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Peter Schiff On Gold vs Bitcoin
Peter Schiff is sympathetic "with what [bitcoin] is trying to achieve," but as he explains in this brief clip he believes, "they are using the wrong vehicle." After rising from less than $20 to more than $600 in one year, many investors are wondering if bitcoin might be worth the risk, Schiff adds, nothing that early adopters pitch bitcoin as "gold 2.0" – a digital currency that cannot be manipulated like fiat money. Bitcoins are even "mined," similar to physical gold and silver (and are scarce and divisble); but as Schiff explains, bitcoins still fail as a substitute for gold and strongly urges investors to avoid this risky new currency. Bitcoin could very well have already hit its top, but Peter is confident gold is still well below its future record highs.
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Have you finished talking to yourself?
You clearly appear to be a PBR man....
BTW, not every one here is a red neck Boetian....
Wow... That's really funny...
It doesn't matter what the latin origin of the word "fiat" is. When applied to currencies, "fiat" means something that can be created at will without limits on how much is created. Gold is not a fiat currency because it can not be created at will in unlimited quantities.
What is the intrinsic value of gold?
about $1,243/ounce at present, maybe more.
I wouldn't sell it unless it was for a lot more.
What's Gold backed up by? ;-)
Seriously though, school-time: How many of you knew that at one time Salt was worth as much as Gold. During the time of the Romans. How many of you knew that there was a time when Aluminum was worth more than Gold?
Nothing is "forever". Certainly not your ability to stay solvent, compared to the Central Banks and its shareholders. Plan, hedge and diversify accordingly. If you bet all your chips on one roll of the dice, well, good luck to you. You'll need it.
p.s. Can I interest you in some gold mining stock? Well priced, fantastic drilling samples and potential for great wealth. Company? BRE-X.
Clueless. Fucking clueless.
Salt is/was not worth more than gold, it has a value in gold, as does aluminium.
Yes there is....you can NOT make it!
Value is not subjective. "Values" are subjective. Price is factitous. The value of money is an objective fact determined by PQ=MV.
"Sorry gold bugs, but there is no magical atoms inside gold or silver or inside anything else that gives it value."
I could make the same argument about you.
Yeah, but when it's 1:1 then the wagon switches tracks from the front loaded 1 real oz to 9000 fake ozs of paper gold. They'll just raise it again just like the last eight times to keep the price down. Just like every other FX exchange when countries knee cap each other by leverage.
Right now no one knows what gold actually is or silver for that matter. You introduce it now and everyone shrugs. Dur...what's that? They don't know what it is yet. Exchanges can meet in the middle at the 1:1. Gold hooks it's wagon to the eventual 1:1 and then you've got two liquid capital instruments that have something in common.
There can only ever be 21 million BtC ever. With ----> 0.00000 working south.
Now for gold, all the gold that has ever been mined EVER is 3,110,420 pounds. Or 49766720 oz. Just over half of it is used in industrial purpose in some fashion leaving around 21 million ounces to match the valuation of Bitcoin. And just like BtC you can shave weights off of it 0.0000000 -> this way from the decimal place. See?
http://www.gold.org/assets/images/content/investment/Demand_flows_5-year...
Weird...very convenient no? Gold unhooks from USD, backs up into BTC and eventually settles on a proper trade value with a current built to resist short action by simply handing it back as a nearly zero sum game against limited availability. Again, balancing out against the available distribution of the PM's that are used for investment purposes.
How's that for a slice of gold? BtC is built to be a PM fortress when it's traded in it. Right now PM's are all risk as long as these clowns are running things.
CPL,
I believe that the figure most often used for 'all the gold ever mined' is around(no one really knows) 180,000 tons or a little short of six billion ounces 5.76 billion Eng tn, or in metric tns, roughly 6.33 billion ounces.
I cannot find my source for this, but I remember very well that it was approximately 1 oz./human about five years ago----
I'm not too interested in right or wrong on this---i won't look it up, but stick with my old research---but you might want to check that number again, my friend
thanks for stirring my brain cells
Approximately 6 billion troy ounces is my understanding as well. About 1 oz per capita in the world.
Got yours?
I'm pretty sure it's dead on the money. Believe me on this. By the time 21 Million BitCoins are floating around there will be 21 Million oz of Gold because that's how it'll balance. Like any float in a cash register. Recipt and Coin match eventually.
Both are built to compliment each other explicitly and implicitly. As I said, it's a fortress to protect the value of investments. If all the people moved first, including pensions. All the net assets were swapped in before the debt. It would be valued to the notional value at the time of the swap. People continue to generate BitCoins and drive the technology to mint that last coin.
It's that gap needed to move to a system called Participatory economics. The fault with Capitalism is the same problem with Communism and all their variations of central nonsense. There's no option to slide self funding into the situation. It's always on a situation of tax, rob and piliage. There's a point where governments ask for their public's support, but when it over runs the ability of a infinite math working against finite resources. It's falls on it's ass everytime. It's math, you can't win against it ever. Interest eventually is the only reflection of the economy after a certain point, like now.
It is also effective as a "jubilee" without the messy concepts that have happened EVERY Jubilee. Paper work gets lost which causes all sorts of fucked up legal action. The BitCoins can also be used to clear up who's got what. It can act as a storage tank while pricing existing debt everywhere to doodly squat. I know it sounds ass backwards. It is on purpose.
No one has time to rebuild the entire economic industry and infrastructure. You've all committed the capital investments already. This time though, tables are turned and it's literally built to unwind all the trades and buffer them so people can catch up. (remember increasing difficulity exponentially) Their bumpers built into it to avoid a cross economy system shock. The entire planet is wired together now, from toes to head. Nice gentle transition between currencies now and BtC/Gold later. Obviously plan for volume eventually, but it will pick up steam at the right pace that everyone can catch their breath and figure out the steps they need to do switching over.
Can't pull the rug out, it really wouldn't be fair to anyone to do that. So it's built to just chug along, set your watch to it. no surprises. In 100 years maybe it won't matter anymore. But the process of approaching currency as a piece of software that can be migrated so it doesn't happen again. Not a bad place to be. Plus Gold should maintain it's value relative to BtC and it's market dynamics. Gold and Silver is the store. It forces proper diversification of capital assets instead of banking credit versus real capital. And it defends it agressively against idiots that want to built ETF leveraged crap aroud them.
Tools, people, all of it is in place today to make it happen and it's all based on participation from every level of society. Anyone right now can mine a bitcoin. Anyone. For free minus energy costs. Obviously early adopters are out there. But BtC is not built to be Hoarded ether, can't run a line of credit to pretend you've got more than you have. Anyone dumb enough to loan BtC is only going to empty their own wallet. Loans can only be truely altruistic. So it's always moving...like money should do. Fungible...completely and totally fungible.
Because the number range goes from this.
2, 1, 0, -1, -2
to this.
21,000,000.0000000000000000000000000000 ->
^ people and investments and pensions get in here.
^ right here is where the entire world debt will fit after the people stuff is moved in.
^this is 15 minutes of rendering a bitcoin to pay it all off and still have the records.
Again, play with the idea first. Lack of knowledge of the current shitshow is a big problem, this will help dig upthe skeletons buried everywhere in accounting books. Take care of an old historical problem of Jubilees and poor record keeping.
Don't dodge the fact that ALL currency is fiat. So you might as well have a system that works with how society grows and flows to where it's needed easily plus offers a value store like gold to hide in a bank vault...or under a rock. Doesn't matter. The option is there to keep it all balanced.
Bitcoins are backed by nothing but artificial scarcity and blind faith that they will have value tomorrow. It really is an absurd premise for a currency, almost as absurd as fiat. I really think the digital currency fad is designed to distract currency activists away from gold and silver. The more physical metals we buy, the less physical metals banks have to play with, and the more we push market manipulators like JP Morgan towards admitting they have been issuing unbacked ETF's. What happens when we buy bitcoins? The banksters actually benefit, because we're wasting energy and resources on an unbacked digital fantasy that could easily disappear next week when we could be forcing transparency in the tangible gold market.
The proof is in the pudding and only time will tell if Bitcoin becomes successful. One major failure I see with gold is that it is not acutally used in the economy. It is purchased and hoarded but hardly ever used to exchange goods and services. Most people are tied to trash fiat to conduct their daily lives.
TheHound73's 2014 predictions to gauge if Bitcoin remains on track for success:
1) Bitcoin continues to retain its position as the best performing asset for the 4th year in a row.
2) The percentage of merchants accepting Bitcoin as a payment method continues to increase at an increasing rate.
Most btcs are also being hoarded, not traded, which is not surprising, considering all the speculation going on with it, but also in complete opposition to all the hyping around it.
Also, unlike btc, gold has been literally relentlessly sabotaged through media and by investment "experts", for decades now; still, you're talking from your small corner of the internet, and painting the whole world the way you see it from your window.
Gold has not the properties as a medium of exchange like Bitcoin. You can hoard Bitcoins, but you can't transfer Gold around the planet within less than an hour.
Rubbish.
I am actually in the market for some gold. I will pay you a 10%+ premium if I can take actual delivery from you here in Yokohama in under 1 hour. No shyster middle-men, please and thankyou.
Are you in Yokohama?
Does it matter? Moscow, London, Dallas... I can deliver and completely settle BTC in under an hour. You seem to claim the same quality applies to gold.
You seem to think it has all the qualities of gold because you can send it to a computer somewhere. Of course it matters, I have no fucking idea who you are or what you're selling or buying and until I do I'm not sending anything anywhere, and if I did want to pay you I can sell gold in Zurich and send the funds to you anywhere over the internet and get it to you in many ways that don't involve owning or having your own computer. And if I don't I can wear it around my neck as a fucking chain.
But let me guess, you have a computer so you can settle the trade yourself and that makes it iniquely 'valuable', but you don't settle anything yourself do you, it just pops up on your hard drive within an hour and YOU THINK THAT'S VALUE. How the fuck are you going to get your money out without a shyster middleman when it took one to get it in in the first place? Dig it our of the fucking carpet?
Please...
"How the fuck are you going to get your money out"
How am I going to get my money out of my money??? BTC is money.
I've traded more BTC in the past week to locals who are too lazy to register with an exchange than all previous weeks combined. Yes, I add a small premium like any gold dealer does. Now I have to cycle the fucking fiat through the antiquated banking system to get more coins from an exchange.
so, shyster middlemen again then. Not so state-of-the-art is it and no, you're not 'like any gold dealer' are you?
Pity most of the world still doesn't accept it. Who doesn't accept gold?
Why shyster? First a person has to navigate to localbitcoins.com on their own accord and click my little ad amongst the other ones listed there. Then they have to compose a message and send it to me before I am even aware they exist. The reason I have to make the trade for cash in person is because I don't trust the banking system to settle and honor the transaction.
'... I don't trust the banking system to settle and honor the transaction'
Utter fucking rubbish. On what basis do you claim that the banking system won't honour a transaction yet a bunch of shyster websites will?
It's not money, because not everyone will take it for like value trade items. When you can buy eggs from the farmer with it, then you might be able to call it money, but since it's value and worth are not truly measurable without the First-World infrastructure holding it up I would not gamble my future on your so called "money".
You world and sense of reality needs a bit of adjustment. Might I recommend you go out into the woods for a few days and try and survive off the land to get an idea of what money actually is?
You can transfer ZH votes, but that doesn't make then valuable.
You can transfer Bitcoin in Reddit.com comments. and yes they can be valuable. Here's a $4,680 comment worth $14,240 today. Gold can't compete in this arena but is pretty good at just sitting there.
Kind of like Enron, Worldcom stocks then, heh?
Gold is meant to just sit there - until you find something really worth it, and then it can for real be anonymous, unlike some phony money I know...
I thought we were on the subject of "Gold has not the properties as a medium of exchange like Bitcoin."
WTF!!! Pure idiocy.
Worth how much? To Who?
The receiver of those 20 coins can send them to Mt.Gox as completly fungible instruments, sell them, and have a wire initiated for $14k to her bank from the comfort of her bed using a smartphone. Mt.Gox's current order book is displayed on the right hand of this page. That single exchange has traded 42,000 coins today. All of the bids represent actual fiat (sp.) that has been wired to the exchange. All of the asks are actual coins that, when sold, the new owner can take immediate delivery of.
'actual' coins?
What's 'actual' about that?
You're buying a fucking number for christs' sake.
Yup, that's kind of the whole point. Bitcoins are fungible, divisible, recognizable, portable and scarce. But the beauty of it? They're just a fucking numbers! I get it you're not enamored with the whole idea. You can hunker down in your bunker and go "lalalala." You can exercise your first amendment rights to tell folks you think it is a scam. Who cares? Money talks and bullshit walks. Surely you'll allow me and people like me to do with our money as we damn well please...
So he must actually right, then (it already hit the top), otherwise he wouldn't have had missed it and would be able to board it whenever and if he wanted to...
@ Dear Infinity: "I understand why he'd be upset.. he missed the boat on this one. Gold is now nearly 1.5 bitcoins per ounce"
Peter was at Simon Black's "Offshore Workshop" back in early April. (As was Ron Paul, Jim Roger, Jim Rickards. He and all these guys were Speakers.) I was there too. One of the speakers talked about Bitcoin and gave a presentation. Like hundreds of others there in the audience, most of us may have looked at it but did not buy it. I'll bet you 10 BTC that, aside from the BTC speaker and maybe Simon, very few bought it. And I agree with Dear Infinity that Pete did not buy any, or he'd be crowing about it.
Instead, Pete was promoting the Gold card that breaks into 50 1 gram rectangles. The margins were horrific and I knew of NO one who gave it serious consideration. Most were too keen to open foreign bank accounts, leaving poor Pete fairly lonely at his table (promoting his latest book).
To my shame and vast regret, I downloaded BTC while there and 'almost' bought 50 coins, but did not take the printout to my local Western Union office for payment. Shame on me! Had I done so, I could have bought a LOT of gold now. I thus also violated the rule to Diversify(!) and allocate small/manageable amounts in higher risk/return vehicles. This bitter lesson sticks with me, and I won't soon forget.
I agree that in the long run (years from now) gold will be worth more. But I don't see its Sideways market ending any time soon. Until then there are more ROI-rewarding vehicles to invest in than PM. In my case, I do not need to increase my already excessive 30% PM holdings. I wish I had listened to Rickards, instead of the gold bulls(hitters), and capped it at 15 or 20%.
That just reinforces the case that its appeal is merely for being a speculation vehicle; the "latest and greatest", the junk bonds du jour...
I'd like to see WB7 do an image with two people carrying a million dollars.
The one with the BitCoins would look like James Dean, hair all slicked back and cool and the one with the Gold would look like Mr. T. with gold coming out of his orifices...well I guess WB7 could express that better than I.
Perhaps a 3rd person, Nancy Pelosi, with her briefcase of $1,000,000 coming open with the fiat dollars falling out.
BitCoin ain't got no shine, ain't no money o'mine. :p
I'm feeling that mania though. Like a siren-song. ;-)
Max Keiser is all over bitcoin, so it's destined to be a losing investment...
Problem with Bitcoins is security. Numerous instances of Bitcoin banks or exchanges vanishing along with the bits. Hard to do to gold ( physical) though I'm waiting for a paper gold exchange to have a similar event. True gold holdings are ones that people physically possess. It doesn't require electricity...merely a pocket. Gold and Silver fill out 2 purposes.
1. Insurance against the fiat should it collapse.
2. The ever expanding grey/underground economy (which Bitcoin ( and other cyber $s) is a part of to a point). But the folks at the farmers market don't take Bitcoin. Any transaction with Bitcoin can be traced.... Physical PMs is much harder.
Now your point is correct at the moment if one looks at PMs and Bitcoin as an investment rather than a mode of exchange. This seems dicey to me due to all the fingers in both pots and the ability of manipulation by so many.
too late bud.. you missed this boat Shiffy
Oops..the gold industry is getting nervous.....laughing my ass off
The most important aspect of any investment is the exit.
He who laughs last eh...
I don't think so. The bitcoin mining depends on who has the biggest Bitcoin mining rig similar to printer of fiat. Instwad of ink you need cheap power. Instead of paper trail you have global transaction ledger which has record of all the transactions.
Bitcoin is a fiat for Playstation generation.
This is where Bitcoins are made bit.ly/19MBR1o
Your analogy is inaccurate; with a printer, you can print as much as you want, as fast as you want. With bitcoin, the rate and quantity of production is constrained to a target.
Also, fiat means "by decree"; no authority decrees that you must accept bitcoins. It is only accepted voluntarily.
Also, those Block Erupters are severely obsolete. The last ones are for sale at a price of around $80 per Gh, when new equipment is coming online for 1/10th that cost.
You can only print until the paper and printing is cheaper than face value.
The sad truth is Bitcoin is backed by nothing, the value is in mind of people who use it. Anyone or group who has control of market can manipulate it. It is only a matter of time when Stuxnet sophistication virus comes toward Bitcoin.
I use fiats also I will use Bitcoin to learn about it further.
Your comment proves Shiff's point. Bitcoin has gone from an alternative currency to a speculative trade.
It is quite many things... just as his holy gold
Why do you and the many here just want to label BTC as one thing? How about just focus on this part of BTC: It is rising against fiat.. something gold has forgotten how to do.
I lack the interpretive ability of your comment but missed what boat suckka? BitCoin still has to go up $750 x 1,333 = 1,000,000
Seriously, Schiff is absurd in this and is out for his own interest. I own quite a bit of physical but even I can see what he's doing here. He sees bitcoin as a threat to his gold sales. What a joke.
Is there a Bitcoin bubble?
No one knows. The value of Bitcoins has soared by a factor of 1,000 since the beginning of 2011. Today, the value of all outstanding bitcoins is now around $4 billion. So far, the volume of Bitcoin-based commerce isn't close to being large enough to justify that high valuation.
http://www.washingtonpost.com/blogs/the-switch/wp/2013/11/08/everything-...
Hmmm... Let's see.... the total float of $4B buys less than 4,000 ounces of gold...
That's like saying the Washington Post knows how much the Kerry aristocracy is bringing in on the opium trade.
"Schiff is absurd in this and is out for his own interest"
How so? I don't always agree with him, but if his interest is the same as mine in this case, he is happy with gold going lower so he can continue to buy more. Imagine what a blessing it would be if silver fell to $5/oz.
The Bitcoin lovers are the same people that get pissed off when gold/silver sell-off. They are playing options and deserve to get burned. If you know it is a manipulated market, why the fuck would you buy gold/silver as an investment and not a store of value? Those are the people that simply don't get it. They may think they do, but they don't.
I like competing currencies and appreciate Bitcoin for that reason. You can't fight technological advancements and singularity, but you can be sure that when the government hits the internet 'kill switch', you'll be happy you own physical metals and not Bitcoin...
What happens if the price of gold is manipulated lower and lower in real purchasing terms (even if it increases nominally) and true price discovery does not happen until 100 years from now, after we're all dead?
There's got to be a better system to set the price. If China intends to depeg from the dollar and back their currency by gold, they must have a plan for that.
You do bring up a substantial point, Matt.
That being said, we are starting to see true price discovery in physical premiums. Ponzi schemes dont last forever.
I've noticed that BTC enthusiasts don't like to discuss that possibility of a "kill switch", or that the ICs both here in the U.S. and U.K. have the money, time and potential to compromise it in other ways when they feel it's in their strategic self-interest to do so.
What is more precious than BTC or PM?
A Nation with a scrupulous legal system that will protect and serve the interests of both in the future without interfering.
ahh yes, the stackers 'Rapture'
the grand kill switch reset zombie apocalypse
Hey.
Just ask the Iranians about the stuxnet virus as an example. of the "possibilities"?
If you can put a $ amount on the perfect rogue trojan horse for Bitcoin to a bunch of NSA types with time on their hands -don't bet that it can never happen?
Just sayin
"is price itself a futures contract?" that would be a worthy debate in these here parts. obviously the day you can convert bitcoin directly into gold is the day my cup of coffee and bagel (with butter) costs me 5,000,000 dollars not five bucks. ($3.10 with tax but who's counting.) what was the subject again? oh, yeah. "what is a price again?" it might be set in the here and now but that doesn't mean it's set in stone. "that is the lesson of 2013." just ask a futures trader..."prices do fall." of course "still better than an options trader where they can expire worthless" and indeed do on strikingly regular basis. this has been four straight years of call option heaven...this year being by far the most spectacular. if you really were "Balls to the Wall" in your option trading this year (long everything pretty much) you've truly knocked the cover off the ball. if you've spent the year buying protection...you've lost a lot of equity...truly a TON of equity actually...to the other side of that trade as well. Obviously you'll never here Peter Schiff talk about options markets...although it would be an interesting discussion if he was asked how he plays the paper side of his gold thesis. "exactly how have you been trading this product on the long side again?" because if you have been (and everyone does) and you've been wrong...that can go a long way towards explaining gold's PRICE decline.
Pete did not research the cyber-currencies well. Not only are there competing cyber-currencies that may or may not do well -- hurray for the "Free Market" that all these pseudo-libertarians crow about -- but there IS a cyber-currency that IS backed by pure gold: Presenting [drum roll, please]...
The Royal Canadian Mint and its MINTCHIP. http://developer.mintchipchallenge.com/index.php
My dear Pete, you may now officially shit your pants.
i interviewed Schiff about this and he kept saying bitcoins aren't real but apparently Schiff's financial advice wasn't real (good)
http://goldsilverbitcoin.com
Schiff's technical knowledge of Bitcoin [YouTube]
Hey Shif, you Doomer Douche, why don't you actually go do something yourself and come back with some experience. and/ or shut the fuck up with your retarded armchair quarterback comments.
I've heard queefs that were far less offensive that you, Teddy, and which also generally made much more sense.
I disagree with Schiff in this case, but this guy is actually DOING things. (Rather than just bitching.)
And speaking of shutting the fuck up...
Yawn.....It looks like another genuine retard made it's way in off the front porch again.
Anyone else missing the math captcha right about now?
How did those bitch slaps taste Tiddy?
It is always interesting to read the comments, long on opinion and short on any real thinking. Good luck with your opinion if you are wrong.
Odds of gold surviving the upcoming economic disaster =100%
Odds of Bitcoin surviving the upcoming economic disaster <100%
Odds of your gold getting detected and confiscated at checkpoints with metal detectors: 100%
You go girl!
Odds of metal detector withstanding a volley of .308: 0%
And just like that ZH turns on metals.
Oh brother!
What's next? Selling carbon credits for the Obama-Gore Carbon Exchange?
Over.
Wtf are you talking about? Where in this post do you see the Hedge turning on metals?
Buying BTC's takes investment capital away from metals. Plain and simple, right.
So people are going to buy something online and instead of directly paying with their credit card they are going to spend the extra time buying BTC's, using BTC's and managing their BTC's? When they could have just used the fucking plastic?
Are you guys nuts?
Over.
You didn't even watch the fucking video. It's obvious by your comments.
It's a well know fucking fact that I do NOT have javascript or flash or whatever. I can't see or hear any media.
*nix system and such. Opensource and patent restrictions.
Over.
Yeah it's a well known fact. You've been here a whole twelve weeks and it's a well known fact that you don't have java script.
Don't mind the dicks wandering in off the streets.
So what you have basically done is write a scathing review about a movie you admit you did not see. Do you realize how that makes you look, or can you not see that either?
He doesn't have a video or sound card either. Everyone knows that too. Thus, he's deaf, dumb, and blind when it comes to the internet. But you already knew that...lol.
Who do you think you are Roscoe P Coltrane or something?
For Christsakes stop saying Over.
it's an interesting thesis and the first time i've ever seen the Hedge fold on gold (albeit briefly)...but i'm not sure i agree with the thesis actually. my personal view is that this is somehow "QE related" but I can't say i have any clue why that would be either other than that they appear to happening "congruently." we did have far more debt to GDP during WWII and while taxes were sky high then and we absolutely had inflation..."the lion slept" all the way to 1971. when that lion woke up though it was to total mayhem...a lot like 2008. unlike 1971...war was optional? war was limited? war would end? Nixon was a Quaker? Nixon had a secret plan to win the war? "now/then"...it's all very confusing.
No reason for infighting. As long as people take fiat out of circulation to buy real assets (beans, bread, bullets, HW, gold, silver) or cyber-currencies, "It's all good".
There is no philosophical reason why people can't buy BOTH: Gold and BTC. Remember that!
The 'problem', I think, is that Pete opened a can of worms (started infighting) by showing that there are quite a few people actually switching from PM to BTC and that this is actually impacting his business. A smarter tack for him would have been to advise people to "limit their exposure" to BTC, and not make it a BTC vs. Gold argument. Poor call Pete, poor call.
BTW, even if BTC did not exist, there is NO way I'm going to increase my 30% holdings of PM. Would rather buy Land, Beans and Bullets. So to speak. Or Asian stock+bonds. So I get an ROI. PM is part of my "Store of value", even if I think that its manipulated price makes it a dubious "store" right now.
Every thread is a bitcoin thread now. Metals are only spoken of as a way to legitimize the new and shiny digital currency/get rich quick investment.
Where can i buy alpaca socks with my gold?
Huh? I think most of the people on ZH think that physical gold and silver is a good thing. As long as it is not fake or tungsten - they have held their value over thousands of years.
Bitcoins are virtual money on a server somewhere? How is someone protected? I am not bashing or pro or con just wondering. Thanks for any info.
You don't understand blah, blah, p2p, blah, blah, cannot ever-ever decrypt, blah, safe, secure, blah, future, freedom, whatever.
How'd I do cryptologists?
Over.
You are totally correct. That's what they used to say about satelllite TV encryption algorithms until they *were* hacked -- then, it was so easy anyone could do it, and everyone did. Point is, gold and silver have a 7,000 year history for a reason. And hey, even the Spaniards had boating accidents in the 1700s..
USA use to have export controls on encryption, why? Because the NSA could not break it back then.
Now? Not so much, but they sure as shit aren't going to tell you this.
SilkRoad, all that coins is now belong to FBIs.
Over.
I agree with Peter 100%. Bitcoin is a mania, but you may soon be seeing Gold, silver, oil, everything -making similar spikes. Can you say $300 silver?
"Can you say $300 silver?"
Just a couple years ago you guys were saying $500 silver and linking me to a bunch of videos talking about massive shortages of physical supply and huge demand in manufacturing.
100-1 $300 is chump change and so is $500. Even Max is far too short of the end price. And what does the end price matter when no one wants fiat!
I've bought some litecoins. If they get listed on Mt Gox, I may double my thousand bucks worth. Ha!
This is fun.
Haven't had fun "investing" for ages.
Almost as much fun as my Iraqi Dinar, which make me lol every time I get them out of the safe. I may just leave that million out on the coffee table for shits and giggles.
intrinsic value is kind of a double edged sword with money. Raise the price of silver to $5M an ounce, solid state electronics stops all prouction and human life suffers. raise useless gold to $134k/oz and the world keep turning ad jewelry gets expensive and central banks have amechanis to settle trade imbalances. thats why its uselessness is its greatest asset as a financial asset.
I can't see any central banks around the world trading their gold for Bitcoins anytime soon. Gold is too shiny and pretty to look at. Ditto for silver.
Edit: And both make an excellent companion for that fun weekend on the lake.
Why would a central bank EVER trade gold for bitcoin, when they have a PRINTING PRESS and can acquire all the bitcoins they desire at zero expense (and pass on the cost to the debt serfs)?
You do mean with a good beer, right?
Try carrying a million dollars worth of gold in your memory.
Money changers in charge of the press will get you, they will.
I think the Bitcoiners need to think a little deeper.
bit-coin-- the joke of the century!
the big boys are blowing this inflatable quarter up to the stratosphere and beyond-- actually into outer-space where the laws-of-physics will send it into another life-time of itself, far beyond our galaxy/ universe? but, in the mean`time, they (fiat masters) will make sure this trial-balloon can be destroyed at their very whim. like aborting a sattelite launch when data isn't what it seems?
so... in summary, the game will be up when everybody is swimming upstream in the same pool`of`greater-fool's'!
Bamm!!! everybody gets fucked, but, as usual the big boys will have taken the next-game too another level of microscopic-genetic-mutation, called or referred today in elite financial circles as financial engineering-- mankind's fodder for Darwinian`ism evolving instinctions?
and, just like that in a wink of an eye the $600 - $700 - - $1,000 bitcoin will become a 'remember when'...? a big ZERO in a value-dollar-added cyberspace of "BORG'S(?)!
jmo
Recognized as currency = $300.
Recognized as world currency = $1,000,000
Am i supposed to choose or agree with both options?
Insteasd of bitcoin to currency exchanges like MtGox, people should set up bitcoin to gold exchanges. For one thing, the "exchangers" are really retail stores selling and buying a commodity. There is no issue of money laundering, regulation of currency exchanges, etc. Official USG policy is that gold ios not currency or money.
You could always turn your US dollars into bitcoins by buying gold first. You could always turn your bitcoins into some thing with intrinsic value (gold) or diollars (selling the gold).
Of course, both are volitile. bitcoin values waver with the wind and gold has huge swings, but as a way to make bitcoin have intrinsic value and as a way for people to move value from currencies to bitcoin and vise a versa a bitcoin/gold exchange would be "golden".
Both have advantages over the other.
Bitcoin is much easier to move, store and transact with but, unlike gold, it's open to unlimited competition in the form of bitcoin clones with a different mining scheme. The creation of each new digital currency effectively dilutes bitcoin (assuming all are accepted equally by providers of goods and services).
Be nice if they could be somehow fused into a digital gold standard with a hard fixed ratio between the quantity of bitcoins and the quantity of gold. Ie, the price of gold in bitcoins would be permanently pegged (this is not a $peg). This would add digital flexibility to gold for transactions and provide a solid connection to reality for bitcoin (backed by gold), calming bitcoin volatility and also making gold manipulation more difficult as bitcoin becomes a competitor against USD denominated paper gold for the same underlying real gold.
Problem them becomes that of hoarding and the deflationary impact of a static quantity of currency having to represent a dynamic (typically growing) quantity of goods and services (a primary reason why the PM backed USD was broken by Nixon).
a very weak argument, peter
goldbugs
I'm sorry to bitcoiners, I agree with the principle idea and hopes behind bitcoin.
But it is doomed to fail by pure math.
The only way bitcoin can function is if.
No one ever loans a bit coin and demands interest.
No one ever gambles a bitcoin
No one is ever charged a fee in bitcoins for transfering or using a bitcoin atm
If any of these things happen, the person who operates the bitcoin atms and collects bitcoin fees, or the person who runs a gambling bitcoin site or charges for any kind of bitcoin loan.... those people will quickly accumulate the BULK of the bitcoins and control the supply in circulation.
If someone hoards the bit coins they will control the entire market, and the bitcoins will endup under more centralized control than the Federal Reserve Notes.
That is why the Bitcoin is doomed, because if you use it for anything other than trading for FRNS or peer to peer transactions, it completely self-destructs as one individual will inevitably endup owning most of the coins in circulation.
The pool of bitcoins is too small, and too easy for an individual to swoop in and buy them all.
If the Fed wanted, they could print up FRNS and buy out the majority the bitcoins and then they control the entire supply.....then it just becomes a matter of loaning bitcoins into circulationa and demanding interest in bitcoins to collect the rest of them.
Say there are 12 million bitcoins.
All the fed has to do is buy 7 million bit coins (chump change for them)................ and boom they control the entire bitcoin exchange.
ummm. can I have some of that which you are smoking?
If someone charges for use of their car, or home or muscles it is the basis of an economy, but if someone charges bitcoins for the use of their bitcoin ATM it is - they will get every bitcoin in existance eventually.
What if someone charges dollars for the use of their bitcoin ATM? Will they corner dollars? bitcoins? if dollers are convertable into bitcoins, both? What are you saying?
I am saying, if you open up a bitcoin atm and charge 0.0001 bitcoin per transaction as a fee , eventually you will own enough bitcoins to control the VALUE of the bitcoins.
Since the supply of bitcoins is finite (capped at say 21 million coins minted), shaving coins off with fees or a gambling website or by collecting more coins than you loan by charging interest in bitcoins on loans.
You will quickly accumulate enough bitcoins and cause deflation in the supply of the currency in circulation.
At that point if you own 20~51% ownership of all bitcoins in circulation, you become what essentially ammounts to a central bank, and you have the ability to manipulate the value of the currency up or down at will.
Which means you can make the value in terms of dollars go up or down, everytime you buy or sell coins, because you know before hand when the market will crash (as you dump coins) and can buy or sell ahead of that event, using the momentum / velocity of the chart to double or tripple your holdings in wild swings.
This is the problem.
Federal Reserve notes do not have this problem, because they are widely accepted and used, and printed in sufficient quantity to deter hoarding of dollars.
I don't like either system.
I am simply saying, if someone out there was rich enough, they could through clever manipulation, take a majority share ownership in bitcoins and control the coins value up or down however they wanted ....causing the de-centralized currency to become even more centralized than Federal Reserve notes.
If I was in charge of the Fed right now, I could completely de-rail Bitcoin within a matter of hours......... bitcoin is easier to manipulate than silver or gold, because at the end of the day, there is no margin call or demand for delivery to stop you like there is with gold/silver.
Again I don't like FRNS, I Dont Like Bitcoins, I just see the flaw in both systems.
Gold's only flaw is that its fucking heavy...... which is a pretty big draw back also.
You see this happening in the bitcoin charts already.
Big buyers come in, buy buy buy buy buy , and then wait for the momentum they created to drive panic buyers up..... then they DUMP DUMP DUMP and wait for the painc momentum to carry the price lower....then they buy buy buy /rinse repeat.
Like this, one person with sufficient starting capital could simply own 20~60% of bitcoins in circulation....and continue to accumulate more till they accumulate all of them and the swings become more violent.
Its getting to the point where you are having 500$ price swings in bitcoin, thats clearly manipulation if you ask me.
If a gold dealer took one gram per kilo transacted he would . . be compensated. There is a finite amount of gold but it will not all end up in dealer's hands, other people charge gold for their services. The gold dealer eats and spends his gold.
Many prople have tried to corner markets with a large stash of money, the Hunt Bros with silver in my memory. Not a workable model.
That argument applies to anything.. I could BUY, BUY, BUY houses in my neighborhood and drive prices up then DUMP, DUMP, DUMP and wait for panic to drive prices lower then buy at a discount. I don;t think it works as an income generating device. It could be done everywhere - used purses on ebay, grass seed, lumber. The limited number of bitcoins aee not a problem any more than the limited amount of gold is.
Maybe I don't know. . . ., im not an expert, Im just sharing what I see with my eyes.
Billions of Ounces of gold sounds a lot harder to corner than
21 million virtual coins with no regulation and completely anonymous transactions, especially when you only have to own a measly 3~4 million of them to start to have an effect on the market.
The fed could easily just go in and buy the entire market up and boom everyone has to switch to a different crypto currency.
To me, if I was the FED I wouldn't be able to even resist the temptation of completely fucking with the bitcoin markets, cause I know how easy it would be to wreak havoc on the markets with such a puny supply....the Fed could easily force price swings down to 30$btc and up to 1.5kbtc
I put a soft-cap of bitcoins at 1.5k, because at that price, there really isn't much incentive to not just buy the mining hardware... thats why btc sees a lot of pressure around 1k....cause at that price, you might as well just buy the mining hardware.
Bitcoins need a protection mechanism in place to prevent one individual from taking majority ownership of the coins............. that is the biggest risk to bitcoins, that one entity aquires 5~12 million coins....if one entity controls that many coins, its pretty much under more centralized control than the FED.
Money needs to be elastic, otherwise it fails at its purpose in creating fixed/stable prices..... people hate it when prices fluctuate too much, its just not good business when no one even knows what to price things at.
Without a currency to compare bitcoins to, pricing a good or service in bitcoins would be a fucking nightmare right now, prices would fluctuate soo much no one would even know what a fair price to charge would be.
Maybe I am missing something, maybe you can help me understand.
I just don't see bitcoins as the long-term solution globally.
I see it as a beta test of what COULD BE A PART of the solution.
"billions of ounces of gold" vs "21 million bitcoins" really. how about
dozens of tons of gold vs billions of 0.000001 bitcoins (thats how much I mined today)
why is an ounce comparedl to a coin, the measurement thingies are arbitrary.
The fed could buy them all? The Fed could buy everything as they create money. If there are a hundred quadrillion beaniebabies, the fed could buy them all.
No regulation is a fault? Here at Zerohedge?
Comments sections in BTC threads now are astounding and shines light on just how much brainwashing has occured in here. Many people don't even know what they believe anymore.
"I'll sink your battleship, with my super-carrier" - B
"Where did you get a super-carrier?" - A
"The same place you got your battleship" - B
***
This is a childs game we all played as children, but now its being played for real money, but truly my BTC was pulled from my arse, just like FED money.
Yep, GOLD and real-estate folks,
The good news is all of this QE( btc and usd ) drives down 'real stuff', which makes it cheaper for those of us old-timers to buy.
So go ahead and sell your gold and land to buy BTC (virtual shit), and make it cheaper for me to buy your gold.
Thanks,
Quit following me around, psychopath.
Yea money should be regulated.
Weights and Measures should be regulated.
The entire point of "money" is to have a standardized system of weights and measurements to use as pricing tool for commerce.
The entire reason we are in this mess is precisely that money creation is free from regulation.
BITCOIN IS BUILT AROUND REGULATION, its regulation comes in the form of cryptography and a pre-defined scarcity.
The problem is, there are soo few coins in circulation, which means a single entity can corner the entire fucking bitcoin market given sufficient funds..... they only have to corner say a few million BTC's its not that much.
Everyone is "in bitcoin" in the hopes its price relative to FRNS rise, so that they can get out and into FRNS.
So the end result is, everyone is trying to be on the right side of the trade (the ones receiving the most FRNS for the least amount of BTC'S).
Thats not a value system, thats a ponzi scheme lol
If I buy bitcoins, I certainly don't give two shits about where I can "spend them", because I am better off just buying the products I want with FRNS (I would get a better deal spending FRNS than BTC).
So BTC to me is purely a gamblers token.... get in early get out even earlier before it crashes.
As BTC'S approach the cost of the mining hardware, they will reach a point where there are more people mining and selling than people buying and spending, at that point you will have a hard correction, and that correction will probably be to within the actual kilo-wat hour cost of mining a coin, which is what? 30$ a month? 30$ a coin? not even.
Paper Money = BTUS of Heat (in carbon fuel paper)
BitCoins = BTUS of Heat (in electricity)
Gold = Tons of oil expended to get it out of the ground + its conductive properties + its metallurgical /scientific uses + its desirability by humans for its uses in jewelry etc.
Things that are made from Gold
Computer Chips
Medicine (dental) and other diagnostic medicine
Aerospace (heat shields etc)
Awards and Medals
Pigments
Art
Protective surfaces
Silver shares many of these uses as well
----
What are Bitcoins used for?
-Gambling?
-Drug Money Laundering?
-Buying stuff for the sake of saying that you buy stuff with it so they don't look at it for the first two primary uses?
;p
I am just not convinced.
Bitcoins don't have any use outside of speculation.
So you want a kind of money that automatically redistributes itself to prevent anyone from being able to own more than anyone else?
The problems you attribute to bitcoin also apply to gold, regarding manipulation and the ability for hoarders to control price.
When there is only 20 million of something, and one person owns 15 million of it.
Thats not exactly a sustainable monetary system now is it?
Thats all I am getting at.
With these crypto currencies, its way too easy for some whale to come in and buy up the lot of them and manipulate the fuck out of it.
What good is a currency if the price swings up and down 90% everyday ? who the fuck would use that currency? only speculators.
Gold relative to goods and services has never had such wild swings on a day to day basis.... a gallon of gas in 1950s probably costs about the same priced in ounces silver then as it did today.
Gold and Silver do not really depend historically on an outside currency to be compared with, because it in itself is the original currency.
Bitcoin without dollars to compare would be unspendable, no one would know what to price things at in terms of bitcoins........ which to me makes the currency a gambling token, a speculative virtual game token.
Its not really that hard to see the difference between the solid stable value of a metal which has industrial uses and a virtual non - existant currency that has no value in and of itself but as a speculative game token.
If I were to open a store tomorrow and price goods and services in terms of gold silver ounces, I probably wouldn't find much trouble in finding a fair viable price.
If I were to do the same thing tomorrow with bitcoins on a price tag, I would have to change my prices every hour or two.... or refuse to sell the product for the bitcoins until I am satisfied with the value of the said coins.
The bitcoins have no value, thats the problem.......and whatever price you have is obsolete before you even got a chance to label it on a tag, making doing business in bitcoin risky as you take a risk on every sale that the value of the currency you are obtaining may drop drastically at any moment.
Also I suspect if you sold someone a cup of coffee yesterday morning for 0.002 bitcoins and today it was priced at 0.004 bitcoins, they would be a little annoyed......
this is classic
so you are saying that the wonderful manipulation of gold/silver is a GOOD thing since it keeps it from wild swings? So if Gold/Silver was doing the wild swings you would hate and spit on Gold/Silver??
blinders on tightly for stackers
No the manipulation is bad, because we can't get an accurate feel for the true demand/supply/price/value of gold at the moment.
I am saying manipulation is bad................... and that bitcoin is more vulnerable to market manipulation than gold at the moment because its easier to manipulate a dozen virtual coins than it is billions of ounces of a metal in a vault..... even if they fake the amount of gold they have, somewhere it will catch up with them and the price will re-adjust to market value.
Watch in the end, I am going to laugh if Bitcoin bugs and Gold Bugs were both wrong and US Dollars come out on top lol................. I mean we all deserve it to happen to us.
Buying gold and Silver is more of an insurance policy against really really bad outcomes of the global markets.
Buying Bitcoin is .......................a gamble.
There is a difference between gambling and insurance.
I don't buy gold waiting for it to go up in FRN price.
I buy gold as a "atleast I have this hunk of metal to spend if I really need to in an emergency"
If I buy bitcoins I would be buying them with the intention to dump them when there is enough profit.... I have no intention of using them to buy bootleg merchendise from china ;)
"The pool of bitcoins is too small, and too easy for an individual to swoop in and buy them all."
The pool could be half the size or 100x the size and not really matter as long as the supply is divisible and strictly defined.
Other than that, what changes if I substitue all instances of "bitcoin" in your post with "gold"?
Gold has margin calls and demands for physical delivery.
Gold is LEVERAGED, so the manipulators can LOOSE MORE than they are gambling.
thats what stops them.
With bitcoin there is no physical demand, industrial use or leveraged call that could double or tripple the cost of manipulation.
There is a limit to how far they can manipulate gold, the goal of manipulating gold is to lower the price of gold, the goal of manipulating bitcoin is to dry up the supply of coins and make it un-usable.
There is no limit to how far they can manipulate bit-coin if they put their mind to it.
Wild price swings make currencies annoying to use............thats all they have to accomplish.
How would you feel if everyday you bought coffee and one day your coffee cost 1.25 and the next day it cost 97$ due to the price swing?
Thats exactly what bitcoins do............. price stability is the number one role of a currency... if it fails at that task........ its not a currency.... its a gambling token.
Understood. BTC started at $0.001 not too long ago and is still very much in the process of price discovery. Volitily may decrease to acceptable levels in the future.
what a clown.. ALL bitcoin purchases are 'physical delivery'
why do any of you gold fools not take delivery?? why don't you worry about that fact instead of pissing on something that is free of that shit
In anticipation of an objection: someone will say "no one would trade their gold for bitcoin" but people trade dollars for bitcoin every day, lots. That's what makes a market, seeing how much of one thing exchanges for another tuhing.
His arguments were so hollow he convinced me to sell a few ounces and buy a few more bitcoins.
More bears to capitulate.
Max Keiser got me into BTC @ $8.25. I'm feeling a 7 year itch about my auto, and I'll be looking at a new 2014 after the new year. Really should start a subchapter S or LLC for tax avoidance . Many thanks to Max & Stacy.
*****************************************************
As the week and a half long roller coaster ride(starting with a parabolic rise) of the BTC/USD and BTC/CNY currency pairs continues, LTC(Litecoin) is starting to catch a bid at exchanges such as BTC-e, Vircurex, Bter, and Cryptsy(to name just a few of the available exchanges), in major pairs LTC/USD, LTC/CNY, and LTC/BTC. Max Keiser initiated coverage of LTC two days ago, calling for an interim of $50(currently ~$8.50). Arbitrage opportunities abound. 24/7 trading. When was the last time you traded on an exchange and didn't feel like you were up against Front Running, HFT, co-located brokerage computers, and POMO?
It's unfortunate that many ZHers wouldn't know a free market if it cracked them across the forehead with a bat.
Yep,
And quoting max keiser to boot, an ex stock broker that's now hustling BTC's,...
He's MSM folk and anybody they let near the MSM camera is one of them. Fact.
Max Keiser telling your were to put your money, and they're listening
***
Probably the only thing entertaining about virtual crypto-currency is the cost of entry is zero, and so long as you give a ton up front to the MSM, you know they'll talk it up to the heaven's, ... oh my fucking god this is going to end bad,
You're following me around like a stalker and it would not surprise me a bit if you are clinically insane.
oh, that same Max that did the 'buy one silver coin everyone and kill JPMorgan'?? that one? the one you all loved?
Stackers, this isn't the GOLD R US forum you know... sorry you are too stupid to take all your years of ZH learning and ignore the one financial vehicle that you've been waiting for
derps.. hilarously blind mates
So God has come down from the mountain to tell the sheep to dump their BTC,... about time.
Beware of false god's that bring you bitcoin 2.0
Crypto-Currency YES, but bitcoin no,
The arguments are out there and weakness is well published,
Now the problem is the MSM has a vested interest in BTC, and of course bitcoin.org is a WASH-DC lobbying firm, and you know its impossible to kill dracula.
***
Someone here say's if "Bitcoin was gambling, ... it will die", I hate to piss on his parade, but the Chinese are now the main buyer, and for them its 100% seen as gambling.
The worst part of BTC is that 90% of the outstanding coins are dormant and have never been traded, they're all just sitting to be converted to real-estate and gold, when the 2-10 guys that own the 90% stash SELL, its game-over.
goldbugs love to live in the 'what if' worlds in their cabinfever infested brains
I am just too old to get involved.
When you are down to your last ten years or so---the effort to figure this stuff out is just too expensive.
I like the idea of bits----great idea!
Just too late to care about more money-----i'll just give it away, anyway---what little I have
I can get by on a couple of grand a year if i have to
great idea, though!
When you start saying "I am just too old to get involved." then you really are down to your last ten years or so and it has othing to do with chronological age.
Go learn about this or something else you find exciting, get active physically or mentally. You might find you have another 20 or 30 years.
My goal is to make it to 120 and hope like hell that the first useful life extension therapies are dicovered.
bitcon
I like Schiff. He is one of the few analysts with true credibility, but I think he misses an important point here: Bitcoin price cannot manipulated like Gold price, because Wall St does not have to monopoly to trade it on their phony markets.
If Bitcoin becomes a broad payment method, then it needs much higher valuation in order to handle the transaction volume. Visa handles $16 bln daily. Valuation of all Bitcoins is only $7 bln currently.
Also consider there are 7 mln rich (the 0.1%) with an average wealth of $6 mln. If they want to invest in Bitcoins they can buy less than 2 Bitcoins in average only.
In addition 80 mln ounces of Gold get mined each year, while only 1.3 mln Bitcoins get mined this year.
They haven't found a way, yet. But if there is a way, they will find it damn quick.
Bitcoin is like Myspace. It will be hot for a while but then the Facebook of digital currency will come around, and you can bet your ass the usual swindlers will be involved. Have fun with Bitcoin in the meantime, but my advice is keep one finger in it's snatch and one leg out the door.
Shell games over derivatives are hard to play, because the base value is perfectly deliverable. The only way will be to buy large amounts of real Bitcoin and try it over volume domination. Until then it will drive up the price significantly.
Nasty old Neocon dislikes non-banker money? How surprising. /s
Peter Schiff On Iran: "Just Blow The Place Up"http://www.youtube.com/watch?v=ujF0--nZsjw
Air, water, food, medicine, weapon, pussy, peace of mind, are the only things that have intrinsic value