Posted by
OffThePeak
10 yrs ago
Investing in 2014: Bitcoins, Gold, etc.
/ original title was / :
St0ck Market Predicti0ns for 2014
(US Stocks):
St0ck Market predicti0ns from banks
S&P 500 is now : 1,841.40
Citigroup---------- : 1,900 :
BoA /Merrill Lynch : 2,000 :
Goldman Sachs -- : 1,900 :
Barclay's Capital- : 1,900 :
Wells Farg0 Secs. : 1850-1900 (1875)
===
> http://economictimes.indiatimes.com/markets/global-markets/predictions-from-market-experts-for-2014/articleshow/28023395.cms
1841 > 1900 - that's +3.2% - not much return, on a market that many say is "toppy"
MORE DATA etc for Bitcoins:
http://tinyurl.com/AboutBitcoins
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Add in dividends (around 1.9% trailing) and the expected total return is a nudge over 5%. After taxes and inflation, the expected real return is probably somewhere around 1.6%. On a risk adjusted basis, that's not a very attractive investment proposition - which begs the question, what is a good risk adjusted investment for 2014?
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PREPARE For The WORST in 2014:
http://tinyurl.com/2014-Ominous
"All of their forecasts are quite ominous"
Some common themes in the Summary seem to be:
===============
+ A stock market crash, starting in the first half - even Q1
+ It could be worse than 2008-9
+ A risk of US govt insolvency, and a bond crash
+ Even real estate prices "could end badly"
The Crash of 2008 was seen ahead of time by many people.
We are being warned about 2014, and I think we need to take these warnings very seriously.
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So what to do with one's savings? Buy gold and silver? Store cash?
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Some have bought productive agricultural property. Question is, what to do with it aftewards.
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Gold and Silver look very cheap and out of favor.
I am also looking at investing in a new Crypto Coin launch
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OTP, are you serious??????
punter, I tried to buy forest land in Scotland, but never found a piece that was good enough, in terms of returns. I think there are too many people looking to buy it as a hobby, and willing to pay more than financially meaningful.
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About what? (do you doubt I am serious)
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If you doubt my seriousness, then I would welcome a discussion (somewhere, not necessarily here) about Crypto-Coins.
I am fascinated by the idea of launch a new coin that would be partly backed by Gold
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OTP, both about gold and silver and about Crypto-Coins. Yes, we could have a discussion, perhaps elsewhere. I am not against Crypto-Coins, I just wouldn't have thought that you would be interested in it.
Gold and silver still look expensive to me. Silver 4 times more than 5 years ago, gold 5 times more than 8 years ago. (or thereabout). Nothing warrants such increase in prices in the last years (though of course one may argue that they were then far too cheap...).
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I have been involved in the design and launch of several successful financial products.
I can see some big flaws* in Bitcoins, which need correcting - and may be able to contribute something to a a team which redesigns Cryptos. I am looking to see what people in Hong Kong might have the right skills to join such a team. If you know anyone with such skills, then please PM to me. We can find a better place to have that discussion. I don't think it is on AX.
Gold and Silver are an obvious out-of-favor asset group. Throughout 2013, the Chinese aggressively bought Gold as silly holders of GLD disgorged their holdings. Gold prices are now on or near a major support level, and could be one of the standout performers of 2014.
=== ===
*The Big Flaws I see in Bitcoins are:
==========
+ There is no gold or political backing for the coins
+ Crypto coins Prices move in too volatile a fashion, to make them a safe medium of transactional exchange, and they are less safe as a long term store of wealth. (After each wave of interest in the coins slows, prices crash. And they are vulnerable to a bigger crash. As some have said: "If I was interested in a pump-and-dump operation I would look to bit coins.")
+ Now the recent rises in prices are accruing to computer geeks who backed new currencies early. Is that the best place to generate or create (temporary?) new wealth?
+ The governments of the world can kill demand by imposing taxes, etc
+ A rising amount of energy is "wasted" in mining the coins. As more computers become engaged in mining them, the equations which need solving become more complex - And more and more energy is engaged in a useless "mining activity". In effect, Bitcoins are created through wasting energy in useless mathematical equations. There must be a better way
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Another big flaw (in my opinion) is that a very good hacker can steal all your money. You do have some protection if that happens at banks (at least they have firewalls and such), but less at home. This is why I don't get involved in bitcoins.
Sorry I don't have anybody with the skills you are looking, but I am interested in becoming an early investor in your Cryptos. So pm me any time. By the way, I am Newby for you (and thanks for the name of your favourite bird).
Yes, I can see gold and silver have a very strong support at current price, but they have been dropping so much over the last 12 months, there is a very strong risk of prices dropping further. Why wouldn't they, if the economy does not collapse?
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OTP,
I've been waiting for a gold-backed digital currency for awhile now. There sort of already is a gold-backed currency via Euro Pacific Bank that allows people to use debit cards to buy & sell in gold... but I think it can be improved by using a new payment system like Bitcoin does that fully bypasses the SWIFT system.
A problem with a gold backed digital currency is where should the gold be stored. HK seems safe but I sincerely doubt that Beijing will tolerate such a valuable currency being founded within its country that flaunts all capital controls. But if not HK, then where? Few other decent choices like SG and Switzerland, but that seems to be about it.
I'm hoping that someone does it soon though.
Y&H,
I agree that the hack-ability is a major flaw. The Bitcoin system is encrypted but your computer itself is not - all it takes is a simple keylogging program to grab your UN & PW and then that person can swipe all of your bitcoins. Of course this is already a current problem with any online financial institution but at least with that the bank / credit cards actively monitor to reduce fraudulent transactions. Because Bitcoin is decentralized you are totally on your own.
This is not a problem that is insurmountable though - one could theoretically form a Bitcoin Bank that stores coins and monitors transactions to detect potentially fraudulent ones.
Along the same line of thinking, another major threat to digital currency is if the NSA simply does a widescale hacking of people's login information. They could then fire off millions of transactions, purposefully draining people's accounts and causing widescale loss of confidence in the crypto system. Of course it'll be blamed on Russian / Iranians though.
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(We should probably move these comments to another thread, and/or start a new thread about Predictions for 2014. And then change the title of this one. If no objections, I will change the title here, and start a new thread for comments on predictions.)
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http://libertyblitzkrieg.com/2013/12/26/asias-richest-man-li-ka-shing-invests-in-bitpay/ will he turn them into real gold? ;-)
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Thanks for those comments.
I think I have a "fix" for many of the problems. But it will not result in Full Gold Backing. Because if you have Full Gold backing, you have to invest 100% of the issued currency in Gold. My fix does not do that - more like 10-20%.
BUt I am eager to have a full discussion of the Problems with Bitcoins. Since there may be some improvements that can be implement, creating a better fix to the problems.
I will outline more problems shortly...
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BTW,
Pundits like Jim Willie and Clif High see a very big drop in the US dollar coming in 2014.
THE RESET : Notes from Jim Willie's Podcast:
MP3 > http://media.tfmetalsreport.com/audio/XmasJackass.mp3
(at 30:50 minutes in):
+ The Reset is about a change in the US Dollar
+ The some clowns think it had to do with the Dinar (only fools fell for that)
+ What is the DOLLAR going to devalue against?
: Not the Euro... ALL major currencies are going to be devalued
: "Gold prices are going to be doubled" - speculates Jim Willie
: The Dollar will be singled out for special treatment - a bigger drop than other FX?
: There may be a new dollar: the Gold-backed Dollar,
: And maybe 50% drop in the existing Dollar
==
>More on the Reboot: http://tinyurl.com/FX-reset
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Bitcoin entrepreneurs are working hard to solve the security issues
Control against fraud
An unprecedented level of security is possible with Bitcoin. The network provides users with protection against most prevalent frauds like chargebacks or unwanted charges, and bitcoins are impossible to counterfeit. Users can backup or encrypt their wallet and hardware wallets could make it very difficult to steal or lose money in the future. Bitcoin is designed to allow its users to have complete control over their money.
> http://bitcoin.org/en/innovation
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A Cool Algorithm can be beaten by a cooler one.
But that is not the only problem faced by Bitcoins
(from Forbes): http://www.forbes.com/sites/karlwhelan/2013/11/20/so-whats-so-special-about-bitcoin-2/
Some of the pro-Bitcoin enthusiasts were keen to emphasize the difference between Bitcoin and previous potential sources of private money. It’s digital, so doesn’t have physical production or storage issues and it’s hard to melt down a Bitcoin and pass it off as two Bitcoins, thus perhaps ruling out the role governments played in verifying and securing money in the past.
Bitcoin
However, commenters were also keen to emphasize that Bitcoin is special because it can only be created according to a special algorithm that ultimately limits the total number of Bitcoins to 21 million and guarantees that payments are anonymous and irreversible.
The fact that Bitcoin advocates rely so heavily on the niftiness of its underlying algorithms and protocol is one of the best reasons to predict its demise. If all you have going for you is a cool algorithm, then at some point there will be someone else out there with an even cooler algorithm. And then someone else.
> more: http://www.forbes.com/sites/karlwhelan/2013/11/20/so-whats-so-special-about-bitcoin-2/
But I reckon Bitcoins, and most Cryptos have far bigger problems, which are being ignored now, because everyone is still making money.
For example, what would happen if everyone spots the same fatal flaw, all at once. We got a taste of that when China passed some new laws making it tough to transact with Bitcoins inside China. Over just a few days, prices fell by about half.
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( Duplicate Post - for the Record here):
"You must get out of paper."
Lindsay Williams describes a Timeline for 2014-2015 - given to him "by the elites"
He says there will be a global currency reset within three months.
He expects the USD will be devalued by 30%, and the Dollar will no more be the world reserve currency.
===
> http://tinyurl.com/FX-reset
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A Surprise ?
SCMP has an article today saying:
GOLD Imports into mainland China thru HK dropped 42% to below 100 metric tonnes last month
That's 76.39 tonnes, down from 131.19 tonnes in October
They speculate that "banks have used up their quotas"
(But at the same time, we seem to have seen a shift INTO Bitcoins, by Chinese investors.)
More recently, Bitcoin investing by Chinese may be WAY DOWN
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An article comparing gold and crypto-currencies: http://www.realclearmarkets.com/articles/2013/12/31/bitcoin_takes_on_gold_but_ill_stick_with_gold_100823.html
As an aside, Taiwan has banned banks from accepting Bitcoins: http://www.wantchinatimes.com/news-subclass-cnt.aspx?id=20131231000037&cid=1203
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OTP banks can now import gold directly into China. No need to go through HK anymore
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Perhaps Gold is being built up in HK for some reason.
Here is one longshot possibility
On that FX-Reset thread it says:
==
+ Within Q1-2014, 204 countries will allow their currencies to be "revalued" (upwards against the USD?), and they will after that be kept within 5% of each other. Currency reset levels will be based upon "the assets of the country." What that means is heavily indebted countries, like the US, will see a big drop. LW spoke about a 30% drop in the USD.
+ At the time of the reset, there will be a New Global Reserve currency, and it wil be gold-backed. ("I do not know what it is." DrB: My own wild guess is: It might be a Gold-backed HK Dollar.)
==
It is not impossible, so long as China supported it.
1 / HK Dollar gets revalued by 30%, to say HKD$5.50 per US Dollar
2 / China agrees to back the New HK Dollar with gold. (I expect it would be a partial backing, like 20% or so.)
3 / The name of the Currency is changed to something like the "Gold Dollar" - and the existing US Dollar is called: "the Old Dollar", or maybe the "Heritage Buck"
4 / Global currencies are linked to the Gold Dollar, within a +/- 5% range, and new levels of parity. For example, the Renminbi and the Singapore dollar might hold their current exchange rate to the HKD, and the Yen might stay at the current exchange rate to the Old Dollar. Essentially, those countries with much debt, like the US and Japan, would see the biggest devaluation against the Gold Dollar.
5 / The Gold Dollar would become the new global reserve currency, backed by the promise of China to support it, and run the Gold backing program
6 / New ways of transferring money at lower costs, outside the current SWIFT system could be developed
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This is interesting stuff but (IMHO) expectations of moving to a currency which actually retains most of its value over the longer term are unrealistically high. This part lost me a bit:
"204 countries will allow their currencies to be "revalued" (upwards against the USD?), and they will after that be kept within 5% of each other."
No country wants its currency to be high against its trading partners - it makes exports less competitive (with implications for employment) and tends to worsen the trade balance over time (increased imports and reduced exports swamping the impact of lower import costs). It is unlikely that many (if any) countries would agree to revalue their currencies by 30%.
The 5% fluctuation band is also not realistically - this is essentially a return to a fixed exchange rate mechanism (which was a recipe for economic crisis after crisis). Of course, if it does happen, currency speculation would become an even bigger business than it is now as every man and his dog has 204 currencies to evaluate for the inevitable over valuations that will appear.
It would also be expected that the "bad money drives out the good" principle will apply with all the adverse consequences that follow.
Question: if a currency is 20% backed by gold, presumably this is simply to limit the ability to print money ad infinitum and holders would not have a right to redeem for physical gold. If so, how will the money supply grow to match economic growth? It cannot be assumed that the amount of gold available to back the currency will increase (there is no correlation between new supply of gold and economic activity) which means that a shortage in physical gold will become an inhibitor of economic growth (and job creation).
Also, this arrangement would inevitably spark new levels of gold buying which would exacerbate shortages of gold needed to increase the money supply. In effect it is easy to see this arrangement ending up like the days of the gold standard where deflationary contractions and financial panics were common and effectively dictated by adherence to the gold standard.
I'm all for something that brings the perpetual debasement of my savings to an end (preferably orderly - but I suspect I am dreaming there). Unfortunately, this idea seems likely to create as many problems as it solves.
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"No country wants its currency to be high against its trading partners - it makes exports less competitive..."
It was not always so !
In historical times, countries wanted stability, so they could make long term plans for their economies. And I think that is is possible (even likely) that international negotiations are going on to return the world economy to a more stable footing.
That would mean that countries with high per capita debt levels (like the US and Japan) would devalue their currencies the most (30%?). And those with low debt and holding cash, would allow their currencies to revalue somewhat.
But they are only likely to agree this, if stability would come out of the other side of the FX Reboot. Hence the need for gold backing, and tight trading ranges.
After such a reset, China would have to change its focus, away from export-driven growth, to developing its internal market, and its own consumer economy.
I reckon that China's continuous buying of gold may be because they have an idea what is coming, an they have quietly been building their gold reserves - so the RV when it comes will not deliver too big a drop in their FX reserves.
==
You ask about the relationship between Gold supply and Monetary growth.
Yes, A tighter relationship to Gold would inhibit money growth - at least in the Gold tied currencies. Those countries who allow their debt levels to grow too fast (meaning rapid money creation) would have to allow for regular devaluations of their currencies. A new regime may provide a more well defined mechanism for this to occur.
Any country (Hong Kong?) which allowed its currency to be tightly tied to Gold, might get a low interest rate in return. But it would have to accept a restriction on money growth. Perhaps that would work best in a country with low population growth.
BTW, the population of the planet is said to be growing at 2-3% per annum.
New gold is mined every year. And the annual production of gold is estimated at about 85 million ounces. Official estimates of World Gold supply are in the region of 170,000 mt, and that is equivalent to about 5.5 Billion ounces. This suggest that that the above ground supply of gold rises at about 1.55% per annum (85/ 5465)
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HONG KONG - the champion of Bitcoin Mining
We look at Hong Kong, where one of the largest Bitcoin mines in the world is located.
In an industrial backwater near Hong Kong's massive port, one of Asia's largest Bitcoin mines is quietly turning raw computing power into digital currency.
Located about eight miles from the city's finance hub, the entire facility is no larger than a two-bedroom apartment. Aside from a small bathroom, the mine offers no creature comforts.
It is dominated by vertical racks that house hundreds of ASIC chips. Shorthand for application-specific integrated circuits, these chips are custom-built to mine bitcoins.
BTC%20mine%201.jpg
These racks house hundreds of ASIC chips used to mine bitcoins.
. . .
This mine was purpose-built by Allied Control for clients based in China.
Kar-Wing Lau, Allied Control's vice president of operations, said the mine is cheaper to run and more efficient than many others because it uses a technology called immersion cooling.
Heat sinks and fans are typically used to disperse the heat generated by massed ranks of computer chips, but this Hong Kong mine is liquid-cooled using a product developed by 3M.
The processors used in the mine were build specifically for mining. They have no other function. "These ASIC chips, they can mine bitcoins and do nothing else," Lau said. "Given the pace of advancement, we need them to be constantly upgraded."
===
> More: http://www.zerohedge...h-bitcoin-mines
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Any thoughts on platinum?
http://www.cnbc.com/id/101301753
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TI,
The "strong currency is bad" myth is an annoying one too frequently repeated. Having a strong currency means that you can do less work to purchase more things from abroad. Rather than manufacture 10 Fords for 1 Ferrari you can now only build 5 Fords to get the same Ferrari - buying more for less work is a bad thing...? only in the perverse world of voodoo economics propagated by statist academics and politicians
Economics is about being economical, which is to say it is about efficiency, or in other words, getting more for less. Economics is not about work, jobs, quantities of widgets produced or quantity of gadgets consumed; it is about maximizing the number of things you can get with the least amount of effort performed. A legitimately strong currency in a non-manipulated world is a sign that a country is very efficient with what it does - it can produce and trade things away using very little economic inputs, thus allowing them to purchase many other countries' outputs.
Politicians and academics love to propagate this "weak currency = good" fallacy because it is the perfect excuse that sounds plausible (but is wrong) and gives them reason to print money, which effectively gives them control of the country and its economy.
When a country has a weak currency not only are foreign imports expensive but domestic production is equally expensive... it must be similar in price level to foreign imports or else the foreigners will purchase all of it as exports to their countries (they will bid the prices up). The way politicians and fraudulent economists like to spin the story is that the net effect of currency devaluation is to only increase the price of imports and increase your exports, having no effect on the cost the local citizens pay for local production. But local production prices will go up, not just because of the inflation but because all of the foreigners will be bidding to export all the local production to their home countries. Everything becomes more expensive except for the cost of local labor, which is to say that the locals now must do more work and receive less goodies for their effort. What a ridiculous and scandalous situation to live under.
I'd also like to note that for all of the talk about the crisis Japan had in the 90s... Japanese citizens have been doing quite damn well. When Keynesians look at the quantitative numbers and run them through their bogus models they come to the conclusion that Japan has suffered for the last 25 years - but is that actually what is happening on the ground for the average Japanese citizen? Are Japanese people living depressed lives? As I see it they enjoy one of the highest quality lifestyles on the planet, high quality infrastructure, products, foods, transportation, technology, communication, etc - and further to the point, this has not declined since 1990 despite all of the talk of how Japan has been an economic backwater.
So Japan has gone through massive deflation, the yen strengthened from 300 yen to a dollar to 75 yen to a dollar, and yet Japanese society benefited ! (only to Keynesians is this a shock) Let's look at other countries that went the currency devaluation route and see how they made out compared to Japan - Mexico, Venezuela, Zimbabwe? Did currency devaluation make the lives of those countries' citizens better? Is there even a single example out there in which a country's currency strong increased in value and its people suffered? Are Canadians / Australians / Japanese suffering because their currencies have all increased in value over the past decades?
A strong currency will reduce exports, yes. But the question should be "so what?" The answer to that question should then be "now we can export less, work less, but buy more, yay!" This is what economics is about... it is not about soviet style "we gotta build more steel and do more work to bring these production figures up and up."
Moving on to the the part about a money supply needing to grow with economic growth - I don't understand that concept despite it being oft repeated. If you and I live on an island and we have 100 gold coins as money, does that limit our maximum wealth? I don't see how. As you and I innovate new products and offer more things in to buy and sell, the price of each thing will just decrease. Wealth will increase despite the amount of money being fixed at 100 gold coins. And even with a fixed number of gold coins the money supply can and will actually fluctuate. If you build a hut and I want to buy it at the cost of 200 gold coins, I simply give you an I.O.U. for 200 gold coins - magically we have agreed to expand the money supply. And naturally as I pay down my debt to you the money supply will shrink back to its original 100 gold coins (I suppose in Keynesian thinking this must be a depression).
I dunno, I just think that the mainstream thinking regarding money is just utterly "bass ackwards." Its not just wrong... its like the complete 100% opposite of what is right. But people only become monetarily stupid when they begin thinking in the abstract and attempt to be academic about it. On the ground level people understand monetary systems very well - when prices go down we are wealthier not poorer. For example today I bumped into the 759 Store - it sells European imported products at outrageously low prices, about 70% less than Park'n'Shop prices. Did I think "oh the horrors, I'm in a depression because prices are down" ? Obviously not - I felt 3x wealthier than I did before because I can buy 3x more with the exact same amount of labor performed. This is actually very analagous to the strong currency / weak currency discussion. Shopping at PnS and paying 3x prices is like having a weak currency whereas shopping at 759 is like having a strong currency. Am I personally better off shopping at PnS where I must perform 3x labor in order to buy the same quantity of goods as I do when I shop at 759?
I'll take a strong currency any day.
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I've put a non-trivial amount of time and effort over the years into researching and understanding monetary systems and I've yet to understand why people assume that base money must increase or else it will inhibit "good things" (like growth / happiness / productivity / leisure etc).
To put it into an extreme example, I will state that I believe there is zero problem with having a global monetary system in which the entire base money is one gram of gold. I believe that the entire world's economic system can safely and easily function with one singular gram of gold as its entire base money (and the base money will never increase nor decrease).
Can someone explain to me why this is wrong?
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Fiat Money is Lent into existence.
If you want to prohibit money growth, you may need to restrict any growth in bank's lending portfolios
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@ Lucane01
Thanks for taking the time to type a detailed and informative reply.
On strong v weak currencies, please bear in mind the context in which my comment was made (a proposal to peg currencies against a new gold backed currency which I consider to be unrealistic). That said, I will stand by my comment that no country wants its currency to be strong against its trading partners. The only instances in my lifetime when I can recall a country's leaders asserting that their currency was undervalued have been either when defending a fixed exchange rate mechanisim (usually but not always with capital controls) or when capital is fleeing the country. Comments made by the UK government shortly before Soros' memorable short of the GPP and various Asian countries defending their pegs at the begining of the Asian financial crisis come to mind. More recently, we have seen countries complaining about the Yen's depreciation (South Korea complaining about the impact of a weak yen on South Korea's exports was on Bloomberg this morning).
There is a difference between what a country wants (or says it wants) and what actually happens. There will also be differences between longer and shorter time horizons and differences arising due to other factors affecting an economy. I suspect it wouldn't be hard to find examples where a strong currency has benefitted an economy and examples where it has hurt it. New Zealand is an example of a country that has been hurt by a strong currency - manufacturing jobs have been decimated, domestic capital has been exported in relatively large amounts (to the point where punitive taxes on overseas investment were introduced to discourage foreign investment) and there has been massive over investment in real estate at least in part due to a lack of other domestic investment opportunities. Only the unprecedented levels of Chinese demand for dairy exports (which have been remarkable insensitive to rising prices) and immigration have kept things going.
There will (of course) be winners and losers from over or undervalued currencies (just as there are from inflation and deflation). Australia's car industry gives us a current example. GM (Holden) is shutting down the last manufacturing plants in Australia because the currency makes it cheaper to import vehicles (there are other issues but that was the one the media were focusing on). About 50,000 people will lose their jobs as a result. The losers are those whose jobs are lost (and their families and those who depend on them). The winners are consumers (cheaper cars), importers (more business), shippers and a few others. The net effect? It's hard to say but this may be an example of a situation where there is net benefit to Australia from the closure.
On the individuals in a strong currency economy benefitting from a strong currency you say that "now we can export less, work less, but buy more, yay!". This is fine, until you ask where they will get the money to pay for what they buy. A country either has to earn its wealth through trade, produce it domestically, borrow the money or spend its capital (printing money being the same as spending capital for this purpose).
The expansion or contraction of the money supply has a huge imapct on economic activity - the great depression of the 1930s and each of the major deflationary periods that preceeded it - were all either caused (in part) or made worse by contractions in the money supply. There are many books and papers on this subject but for an interesting perspective on the issue: http://www.amazon.com/Mellon-An-American-Life-Vintage/dp/0307386791
(Of course, expanding the money supply too much is also a bad idea - Weimar Republic and Zimbabwe being examples).
On Japan - I totally agree. I pointed out sometime last year that Japan's real GDP per capita has remained remarkably consistent over the last decade or so (give or take a bit depending on your starting point and which data series you look at). The response (not from you) was that Japan was on the point of collapse.
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L, your comment:
"When a country has a weak currency not only are foreign imports expensive but domestic production is equally expensive... it must be similar in price level to foreign imports or else the foreigners will purchase all of it as exports to their countries (they will bid the prices up). The way politicians and fraudulent economists like to spin the story is that the net effect of currency devaluation is to only increase the price of imports and increase your exports, having no effect on the cost the local citizens pay for local production. But local production prices will go up, not just because of the inflation but because all of the foreigners will be bidding to export all the local production to their home countries. Everything becomes more expensive..."
The Main HIGHER COST that Americans would have is : Higher Gasoline prices - since the US remains highly dependent on foreign oil.
I see that as - A VERY GOOD THING - because it would help to spend up the trend in America against the very unhealthy Car-dependent economy that the US now has.
It has not been politically possible to put thru a big jump in gasoline taxes - so this is the next best thing: A big and permanent increase in oil prices. This will get people to think twice about where they live, what they drive, and the length of the commute they have to endure.
If sense does not penetrate people's closed-mind thinking, sometimes you have to "hit them with a brick" - in this case, the shock of higher oil prices.
My view is that the Dollar should have dropped long ago, but it was held artificially high by geopolitics - And a strong US military presence around the globe. This should have been scaled back years ago - or decades ago. Let's do it now... that it is very obvious that the US can no longer afford to have foreign bases in over 100 foreign countries. And what benefit has accrued to US taxpayers from those bases? The big beneficiaries have been US corporations, who do not want to pay the required taxes for the system that feeds them. Let's cut off the artificial subsidy to these co's, and cut red tape to allow the growth of smaller, local business. That's where the healthy growth comes from.
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@ OffThePeak
If the USD is to drop by a meaningful amount, it has to drop against other currencies. Given the volumes of various currency pairs traded, in order for the USD to drop, at least one of the Euro, the Yen and the GBP has to appreciate (or a lot of minor currencies have to appreciate by much higher percentages than the USD drops). Given that pretty much all of the countries with freely tradable currencies are either trying to weaken their currencies (e.g. Japan) or frequently talk about over valuation (e.g. AUD, NZD), I'd be interested in figuring out which of the other three major currencies will be the "strong" one?
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Perhaps you did not read my post carefully...
If the Dollar was Devalued 30% against Gold, and a new Currency was pegged to Gold, then THAT NEW CURRENCY would become the STANDARD against which the other currencies woudl be set.
The Key thing would be price adjustments relative to Gold (and the new Global currency, which would be gold backed.)
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(Some high-octane speculation):
2014 will be the year of the currency reset and gold backed trade note
On Dec. 26, financial analyst and statistician Dr. Jim Willie provided a look at major economic events that will take place and shape the global financial system in 2014. Of the several key changes set to occur in how nations trade amongst one another, the two primary events. that of a currency reset and the implementation of a gold backed trade note, will be the catalyst for China's vision of a de-Americanized financial order.
Quote
The next year will feature many powerful new effects. The Indirect Exchange will become a prominent fixture, its channel filled. It will direct many $billions in USTreasury Bonds from large scale asset acquisitions by Eastern and BRICS players, sent back to New York and London. The payments for the asset purchases will be done in USTBonds, as the Eastern entities dump them as fast as they can before the great devaluation.
But the biggest shock waves will come from the currency reset followed by the introduction of the Gold Trade Settlement. The return of the Gold Standard is near, but it will arrive on the trade vehicles, not the FOREX currency or SWIFT bank platforms. It will feature the Gold Trade Note, used as letter of credit. - Goldseek
At least 23 nations have already prepared for a new trade system that will occur outside the dollar and Swift systems. Through their moves away from reliance on the dollar via the creation of new currency swap lines, major economic powers are transitioning away from the 42 year old petro-dollar system that saw America devalue its currency nearly 98%, and export inflation to the rest of the world.
A global currency reset is inevitable, especially when you consider that the historic life cycle of a purely fiat currency is only 30 years, with a maximum length of 42 years. This falls in line with the U.S. dollar which has been a purely fiat currency since President Nixon took America off the gold standard in 1971, and subsequently allowed the central bank to grow the economy with debt rather than sound money and real production.
2013 will go down in history as the year of global currency wars. But intermixed in this financial conflict will be the rise of China, and their plans for a new financial order.
===
>more: http://www.examiner.com/article/2014-will-be-the-year-of-the-currency-reset-and-gold-backed-trade-note
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"If the Dollar was Devalued 30% against Gold, and a new Currency was pegged to Gold, then THAT NEW CURRENCY would become the STANDARD against which the other currencies woudl be set."
This is the same as saying that the price of gold goes up by 43% in USD terms. Or from USD 1200 to USD 1700. Gold has only recently been well above that level and there was no currency repeg or gold backed currency created. Attempts at gold based trading platforms have failed to gain any traction whatsoever. Please forgive me for being skeptical, but I am still struggling to understand either why countries which need the printing presses and inflation to fund their deficits would want to do this or how it would be given effect to even if they did?
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Regarding tapering and possible interest rates, whats the best way to play an assumed rate rise?
What about local financials like hsbc/hang seng. They derive revenue from lending mortgages and interest from cash deposits. The mortgage volume is already so tiny since cooling measures, so i see little downside risk there. and since local banks have huge cash deposits, I can only see rate rise helping a bank like hsbc.
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HSBC's yield is already at 5%, so a pretty safe bet, in my opinion.
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"Attempts at gold based trading platforms have failed to gain any traction whatsoever. Please forgive me for being skeptical, but I am still struggling to understand either why countries which need the printing presses and inflation to fund their deficits would want to do this or how it would be given effect to even if they did?"
I am not promising anything. I am mainly acting as a reporter, telling you what many informed (and uninformed?) observers in the Alternative media are talking about.
There have been reports of a Currency Reboot for some years. But the reports are getting more specific and more convincing. Many of them are saying it is possible, even likely, in Q-1. So if they are right we will not need to wait a long time. (If there is some reality to it, I would expect to see some anticipatory moves in Gold and the USD as the new year develops.)
I do not expect to see the mainstream media carry reports until AFTER it happens. Remember, mainstream reporters failed to tell you about the very obvious stresses that let to the crash of 2008. On alternative websites (like GEI) there was talk of a "financial tsunami" years before it happened.
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Will HK Be...
Boomtown for Bitcoins? - SCMP : 1/4/2014
=======
A growing number of bitcoin enthusiasts and entrpreneurs believe that Hong Kong can become the the bitcoin capital for the world.
+ HK can keep Bitcoin clean, and encourage bitcoin businesses
+ Regulations can be established to deter money laundering
+ Bitcoin related start-ups increase if there was less grey area
But Fin'l Sec. John Tsang is reported to have said:
The bitcoin bull run could not last forever because there is "no support from the real economy"
Various traditional economists have trashed BTC's:
+ Paul Krugman
+ Alan Greenspan, who calls it "a bubble"
+ John Greenwood, who says it "fails three ways":
1 / As payment mechanism for goods and services,
2 / As a stable store of value
3 / As a universal measurement (basis for accounting)
BTC prices crashed on Dec.5th, when China's Central Bank, PBOC:
+ said it was banning financial institutions from dealing in Bitcoins,
+ prices plummetted by xx% from US$1,242 to US$576
+ PBOC also halted new deposits coming into bitcoin exchanges
>MORE NOTES:
Neverthless, various HK Entrepreneurs are working on various efforts...
http://tinyurl.com/Crypto-ReD
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"There's Nothing New about parallel Currencies" -says Bloomberg,
an an article where it calls Bitcoin "a high-tech dinosaur, soon to be extinct":
http://www.bloomberg.com/news/2013-12-31/bitcoin-is-a-high-tech-dinosaur-soon-to-be-extinct.html
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@ OffThePeak
Thanks for posting the links. Apologies if it sounded like I was attributing the reported views to you.
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No probs.
I am watching this Story with interest.
I think some parts of it will prove to be true.
But I cannot yet say which parts those will be.
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Robocoin, The Bitcoin ATM, Is Heading To Hong Kong And Taiwan
http://techcrunch.com/2014/01/02/robocoin-the-bitcoin-atm-is-heading-to-hong-kong-and-taiwan/
56% of Bitcoiners Believe the Bitcoin Price Will Reach $10,000 in 2014
http://www.coindesk.com/56-of-bitcoiners-believe-bitcoin-will-reach-10000-in-2014/
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"Bye-bye, Bitcoin" ? ( A China perspective )
Andy Xie thinks it is the beginning of the end of the Bitcoin, because of China's crackdown.
"Bitcoin is a Ponzi scheme masquerading as a futuristic currency. It was a small bubble until it found China last year," he says
+ Fed policy has created a plethora of colorful bubbles
+ China is the land of retail bubbles, thanks to the 22% average growth in China's money supply since 1978, and the shortage of alternatives to real estate investing
+ Savings rates are low, so "rolling the dice seems more attractive than keeping money in the bank"
+ Bitcoins caught fire because it attracted retail punters. With a small market cap, bitcoins were perfect for pump and dump... and it jumped 100x before China cracked down
+ The recent recover is just a dead cat bounce. China sees BTC as a bubble that benefits foreigners. It cannot be controlled by the Chinese govt (unlike property), so it cannot be tolerated
+ A Bitcoin ATM is coming to Hong Kong, but BTC is not real money. With China's support, it cannot hold up
Bitcoin / BTC price ... update
http://imagizer.imageshack.us/v2/800x600q90/855/gyuf.png
+ When a price is holding, but without volume, a bubble cannot hold up for long
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Kim Dotcom on Hollywood, Cryptos etc / with Max Keiser
http://rt.com/op-edge/kim-dotcom-keiser-report-531/
Hollywood hasn’t woken up to the changing world, refusing to evolve their business model into something that works better with the internet, Kim Dotcom, internet entrepreneur and businessman, told Max Keiser.
In the latest episode of the Keiser Report, Max Keiser and Kim Dotcom discussed copyright issues, crypto currencies, Edward Snowden’s revelations and the Trans-Pacific Partnership [TPP].....
http://www.youtube.com/watch?feature=player_embedded&v=N1bDMfRfsrw
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Ed
10 yrs ago
Might I suggest that anything that threatens the Fed's control of the money supply is destined to die..... that is of course unless the Fed is behind Bitcoin....
Perhaps this is the new world currency often spoken of --- USD is itself destined for the junk heap so who knows...
If the US gov wanted this dead it would be dead - the NSA has unlimited power to do unlimited things.... and they could in a heart beat put an end to this....
Another thing that makes me wonder is --- the MSM is controlled completed by corporate interests in what is effectively a quasi fascist world .... corporations and govt are one and the same...
They do not cover stories that are relevant and interesting because they are told not to (or they understand that said stories go against the narrative so they self-censor)...
So if bitcoin is getting all this press - someone wants it to....
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From AA Stocks:
"Chinese media cited people with knowledge of the matter that ANZ Bank and HSBC were granted import approval of gold by China last year. In addition, market sources suggested CEB BANK (06818.HK) -0.030 (0.798%) had also obtained the import approval, marking the 10th Chinese bank which is allowed to import gold.
According to the news report, China had granted import approvals to two foreign banks, showing the country is further opening its huge gold market to the world."
With more banks able to import gold into China, it's reasonable to assume that (i) the banks involved will need to build up stock and (ii) they will be promoting gold to their customers - meaning that the China related demand for gold will go up?
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This is just silly (from AA Stocks):
"Magnum (02080.HK), to be the first night-club listing company, has stopped receiving subscriptions for its IPO yesterday. Sources said it has registered over-subscription of more than 3500 times. A capital of more than $44 billion was frozen.
On support of the overwhelming response, Magnum reportedly will price the shares at $1.5, the pricing ceiling, to raise $126 million. The shares will be listed on 23 January."
On that basis, I would expect a lot of investors will get zero and the bulk will get only a board lot or two. No matter how high it trades at when it lists, it just wouldn't be worth making an application.
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I am curious as to when dealers pay for their gold and silver. I mean companies like Kitco and Lpm whic sell in Hong Kong, do they pay for their silver when they buy it from melters (say, Perth), or when they sell it to buyers (say, me)? If they pay it when they buy it from melters they should have lost a lot for the last couple of years, since they need to have some sort of stock.
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I am sure metals dealers are all hedging their inventory using futures on comex. From my understanding some local dealers pool their assets together through the metals exchange and help reduce risk that way (can maintain lower cumulative inventory).
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Finland confirms Bitcoin is not a currency and classifies it as a commodity: http://www.bloomberg.com/news/2014-01-19/bitcoin-becomes-commodity-in-finland-after-failing-currency-test.html
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From AA Stocks - Morgan Stanley trims gold price forecast:
"According to the report, 2014 gold price estimate was reduced by 12% to USD1,160 per ounce, and 2015 gold price estimate was reduced by 13% to USD1,138 per ounce."
(I am not expressing any views on their views.)
FWIW - I have just added some shares in CNOOC to the portfolio. Feel free to tell me this was a bad idea.
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Strange Rumors of FX Reset, and that China is "Buying" the Fed to effect it
(Reset rumors are taking on a new face. Let's see if there's truth in it)
Solution may be Two "Dollars"
Why would China and other countries take on the risk of this (US Dollar) debt (held by the Fed)? Simple, it’s economic reset or economic collapse. Its in the worlds interest to re-structure the U.S. debt to save the whole whale from beaching itself.
Rumors are circulating that the U.S. dollar will have a rate for in country use, and a separate international rate. That is because the U.S. treasury and the Federal Reserve are about to be severed from each other. The Treasury will control the in country dollar, and the “international reserve” dollar will be controlled by China and or the I.M.F. consortium of debt holders.
. . .
(That's not strange enough for you? How about THIS part?):
China has recently purchased the JP Morgan building in Manhattan for $725 million. One could reason that they have in fact purchased all of JP Morgan. And I’m sure it will soon be announced that China has or is in the process of purchasing other Western banks and physical assets. These banks make up the majority owners of the Federal Reserve. (edit: Big call out to Archer for catching my typo and error in the amount which the building was sold.)
==
> source: http://philosophyofmetrics.com/2014/01/16/china-to-purchase-the-federal-reserve/
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OTP, you post very thoughtful posts when you post about HK property, but when you post about your supposed "reset" you just post gibberish. Do you have a split personality?
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Thanks for asking, Conte.
I presume you meant:
"What's the source of that info? What does it mean?"
Though you did not put it that way.
I am sure that you have recognised by now that the Mainstream Media is full of half-truths, spin, and propanda. That is no place to go for the truth. If you want to find the truth, you need to look for it in the "bin" - ie in the place where the MSM leaves the stories they refuse to cover - the Alternative media. But of course, the signal to noise ratio there is low too, and it takes much monitoring and much reseearch to begin to discern it.
So I look at stories like the one that I linked to. Must of the words in the posting were not mine. (My words) were the ones in (brackets). I an Exerot from that article, because I think it gave some fascinating details on what MIGHT happen.
The bigger story of the potential FX RESET could be one of the biggest stories of 2014. There are persistent rumors on the web that it will happen in 2014, very possibly in Q1. And it could even be during a weekend in February, if the latest rumors that I am hearing are true.
If we get a Reset, I cannot tell you what it will look like, not yet. But I suggest that you should not be keeping money in US dollar assets, and certainly not in US dollar bank accounts. Euro-denominated bank accounts may also be a problem.
If you think this is silly, and not going to happen, then why not say why you believe that. Do you the the US is solvent now?
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=======
BiTCoin's moving ! Why?
Maybe this :
CNBC Art Cashin Predicting Up to 4 Currency Adjustments by Sunday
http://video.cnbc.com/gallery/?play=1&video=3000239346
or here:
http://www.rumormillnews.com/cgi-bin/forum.cgi?read=297662
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OTP,
Why do you think that "the Mainstream Media is full of half-truths, spin, and propanda"? I believe only about 10% of what I read in the MSM about politics and international relations, but why would they lie concerning economics and finance? I never read these pages, because I don't care, but why do you think they are not reliable?
I can also make up a website and write some crap (e.g. Jesus is coming, send me your money or you will die in hell). How do you select websites that you believe are reliable?
No, the US is not solvent, but I believe the US would rather bomb every other country in the world to the ground than seeing its US$ no longer be the world currency. That, or make China and Japan start a war, and then say that since China is evil and Japan is the US ally in the conflict, it won't honour its obligation (i.e. pay its debts to China). Not only that, but after dropping a couple of nuclear bombs on Beijing and Shanghai, it will also take China's gold as "reparation".
This is much more likely to happen than the US willingly going bust!! The US believes it is the world's master and everybody must obey or will die (Saddam, Gaddhafi, etc.). They know they are a paper puppet and American capitalism has no way to survive without the US$ being the currency of reference.
And I have $0 in US$ and in US banks. I don't bank with the devil!
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"How do you select websites that you believe are reliable?"
You have to monitor them over some period to see how reliable they are.
And it helps to have your own website - to see how information, trolls, fears, and hopes come and go.
You will also find that it is impossible to keep everyone happy. Ed has found that, and so have I on my own site
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You didn't address my other points...
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Why does the MSM lie?
Isn't it obvious?
They are paid to do so.
Their paymasters want you dumbed down, compliant, and open for instruction.
In short, The Powers That Be want to control you thru their MSM. It is easier to do so, when the majority think that the press is as they once were: Independent. That's no longer true. About six guys (mostly wealth Jewish ones), own about 90-95% of the US media.
These same guys have close ties with banksters and other global power players. I call them "the Cabal"
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Conte,
Why lie about economics and finance? Because money is the way that western governments control their people.
Back in the day the king controlled his people with arms - he had the most swords, strongest armor and most knights. But the gun leveled that playing field are weapons enough for a ruler to control his people (American / French revolution and the many insurgencies / revolutions since then have proven that to be the case).
Another form by which governments controlled their people was with religious thought. Do this or else you go to hell, do what we say and you'll go to heaven. This control has worn thin as the western countries have increasingly become non-religious.
The latest form of control began in the early 1900s and it was economic control - control by handing out economics goodies / services and most importantly, hope. Join the communist / socialist revolution and we'll create paradise on earth. Pay into social security / medicare and we'll take care of you 40 years from now when you retire. Join the union and pension plan and you can have a golden retirement on the golf course until the day you die.
It is really more of the same except rather than religious hope it is economic hope. And because their power is built upon economic promises they must either be sure to follow through with their promises or to make people believe the promises are being met. With ~80-200 trillion of unfunded liabilities in the US alone, it is laughably clear that the promises can never be met. As such the only tactic left for them to maintain power is to create the false narrative that the promises are being met.
This form of power will ultimately self destruct because the promises are hundreds of times greater than what can physically be supplied by the economy. What form of control comes next is anyone's guess.
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Ed
10 yrs ago
What comes next? NSA monitored totalitarian state with boot on neck?
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Ed
10 yrs ago
"why would they lie concerning economics and finance?"
Are you serious?
I can post a 1000 lies from jobs numbers to gdp - shall we start with 'Europe is recovering - Green Shoots in the USA x 10'
Why do they do that? Because if people knew the truth about the state of the economy they'd lose all confidence that there could be a recovery --- because there is not and will not be a recovery ...
And when confidence goes - we collapse overnight
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Maybe, it could be anything.
You could get a fear-based control which utilizes digital data to blackmail its citizenry into complacency. Everyone has tons of dirt that we don't want to be made public - emails that badmouth a friend, texts that discuss your job, embarrassing pictures, etc. What if you had a Stasi type police that threatened to release parts of your digital info to the people you least want to see it?
My guess is that it won't go down that route because it is a high resistance route (very hard to pull off) and people usually pick the low hanging fruit. My guess is just a reboot of the same economic control we had throughout the 20th century - once the current false hopes collapse we'll just have new political parties promise all sorts of new goodies and the people will buy into it all over again.
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Ed
10 yrs ago
yes boot to neck is the least attractive option --- better Huxley who believed force would not be needed --- instead the people would invite the best into their homes 'to keep them safe'
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Lucane, that's fair enough, and I do think that capitalism is a sham used by some people to make incredible riches on the back of the remaining 90% of the people. Same goes with globalisation.
However, I think that OTP was talking about "small lies", like the rate of growth, the rate of unemployment, the rate of inflation, etc. Why would they lie about this? It's actually counter-productive to lie because for people to make informed decisions about investments, etc. they need to know more or less what is going on.
And note that all that information is actually volunteered by the government. Decades ago that information was not collected, and governments decided to collect the information because government, investors, and people needed to know to improve the system (e.g. make it more stable and increase growth rate). So why would the MSM lie about these things?
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Conte,
Why the "small lies"? Because 2006 began the collapse of the economics promises and its been a full court press since then to give the illusion that things are continuing on normal as they did before.
Also the small lies are not small because they affect massive pools of money. Since social security is tied to CPI and the unfunded liabilities of social security are 10 trillion+, a 1% or 2% difference between reality and the "official statistics" can lead to massive differences in the ability for the government to fund itself this year.
The same goes for all of the bond funds out there. Pimco manages ~3 trillion dollars worth of bonds. These guys live their lives to try to pick up an extra basis point (1 / 100th of a percent), so an increase in inflation by 1% is devastating to them.
The numbers are not outright falsified like they were in the USSR, but the assumptions and algorithms are massaged to produce acceptable outputs. What are acceptable outputs? Ones that look similar to those before the crisis began.
Also the US Government is funding ~30% of its official debt at 0% borrowing - they are borrowing on the shortest edge of the curve (1 year and less). Any movement in the short rate will blow dramatically blow a new hole in their "budget" (because right now it shows up as being costless).
As an aside, I also question the notion that there are investors in the world. As I see it the financial system is 99% speculation and 1% investment. Investment is about putting capital to work to create a new asset which increases productivity and output to turn a profit. Is that what the American financial system does, does it invest in factories to increase output? No. It makes millions of trades every nanosecond between stocks to arbitrage fractions of fractions of a penny. It loans money to the masses to "invest" in marble countertops and new cars. Even buying a stock does not qualify as an investment unless it is an IPO, and even then most all IPOs are not about raising capital to fund expansion of the business but rather just about allowing owners to cash out.
At one point in time the financial system used to be about investment. The local banker was there to allocate capital to local businessmen who wanted to open a new factory or purchase new equipment. But that is long since been dwarfed by all the other activities of finance - speculation over whether a stock is properly valued, HFT arbitrage and loaning hundreds of millions of dollars to internet startups that collapse shortly thereafter. I'd say the reason the industry exists is precisely because of the needs of the government to create the illusion that future promises will be made. If the government starts collecting all sorts of savings for social security / medicare / pensions then it needs to manage it. But how can Pimco allocate 3 trillion dollars to local businessmen? There aren't enough real investments to be made for that much money - so instead they are left creating the illusion of investment by all sorts of financial witch doctory like extending / shortening the duration of your portfolio and convexity of your interest rate exposure.
At the end of the day all that matters if whether or not the supplies will be there that were promised. What the government wanted(wants) the people to believe is that it has secured for them golden age retirement on the golf courses and on the cruise ships. But is the economy actually physically capable of supplying that to a hundred million elderly people? No, of course not. So yes perhaps their houses are worth a million dollars but what can that million dollars purchase them? Not what they expected it would be able to. Yes maybe their investments in a stock portfolio went up 1000%, but can it buy them what they were promised (or think they were promised)?
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the MSM lies, tells half-truths, and spins....
About the big and the small things.
They do the bidding of their paymasters - and f they stop,
Lose their jobs, get shot, or in some other way get marginalized.
Do you think the official story about any of these is true?:
+ JFK's assassination
+ 9/11
+ Benghazi, and Hillary's "accident"
I could go on, and on
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"the MSM lies, tells half-truths, and spins...."
And the alternative media tells nothing but the unvarnished truth supported by solid evidence and wholly unbiased analysis.
My HK$0.02 worth is that all media articles need to be put under a mircoscope without distinguishing the source.
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Sure.
THere's plenty of disinformation in the Alternative media
But the motivations of the Alternative Media pundits can be very different, and often more genuine that the piggies who work for MSM.
That is why the Truth often FIRST turns up in the alternative media. And the MSM covers it when they have no choice.
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+ JFK's assassination - No
+ 9/11 - No
+ Benghazi, and Hillary's "accident" - Yes (though I don't know what she said, I didn't follow the thing because I don't care)
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Hillary C. is being "marketed" to us as the Presidential frontrunner.
(The thought makes me ill. Nearly as ill as the thought of Jeb Bush.)
She was called to testify in front of Congress to answer questions before Congress on her role in Benghazi. She had a mysterious accident, and failed to show. This probably saved her from perjuring herself, which might have end her Presidential hopes.
The press has soft-peddled many things in her past - and instead there was a promotional piece in TIME Magazine: "Can anything stop Hillary?"
By contrast, the press is trying to clear the field on the Republican side (see attacks on Chris Christie) to make room for Bush. A Race of Hillary versus Bush seems to be the cabal's present plan for 2016. They like to get the candidates they desire in place as early as possible.
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Oh my goodness?!?!?!?! Another Bush!?!?!?!?!?!? 2 are not enough?!?!?!?!?!
I didn't hear of that accident. I am following the Chris Christie bridge thing. It's pretty funny. He creates traffic jams in a city because the maire didn't support him. Even in kindergarten I didn't come up with anything as childish :)
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Ed
10 yrs ago
More truths are published in the non MSM media in a day than the entire MSM in an month....
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I just saw this interesting interview of Campbell Harvey: http://www.kitco.com/news/video/show/on-the-spot/531/2014-01-27/Gold-Inflation-Hedge-Is-A-Myth-Duke-Professor
He also refers to his paper The Golden Dilemma http://csinvesting.org/wp-content/uploads/2013/04/The-Gold-Dilemma.pdf
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What investment would have done better than a Gold coin, from - say -
Roman Times to today?
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I am thinking of farmland, forestland, and in general anything related to land. This is simply because land doesn't disappear, while anything else decays. However, trade (for example in beer) would likely have done better too.
Gold isn't even an investment. In the paper I linked, Harvey compares the salary of soldiers in the roman empire to soldiers today, and it is similar. The trouble is that when you pay the soldier with your gold, you don't have anything left in your pocket. On the other hand, if you own farmland you can feed these soldiers every day, for 2,000 years.
Farmland probably also keeps similar value over 2,000 years, if you want to sell it, but in addition it provides a yearly revenue, which gold does not. Gold simply allows you to defer purchase (instead of paying a soldier 2,000 years ago, you pay him now). A very bad investment, in my opinion.
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Try investing in farmland in Hong Kong, or even in China.
Soon you will discover a big problem.... Taxes
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??? So what is your point??? Remember what your question was???
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If Farmland barely covers the taxes, how can it be better than Gold?
That is the situation in many places.
And remember, it is total immoble (obviously - haha)
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Ya but if you invested and owned gold in the United States during 1933, you wouldn't be so happy.
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You don't "invest" in gold. Gold is money and you don't invest in money, just like how no one invests in Hong Kong Dollars or Euros. You should not compare money to investments because it is comparing apples and oranges. Money is about your savings, which is to say it is about retaining the purchasing power of your previous excess of supply over the amount you consumed. Investment is about taking your money and purchasing or creating new assets through which you can increase overall productivity / supply as to earn more money in the future.
Things get overly confusing when we are loose with our language. Can't blame us though, the government educations we received never explained to us what money is.
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Charlie Lee,
Founder of Litecoin chats about the future of money and his role
= https://www.youtube.com/watch?v=rFZYLA6GS4M =
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Bitcoins are WEAK today - down below $740
The USD will have its time of weakness too, I reckon
=================
Set for a Big Dive? - The US Dollar this year
Here's UUP / DB US Dollar Index Bullish Fund (2X Bull-ETF)
Chart : http://imageshack.com/a/img203/8272/o5.gif
Look at those moving averages hovering just above, and ready - maybe - to confirm a big downturn
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Bitcoin Issues for a Skype Chat
=========
+ Bitcoin market issues - what is causing the Price drop?
+ Summary of Flaws and Advantages of Bitcoins**
+ Security / Can lost coins be recoved?
+ What role for Bitcoins, and other Fiat Currencies in the Future
==
The Chat is happening tomorrow evening on Skype
> http://tinyurl.com/GEIchat-01
If a VIDEO is made afterwards, I plan to post it here, on AX
MONEY's FUNCTIONS
1. Medium of exchange
2. Store of Value
3. Unit of account : measuring revenue or profit, etc
==
Do Bitcoins work for these functions ?
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BITCOINS: After a nearly 30% drop in the days before...
Nearly ALL the Cryptos are getting pounded again today
CRYPTO== : $Price= : Mkt-Cap= : 24h.rChg / Volume==
=======
1. Bitcoin--- : $661.40 : $8,183 mn : - 3.92% / $32.41 mn
2. Ripples-- : $ 0.017- : $1,716 mn : - 3.58% / $ 49,487
3. Litecoin-- : $ 17.76 : $ 454.0 mn : - 2.74% / $ 5.64 mn
4. Peercoin- : $ 04.49 : $ 94.88 mn : - 5.13% / $775,141
5. Dogecoin : $ .0011 : $ 49.22 mn : - 2.17% / $798,094
6. NXT ------ : $ 0.046 : $ 46.23 mn : - 2.23% / $ 77,660
7. Mastercoin: $61.51 : $ 34.64 mn : - 1.52% / $ 05,285
8. Namecoin : $ 04.16 : $ 33.24 mn : - 2.81% / $624,836
9. Quarkcoin : $ 0.072 : $ 17.90 mn : - 5.69% / $ 97,363
10 Protoshs. : $ 10.21 : $ 14.74 mn : - 2.58% / $ 15,840
=========
Exceptions, trading higher:
17. YbCoin------- ($04.71: $4.81 mn) + 55.3%
22. Unobtainium ($12.23: $1.82 mn) + 48.4%
30. Particle------- ($.0016: $1.10 mn) +23.7%
==
> source: http://coinmarketcap.com/
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"The Chat is happening tomorrow evening on Skype"
WE HAD IT - and it went very well - about One Hour overall.
You can listen here :
"Bitcoins: Facts, Flaws, and the Fabulous Future"
You might like this revealing Podcast on Bitcoins:
= http://www.youtube.com/watch?v=ZOYBPhaQ0qo =
DESCRIPTION:
Six people from all over the world with varying degrees of expertise discuss the present reality, and the future of Bitcoins, including:
+ What triggered this week's big price drop?
+ The implications of concentrated coin ownership
+ Are Bitcoins really anonymous? Or just Pseudo-nonymous?
+ Are big coin holders positions "frozen" since Silk Road is busted?
+ When bitcoins are lost, are they lost forever?
+ Is Bitcoins a trojan horse for a new world govt crypto?
+ How well do Bitcoins serve the Functions of Money?
+ What are the Virtues and Flaws of Bitcoins?
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Clif High talks about Bitcoins - 14 Feb. 2014
+ What happened with MtGox
+ The Future of Bitcoin exchanges
+ Why Bitcoin may be one of the few Crypto-coin survivors
= http://www.youtube.com/watch?v=9zNX2p5mPrU =
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A grand Crypto experiment in Iceland
Innovation in Iceland - entire population to get free Crypto Coins
"Iceland prepares to launch the Aurora Coin"
= http://www.youtube.com/watch?v=tmwKfBz6vNM =
Projected launch : Midnight March 25th, 2014
Each citizen to get approx 31.8 Aurora Coins
Distribution through "an airdrop" gifted to each citizen
Iceland is a small country with 96% internet penetration - the highest in the world
Creator : Baldur Friggjar Odinsson invites developers to create new aps
===
AuroraCoin Homepage : http://auroracoin.org/
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Comment on Bitcoin price differences (as asked elsewhere):
"Bitcoins trading at very different prices on different exchanges is reminiscent of the days when banks issued their own currencies..."
Indeed
The price gap has been between Bitcoin prices on the mtGox price and other exchanges has been Huge.
- Why? Credit Issues!
Initially, when Gox announced it was going to be slow in sending out payments in Cryptos (like a 6 weeks delay!),
The price of BTC on the exchange rose, because people could buy BTC and transfer them out immediately.
The premium on mtGox rose to over $200 at one stage
The factors driving the price differences were discussed in a recent interview with Hadrian, who owns a Cryptocoin exchange:
The REALITY of Crypto Exchanges
= http://www.youtube.com/watch?v=Av-Im0pqDb4 =
If you are new to bitcoins, I think you might learn something from this conversation.
I am now studying the launch on new cryptos, and I am looking closely a Auroracoins, and Icelandic Crypto.
This is truly an interesting experiment in distributing a new coin. They will be using an "airdrop" to gift
coins to all the citizens of Iceland.
This is explained in this short video:
= http://www.youtube.com/watch?v=tmwKfBz6vNM =
I want to track this "airdrop" experiment, and have made some suggestions about how to promote the coin,
on a thread on the Aurora Coin development forum:
> http://forum.auroracoin.org/viewtopic.php?f=8&t=44
One of the coin holders is giving away 0.25 AUR for free to interested parties. In theory, that worth something like $1.00 - $1.50. just ask me, and I can tell you where to get more info.
I haven't yet worked out how to get an AUR wallet
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Mt. Gox goes bust with a loss of US$400 million to bitcoin owners. No government guaranteed security (if a HK bank goes bust, the gov. guarantees the first HK$100,000, I believe), and no way to trace where the bitcoins have gone. Is this the end of bitcoin, or just a blip? Bitcoins are now traded at US$536.
http://dealbook.nytimes.com/2014/02/25/trading-site-failure-stirs-ire-and-hope-for-bitcoin/?hpw&rref=business
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It's HKD 500,000 per depositor: http://www.dps.org.hk/en/main.html
If its a choice between HKD/USD and crypto currencies, I would rather hold HKD/USD. (And, of course, there are better assets to hold.)
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The best choice of all - may be to diversify.
And perhaps to diversify AWAY FROM the US Dollar:
+ HKD
+ Gold
+ A few Cryptos tucked away (but buy when they are "in a dip")
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"Our Bitcoins Vanished!" - MtGox CEO, about $110 Million in missing coins
Meantime:
Wow! AUR is still rising!
Auroracoin $ 236,583,973 $ 22.34 :
After +404% yesterday to $15.46
> CoinMktCap : http://coinmarketcap.com/
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Another Auroracoin Video:
"Don't Miss the Airdrop!"
= http://www.youtube.com/watch?v=CgDSZe0f7Jo =
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LOOK : Even Bloomberg is talking about how the Can-kicking is ending
=
callmejoe, on 14 Mar 2014 - 04:53 AM, said:
http://www.youtube.com/watch?v=gImJsMt-Lh4
Bloomberg Analyst Global Currency Reset Coming??
Published on Aug 1, 2012
=
Perhaps Weirdly...
He says: "The Dollar will rise... The Euro will fall"
"It will cause a massive rally."
(Maybe the change will hit hard the 1%. anything else will be temporary IMHO)
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OTP, that was almost 2 years ago...
What do you think of the Bitcoin ATMs in HK? I would have thought Bitcoins would have disappeared by now, after these thefts, but some people still seem to believe in them??
I am waiting for silver to drop to 19, and then I am buying a couple of coins...
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2012 - yes.
Interesting that they were talking about a need for a Drop in the Euro,
and instead... The Euro rose and the Dollar dropped.
So maybe now that people are getting very bearish on the US Dollar...
If the dollar fails to drop thru key support at DXY-79,
Maybe it will surprise everyone (like the Euro did), and bottom here
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