cypherdoc, I've been reading this thread for quite some time and find your comments insightful but it seems you think that gold will descend significantly vs. fiat currencies long term. But that certainly is counter the typical expectation on these forums which seems to be predicting hyper or high levels of fiat currency inflation long term. This of course would mean both BTC and GLD increase against USD... although BTC might increase much faster then gold as adoption increases. Can you clarify what you think bitcoin and gold will do against fiat (long term, i.e. 1+ years) and against some classical commodity like milk or oil and why?
Silverbox jokes about gold "collapsing upwards" but is that your actual position? -- i.e. the buying power of an ounce of gold in other commodities will collapse while simultaneously its price in USD increases?
Thanks!
the essence of the deflationary theory is that the debt contraction will overpower the money printing thus decreasing the money supply as i define it: money + debt extended. Ben can say he will print to eternity but he is constrained as i believe the PTB won't let him destroy the reserve currency status the US enjoys. the reserve currency is after all why the US remains #1. you're already seeing the UST market pulling in the reins the last few months as reflected by the recent significant rise in TNX. if Ben keeps pumping up risk assets the bond vigilantes will/have attack. i think the banks have already offloaded much of their bad debt to the Fed and and want to increase the value of their remaining debts extended to corporations and the citizens. they do this via deflation, not inflation. don't even begin to think that Ben will inflate the US debt away; its not in the best interests of the banks. there is a dichotomy of interests btwn the ppl and the corporate/financial/political elite. when one wins, the other loses IMO. i always think in these terms.
gold, IMO, is at the end of a 13 yr bull market and was the last risk asset to inflate due to the longterm USD devaluation. i think the USD devaluation process is coming to an end and you will see the USD skyrocket. we saw this for a brief period during the 2007-9 crisis but the deflation was not allowed to clear the bad debts. the banks used the last 4 yrs to shed what they could to the Fed and rebuild their balance sheets with free money from Ben. inflationists think in linear terms; that the future will be like the past, as in straight up. i believe in cycles where the long 40 yrs plus of inflation will be followed by a significant deflationary cycle.
i think Bitcoin is going to help enforce this deflationary correction. i know that its counterintuitive that Bitcoin could rise while gold falls in deflation. however, its bull is only a couple of years old and its born of, from, and for the Internet. its too good of an idea and there are too many ppl who want it to succeed. its too practical not to be used and its democratic nature ensures its success. the fixed supply will cause it to rise in value and act as a significant store of wealth as well.
the Internet, BTW, is contributing to the deflation as it enables the flow of information and bits which is enabling price discovery which so far has been confined to technology but which is now spilling over to risk assets like stocks, bonds, RE, and commodities. you guys need to read "This Machine Kills Secrets" by Andy Greenberg. i just received my copy yesterday and i'm 40% of the way thru it already. it shows the future by explaining the past. the history of the Cypherpunks/Wikileaks and hacktivists is critical to understanding how Bitcoin represents the culmination of a movement to revolutionize money and privacy on the Internet. its a great, riveting read and helps explain why Bitcoin is impenetrable and destined for great things.
