you see this crap all the time now with computerized trading.  and then one day, it never comes back up.  i suspect at some pt Apple will gap down, trapping everyone up at the top.

more on Apple:

http://www.zerohedge.com/news/fat-finger-halts-unhalts-aapl-shares-which-hit-54280

BTW, what are your thoughts on EUR if you have any?

Now the question for us Europeans would be what will decline more, Bitcoins or Euros?

I sure hope EUR. On a long enough timeframe anyway.

Me neither, it was just a rhetorical question.

I’ve actually become very bullish the past few weeks. Good things are brewing up in my view. Once we bottom, I can see a recap of 2011’s spring coming. Early adopter times.

Fixed. Also:


How long do you think it will be before the funds from the Euro bailout (which were no doubt multiply levered up after being supplied) flow into real assets - six to nine months? That's monetary inflation, and it won't do a thing to stop real deflation.

You're so focused on deflation overall - it isn't one or the other, it's both at the same time. Think non-linearly.


^ Real asset deflation.
v Monetary inflation.

Since the beginning of 2012:

Date	Gold	USDX
Jan	1575	79.6
Now	1660	79.3
	+5.4%	-0.4%

You noticed

No argument on the cyclical shifts between inflation & deflation. I'm pointing out the lack of distinction between monetary and real assets. Applying only real asset thinking to gold (appropriate for paper contracts) while it's acting primarily as a monetary asset (applicable to physical gold) produces a flawed representation: assumption that contracts are the same as the underlying physical gold.

Printing hasn't mattered since day one - it only creates an illusory smoke-screen. It won't matter any time they print. What will matter is how real assets with monetary functions behave in relation to normal assets. Take fiat as baseline and look at real assets in general. If you lump gold in with real assets as "just another commodity", then virtually all assets were rising in value relative to gold, which was falling.

A grossly-simplified visualisation:



The deflation occurring in real assets relative to gold is independent of fiat. If fiat were abandoned entirely, the same situation would remain. Printing is a reaction to this circumstance in order to maintain relevance and control among established, fiat-dependent systems. What fiat has done over time is distort the relationship between gold (in its monetary capacity) and real assets. Critical to note is that fiat as monetary foundation is inherently destabilising, unlike gold (or Bitcoin).

If things really were getting better and authorities showed a genuine measure of responsibility, I'd agree with you on gold and sub-$1500 expectations. For now I'm still amazed that such an intelligent individual can give Bitcoin monetary credence, yet not gold. The only functional difference between the two is their physical nature (or lack thereof).

+1
I think if severe deflation really takes hold, Bitcoin will take a bigger hit from King Fiat than gold does; As in 2008, US government and Fed world governments and CBs have shown their ability and determination to prevent severe deflation from happening.

Bitcoin's ultimate success to a great degree depends on hyperinflation of major currency(s), which seems unavoidable IMO.