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Biggus

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Posts posted by Biggus

  1. As you say it's important to note the difference between inflation caused by bank credit, typically lent against a particular asset class and general price increases caused by an increase in monetary base. Bank credit creates bubbles which distort markets and later burst, creating a lot of misery. Inflation in base money ought generally to cause increases in overall price levels. I'll call overall general price rises inflation, for the sake of simplicity.

    High overall price increases are a bit of a nightmare. Not really noticable at first, one begins to spend an ever higher proportion of income on necessities. Imagine the price of pertol going up to £2 per litre, bread going up to £3 per loaf, higher gas and electricity bills and so on. You may have to cut back a bit. Then prices go up by a similar proportion the next year and the next. You get poor over time, especially if you're on a fixed income. Government expences also increase leading them to print more perpetuating the cycle.

    There are other effects, such as erosion of capital and difficulties faced by businesses attempting to plan for the future and so on. You could fill a book with the effects.

    Hyperinflation is an unimaginable nightmare. Fuel is not available. Electricity is typically shut off for large periods of time. Shops are empty. Savings, pensions and so on become worthless. People resort to barter for food and get really, really bd deals. There's a story in a book I once read of a woman exchange her grand piano for a sacl of spuds. A grand piano would cost about 50k, so go figure. People acutally starve to death. Society breaks down. It's really not something you want to see.

     

  2. 7 minutes ago, Speed1987 said:

    We know this is going to happen, you know it also really....

     

    If rates went up there would be a spectacular crash. Not just in stocks, but also bonds, housing and anything else that's in a credit bubble. There would be defaults and banks would have to write down debts, probably a some would go bust. The US would go broke pretty quickly, as they have no intention of balancing their budget and debt payments would skyrocket. There would be huge unemployment as credit dependent firms went bust.

    The other choice is even worse. To keep rates low and keep printing until the dollar is worthless. The result would basically be an end to most economic activity. State employees are paid with worthless paper. Pensions and state benefits become worthless. Farms and factories stop production as they would be paid in worthless paper. Nothing is available to buy in stores and people go hungry. Imports stop as exporters don't want worthless nothing in exchange for thei goods an services. Full on economic collapse.

    That's the choice thanks to twenty years of incredibly, unbelievably bad policy. In keeping with past performance I'm betting they go gor the second option. They wont believe it's even possible until it happens. And it's inevitable if rates are never allowed to increase and money is continually printed.

  3. On 10/06/2021 at 20:47, dirtyduck said:

    Not the best source, but could this be the next leg up in gold?  Could Macron top the excellent strategy Of Gordon and signal to the world there is a fire sale on gold , before selling?
     

    https://www.zerohedge.com/geopolitical/frances-macron-urges-g-7-sell-gold-reserves-fund-bailout-africa

    Gold is down sharply today. I have a suspicion that some European banks are in trouble with the Basel 3 deadline around the corner. Efforts, such as the French government selling gold to bail them out are underway. Gold price could go down even more.

    The media is reporting the reason for the drop is the Fed saying it might raise interest rates in a few years. Maybe that's the real reason. Or maybe there's some other reason I'll never find out. Either way I was stopped out. I'll buy back in when the correction looks to be over.

     

  4. On 14/06/2021 at 13:44, Bugger BTL said:

    It's a consequence of Brexit that the UK has entered into trade talks with India, which were needed due to us leaving the EU, and has been obliged to accept the Indian desire for improved visa access. That wouldn't have happened if not for Brexit. 

    There is no getting round this fact. It exists as well as, not instead of, the elite not giving a crap about the population generally. 

    Brexit's consequence was the ability to enter trade talks with India. There is no obligation to reach any agreement. An agreement that lowers the standard of living of a huge portion of the country would be incredibly inept.

    Imigration is an election winner or loser. In Europe the French military are warning about a civil war over the issue. So, really, I doubt the deal will go ahead if it is not very much in the interests of the UK.

  5. 20 hours ago, reginekierkegaard said:

    It is not the property prices that are rocketing. It is the fiat currency that is deprecating rapidly. Decade of QE and an ultra low interest rate environment will only lead to one thing and one thing only, inflation. 

    When the velocity of money finally pick up, the fiat will reveal its true nature. 

    It's interesting that the velocity of money is low. The Keynsians have been telling us that lower interest rates will encourage economic ativity. Instead low interest rates seem to have a stifling effect on the economy. Take a look at this

    Fed-Funds-Rate-and-MZM-velocity-1024x648

    Of course it's always tempting to see a correlation and jump to conclustions. It could be that rates were lowered in response to a decline in economic activity. At first glance, though, it does not look like lower rates are causing people to spend more. The opposit seems to be true, with Increasing rates having a stimulous effect on the turnover of money.

  6. 16 hours ago, Staffsknot said:

    Strangely though filled up my car today and the £1.14 diesel now £1.24 3 months on... how's that for a rise.

    Might be temporary because everything will jump by a bananas amount first 3 months then only smaller rises meaning they just need to ignore it for a few months and they'll get away with it.

    Remember when the oil price went negative last year? What happened if you opened a long cash position when it was negative, would your account go negative and get a margin call? When it crossed zero was everyone wiped out? Crazy.

  7. 'Vlieghe rejected the idea that increases in the money supply, commodity prices or wages were poised to send the inflation rate permanently above the government’s 2% target. “Comparisons with the 1970s are misplaced,” he said.'

    That's the Bank's answer to the inflation people are experiencing? Ther are completely crackers! I don't know how bad inflation really is because the stats have been falsified. But when you can feel it you know it's bad. But really, holding interest rates at zero and printing money for decades and they actually think this is not going to be inflationary? A pack of monkeys would do a better job.

    We're at the point where a lot of people think a complete systemic collapse would be a good thing. Inflation eats away savings, interest rates on savings are basically at zero and houses are stupidly expensive. Taxes are also incredibly high. Yields on equities are are low and they are overvalued. People are being pushed into speculation in an attempt to achieve financial security. Bubbles everywhere.

    The BOE would be a joke, were they not impoverishing the population. We really need to get rid and replace them with sound money and interest rates set by the market.

  8. We're in the middle of a battle between market forces and the printing press. For a long time central bank money creation seemd to have the upper hand. But it looks like the tide is finally turning. People sometimes compare inflation to turning an oil supertanker around. It takes a long time and a lot of effort to get it to turn. It would take a similar effort to make it turn back the other way. Back in the '80s Milton Friedman put it like this

     

    The consequences of letting inflation run rampant are dire. Inflation grows as a portion of itself, or can be expressed exponentially. Eventually it causes complete collapse. But to turn it around the pain would be extraordinary. Here's a comment from today's daily mail.

    '

    nflation is a ticking timebomb in these circumstances. If it seriously takes hold, the recourse has to be higher interest rates.

    And any rise in rates would be murderous for home buyers, who have taken on oversized mortgages in the belief that low interest rates are here for ever.

    It could lead to a cascade of defaults on payments, to plunging house prices and negative equity causing misery across the land.

    But it’s not just homeowners. Higher interest rates would be equally troubling for over-borrowed firms, plunging countless ‘zombie’ companies — those currently protected by low interest rates and Covid borrowing schemes — into insolvency.'

    https://www.dailymail.co.uk/debate/article-9597783/ALEX-BRUMMER-Theres-timebomb-heart-economy-fear-started-tick.html

    Yes, we could still turn this around. But it would be really, really painful. Allowing inflation to take off would be much worse, but is easier politically. It's been a long time coming, but it looks like the inflatinary chickens are finally coming home to roost.

  9. Gold is now above the 200 dma on the daily. Golden cross is forming. The technicals are very bullish. (The last candle is a shooting star man, btw, so possibly a pullback tomorrow)

     

    gld.png.75cb4f7ddeceb4e8a7adf5d6741c735d.png

     

    The fundamentals also make a bullish case. Inflation is rocketing and there are is signs of the Fed tightening. Also June 28th is a key date for Basel 3. From what I've been told a lot of the gold bucket shops will be shutting down on this date.

     

  10. 1 minute ago, longgone said:

    watched half of that gold going sideways ways the obvious conclusion.  will the banking cartels let gold rise though ?

    i was hoping to see £1000 oz earlier in the year to buy some but never happened yet. 

    I like gold because everyone is so bearish. The Fed just printed trillions and is continuing to print and inflation is rearing its ugly head, yet suddenly everyone hates gold? There are some solid fundamental reasons for getting into gold now. The technicals also look good, so I'm going to trade gold for a while and hopefully ride the bull I think is coming.

    But you should never take advice from a salesman.

  11. 14 minutes ago, markyh said:

    $5k  , way to expensive, i like my majority entry better, @ $400. 

    A very good buy.

    Even if people don't sell now and lose a pile of money there will be another bitcoin bubble in a couple of years. There was a guy who sold his house to buy bitcoin a few bubbles back and was crushed in the crash. But, if he kept them, he'll be happy now.

    Not that I'm saying hold. You should sell now and buy back later, if you like bitcoin.

     

    Edit - Don't take investment advice from me or you will go broke.

  12. 10 minutes ago, longgone said:

    indeed BTC is going down in fiat terms even with the scaremongering from inflation doom mongers. 

    Yes, it's well below the 50 day moving average, for the first time since the bubble really took off. It's going down.

    Best say something about gold, as we're in the gold thread. This guy seems to know what he's talking about

     

  13. 1 minute ago, Frugal Git said:

    Why anyone with a decent amount of capital to park somewhere wouldn't have BOTH bitcoin and gold is beyond me. Alongside some global equity trackers, platinum, silver, Ethereum, Etc etc etc.

    Hedge your bets. 

    Nothing wrong with bitcoin, if you buy at the right time. But when the price goes up from about 5k to about 60k in a couple of months it's time to sell and buy back later. The problem is that people get too emotionally involved. Same with gold and silver. There's a time to buy and a time to sell.

  14. 18 hours ago, markyh said:

    So it could go up, or could go down? 🤣

    Well, it could go up or down. But that's not what I said. In the absence of a market downturn  I'm actually expecting gold to move sideways, or have a slight upward trend for a while. This is the called accumulation phase.

    'Dow theory asserts that major market trends are composed of three phases: an accumulation phase, a public participation (or absorption) phase, and a distribution phase. The accumulation phase (phase 1) is a period when investors "in the know" are actively buying (selling) stock against the general opinion of the market. During this phase, the stock price does not change much because these investors are in the minority demanding (absorbing) stock that the market at large is supplying (releasing). Eventually, the market catches on to these astute investors and a rapid price change occurs (phase 2). This occurs when trend followers and other technically oriented investors participate. This phase continues until rampant speculation occurs. At this point, the astute investors begin to distribute their holdings to the market (phase 3).'

    https://en.wikipedia.org/wiki/Dow_theory

    Bitcoin, for example, is in phase 3, the distribution phase. If you were to sell now you can buy back cheaper in a few weeks.

    The upward trend I was talking about was stock volitility. I'm looking for signals that tell me to buy in or sell and go short. Obviously I'm not going to buy into a falling asset.

     

  15. 18 hours ago, warpig said:

    I take your point about waiting for confirmation... wise... Baring some hugely deflationary event where even good oversold assets are sold to pay for underperforming assets - I'd say the bottom's in. Thinking about buying some more miners now...

    It does look like we are moving into the accumulation stage of the cycle. I'm also dipping my toes in to test the water. Everybody's wary of the frothy stock market, so I am not into calls but am looking at mining stocks instead. Also using a tight stop loss. Maybe I should hedge with a dow put.

    I like the look of Centamin right now. Here's what I'm seeing

    gghy.png.9e807a9f949bc994a3f605d67d5c1ac7.png

    A hammer followed by a DOJI, an engulfing candle then three (actually four) rising methods. Up trend looks good. But beware. A falling tide sinks all ships. Watch out for a market correction.

  16. 3 minutes ago, markyh said:

    Yeah because you have enough money to crash a $1 trillion market on your own, you would get raped. 

    The 1 trillion is nonsense. A huge pile of those bitcoins were mined by Satoshi and a couple of other early adopters, years ago. If they ever even moved the market would crash like a stone. Loads more have been lost over the years. Remember too it's not a bank. There's no money backing it. Just bids on an exchange. With the speed of the price rise restitance on the way down is going to be weak.

    You will see how weak resistence is in the coming crash.

  17. 34 minutes ago, Biggus said:

    Option to sell 1000 btc at 50k. So far out of the money it should have cost about 20 bucks. 1 million per drop of 1000 dollars. 10k btc price target, 50 mil profit. I'm going to be too late.

    In fact this is why btc is not taken seriously. If you want to speculate on a price rise you buy a call for 100 btc. It would cost you less than 1 btc and every time the price goes up 1k you get 100k. You are not supposed to scrape your money together and buy the underlying asset if you are speculating.

    Take the speculation away and the price of btc reverts to it's actual real value. Speculation is done elsewhere and the price stablises. lIke, I don't know, every other financial asset in the world. This is why the price of gold is not rocketing up and down like a yoyo. People trade the comex, not a coin shop. It's also why people buy stocks and the underlying asset, because the price is relatively stable.

    You best hope the world of finance does not take an interest in btc or the price is going to be about 10 bucks.

    Oh and set a stop loss next time.

     

    Thinking about it I could set up a cascade of puts, take the bitcoin gains and sell them on the open market. Drive the price down to bring my next put in the money and repeat. Single handedly crash the entire bitcoin market. Heh.

  18. On 16/04/2021 at 23:15, dannyf said:

    I don’t like discussing bitcoin too much on a gold thread, but at least share what strike and expiration you would buy if you could? So we can track what profit you would have made

    Option to sell 1000 btc at 50k. So far out of the money it should have cost about 20 bucks. 1 million per drop of 1000 dollars. 10k btc price target, 50 mil profit. I'm going to be too late.

    In fact this is why btc is not taken seriously. If you want to speculate on a price rise you buy a call for 100 btc. It would cost you less than 1 btc and every time the price goes up 1k you get 100k. You are not supposed to scrape your money together and buy the underlying asset if you are speculating.

    Take the speculation away and the price of btc reverts to it's actual real value. Speculation is done elsewhere and the price stablises. lIke, I don't know, every other financial asset in the world. This is why the price of gold is not rocketing up and down like a yoyo. People trade the comex, not a coin shop. It's also why people buy stocks and the underlying asset, because the price is relatively stable.

    You best hope the world of finance does not take an interest in btc or the price is going to be about 10 bucks.

    Oh and set a stop loss next time.

     

  19. 15 hours ago, MonsieurCopperCrutch said:

    Bitcoin Is Displacing Gold as an Inflation Hedge

    The digital asset’s increasing scale has made it a more viable competitor to the traditional protector against currency debasement.

     

    https://www.bloomberg.com/opinion/articles/2021-04-09/bitcoin-is-displacing-gold-as-an-inflation-hedge

     

    Sure. There have been five bitcoin bubbles exactly like this one but this time it's different. Wont need suicide support threads on foums this time. This is the big one!

    Interestingly it's difficult to find anyone dumb enough to sell me bitcoin puts. I've been trying to get a bitcoin options account set up all week, so that I can cash in on the massive crash that's coming.

     

     

  20. 22 minutes ago, Errol said:

     

    First let me make this clear. Whatever you do don't take investment advice from me. You'll lose all your money.

    I've been hearing about shortages in pms, especially in the silver market. Mints running out of available coins and so forth. When people have the money to buy something but the product is not available the price is too low. Also heared that mines are not delivering silver as they are waiting for the price to increase. I'm getting more bullish on silver than gold in the short term.

    Also this is a pretty good discussion

    https://www.youtube.com/watch?v=J99fm7ssGIc

  21. You guys must be seeing something I'm not. To me it looks like people are buying because the price is going up and they believe it will make them rich. There is some underlying value in btc, sure. But sixty thousand dollars? Really? How would you calculate that value?

    Given the choice between your body weight in silver, one hundred and fifty gold sovereigns or one digital token, you want the digital token? I don't see it. Not disputing the price could continue to rise. Could hit a hundred thousand or a million. I don't know, but honestly, do you think it really worth that much?

    Take a look at this.

    https://cms.zerohedge.com/s3/files/inline-images/2021-04-12_5-10-44.jpg

    and this

    https://www.listenmoneymatters.com/wp-content/uploads/2017/12/bubble2.jpg

    Could be you are right. I've been wrong many times before. But to me the price of bitcoin seems a little bit high.

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