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KenJackson
12-14-2014, 03:31 PM
When the stock markets crashes, many investors will pull their money out and put it somewhere else. But where? Some will rush to buy gold and silver, but I hear inventories are so low that many won't be able to buy any at all. The banks pay nearly zero, and the specter of a "bail in" makes it foolish to trust a bank in a crisis anyway. Some may opt to stack bales of currency in the basement.

But this time we'll have the additional option to shift money into bitcoin. That choice wasn't available when the stock markets crashed back in 2008, so we haven't really had an opportunity to see if investors will trust it in a crisis.

I wonder if more people will rush to buy bitcoin or if more will rush to sell their stash.

I'm guessing more will buy than sell. Also, bitcoin is global and extends to people that don't own any stock, which should have a stabilizing influence.

Markpti
12-14-2014, 06:10 PM
When the stock markets crashes, many investors will pull their money out and put it somewhere else. But where? Some will rush to buy gold and silver, but I hear inventories are so low that many won't be able to buy any at all. The banks pay nearly zero, and the specter of a "bail in" makes it foolish to trust a bank in a crisis anyway. Some may opt to stack bales of currency in the basement.

But this time we'll have the additional option to shift money into bitcoin. That choice wasn't available when the stock markets crashed back in 2008, so we haven't really had an opportunity to see if investors will trust it in a crisis.

I wonder if more people will rush to buy bitcoin or if more will rush to sell their stash.

I'm guessing more will buy than sell. Also, bitcoin is global and extends to people that don't own any stock, which should have a stabilizing influence.

I'm still not fully appreciative that Bitcoin (and other digital tokens) are safe haven products. Has not most of Bitcoins benefit been to speculators that purchased early and cashed out at the higher levels?

Is Bitcoin more liquid (in a broad marketplace sense) than cash? Don't we all still have to use a "currency" or money (read-gold) to purchase those tokens?

Now, if you were to ask what will people do if the dollar crashes and gold becomes unavailable (maybe), will Bitcoin default as a place to go - I guess that seems plausible.

But if the market crashes, and thus the global market follow suit, I suspect either gold/silver and dollars will still be the place to be.

Then again, I don't know a lot.

AnotherDave
12-15-2014, 10:51 PM
I'm still not fully appreciative that Bitcoin (and other digital tokens) are safe haven products. Has not most of Bitcoins benefit been to speculators that purchased early and cashed out at the higher levels?

Is Bitcoin more liquid (in a broad marketplace sense) than cash? Don't we all still have to use a "currency" or money (read-gold) to purchase those tokens?

Now, if you were to ask what will people do if the dollar crashes and gold becomes unavailable (maybe), will Bitcoin default as a place to go - I guess that seems plausible.

But if the market crashes, and thus the global market follow suit, I suspect either gold/silver and dollars will still be the place to be.

Then again, I don't know a lot.

Bitcoin is an alternate currency, but I wouldn't consider it an investment. Not unless you know something about the economy that most of us don't.

KenJackson
12-16-2014, 01:14 AM
..., but I wouldn't consider it an investment.
The aspect I'm asking about is not so much an investment, but rather it's ability (or lack) to hold value while equity investments are falling.

I already know precious metals fill that role admirably, but I'm looking for a hedge or an alternative, and an alternative currency seems ideal.

It seems to me that the dollar/bitcoin rate doesn't fluctuate as much today as it did a year ago. I hope that means there's getting to be enough value and traffic to smooth out the big transactions and speculations.

One encouraging thing is that in this most recent stock market correction, October 14-15, bitcoin peaked totally out of sync with stock prices. That's good. I hope that will be true during the next big crash.

Markpti
12-16-2014, 08:46 PM
Bitcoin is an alternate currency, but I wouldn't consider it an investment. Not unless you know something about the economy that most of us don't.

Did I imply it is an investment? I did not mean to. It is, IMO, pure speculation. Now, is the Blockchain a useful tool for decentralization? That is plausible. But it, like all else, takes trust and critical mass in terms of use.

Markpti
12-16-2014, 08:51 PM
The aspect I'm asking about is not so much an investment, but rather it's ability (or lack) to hold value while equity investments are falling.

I already know precious metals fill that role admirably, but I'm looking for a hedge or an alternative, and an alternative currency seems ideal.

It seems to me that the dollar/bitcoin rate doesn't fluctuate as much today as it did a year ago. I hope that means there's getting to be enough value and traffic to smooth out the big transactions and speculations.

One encouraging thing is that in this most recent stock market correction, October 14-15, bitcoin peaked totally out of sync with stock prices. That's good. I hope that will be true during the next big crash.

If the dollar and bitcoin consistently maintain a ratio and do not "spread", then why not just keep dollars. Basically you need to put the dollars into bitcoins to start with, or not? I would think that in a dollar crash, capital will be flowing wildly for the best haven. Gold may be the benefactor or that.

That does not mean that gold or anything else must rise in value. Not if all assets are already inflated due to excess speculation. But I still think gold will benefit, even if for some reason I can't yet grasp, bitcoin does as well. But, what do I know?

HeavyMetalIronSteel
12-16-2014, 09:03 PM
Has Bitcoin become the Reserve US Currency > ? I hope they do move into Bitcoin, they as in; "most, look for the fast buck without any real homework.".

Ask AS.. lol.. He trusts nothing except what he can control. I am also in that camp. Majority shareholder, perhaps > ? Corp. debenture perhaps > ? Common stock, IDTSF...

HMIS

captainsilverton
12-16-2014, 10:02 PM
BC was indeed a sweet investment vehicle for many, many bought low and got out high..... i will always prefer to not use digital math currency if i can help it, i can trade and barter till i die if anything happens.... i own more non denominational, real hard assests, assets that can be used as currency, money, or whatever one wishs to call it.... i know how to use it...lest alone servics i could barter with..

seasons greetings,

best,

INCT

KenJackson
12-17-2014, 12:01 AM
If the dollar and bitcoin consistently maintain a ratio and do not "spread", then why not just keep dollars.
You have great faith in the dollar?

In answer to your question, two words: hedge and diversity.


But I still think gold will benefit, even if for some reason I can't yet grasp, bitcoin does as well.
Gold and silver are excellent. But their strength (physical presence independent of third parties) makes them very vulnerable to very serious non-economic attack: fire, riot looting, and tyranny.

I have some in each of two places, and one of those is a big vault far away from me. But I fear the day will come soon when it becomes known that China and Russia have lots and lots of gold and the US has none. In that day, fascist Obama, or even a righteous replacement, may order that for the country to remain solvent, all private gold is to be sold to the government under penalty of jail. And the price will likely be less than I paid for it.

Wise people often encourage investors to diversify and hedge. So I buy a few pennies worth of bitcoin and am thinking about buying a lot more. I hope and expect the dollar value will go up in a crisis for the same reason gold does--many looking for a safe haven will pour money into that limited resource.

AnotherDave
12-20-2014, 11:43 PM
If the dollar and bitcoin consistently maintain a ratio and do not "spread", then why not just keep dollars. Basically you need to put the dollars into bitcoins to start with, or not? I would think that in a dollar crash, capital will be flowing wildly for the best haven. Gold may be the benefactor or that.

That does not mean that gold or anything else must rise in value. Not if all assets are already inflated due to excess speculation. But I still think gold will benefit, even if for some reason I can't yet grasp, bitcoin does as well. But, what do I know?

How do you measure "value"? The supply of gold, silver, and Bitcoin are controlled by Nature, and fairly closely known. The supply of fiat FRN/USD are controlled by, um, well, we don't actually know, do we?

Most today think that the fiat dollar is the standard of value. I think they are being farmed.

Markpti
12-22-2014, 06:57 PM
How do you measure "value"? The supply of gold, silver, and Bitcoin are controlled by Nature, and fairly closely known. The supply of fiat FRN/USD are controlled by, um, well, we don't actually know, do we?

Most today think that the fiat dollar is the standard of value. I think they are being farmed.

You may be reading something into my comment that I did not mean to inspire. I've no faith in the USD other than what is temporarily put into it by those who, in times of inter-national stresses still look to the US for "policing" the rule of trade law (meaning military might to back it up (assuming we have a police commander in chief with the interest and balls to do so), and the defacto prop it is getting from China until China decides it losses less or gains more by pulling the Bond/reserves trigger. (Of course, we cannot also assume that China itself can for ever avoid its own, excesses, mistakes, social conflicts and corruption).

What I can learn from you, however, is how is or does Bitcoin supply function in or as a "natural" process. Is it not just an animated idea running on formulae and encryption (blockchain) and a "result" of who and how many people take (mostly) fiat dollars (perhaps mostly USDs) and puts them into the system and takes them out of the system? (I assume some people take the USDs out in the form of a purchased product or service as well. Is this happening a lot?).

I admit to not fully understanding this subject.

AnotherDave
12-22-2014, 11:14 PM
You may be reading something into my comment that I did not mean to inspire. I've no faith in the USD other than what is temporarily put into it by those who, in times of inter-national stresses still look to the US for "policing" the rule of trade law (meaning military might to back it up (assuming we have a police commander in chief with the interest and balls to do so), and the defacto prop it is getting from China until China decides it losses less or gains more by pulling the Bond/reserves trigger. (Of course, we cannot also assume that China itself can for ever avoid its own, excesses, mistakes, social conflicts and corruption).

What I can learn from you, however, is how is or does Bitcoin supply function in or as a "natural" process. Is it not just an animated idea running on formulae and encryption (blockchain) and a "result" of who and how many people take (mostly) fiat dollars (perhaps mostly USDs) and puts them into the system and takes them out of the system? (I assume some people take the USDs out in the form of a purchased product or service as well. Is this happening a lot?).

I admit to not fully understanding this subject.

Bitcoin and FRN/USDs are both fiat currencies, and neither has an intrinsic value. Bitcoin is created into the economy via a publicly-known algorithm, and cannot be manipulated via devaluations, twists, quantitative easings, or other looting. On the other hand, history proves USD/FRNs are totally unconstrained in their potential to confiscate wealth.

The values of the two currencies are whatever the market determines them to be. I believe that the lack of privacy, the accounting overhead, and the hidden taxations inherent in the USD/FRN makes it a very poor currency to base an economy upon, but that is what the market currently prefers.

yellowsnow
12-22-2014, 11:38 PM
look at these 2 charts, enough said

http://qz.com/313492/bitcoin-and-the-ruble-are-racing-to-the-dollars-bottom/

http://www.goldpriceoz.com/gold-price-russia/

AnotherDave
12-23-2014, 10:39 PM
look at these 2 charts, enough said

http://qz.com/313492/bitcoin-and-the-ruble-are-racing-to-the-dollars-bottom/

http://www.goldpriceoz.com/gold-price-russia/

Sure, if you include the MtGox fraud of last year. But MtGox is not Bitcoin, it was merely an exchange. Bitcoin continues to accurately reflect the market now, as it did then.

Pick a starting date other than last December, and try to make that same claim.

DutchSilver
01-18-2015, 04:13 PM
Bitcoin value is only $208 right now.....So you have your answer: NO, people ran to pm's.

Markpti
01-18-2015, 04:29 PM
How do you measure "value"? The supply of gold, silver, and Bitcoin are controlled by Nature, and fairly closely known. The supply of fiat FRN/USD are controlled by, um, well, we don't actually know, do we?

Most today think that the fiat dollar is the standard of value. I think they are being farmed.

I measure value in the amount of hours one must commit to earn products they require. During my working years (60s, 70s, 80s, 90s) in the US and Europe, it was obvious that Americans worked less for what they needed and wanted. That began to erode as wages seemed to lose ground to increased prices. I was fortunate (an a bit insightful - I built my career in the world of sales where I specifically knew I could alway outpace the world of "salaries" (for the most part)) in that I did outpace the trends in earnings. That was never my problem. My problems was being a sucker and irresponsible in my wealth handling and management. That's not a story anyone else would be interested in.

KenJackson
01-18-2015, 04:34 PM
Bitcoin value is only $208 right now.....So you have your answer: NO, people ran to pm's.

Stocks haven't crashed yet, so no, I don't have my answer.

But you're right that things aren't looking good for bitcoin.

Markpti
01-18-2015, 04:35 PM
Bitcoin and FRN/USDs are both fiat currencies, and neither has an intrinsic value. Bitcoin is created into the economy via a publicly-known algorithm, and cannot be manipulated via devaluations, twists, quantitative easings, or other looting. On the other hand, history proves USD/FRNs are totally unconstrained in their potential to confiscate wealth.

The values of the two currencies are whatever the market determines them to be. I believe that the lack of privacy, the accounting overhead, and the hidden taxations inherent in the USD/FRN makes it a very poor currency to base an economy upon, but that is what the market currently prefers.

I hear what you say, but I still don't get it. I see bitcoin as a decentralized method of transacting interchange (currency and other potentials). A bunch of people crating digits which we can pay for is far from intrinsic anything. There is only their effort in play. You might say the same for those who spend time producing results in video games.

I see value in the protocol (blockchain) and the difficulty of "authorities" or those that would want to "control" things being thawarted by the digital/Internet decentalized network, but I don't see anything here as intrinsic. I just may not be smart enough to realize what I should but at this point, if I purchase a digital currency (Bitcoin, in this instance), it would be only to speculate on its increase in value. I feel the same way when I play poker only in more control of my outcome (not always though).:(

Silver and Gold
01-18-2015, 05:59 PM
You have great faith in the dollar?

In answer to your question, two words: hedge and diversity.


Gold and silver are excellent. But their strength (physical presence independent of third parties) makes them very vulnerable to very serious non-economic attack: fire, riot looting, and tyranny.

I have some in each of two places, and one of those is a big vault far away from me. But I fear the day will come soon when it becomes known that China and Russia have lots and lots of gold and the US has none. In that day, fascist Obama, or even a righteous replacement, may order that for the country to remain solvent, all private gold is to be sold to the government under penalty of jail. And the price will likely be less than I paid for it.

Wise people often encourage investors to diversify and hedge. So I buy a few pennies worth of bitcoin and am thinking about buying a lot more. I hope and expect the dollar value will go up in a crisis for the same reason gold does--many looking for a safe haven will pour money into that limited resource.



Blow up a countries power grid, Hack sites and bitcoin means nothing. If it did get that bad I would think food,shelter, guns, and ammo would be on top of the list to have with gold and silver 2nd.

KenJackson
01-18-2015, 06:42 PM
Blow up a countries power grid, Hack sites and bitcoin means nothing. If it did get that bad I would think food,shelter, guns, and ammo would be on top of the list to have with gold and silver 2nd.

Yes, but two words: hedge and diversity.

AnotherDave
01-18-2015, 10:52 PM
I hear what you say, but I still don't get it. I see bitcoin as a decentralized method of transacting interchange (currency and other potentials). A bunch of people crating digits which we can pay for is far from intrinsic anything. There is only their effort in play. You might say the same for those who spend time producing results in video games.

I see value in the protocol (blockchain) and the difficulty of "authorities" or those that would want to "control" things being thawarted by the digital/Internet decentalized network, but I don't see anything here as intrinsic. I just may not be smart enough to realize what I should but at this point, if I purchase a digital currency (Bitcoin, in this instance), it would be only to speculate on its increase in value. I feel the same way when I play poker only in more control of my outcome (not always though).:(

Bitcoin is a currency, it has no intrinsic value as real money would have. Its value is in its utility as a currency, and in its immunity from manipulation. The "authorities" have no way to control it, so its independence from TPTB is an added bonus.

Mining Bitcoin, and speculation in Bitcoin are sideshows as far as I'm concerned. "Investing" in Bitcoin is an abuse of the language. I think it has a lot of promise as a useful service, but it's not going to be everybody's rocket todamoon.

KenJackson
01-19-2015, 12:07 AM
"Investing" in Bitcoin is an abuse of the language.

Then you should also be disgusted by Guggenheim CurrencyShares (http://currencyshares.com/home) ETFs.

Guggenheim CurrencyShares products offer investors and institutions a convenient and cost-effective method of gaining potential investment benefits similar to that of holding foreign currencies. The foreign currencies market is the largest and most liquid financial market in the world.

AnotherDave
01-19-2015, 11:10 AM
Then you should also be disgusted by Guggenheim CurrencyShares (http://currencyshares.com/home) ETFs.

And the horse that they rode in on!

dukadan
01-22-2015, 03:27 PM
Blow up a countries power grid, Hack sites and bitcoin means nothing. If it did get that bad I would think food,shelter, guns, and ammo would be on top of the list to have with gold and silver 2nd.

People put a lot of faith in their computer networks. Not sure if Snowden is a whistleblower or a fear monger yet. Infrastructure can be brought down by computers.



Snowden leaks: Five Eyes alliance, Australian involvement detailed

“The next major conflict will start in cyberspace”

One of the leaked NSA presentations claims that our next major war will be fought digitally. Because of that, the US government is arming itself for network warfare. Almost every part of modern life is vulnerable — from hospitals needing power to the computerised cars we all drive. The leaked documents eloquently word it as “the ability to control/destroy critical systems and networks at will through pre-positioned accesses (laid in Phase 0).”

The documents show there is little differentiation between targets and civilians, with any internet user a possible victim. It’s through certain viruses that are injected in everyday internet tools like Facebook chat that the group can intercept content on your computer and take complete control of it.

http://www.news.com.au/technology/online/snowden-leaks-five-eyes-alliance-australian-involvement-detailed/story-fnjwnj25-1227191761395

yellowsnow
01-22-2015, 06:07 PM
so far USD and gold/silver (safe haven) are up while bitcoin had fallen.
will bitcoin be any safer tomorrow?

KenJackson
01-22-2015, 06:45 PM
so far USD and gold/silver (safe haven) are up while bitcoin had fallen.
will bitcoin be any safer tomorrow?

Hey! That's my question. And I asked first.

Notice the graph at CoinDesk (http://www.coindesk.com/price/) shows the price hit $177 January 14 and it's been going up since.

But we still don't know the answer to the question, because bitcoin wasn't around in the last meltdown, so we don't have any empirical data to draw from. And the next meltdown is predicted to be big, so bitcoin will get a big test in it's first crisis. I'm guessing it will either die and be gone off the virtual face of the earth, or will come into its own and become a currency of great significance and a store of wealth to boot.

yellowsnow
01-22-2015, 08:59 PM
Hey! That's my question. And I asked first.

Notice the graph at CoinDesk (http://www.coindesk.com/price/) shows the price hit $177 January 14 and it's been going up since.

But we still don't know the answer to the question, because bitcoin wasn't around in the last meltdown, so we don't have any empirical data to draw from. And the next meltdown is predicted to be big, so bitcoin will get a big test in it's first crisis. I'm guessing it will either die and be gone off the virtual face of the earth, or will come into its own and become a currency of great significance and a store of wealth to boot.PM took off after Jan 2. I'm sure bitcoin would get some consideration on wealth preservation but the super rich would put some % into it but i wouldn't put too much. Any bitcoin exchange is still hackable.

insidedealer
01-22-2015, 09:37 PM
Any bitcoin exchange is still hackable.

Maybe. If you say so.
Any fiat exchange would be hackable as well.
We've seen hacks into a handful of both....but it looks like we should assume all are hackable, like anything on the internet.
.
.
How's that money in the bank sure retirement bitcoin short working out for you after you've lost 20% of your retirement, and rising.
That's why I don't go short, that squeeze gets worse before it gets better, if it ever does.

AnotherDave
01-22-2015, 11:22 PM
Hey! That's my question. And I asked first.

Notice the graph at CoinDesk (http://www.coindesk.com/price/) shows the price hit $177 January 14 and it's been going up since.

But we still don't know the answer to the question, because bitcoin wasn't around in the last meltdown, so we don't have any empirical data to draw from. And the next meltdown is predicted to be big, so bitcoin will get a big test in it's first crisis. I'm guessing it will either die and be gone off the virtual face of the earth, or will come into its own and become a currency of great significance and a store of wealth to boot.

Do you ask if Bitcoin safer as an investment, Ken? Bitcoin is not an investment, it's a currency. Did you see what happened to the hipsters that caught the Bitcoin popularity wave? Same thing that happens to everyone who has to have the latest cars, smartphones, and sneakers: Being the first can be expensive!

But as a currency, Bitcoin goes chugging along, exactly as it was designed to. It's safe in that respect. It's never been hacked, and TPTB have not been able to bring it down. The only detractors left are those who cheer during drops in the market price.

So, yes. Bitcoin is safe. Wild speculation isn't. Does that answer your question?

KenJackson
01-23-2015, 12:08 AM
Do you ask if Bitcoin safer as an investment, Ken? Bitcoin is not an investment, it's a currency.
...
So, yes. Bitcoin is safe. Wild speculation isn't. Does that answer your question?

No, it doesn't. And you're not paying attention, Dave.

You can offer an opinion, but you can't answer the question because you haven't seen a stock market crash since the advent of bitcoin. And you certainly haven't seen a bank bail-in or hyperinflation or the massive economic trauma that some are predicting.


But as a currency, Bitcoin goes chugging along, exactly as it was designed to. ... The only detractors left are those who cheer during drops in the market price.

There's no need to be defensive. I'm not attacking bitcoin. I'm pondering how useful it will be as a store of wealth when fiat currencies fail. You see, it's very very hard for any of us to grasp the concept of dollars becoming worthless. But it's a very worthwhile exercise to ponder and to investigate all options now, before the storm.

DaveUK
01-23-2015, 04:47 AM
I think the issue is that Bitcoin is not a store of wealth in any way. It doesn't have any intrinsic value. It is clever technology and useful for online money exchange but it's not a safe place to store wealth long term

KenJackson
01-23-2015, 07:13 AM
I think the issue is that Bitcoin is not a store of wealth in any way. It doesn't have any intrinsic value.

The US dollar doesn't have any intrinsic value either. Worse, central banks have a stated mandate to cause inflation which slowly steals any effective value it has. Yet much of the world's wealth is currently stored in it.

AnotherDave
01-23-2015, 10:01 AM
No, it doesn't. And you're not paying attention, Dave.

You can offer an opinion, but you can't answer the question because you haven't seen a stock market crash since the advent of bitcoin. And you certainly haven't seen a bank bail-in or hyperinflation or the massive economic trauma that some are predicting.



There's no need to be defensive. I'm not attacking bitcoin. I'm pondering how useful it will be as a store of wealth when fiat currencies fail. You see, it's very very hard for any of us to grasp the concept of dollars becoming worthless. But it's a very worthwhile exercise to ponder and to investigate all options now, before the storm.

Maybe you're the one who should be paying attention, Ken. I've said here several times that Bitcoin is a currency, not a form of money. So is the FRN/USD. You are foolish to consider either as a store of wealth.

Carry on.