reason to like it better than gold.  definitive fixed supply, portable, divisible, transportable, room for growth, intangible, not encumbered by a paper market (yet), unreachable by gvt, etc.  so no, i don't think they will go up together.  for the last 3 yrs, we've already seen them go in opposite directions.  gold has failed in its historical role as an enforcer to UST's.

Treasury Department officials have quietly told bank insurers that in the event of a cataclysmic attack, they would activate a government backstop that doesn’t explicitly cover electronic intrusions, two people briefed on the talks said.

http://mobile.bloomberg.com/news/2014-08-29/next-u-s-bank-bailout-could-come-after-a-cyber-terror-attack.html

i think the Ripple printing inflation that just happened is a major flaw for all appcoins.  sure appcoins can have value, but they will likely degrade over time.  i look at my cc generated flight miles that used to be $1/1pt.  now it's nowhere near that and periodically i lose them if not used. 

there should be no comparison of these appcoins to something like Bitcoin.  they are entirely different.

http://www.caribbeanbusinesspr.com/news/ecuador-heralds-digital-currency-plans-100166.html

this on reddit just now as well. tied to the central bank and if theres anything ive learned on this thread that means just more of the same. at least the groundwork is being laid for bitcoin

don't forget about this part of the Black Hole as well:

I agree on most of what you say in this thread. That chart does not indicate that debt is contracting yet, and including other countries, I think debt is still increasing greatly, contributing to the inflation (higher prices), as seen in consumer prices including housing, energy and capital prices which is also part of the equation. Still the equation is not exact, because the market expectations are a great part of it.

The deflation scare put forward by politicians is a tool to manipulate the hordes to accept the current money regime.

Now it's better to talk about recent projects to invest in to multiply your savings and be happy watching the same graph but telling about best investments in 2014.

Don't you think that LTC is dying? The exchange rate is low and I decided to get rid of LTC 

Yes, Gold was scarce because the Organized Violence (State and Church) declared it as the thing in which the people were taxed.
The Organized Violence needed the metal to produce the weapon to organize the violence against the people.

http://www.elliott-waves.de/free/tagung2/pcm/GewaltmetallGold.pdf

Another desturbing chart:

http://photos4.meetupstatic.com/photos/event/6/2/9/f/event_925247.jpeg

Thanks for explaining this in such detail. I have been following your writings since mid-2011, and I must admit you were more right than at first I dared to concede.

Do you think it is possible that we will see hyperinflation in USA? I ask this because while Mish believes that scenario is almost impossible, Fekete does not rule it out.

Finally, many people seem to think that gold and bitcoin can go up hand in hand. What do you think of that?

The implications of the above illustrated display of the penultimate power of marginalism have disturbed me for some time (since 2007).

   Oh wise and more-knowing cypherdoc, what shall we do at Zero Hour?   

Head to backwoods Idaho?  Trade silver for gunmetal, brass, and lead?  Join the Masons?  Smoke a fat joint?  Take some BTC profit?  All of the above?

no one knows of course.  according to Fekete, we are going to end up in death and destruction as the Black Hole US Treasury sucks everything into it.  only then does he think gold will be restored as ultimate money.  gold would be part of an Armageddon play.  i obviously disagree with this part about gold.  i'll also disagree with the death and destruction part b/c w/o hope for a better life, there is no living.  so i'll take the optimist prediction.  not just for that but also b/c i think technology can save us, of which Bitcoin is an integral part.

whether gold's drop in price from 2011 to now is from a topping of its 9yr cycle, from manipulation, or from a nascent Bitcoin effect doesn't really matter.  the fact is, the price is dropping.  if it continues to drop and Bitcoin is flat or starts increasing in price, there will be a solid case for optimism.

to explain this, let's assume interest rates continue to drop from Fed printing and more deflation.  but first, it's helpful to understand the relationship btwn interest rates and gold hoarding from long ago before CB's.  when a country lowered interest rates on loans that were considered "too low", fears would arise from investors that the lending was being made too easy thus encouraging a potential speculative boom.  as a check to this, potential new bondholders would not buy and instead redirect their money into gold hoarding.  when the country noticed this, it would be a signal that their lending policies were too easy and that they needed to raise interest rates.  so gold was a check on bond prices and vice versa interest rates.  fast forward to today when there appears to be something wrong with this dynamic.  as i said above, it could be from manipulation, a topping of gold's 9 yr cycle, or a nascent Gold 2.0 effect from Bitcoin.

if there is manipulation going on then one has to assume that this is possible b/c the Fed actually owns some gold and can thus lease it out to primary dealers to do the manipulating.  how much is left is anyone's guess.  also, there is a huge paper market surrounding gold that is opaque and can be manipulated to suppress price.  to the extent that the Fed/gvt doesn't have any usable Bitcoin to short with (excluding the SR stash that we can monitor on the blockchain) i think that Bitcoin has an advantage over gold in that regard.  if my 9yr cycle top call continues to hold, that means we still have a few more years of downside in the gold price to go.  the question will be how deep that goes.  if Bitcoin holds steady or starts to rise again, that would be a huge sign, imo.  not to mention all of the technical advantages we've all advanced ad nauseum in this thread.  all these factors tip the scale towards Bitcoin from gold, imo.

so my optimist view goes like this.  since gold doesn't seem to be doing its historical role of providing a check on bond buying or interest rate manipulation, perhaps Bitcoin might one day assume this role instead.  that would require a significant and progressive rise in the Bitcoin price as speculators would start dumping UST's in favor of Bitcoin.  if this happens, interest rates will start to rise, savers in fiat won't continue to be penalized as now they could start leaving money in the bank again and earn reasonable interest.  pensioners and retirees could start to rely on CD's for income once again.  and then maybe we could even go to a Bitcoin Standard as i've talked about in the past.  Bitcoin could become the great regulator of CB's and gvt's.  

this would be my greatest hope.  after all, i am biased.

furthermore, continuously falling interest rates increase the burden of previously contracted debt at higher rates for businesses.  this destroys their capital.  a perfectly sound business may fail if their debt burden begins to exceed the profitability of their deployed capital, thru no fault of their own.

you're over thinking this.

money supply = monetary base + mostly credit/debt.  in the run up into the 2008 high in housing and stocks, ppl leveraged up to buy both assets.  when the bubble burst, margin calls went out to stock holders and home owners found they could no longer make mortgage payments.  what do you do in that situation?  panic sell at lower prices to limit your losses.  the whole process began to snowball with stocks and home values plunging as a result along with widespread debt defaults.  oil dropped to $30. gold hit its 9 yr cycle low. all that leverage started coming out of the system (deflation) and there was a worldwide scramble for USD's to pay off that liquidated debt as well as a run to safety into UST's which only exacerbates the deflation associated with Fed policy to manipulate rates downwards during normal times.

i think this is what you're looking for.  net shadow liabilities in the system have been dropping since 2007-8 despite new record national debt levels trying to compensate ---> deflation:

http://www.newyorkfed.org/research/epr/2013/0713adri.pdf