Credit deflation and the reflation cycle to come (part 2)

[JMD]

2 hours ago, Clueless Imbecile said:

They may not be able to create any more than 21 million but what is to stop them just dividing the existing units into smaller and smaller fractions. For example, 1 BTC becomes worth 1000 GBP so someone pays 0.001 BTC for a 1 GBP loaf of bread. Then 1 BTC becomes worth 10,000 BGP so someone pays 0.0001 BTC for a 1 GBP loaf of bread. maybe they could invent a new name (e.g. "Bitcent") and define that as 1/1,000,000 BTC. Then people start dealing in Bitcents until the value of that is inflated so high that they then divide that into smaller and smaller fractions until they invent another new name. And so on... and so on...

Cheers,
Clueless Imbecile

Disclaimer: I am not an expert. Anything I post here is just my opinions, which may not be factually correct. My posts are intended purely for the purpose of debate and are not to be taken as advice. If you act on any of the above then you do so entirely at your own risk. I do not accept any liability.

Actually bitcoins can already be divided to 9 decimal places. Each btc comprises 100million units or Satoshis. 

[Viceroy]

7 hours ago, DurhamBorn said:

Its funny how things change.Where i was born there were coal mines at the end of the street,and railways hauling the coal along the paths through the town from all different directions.The pit near me had the nickname Dabble Duck because it was that wet the miners were up to their wastes half the shift as they only pumped from the seam itself.Years later a factory on the site had a lot of lesbians working there and the locals called it Dabble Dyke in reference to the old pit.

The other colliery was called Black Boy,mainly as it was a really dusty seam and didnt have baths so the lads used to go home black.The old line hauling them is still a path now and goes past my dads back door.Lads used to jump on the back of the wagons for a lift around town.The coal coming along the oldest railway in the world stopped first as they built a tunnel instead straight under the town,hand dug.Irish mostly and at the far end of the tunnel was a row of houses called Paddys Row where a lot of them lived and stayed after the tunnel was built.

my great-grandad, a coal miner from Mountain Ash in Wales moved to south east england to become a taxi driver so that his off-spring would never have to go down into the pit. Amazing to listen to Richard Burton, the 12th child of a Welsh coal miner, talk about his family's love of mining.. 'muscular buttocks and bow legs'!

 

 

[macca]

16 hours ago, Bricormortis said:

Silver at the moment is through resistance level of  $28.42, next hurdles $ 30 and $ 30.35, then it could be off to the races.

Does it get smacked down by bullion banks first, dunno.

Basel 3 is on course to regulate the LBMA out of existence. And with it will go all the associated arbitrage business and position-taking on Comex, because most bullion bank trading desks will cease to exist. The only supply to buy-side speculators of gold and silver contracts will be producer hedging.

In recent months there has been some limited commentary concerning the introduction of Basel 3 regulations and the implications for precious metals trading. These new regulations are scheduled to be introduced for European banks at the end of June — only seven weeks’ time — and in the UK from 1 January next, affecting all LBMA member banks.

This article explains the new regulations and concludes that the recent joint LBMA/WGC consultation paper addressed to the British regulator is unlikely to save London’s unallocated gold trading market. And because Basel 3 regulations are scheduled to be introduced into the UK at the year-end all banks in the London gold market can be expected to wind down their exposure well ahead of the deadline.

The unallocated forward settlement market will effectively be shut down. Hedging into Comex futures from this source will also cease. As it is unwound, the withdrawal of synthetic supply has enormous implications for future precious metals prices by transferring pricing power to physical markets, now dominated by China.

[JMD]

13 hours ago, Harley said:

Ta.  As part of my research, this European guy's (based in Sweden?) approach to constructing the portfolio.  Probably a bit too much for me though.

https://driftwoodpalace.github.io/Dragon-Portfolio/

PS:  I really need to get into options given the previous need and now this and my recent look at writing options for income.  I have everything set up but need to swot up on the execution on the various platforms.  Maybe I can lean on you a bit on your options thread?

Interesting link. But I think im happy constructing my own low risk pension portfolio. However I would in near future like to start a options trading account as I'd also like to put some capital at risk in return for capital gains/profits and see where that takes me. I've mentioned before that the £12300 capital gains free tax threshold is something I'd like to have a  bite at!!                                                                                                               A few weeks back you posted a link for a guy in the US who offered a subscription service for his hybrid momentum and options trading service. That would be my ideal and really wish there was a similar offering from a UK based individual. I'd certainly pay good money for that type of system guidance whilst learning the ropes at least, but unfortunately all we seem to have over here are some momentum trade offerings. The yanks probably don't know how lucky they are in the investment choices they have, but certainly puts the so called EU 'single market' to shame, boasting twice the population but providing only half the choice!

[goldbug9999]

5 hours ago, nirvana said:

In total there will only ever be 21 million Bitcoin. This means that Bitcoin’s scarcity is even greater than gold. Although gold is difficult to mine, there is a near “infinite” supply as new mines are always being prospected.

Although Bitcoin has a supply of 21 million, that doesn’t mean that all 21 million of those coins are available to purchase 

edit: i know you guys hate bitcoin so I won't comment anymore BUT

By Galaxy Digital's calculation, the annual electricity consumption of Bitcoin is estimated to be 113.89 TWh/yr. For some perspective, the energy consumption of always-on devices in the US is 1,375 TWh/yr — 12.1 times that of Bitcoin's consumption

 

the banking industry consumes 263.72 TWh per year

 

 

My answer to the question "is bitcoin worth the energy use ?" is this ...

Fiat currency debasement is the single most destructive force on earth given the wars it funds and the poverty and general economic strife it creates in various degrees. Hence if bitcoin manages to curtail that by even a modest amount then its worth the current energy consumption 100 times over.

[Viceroy]

17 minutes ago, macca said:

Basel 3 is on course to regulate the LBMA out of existence. And with it will go all the associated arbitrage business and position-taking on Comex, because most bullion bank trading desks will cease to exist. The only supply to buy-side speculators of gold and silver contracts will be producer hedging.

In recent months there has been some limited commentary concerning the introduction of Basel 3 regulations and the implications for precious metals trading. These new regulations are scheduled to be introduced for European banks at the end of June — only seven weeks’ time — and in the UK from 1 January next, affecting all LBMA member banks.

This article explains the new regulations and concludes that the recent joint LBMA/WGC consultation paper addressed to the British regulator is unlikely to save London’s unallocated gold trading market. And because Basel 3 regulations are scheduled to be introduced into the UK at the year-end all banks in the London gold market can be expected to wind down their exposure well ahead of the deadline.

The unallocated forward settlement market will effectively be shut down. Hedging into Comex futures from this source will also cease. As it is unwound, the withdrawal of synthetic supply has enormous implications for future precious metals prices by transferring pricing power to physical markets, now dominated by China.

 

Basel III & Metals

SATURDAY, 15 MAY 2021 BY: MARTIN ARMSTRONG

QUESTION: Last year you said that Basel III would create a liquidity crisis and end even the London metals market. Finally, others are starting to say that same thing a year later. Do you still see this unfolding and what will be the real impact upon the metals?

SK

ANSWER: The traditional arbitrage business and position-taking on Comex, will be reduced for the liquidity is provided primarily by the position-taking between both markets. Yes, I warned this would be the outcome of these regulations because those who write the regs are clueless about how the international markets really work. 

For example. I became one of the largest market makers in gold and began the overnight market out of necessity. Back in the 1970s, nobody would make a market after COMEX closed. I had a friend in Hong Kong, Francis Lee, who I asked if I could sell gold there. He said yes, but I would have to make a delivery in London. Luckily, I had a friend in London and we struck a deal that I would borrow gold in London to make the delivery on the sale in Hong Kong, and then I would swap him a COMEX Contract upon opening. Thus, we CREATED THE OVERNIGHT MARKET WHICH BEGAN WITH GOLD.

I later became a partner in Rudolf Wolf, one of the founding firms in the London market. This method was later expanded to currencies as they began to trade in futures and eventually into the S&P500 futures which finally began in 1985.

Therefore, this is what Basel III is ending. The liquidity in the metals will decline which means that the business will shrink and perhaps this is their real objective. Additionally, the Buffett silver manipulation of 1997/1998 was carried out by him buying nearly $1 billion of silver but in the London market so they would ship silver from the warehouses in the USA and then claim there was a shortage in silver since inventories were not reported in London. This old trick of moving the supply to create fake shortages will also come to an end

[macca]

13 hours ago, jamtomorrow said:

I like Bitcoin's energy use - it's what makes the network hard to attack, and that seems valuable to me as a user.

More generally, the idea we should start squabbling amongst ourselves over end-uses of energy because we've f***ed up supply-side policy is just plain daft - to my mind, that just represents civilizational retreat.

If anything, we could do with a good energy crisis to properly focus minds on supply-side. So I'm just nipping away to buy more Bitcoin, open some windows and turn the thermostat up.

You know we have killed 75% of our pollinating insects

50% of our aquatic life dead

7% of UK Forests remain

80% of UK food is imported

At what point do we stop fucking the planet to death to obtain wealth? Everything we do is quite pointless.

 

[macca]

2 hours ago, goldbug9999 said:

My answer to the question "is bitcoin worth the energy use ?" is this ...

Fiat currency debasement is the single most destructive force on earth given the wars it funds and the poverty and general economic strife it creates in various degrees. Hence if bitcoin manages to curtail that by even a modest amount then its worth the current energy consumption 100 times over.

If fiat money crashes to zero..

How will people pay for their electricity and broadband to use their bitcoins?

And if everything shuts down where will they spend it?

Does it protect you from collapse really?

I have been investing in petrol canisters filled up, seeds, lots of fruit trees, tins of beans, paraffin lamps, paraffin, bog role..etc

kind of end of days and money.. How bad could it get if money crashed?

[nirvana]

9 hours ago, nirvana said:

they've taken everything down today, markets in danger of 'rolling over' again? 

Christ who upset Mr Market overnight? 

4 hours ago, goldbug9999 said:

Fiat currency debasement is the single most destructive force on earth given the wars it funds and the poverty and general economic strife it creates in various degrees

Amen bro, methinks folk forget what bankers are really there for....

Do we have any thinkorswim users in da house? mini futures?

[Mapper]

5 hours ago, Viceroy said:

my great-grandad, a coal miner from Mountain Ash in Wales moved to south east england to become a taxi driver so that his off-spring would never have to go down into the pit. Amazing to listen to Richard Burton, the 12th child of a Welsh coal miner, talk about his family's love of mining.. 'muscular buttocks and bow legs'!

 

 

I was looking for a Richard Burton interview a while back, and I came across this.

The interviewer, Dick Cavett, had some amazing guests on his show. Jimi Hendrix, Salvador Dali, alfred Hitchcock to name a few off the top of my head.

I'd never heard of him before.

[ThoughtCriminal]

@Cattle Prod

 

Feel free to blow me out of the water, but am I wrong to think that Russia and China are highly unlikely to give a flying fig about the woke pressures to end oil exploration and thus they're basically going to end up cornering the oil and gas market as the wests share of the market declines? 

 

To my non expert mind that makes the Chinese and Russian companies a great play on oil and gas prices in the longer term.

 

Or am I talking utter shite? 

[Lightscribe]

Nikkei down 2% then recovered slightly. Futures down 1%, and BTC down 14%.

My spider senses are tingling.

Something very strange is happening with BTC. Some of the big alts pumped yesterday without it (in relation to BTC). BTC is not recovering merely holding and dropping.

one of two conclusions

1) The big funds are shaking the tree (violently) and sweeping up cheap BTC.

2) This is the start of the unwind which will gradually transfer into the FAANG and tech sell off (and maybe the BK). I think gold and silver is about to explode very soon especially with Basel III next month.

Im also feeling uneasy, like something big is about to happen. Interesting times.

[Loki]

17 minutes ago, Lightscribe said:

Im also feeling uneasy, like something big is about to happen

Same here but I'm never sure if it's just general anxiety with everything going on.

[nirvana]

Just now, Loki said:

Same here but I'm never sure if it's just general anxiety with everything going on.

it be dem whales bros....dey be flapping around in da water and causing a few ripples for us ickle bitty tadpoles...

 

[Harley]

6 hours ago, JMD said:

Interesting link. But I think im happy constructing my own low risk pension portfolio. However I would in near future like to start a options trading account as I'd also like to put some capital at risk in return for capital gains/profits and see where that takes me. I've mentioned before that the £12300 capital gains free tax threshold is something I'd like to have a  bite at!!                                                                                                               A few weeks back you posted a link for a guy in the US who offered a subscription service for his hybrid momentum and options trading service. That would be my ideal and really wish there was a similar offering from a UK based individual. I'd certainly pay good money for that type of system guidance whilst learning the ropes at least, but unfortunately all we seem to have over here are some momentum trade offerings. The yanks probably don't know how lucky they are in the investment choices they have, but certainly puts the so called EU 'single market' to shame, boasting twice the population but providing only half the choice!

Did I?  Must have been Big Picture Trading.  I'm currently trying their 14 day free trial.  The nice thing about options is eligibility is based on what you know rather than where you live.

[jamtomorrow]

32 minutes ago, Lightscribe said:

Something very strange is happening with BTC. Some of the big alts pumped yesterday without it (in relation to BTC). BTC is not recovering merely holding and dropping.

one of two conclusions

1) The big funds are shaking the tree (violently) and sweeping up cheap BTC.

2) This is the start of the unwind which will gradually transfer into the FAANG and tech sell off (and maybe the BK). I think gold and silver is about to explode very soon especially with Basel III next month.

3) we're witnessing an acrimonious divorce where Elon and TSLA are getting custody of the froth (BTC is now at the price where TSLA bought in Feb ... )

[Harley]

43 minutes ago, ThoughtCriminal said:

@Cattle Prod

 

Feel free to blow me out of the water, but am I wrong to think that Russia and China are highly unlikely to give a flying fig about the woke pressures to end oil exploration and thus they're basically going to end up cornering the oil and gas market as the wests share of the market declines? 

 

To my non expert mind that makes the Chinese and Russian companies a great play on oil and gas prices in the longer term.

 

Or am I talking utter shite? 

I hope not!

[Harley]

BTCGBP down 34% MTD.  Will be a good test of my technicals to see if it goes lower still.

[Harley]

46 minutes ago, Lightscribe said:

Nikkei down 2% then recovered slightly. Futures down 1%, and BTC down 14%.

My spider senses are tingling.

Something very strange is happening with BTC. Some of the big alts pumped yesterday without it (in relation to BTC). BTC is not recovering merely holding and dropping.

one of two conclusions

1) The big funds are shaking the tree (violently) and sweeping up cheap BTC.

2) This is the start of the unwind which will gradually transfer into the FAANG and tech sell off (and maybe the BK). I think gold and silver is about to explode very soon especially with Basel III next month.

Im also feeling uneasy, like something big is about to happen. Interesting times.

Nikkei has been signalling a top/pull back and has confirmed it to me (DYOR).  I expected it earlier.  Sad for now, it's been fun.  Most of my stocks are down today and I have a number of sells.  HK has compensated and I have a number of buys given its pull back but a buy signal overall there too.  Asia the canary?

[nirvana]

24 minutes ago, Harley said:

BTCGBP down 34% MTD.  Will be a good test of my technicals to see if it goes lower still.

just a bit more down and you can grab 2 of em for £50k 

didn't think you were into this 'crypto crap'?  good luck!

[planit]

6 hours ago, goldbug9999 said:

My answer to the question "is bitcoin worth the energy use ?" is this ...

Fiat currency debasement is the single most destructive force on earth given the wars it funds and the poverty and general economic strife it creates in various degrees. Hence if bitcoin manages to curtail that by even a modest amount then its worth the current energy consumption 100 times over.

Your word equation simplifies down really nicely to 

 "central banks will go to war with Bitcoin"

[Barnsey]

 

[ThoughtCriminal]

46 minutes ago, Harley said:

I hope not!

Well Orwell said if theres any hope it lies with the paroles. The 2021 version is if there's any hope it lies with the east. 

 

Because to quote Han solo, I've got a very bad feeling about where we end up if this green fantasy bullshit is pursued to its logical conclusion. 

[M S E Refugee]

Just now, ThoughtCriminal said:

Well Orwell said if theres any hope it lies with the paroles. The 2021 version is if there's any hope it lies with the east. 

 

Because to quote Han solo, I've got a very bad feeling about where we end up if this green fantasy bullshit is pursued to its logical conclusion. 

I have same thoughts as you, I have been investing in the JP Morgan Russian Securities Investment Trust as it holds Russian Oil and Gas companies.

It looks like the West is going to virtue signal itself into poverty.

[Harley]

1 hour ago, nirvana said:

....

didn't think you were into this 'crypto crap'?  good luck!

 

Cheers!  What?  It's not a religion either way but no one got rich wasting money!  I hold a few testers but hope to accumulate more at a coming bottom.  BTC is legit to me as much as anything that has a market.  I probably should buy others as well as the supporting companies.   More the standard old fashioned stuff such as risk reward and optimal allocations.

PS:. The most annoying thing is I bought all the wallets back in 2019/20 but never got round to it!