lol!  yup, as long as your GPL keeps collapsing i'll be satisfied. 

Update:

silverbox's long GPL:  -17%  (let's see a screenshot silverbox!)

cypher's GG short:  

Bitcoin:  +148

Gold:  0%

Difference:  +148% advantage Bitcoin (destroying gold and silver)

silverbox, i'll never forget when Bitcoin went from $5.40 to $4.50 and you were thrilled to see that just so you could whoop it up that i was wrong despite everyone else's disappointment in the price drop.  

Generally, yes. The deflation would be of asset values, because there is less currency available. Securitised debt is treated as money at an institutional level; most individuals don't have access to it.


There's a fly in your assertion: is that nominal or real GDP? The former is a reflection of an expanding monetary system, the latter is real growth. The chart is also a year out of date, do you know of a more recent one?

It's important to note that in order to keep the system afloat, it isn't necessary for the Fed to inflate from the GDP level to the derivative level. Inflation only has to keep the derivatives parallel to GDP. What's difficult about this is that the financial arena is struggling to prevent any contraction on itself, and that means continuing growth irrespective of GDP, whether nominal or real.

At the level of disparity between financial and real, a 1% relative rate of growth in each is vastly different from their absolute rates.


The USD is effectively the fund for the USA, which is being run like the banks mentioned, at perhaps 100:1 leverage or greater. The rush to dollar cash post-2008 was an initial reaction. As the realisation set in that the dollar (and all other fiat) is in the same over-leveraged situation, there has been a tidal shift toward debt-free assets.

Everything is being done to accumulate these protective forms of wealth so that the institutions might survive, and there's a lot of competition among these institutions for a limited set of available resources.

A debt problem cannot be solved with more debt, but if the debt issuance can be slowed, recovery is possible. The problem is, we've passed that point and now nations will have to renege on their promised obligations - with disastrous results.


Banks are effectively living hand-to-mouth. Funds must be used, as cash-flow is more important than reserves. If the precarious flow is not sustained, reserves rapidly deplete and banks start to default.

Since this flow is barely enough to sustain the financials, they can only scale down or grow. Citi laying off another 11,000 employees is a sign of this - the weaker scale down, the stronger grow or consume their opposition. Any negative disruption to the flow will accelerate these actions.

I realise that your tendency is toward flipping properties, but that isn't what the banks are interested in - they look for revenue streams; cash-flow. It's like oxygen to them. While you may look for a property that can be increased in value for a small investment, the financials look for multiple properties that are net cash-flow positive. The two courses of thought are fundamentally very different.


You might have missed this:


It's important to understand the criminal mindset, but also the survival perspective; especially a criminal trying to survive. This is not business-as-usual, it's survival of the fittest. Any firm that doesn't play the game will fall and be devoured - they're all in survival mode, striving to see which will survive best.

miscreanity:

you are incorrect about securitization as well.

as of April 2012:  http://www.newyorkfed.org/research/staff_reports/sr559.pdf



securitization has not increased; in fact, its terribly impaired:

as of Dec 2012:  https://www.imf.org/external/pubs/ft/sdn/2012/sdn1212.pdf



finally, this is the graph i meant to put up above.  the drop in shadow debt is greater than the rise of traditional debt

I'll never forget when you bet me 10 BTC that AAPL would drop to 500 in 2 months and lost.  (Thanks for the 10 BTC)

I'll also never forget when you said that you were putting on a massive short in GLD at 152 and to put this on the record!, then promtly lost your ass and had to cover.  Why did you cover if your certain gold is about to deflate?

Lets see you disclosing your positions on the day you start them, not cherry picking the winners  (like you did with your GLD short, which you lost money on)

I'll also never forget how you crow about selling silver at the peak, but you neglect to mention that you bought into BTC at 20+ with those funds and it promptly crashed to 2.

i like Kyle Bass. i really like him. but i see things differently on 2 points:

1.  he's stacked a crapload of gold i'm sure.  probably the same as i had relative to my net worth (i'm nowhere near in his category).  i don't think he knows about Bitcoin.  i think that's a problem given what you know my opinion on the metals is at this point.

2.  i understand he's constructed a huge fortified ranch somewhere in Texas i believe?  complete with jeeps and men armed with AK-47's.  probably with rocket launchers, etc?.    i'm more of an optimist in that regard.  although, i think things will get very rough when the collapse comes, i think it will mostly hurt Wall St as most retail investors have left the stock mkt knowing how crooked it is.  at least i'm hoping so.  i think Bitcoin will grind this corruption down into the ground over several years.  perhaps fast, perhaps slow, i don't know for sure.  but i think we'll all come out of this much better for it in the end so in that sense i'm very optimistic for myself and my family.

i heard a great argument the other nite about why everyone should not be buying into this rally off the March 09 lows.  and it applies to housing, stocks, metals, all risk assets.  it goes like this:

"its been an exceeding poor quality rally".

yes, that's it.   most of you guys don't really follow financial markets like i do and it helps to be a technician who listens to the news.  reasons for "poor quality":

1.  low volume
2.  its been based on QE1, QE2, operation twist, QEternity.
3.  we've had to double the national debt in 4yr just to accomplish it.  
4.  we've allowed the corruption to continue and in fact get worse.  no one has gone to prison esp. the CEO's of the investment banks.  thus they will continue their illicit activity until someone or something does something about it.
5.  retail investors have continued to bailout in record numbers
6.  insider sales have been at record levels
7.  if you borrowed to invest in risk what happens when rates go up?
8.  personal income is going down
9.  total debt levels and securitization is coming down
10. excess reserves are being hoarded
11. the student loan bubble is coming to an end.
12. Europe is in a depression.  we're all connected.
13. the China miracle is coming to an end.
14. mark to model still reigns
15. how is the Fed ever possibly gonna sell off it assets?  answer:  it can't.

i could go on but thats enough for now.

Yeah, he can be a little apocalyptic sounding, though he does often state something along the lines of "well, the world is not gonna end, but it'll be difficult for a while".

With regard to:

1) Yes, he certainly holds gold. As he does various equities, debt, real-estate, etc. He's just also very nicely hedged via hugely asymmetrical positions that'll payoff by orders of magnitude if massive dislocations do end up occurring. Japan is obviously his big hedge here... Though I still don't understand how he can bet that JGB yield will rise when the BoJ has shown that they're fully willing to buy all the bonds (probably forever); thus, they can keep yield stupid low forever. Started a thread on this here.

2) Heh... Yeah, sounds about right. I guess you can really insulate against tail risk when you're worth a couple $B and feel like it might come down to having to physically protect it...

1.  yes, no doubt along with Hugh Hendry, Nassim Taleb and several others.  there is an argument that the yen is going to weaken starting right about now.  but i'm not betting on it.  i actually shorted UST's over the last month for a nice profit using TBT but closed it out last week fearing another rush to safety.    i'm diversified as well:  still have my small RE portfolio which i never sold b/c of the trouble (could regret this if they start raising property taxes), still hold my 24 1 oz gold coins, have a load of Bitcoin, plenty of cash, and plenty of shorts. 

2.  don't get me wrong.  i've also bought all my guns and bullets along with freeze dried food so i'm ready if the SHTF too.  i just don't have armed guards patrolling my property.