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Liberty News ForumLNF Forums HereEconomics, Financial News › On Gold, Dollars, & Bitcoin
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Very Hot Topic (More than 25 Replies) On Gold, Dollars, & Bitcoin (Read 1,123 times)
TowardLiberty
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On Gold, Dollars, & Bitcoin
May 27th, 2017 at 3:47pm
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I like this. It basically captures what I am doing and what I plan to do more of, in terms of investing.

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We have been bullish on gold – the barbarous relic; King Dollar – the modern hegemon; and Bitcoin – the crypto currency investors love to hate. One might say our feet have been planted firmly in the past, present and future. (We may not have three feet, but let’s go with it.)

1) gold, because central banks around the world own it and are buying more, ostensibly to devalue their fiat currencies against it someday, after they are forced to hyper-inflate in order to reduce the burden of systemic debt service and repayment;

2) the dollar, because dollar-denominated financial markets are broader and deeper than any other market and because the Fed is years ahead of other major central banks when it comes to normalizing policy and maintaining bank solvency (i.e., other fiats are in worse shape), and;

3) Bitcoin, the borderless digital currency that is already being perceived as a better store of value than gold and all fiat currencies, and potentially a more expedient means of exchange too. All three should win in different ways.

At a $50 billion total market valuation, of which Bitcoin is about $30 billion, crypto currencies have almost incalculable appreciation potential vis-à-vis fiat currencies. They should gain significant market share for store of value purposes, and this could be sped up if payment systems adopt Bitcoin, Ethereum, Litecoin, or another crypto currency as a global means of exchange. After all, global fiat money amounts to nearly $100 trillion.

Many of us who have toiled over the years as professional investors are deluded with the explicit or subconscious expectation that the perception of wealth and markets will someday revert to what they were five, ten or twenty years ago. They will not, in our view. Yes, this time IS different (as it always has been). Our money will change (as it always has).

Given the highly leveraged state of the current monetary regime, the most dominant variable for future wealth maintenance and creation, in our view, may not be asset selection but rather money selection. Something to think about...

http://www.zerohedge.com/news/2017-05-26/gold-dollars-bitcoin
  

"Practical men, who believe themselves to be quite exempt from any intellectual influences, are usually the slaves of some defunct economist." J M Keynes

"In the first place, the dichotomy between "theoretical" and "practical" is a false one. In economics, all arguments are theoretical. And, since economics discusses the real world, these theoretical arguments are by their nature "practical" ones as well." M Rothbard
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Possumpoint
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Re: On Gold, Dollars, & Bitcoin
Reply #1 - May 28th, 2017 at 9:23am
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That's the beauty of the system. Each of us approaches the opportunities differently. None of the choices shown are mine. Gold is something I just can't afford. The other two I reject out of concerns I have. I wish you the best in the choices you've made.
  

Learn all you can, it's a one way trip.
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TowardLiberty
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Re: On Gold, Dollars, & Bitcoin
Reply #2 - May 28th, 2017 at 9:33pm
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Possumpoint wrote on May 28th, 2017 at 9:23am:
That's the beauty of the system. Each of us approaches the opportunities differently. None of the choices shown are mine. Gold is something I just can't afford. The other two I reject out of concerns I have. I wish you the best in the choices you've made.


Thanks, PP.

BTW, what's your concern with bitcoin?
  

"Practical men, who believe themselves to be quite exempt from any intellectual influences, are usually the slaves of some defunct economist." J M Keynes

"In the first place, the dichotomy between "theoretical" and "practical" is a false one. In economics, all arguments are theoretical. And, since economics discusses the real world, these theoretical arguments are by their nature "practical" ones as well." M Rothbard
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Possumpoint
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Re: On Gold, Dollars, & Bitcoin
Reply #3 - May 29th, 2017 at 9:56am
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Being the Doom and Gloomer I am, I see in the coming meltdown a complete loss of services including loss of electric power. That may or may not be universal but a local loss in your area would result in the loss of access to your money.
  

Learn all you can, it's a one way trip.
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TowardLiberty
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Re: On Gold, Dollars, & Bitcoin
Reply #4 - May 29th, 2017 at 11:39am
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Possumpoint wrote on May 29th, 2017 at 9:56am:
Being the Doom and Gloomer I am, I see in the coming meltdown a complete loss of services including loss of electric power. That may or may not be universal but a local loss in your area would result in the loss of access to your money.

Okay but that's a temporary thing, right?

Do you really think we are going into a post-electrical future?

If it is temporary then holding bitcoin makes perfect sense, along with other forms of money.

Similarly, if order ceases temporarily you won't have much use for gold either, at least not until civilization returns and people start trading again.

I don't really think that sort of thing is going to happen. It could. But it strikes me as a far out risk.

I am much more worried about more probable risks- like more of the same over the next 70 years, punctuated by moments of financial crisis but not social breakdown or the loss of essential services.

No doubt I could be wrong.



  

"Practical men, who believe themselves to be quite exempt from any intellectual influences, are usually the slaves of some defunct economist." J M Keynes

"In the first place, the dichotomy between "theoretical" and "practical" is a false one. In economics, all arguments are theoretical. And, since economics discusses the real world, these theoretical arguments are by their nature "practical" ones as well." M Rothbard
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Possumpoint
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Re: On Gold, Dollars, & Bitcoin
Reply #5 - May 29th, 2017 at 12:41pm
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The valuation of a bitcoin is established by demand. Yet, among the majority of people, it is an unknown. Correct me if I'm wrong, you don't hold bitcoin in hand. Exchanges are facilitated with computer terminals.  Physical money, either paper or precious metal held in hand will be the universal exchange media. Once. people learn that fiat money is only backed by a promise and the government isn't going to be there for the average Joe, it will be worthless.

You give me a dozen eggs and I give you either something in barter or a physical coin. Gold carries such high value that eggs would be very valuable indeed. My understanding of silver fits in the next level down. A Silver Dime, roughly 1/10 of an oz of silver, would cover the purchase. By the way, a 1/10 of an oz of silver was the day's wages for soldiers and farm workers during the Roman Empire.

A whole new valuation based on precious metals will have to come into its own. IMHO in a collapse, I believe that fiat money will revert to its true value, toilet paper. Yet, I'm holding physical cash for purchases needed just before the collapse I see coming. I will use it till it becomes worthless.
  

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TowardLiberty
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Re: On Gold, Dollars, & Bitcoin
Reply #6 - May 29th, 2017 at 1:00pm
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Possumpoint wrote on May 29th, 2017 at 12:41pm:
The valuation of a bitcoin is established by demand. Yet, among the majority of people, it is an unknown. Correct me if I'm wrong, you don't hold bitcoin in hand. Exchanges are facilitated with computer terminals.  Physical money, either paper or precious metal held in hand will be the universal exchange media. Once. people learn that fiat money is only backed by a promise and the government isn't going to be there for the average Joe, it will be worthless.

You give me a dozen eggs and I give you either something in barter or a physical coin. Gold carries such high value that eggs would be very valuable indeed. My understanding of silver fits in the next level down. A Silver Dime, roughly 1/10 of an oz of silver, would cover the purchase. By the way, a 1/10 of an oz of silver was the day's wages for soldiers and farm workers during the Roman Empire.

A whole new valuation based on precious metals will have to come into its own. IMHO in a collapse, I believe that fiat money will revert to its true value, toilet paper. Yet, I'm holding physical cash for purchases needed just before the collapse I see coming. I will use it till it becomes worthless.


I would disagree slightly and say that money is valued based on supply and demand. Yes, bitcoin is not something tangible. It is intangible, like bank deposits. But unlike bank deposits, it is not controlled by a central network. Rather it is based on a decentralized ledger and you would have to hack every computer in that system (impossible) to hack bitcoin.

As you say, among the majority of people it is unknown. Yet it is already worth 2000 times more than a dollar.

It's visibility in the market is growing fast and that is explaining why it is has increased so much recently.

As it becomes more common it will be worth a great deal more. Even at 2000 a coin, we are on the ground floor of this thing.

I understand what you are saying about fiat money and have sung a very similar tune for a very long time. I don't doubt that we will continue to see a steady devaluation- just as we always have.

I don't know if it will go to zero. It could. But I don't know it.

I do believe that cryptocurrencies are superior to gold and if fiat money collapses, they will be next best option rather than gold. Gold and silver are great but they are not suited to the modern world. We need a digital form of money to reduce transaction costs and to more easily facilitate exchanges.

No doubt we could see digital credits tied to gold and silver traded as money.

But we could also see blockchain based cryptocurrencies like Bitcoin.
  

"Practical men, who believe themselves to be quite exempt from any intellectual influences, are usually the slaves of some defunct economist." J M Keynes

"In the first place, the dichotomy between "theoretical" and "practical" is a false one. In economics, all arguments are theoretical. And, since economics discusses the real world, these theoretical arguments are by their nature "practical" ones as well." M Rothbard
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Possumpoint
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Re: On Gold, Dollars, & Bitcoin
Reply #7 - May 29th, 2017 at 1:46pm
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Best wishes and good luck with the path you've chosen. You may very well be right but I'm one that very much values the bird in hand.
  

Learn all you can, it's a one way trip.
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TowardLiberty
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Re: On Gold, Dollars, & Bitcoin
Reply #8 - May 30th, 2017 at 10:42am
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Possumpoint wrote on May 29th, 2017 at 1:46pm:
Best wishes and good luck with the path you've chosen. You may very well be right but I'm one that very much values the bird in hand.

Thanks PP. We shall see!
  

"Practical men, who believe themselves to be quite exempt from any intellectual influences, are usually the slaves of some defunct economist." J M Keynes

"In the first place, the dichotomy between "theoretical" and "practical" is a false one. In economics, all arguments are theoretical. And, since economics discusses the real world, these theoretical arguments are by their nature "practical" ones as well." M Rothbard
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Re: On Gold, Dollars, & Bitcoin
Reply #9 - Jun 1st, 2017 at 7:20pm
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Possumpoint wrote on May 29th, 2017 at 9:56am:
Being the Doom and Gloomer I am, I see in the coming meltdown a complete loss of services including loss of electric power. That may or may not be universal but a local loss in your area would result in the loss of access to your money.


We will not lose services.  The state will not go so easily.  Rather, in a truly systemic crisis the state will take control of services and rule by fiat.
« Last Edit: Jun 1st, 2017 at 8:20pm by Frank1 »  


To say homo sapiens, is to say Homo religiosus; there is no man without God. ~Frithjof Schuon
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