US Downgraded by S&P/Moody - Safe haven = BitCoin?

cypherdoc

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Quote from: CurbsideProphet on July 27, 2011, 09:55:33 PM

Quote from: JackH on July 27, 2011, 05:04:42 PM

What do you guys think? Will anyone with some deep pockets find their way here? Or is gold going to take all the credit for it again as safe haven?

As counterintuitive as it may initially seem, Treasuries are most likely the safe haven. The US will pay P&I on their debt and furlough discretionary spending. Gold will rise but more likely due to devaluation of the dollar. A downgrade will most likely hit equities the hardest, thus causing a run to Treasuries.

Could there be a run to Bitcoin? Sure. We're in some unprecedent water, no one really knows what will happen. But if I was putting down a wager, it'd be on Treasuries.

thats certainly a good bet. in 2008, paradoxically UST's and USD's rose while everything else tanked including gold but not as bad as everything else. this may happen again as i think the equity mkts have topped. but one things for sure, relationships that held in the past may not necessarily hold in the future and there will be surprises.

could btc be the wild card?

CurbsideProphet

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Quote from: JackH on July 27, 2011, 05:04:42 PM

What do you guys think? Will anyone with some deep pockets find their way here? Or is gold going to take all the credit for it again as safe haven?

As counterintuitive as it may initially seem, Treasuries are most likely the safe haven. The US will pay P&I on their debt and furlough discretionary spending. Gold will rise but more likely due to devaluation of the dollar. A downgrade will most likely hit equities the hardest, thus causing a run to Treasuries.

Could there be a run to Bitcoin? Sure. We're in some unprecedent water, no one really knows what will happen. But if I was putting down a wager, it'd be on Treasuries.

cypherdoc

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Quote from: JackH on July 27, 2011, 05:04:42 PM

There is a slight possible chance that the scenario of a certain safe haven would be in Bitcoins. Not that every guru on wall street will put their entire portfolio into Bitcoin, but its likely that Bitcoin will get some sort of interest since its significantly different from a government backed currency model. One can only hope this would be a scenario.

What do you guys think? Will anyone with some deep pockets find their way here? Or is gold going to take all the credit for it again as safe haven?

you're absolutely right. it could happen.

netrin

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FirstBits: 168Bc

Quote from: foggyb on July 27, 2011, 05:58:44 PM

The USA AAA credit rating is ludicrous, they are the world's largest debtor.

Hey foggyb, I'm giving you a DDD rating. Your sig is a blinding sight.

Quote from: The_JMiner on July 27, 2011, 06:09:46 PM

but if you consider the USA GDP to debt ratio , USA is not the highest.

Also USD are used as reserves for other countries so of course the USA can afford to run such a high debt.

That depends on your calculation or who you ask. The CIA's World Factbook says 58% (*) of GDP while the IMF says 93%. If we take the IMF's 2010 numbers the United States is doing better than only these rock stars.

Code:

 	 Japan 			225.8
 	 Saint Kitts and Nevis 	196.3
 	 Lebanon 		138.9 
 	 Jamaica 		135.7 
 	 Greece 		130.2
 	 Italy 			118.4 
 	 Iceland 		115.6 
 	 Belgium 		100.2 
 	 Singapore 		98.9 
 	 Ireland 		93.6
 	 United States 		92.7

(*) Does not include the state debt issued by individual US states and intra-government debt

The_JMiner

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Quote from: foggyb on July 27, 2011, 05:58:44 PM

The USA AAA credit rating is ludicrous, they are the world's largest debtor.

but if you consider the USA GDP to debt ratio , USA is not the highest.

Also USD are used as reserves for other countries so of course the USA can afford to run such a high debt.

foggyb

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The USA AAA credit rating is ludicrous, they are the world's largest debtor.

JackH

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Well I do somewhat agree. But at this point, I hope they will classify it. Getting the approval of being a part of the wider financial industry from someone as powerful as S&P would once again place Bitcoin in the news and once again remind investors that there is something called Bitcoin. How bad can they classify it anyway? Greece is now junk status and the mighty US is about to loose its triple A status for the first time ever.

While the whole world is going to crap in the financial industry one stands out - Bitcoin!

foggyb

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There are strategies that will be employed to try to bring down bitcoin once it achieves mainstream saturation. Credit rating manipulation is not one of them.

m0w3r

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I'm suggesting the rating agencies could be used to denigrate/downgrade bitcoin. Would this not restrict large or institutional diversification into bitcoin? I hope bitcoin itself will always be outside the rating agency debt classification purview as you mention. Those rating companies are simply a tool of the government and will apply ratings as directed.

JackH

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Good luck with that, because it has no impact on models that are not based on debt certificates. Rating is provided by the credit agencies to allow for borrowing. The Bitcoin economy, due to its decentralized nature has no need for borrowing or classification.

m0w3r

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The corrupt rating agencies will just rate bitcoin as junk status if it gets too big.

JackH

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There is a slight possible chance that the scenario of a certain safe haven would be in Bitcoins. Not that every guru on wall street will put their entire portfolio into Bitcoin, but its likely that Bitcoin will get some sort of interest since its significantly different from a government backed currency model. One can only hope this would be a scenario.

What do you guys think? Will anyone with some deep pockets find their way here? Or is gold going to take all the credit for it again as safe haven?

Topic: US Downgraded by S&P/Moody - Safe haven = BitCoin? (Read 1714 times)