The Great Rotation: From Bullion To Bitcoin

Tyler Durden's picture

Well you buy what's working, right? Don't fight the Fed? Oh wait...



BTC just hit $670...

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JimRogers's picture



AllThatGlitters's picture

Buy Fear / Sell Greed.

Now, which chart looks like fear, and which chart looks like greed?

The mistake people are making is believing that somehow that Bitcoin Chart is a reflection of some sort of deep principle, rather than nothing more than speculative greed.

F-Tipp's picture

Also I don't accept the premise that people are rotating out of bullion and into bitcoin. I would like to see some evidence that this is happening, if Tyler is going to call it the Great Rotation.

Ham-bone's picture

TIC shows no significant foreigners are selling US Treasury debt and maintaining their $5 T + in Notes/Bonds...simply not much left to buy due to Fed's $45 B untapered QE coupled w/ lower Treasury issuance...Foreigners maintaining over 50% of all Treasury debt (notes/ bonds) compared to the Fed's 20% (both about record highs)  (foreign record holdings of all Treasury debt was last March @ $5.721 T and now @ $5.653 T showing massive increases since '08)

Tired of hearing bullshit about China, Russia, whoever running from the dollar...don't listen to what they say, look @ what they are doing...buying Treasury debt!

Pegasus Muse's picture

TIC shows no significant foreigners are selling US Treasury debt ...

Is the TIC Report as trustworthy and reliable as other government reports like Unemployment, Inflation and GDP?

strannick's picture

Gold is only as safe as its encryption. No wait, thats Bitcoin

CH1's picture

Gold is good, Bitcoin is good.

Get over the false dilemma.

fonestar's picture

People will fight to retain their ignorance as it is their most prized possession.

BaBaBouy's picture

Didn't Somebody SELL ALASKA For $7M Fiats ???



disabledvet's picture

Exactly. That's a lot of gold...and oil...for seven million bucks. This thing is an arms race to see who can create to most secure form of "digital money exchange." They're trying to hold on to the very real money that is in their totally virtual bank that has only totally virtual money. Read up on Mt Gox. Only reported here btw...the Government should have demanded all the money be given back to the kids who put it in their. Instead the Government took it in the form of some "failure to get a license" thing. But now the system has evolved into an actual ATM...putting in real money, getting crypto currency then buying a cup of coffee with it. Sounds stupid...gotta admit I had a fear that all the dollars in my wallet would no longer be able to get my own coffee ("forced into an exchange"...sound familiar?) reality is that real dollars are flooding into a "virtual currency" so to the extent that it is providing greater security of your personal savings then it's hard to argue they 're not adding value. The dollar amounts to set up one of these "mining operations" is now gigantic...5 million I hear. Plus your electrical bill goes sky...all just to define "your money is still in the bank" and "you are who you say you are."

Squid-puppets a-go-go's picture

rotation from gold into Bittulip ? Damn, and we were the width of a pubic hair away from cracking Comex

(sarc about bittulip, i am a fan of it, i just dont think it has a wide enough utility to truly become a major force)

gold-is-not-dead's picture

double spend proof protocol has no price... just like some other major inventions, a steam machine in a world of finance?

SilverIsKing's picture

Any of you ZHers buy Bitcoin anywhere near $600/BTC?

fonestar's picture

I will be buying until the crack-up boom.

Herd Redirection Committee's picture

Thats good.  Like English humor.

SilverIsKing's picture

Thought so.  So no one here is paying $600+ for a Bitcoin and this place is ground zero for Bitcoin.  So who is paying the higher and higher price for these Bitcoins?  The Chinese?  Sure.


TheHound73's picture

HAHA, i did. just doing my part to get it in the news  O.o....

Well, doing dollar cost averaging over 2 weeks, painful to press the buy button today but did it anyways.


Simplifiedfrisbee's picture

If the bitcoin community shares your view fonestar, then I detest bitcoin. You appear to have traits of a sociopath and dictator who praises his own intelligence and knowing, while preaching anti-banks. You are a corrupted man who will rise to a dictator given the chance, and to the depth of only your own ignorance will you succeed. You can have bitcoin and your false theories of value. It seems more and more, that greed is your God. I know truly why value is inherent in all that man has dominion over. Love. So keep your anger and self righteousness for when your time comes, be conscious that he who will exhalt you from your inequities, looks at the heart.

Hint: Give advice and Information that is useful.

fonestar's picture

Value is subjective, not intrinsic.  You're pissed because you bet all your money on a losing horse and you're a sore loser.  You claim to be against ignorance but it's apparent you revel in it.  Why should I be sympathetic to those who claim some of the greatest technological and mathematical genius in human history has "no intrinsic value"?  Fuck 'em!!!

Simplifiedfrisbee's picture

False. I have not bet on a losing horse, I have won the race. I stopped playing the game of "ego" long ago. That is precisely why your view towards my words are a gnashed set of teeth. You are weak without a cloak to disguise your true self. You hide in the internet and flourish with your ego because you have devious fantasies of your virtual throne that only you can hold and that is built solely for your premise. Your a sociopath and in real life you simply can not accept failure. You spew anger at me and call me angry. Bitcoin will not liberate you. Wether it is $5000 or $50, when the time arrives we all must accept who we truly are. That your ignorance gives you breathing room to rise above your own stench, is a losing bet. That you humble yourself is a winning proposition and you might help inflate bitcoin more.

ElvisDog's picture

Man, it's cool that the Dalai Lama has the ZH name "Simplifiedfrisbee". Your avoidance of the usual "you're an idiot, no you're a bigger idiot" rhetorical exchange is refreshing like a icy glass of beer on a hot beach. You may have done the impossible - silenced fonestar.

fonestar's picture

Nobody is going to silence me!  We are riding the Bitcoin to the top!  Take no prisoners and no surrender!

ElvisDog's picture

I up-arrowed you, fonestar, because I find your Rasputin-like insanity to be entertaining. 

RichardP's picture

Win the whole thing.  Use your inflated bitcoin to buy tulip bulbs.

Seer's picture

There's theory and then there's reality...

As I keep saying, and I'm in no way bashing the intent/THEORY of Bitcoin, so don't get me wrong, Bitcoin is way too limited in reach and its dependencies on a highly controlled infrastructure (internet w/NSA now firmly hooked into it) is vastly overlooked.

PMs have a proven track record.  They have survived countless calamities and currency busts.  ANYONE can possess them, no infrastructure (other than perhaps a coffee can) is required.  Yeah, cumbersome, but Bitcoins would also be a bit cumbersome in cases when one cannot make an internet connection (think that the NSA can't create internet brownouts?).  Also, PMs are held by TPTB themselves, in which  case it's highly unlikely that PMs will be associated with "terrorism."

Kirk2NCC1701's picture

What's gold backed by?

Ham-bone's picture

Pegasus - Is the price of gold reliable?  Oil?  Dollar?  Bit coin?  Interest rates?  GDP?  Inflation? 

Of course nothing is reliable in a global command simply is what it is.

maskone909's picture

its great you have taken the initiative to look for yourself, as i have not.  have you tried calculating the average holdings as compared to issuance?  is that increasing or decreasing?

Ham-bone's picture

After gargantuan increases from '08 to early '12, Foreign holdings have flattened out...seems commensurate w/ a decrease from $1.7 T peak debt issuance to present $700 B debt issuance...

But just so you know this could all be the Treasury's note from the bottom of the report???

The data in this table are collected primarily from U.S.-based custodians. Since U.S. securities held
     in overseas custody accounts may not be attributed to the actual owners, the data may not provide a precise accounting of
     individual country ownership of Treasury securities

maskone909's picture

this report may or maynot be complete bullshit.

Ham-bone's picture

China may or may not hold $1.294 T in US Treasury debt...Japan may or may not hold $1.178 T???

But the more I think open mindedly about QE...the more I think it may not be an issue to taper!?!  If "foreigners" were so willing to massively increase their holdings from '08 til now...if the Fed has to taper for a bit, what's to stop "foreigners" from continuing their now 5yr buying spree of Treasury debt?  Who's to say they don't get the dollars for free via QE or currency swaps or the like and maybe they have a sweetener quid pro quo (cheap gold???) for their continued ever increasing ownership of US Treasury debt?@?

Whether "foreigner" is truly the countries attributed in the report or not...the debt is finding a home somehow, someway (ESF? or or or)...interest rate spikes seem more of a political tool than reflecting true demand / supply? 

Welcome to the hall of mirrors.

CPL's picture

LOL!  Awesome.  Now take the same offer, put it on a box and sell it in a store.  No one sane would ever buy it.

"Buy Acme brand box of nothing, may or may not contain something."

InTheLandOfTheBlind's picture

may i propose that bitcoin is being inflanted while the great purchasing acquistion of precious metals continues.... another day... another.... well something.....

Poor Grogman's picture

Now if there were serious issues in the phys market on the supply side .
What better way to keep the game going a bit longer (pun intended) than to slip in a brand new shiny distraction, that is guaranteed to pull purchasing power in a different direction.

Of course there's no issues in the phys market at all so this theory must be false.

indygo55's picture

Someone had made buying Bitcoin here in the US very difficult. Go ahead and try to buy a bitcoin without flying to Vancouver.

CH1's picture

People do it every fucking day!

fonestar's picture

It looks like is having trouble right now?  Possible DDOS attack? has been DDOS'd before.  Looks like we are winning!

dracos_ghost's picture

LOL. I guess is a fucking success then.

Bay of Pigs's picture

I told you last week the localbitcoin spread was $500 dollars apart where I live.

Buying $200 and selling at $700 when the spot was $400-450. Sounds perfectly reasonable. s/

Enjoy the ride.

Rubbish's picture

I'm spinning a 1 oz. Gold Eagle on my desk.



Cacete de Ouro's picture

If some bit coins were in a boating accident, would they sink or float?

Just askin'

Buckaroo Banzai's picture

I had a bunch of bitcoins, but I lost them in an internet accident. In the cloud.

dick cheneys ghost's picture

I store my bitcoins on the front lawn and driveway, since they are invisable, I have no worries about anyone stealing them..........

get it?

StillSilence's picture

Hard to figure many are selling physical bullion to aquire bitcoin, aside from maybe those heavy in PM needing to liquidate in order to fund an online purchase perhaps. Wouldn't be shocking if GLD or SLV were being swapped for some bitcoins, though. I could also see where some new investment $$ might be swayed into bitcoin rather than adding to a physical postion.

Let's assume that right now bitcoin and gold are a 1:1 at about $1,000 and also that you hold an equal position in each. They both then begin a rapid ascent in what appears to be investments and savings around the world moving away from debt and risk based assets. The price of each goes over $5,000, then $10,000 and let's say to $20,000 or so.

Perhaps many of you would not change your position at this point, but would you be more comfortable converting your (physical) gold into bitcoins at this point or trading your bitcoins in to sit with all gold? If you had to make a move one way or another, what would you do? Would anyone go completley cyber?

Just curious.



Winston Churchill's picture

Just another fiat currency relying on faith.Fiat valued in fiat.

The irony is far beyond the BTC enthusiasts.

fonestar's picture

Fiat is a dictate and has nothing to do with faith or "intrinsic value" (which is still situational).

Where is the Ark Royal Mr. Churchill?"