





I. Bitcoins are in a Recession Themselves





II. Bitcoin Mining is in the Midst of a Correction



Meanwhile, the difficulty continues to rise at an unforgiving pace.



III. The Big Picture


This picture may change, when and if:
  2. Bitcoin mining difficulties stabilize.
  3. Bitcoin exchange prices stabilize.



Comments     Threshold


RE: What the F**&*&*^&*^?????
By The Raven on 8/9/2011 11:16:06 AM , Rating: 2 do know that gold holds intrinsic value right? Fiat money is intrinsically useless (maybe you can use it for rolling more doobies because you are smoking something if you think gold will lose all value). So me and my gold will be each have a nice Beefy-T when you are lying in a pile of useless money on a park bench somewhere.

Will those of us with gold be millionaires (well probably after serious inflation lol...but you know what I mean)? No. But it is called a hedge. Like insurance. If you want something safe don't expect to make money off of it. Have you ever made money off of car/homeowners insurance? That is what hedging in gold is like. Though incidentally people who got into gold early ARE actually rolling in fiat currencies right now. Those who get in it now will merely be protecting themselves from total loss.

Also as mentioned, you could invest in stocks as a way to safeguard yourself. But which ones will be safe can be tricky when you are making an assumption that the US dollar and/or economy will be tanking. And I'm not saying that you have to believe that it will tank, but you'd have to if you are taking such defensive precautions.

By The Raven on 8/9/2011 11:42:24 AM , Rating: 2
Not to mention if you invested in gold at the height of the last "gold bubble" you would've actually DOUBLED your investment by now (albeit in fiat US currency). 1979:~$800 NOW:~$1700

But you certainly wouldn't be broke. And that is the point.
It is not people trying to get rich off of tech stocks in the 90s or people trying to get the house of their dreams in the 00s. People investing in gold want safety.

By Integral9 on 8/10/2011 10:48:33 AM , Rating: 2
actually, if you bought something in 1979 for $800, it would cost you almost $2500 in 2011. So you would have lost money on that investment.

By The Raven on 8/10/2011 11:05:44 AM , Rating: 2
If you HAD $800 in 1979 and held on to that instead of buying gold with it THEN it would've been an opportunity cost of $2500. The inflation referred to is inflation of the $ and not gold.

Do you see where you are totally mistaken now?

By Integral9 on 8/10/2011 11:54:51 AM , Rating: 2
it's not a mistake. it's called inflation and it's always a poor decision to investment at the top of a market. the buying power of $800 in 1979 = the buying power $2500 in 2011. So if you make an $800 investment in 1979, you better get more than $2500 out of it if you sell in 2011, or you are loosing money.

in your example, buying it at the peak of the gold market in 1979 is such a poor idea, that the original investment won't even keep up with inflation as it is only worth $1700 today, only 68% of it's original value. In contract if you had invested $800 in Exxon in 1979, it would be worth $143,000 today and doesn't even count dividends. Does gold pay you dividends? Nope.

Exxon was trading @ 3.08 on 1/2/1979 (
$800 gets your roughly 260 shares. due to stock splits you would have over 2000 shares today @ $71.64 ea = $143,000.00.

Do yourself a favor and give me your money. You are going to loose it anyway.

By The Raven on 8/10/2011 6:24:09 PM , Rating: 2
lol I see where I was mistaken there. The value (in USD) did not double.

You are correct except that I am not trying to make money in this instance. Yes, I know loss is a possibility. As I said...
But you certainly wouldn't be broke. And that is the point. It is not people trying to get rich off of tech stocks in the 90s or people trying to get the house of their dreams in the 00s. People investing in gold want safety.

The cost would not be $2500. It would be $2500-$1700(the value of the gold that you can cash out now)=$800. If I had $800 in '79 bought gold and it is now worthless then that would be a loss of $2500. The current value of the gold needs to be in the calculation.

On the other hand this does not include the opportunity cost of not investing in something like Exxon (or maybe even BTC ;-) But these options do not provide safety. At least with gold you end up with $1700 today. But investing in Pan Am (or maybe even BTC ;-) could leave you with nothing.

And also we are talking about buying gold at the worst possible time. Because as you said, it is unwise to buy high. But in this case you STILL end up with money in the bank.
But then again, in this scenario, we might be selling at the BEST possible time too. Five years ago the cost would be greater.
But as part of a long-term strategy there is nothing wrong with buying the gold at the height of a bubble and selling at the height of a bubble. With the uncertainty going on right now, I wouldn't doubt gold climbing up to $2500. As we have pointed out...It essentially happened in 1979.

So I certainly won't be buying at that price ;-)

I'm not sure if you think I believe people should put everything into gold or not, so let me clarify that I agree with Wu Tang Financial because you should definitely diversify. I'm only addressing the merits of gold as an investment.

Now I'm not sure if I misunderstood your initial comment or not but I thought you were saying that you would lose $2500. But I think we are now in agreement here on the numbers, though we may disagree on investment strategy. Please excuse my mistakes, I do get it wrong in these comments sometimes.

By Integral9 on 8/11/2011 9:20:52 AM , Rating: 2
wow, I'm such an a--. I think I thought you started the thread and so my comments should not have been directed to you. My bad. Respect.

but yeah, if guy who started this thread was my investor, I'd fire him faster than he could say gold.

