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I see it as speculation but that is just me. They bought something because they thought somebody else would be willing to pay more for it. That works for a while. And they have. Eventually the number of buyers dwindle. Most were not buying it because they felt it would be useful to them but because they thought they could make money doing so.
Isn't it something like half of what it peaked at? http://www.washingtonpost.com/blogs/...-three-months/
Actually since December it has lost two thirds of its price.Bitcoin prices have dropped nearly 50% in three months
Over the past three months, the price of the cryptocurrency bitcoin has fallen nearly 50 percent — going from $630 per bitcoin to $320 per bitcoin, according to CoinDesk's Bitcoin Price Index, which averages the prices on major exchanges.
That's obviously an extreme shift — but bitcoin trading prices are notoriously volatile, sometimes making similar percentage drops in a matter of hours or days.
The difference here is that it appears to be a slow, measured pattern of decline. There have been bits of major regulatory news in the past few months, including New York's proposed rules for virtual currencies and Russia's proposal to punish their use. But that doesn't seem to have produced the same type of seismic shifts as when China ordered local payment processors to stop transactions involving digital currencies such as bitcoin.
Last edited by Zippyjuan; 10-21-2014 at 04:09 PM.
So, Zippyjuan, I know you probably don't appreciate the way I phrased it, but would you in fact agree with and go along with the statement that, say, "bond performance in the past 12 months has been surprising. I certainly wouldn't have predicted a year ago that 20+ year bonds would be up over 20% today and steadily climbing."?
Everything single one of your sentences. If you want to take a poll of members here, then be my guest.
And it took you over 20 minutes to revise your response into a single question? It was fairly apparent that you did not even bother to read the research before you commented the first time. You just repeated your canned response that usually goes unquestioned. The only problem with that is that your script is now outdated in light of new research.
It now appears that you did not even read anything this second time. No problem though because it looks like you're now avoiding both issues.
You had a chance to comment on the research, but you declined twice. You had a chance to take my bet twice, but you declined both times.
You are afraid to bet because you have too much to lose. So be it.
Disrupt, Deny, Deflate. Read the RPF trolls' playbook here (post #3): http://www.ronpaulforums.com/showthr...eptive-members
Speculation is what you call what you don't know. What we do know is people who speculated, risked, gambled on bitcoin have made money today, that's a fact, not just like your opinion man.
Whether you see the continue value in it is separate question from whether they already made value from it.
pcosmar's lie : There are more votes than registered Voters..
It's amazing to me that people here will decry things like house-flipping and other ponzi-ish scheme investment opportunities that rely on a constantly growing pool of foolish buyers, yet get raging erections for bitcoin.
I'm not into Bitcoin at all, but I think the basis is no different than a lot of other things. Paper money and metals have value because people assign value to them. You always need risk takers for these things. When there are enough risk takers, then the endeavor starts to stabilize. It's often sink or swim for the risk-taker. The people who follow along are often jumping on the bandwagon, but numbers do increase the stability. It's the difference between an entrepreneur taking on the risk of buying a business versus the person who works for him.
My understanding is that more and more credible companies are recognizing Bitcoin. It's obviously a legit idea in theory, and could be widespread practically. Others can speak better to this than I.
Disrupt, Deny, Deflate. Read the RPF trolls' playbook here (post #3): http://www.ronpaulforums.com/showthr...eptive-members
pcosmar's lie : There are more votes than registered Voters..
Disrupt, Deny, Deflate. Read the RPF trolls' playbook here (post #3): http://www.ronpaulforums.com/showthr...eptive-members
Wrong.
Interest rates are a function OF bond prices, not bond prices being a function of interest rates. How does the Federal Reserve move interest rates?? By buying or selling bonds. Because rates cannot be adjusted up or down directly, because rates are a FUNCTION OF BOND PRICES! They CANNOT declare interest rates are X% and then the bond market magically adjusts its supply. They must manipulate the supply of bonds in order to accomplish that goal.
So, as I said, bond prices affect interest rates, not the other way around. If interest rates are higher in different markets, investors dump overpriced bonds to buy underpriced bonds, which reduces interest rates elsewhere. It happens AS A CONSEQUENCE of buying and selling bonds, which reduce or increase the prices, which in turn moves interest rates.
When interest rates increase from 0% to 20%, that destroys the value of bonds. Why? Not because interest rates go up, but because the price of the bonds go down which THEN pushes rates up.
Shadows react to light...light doesn't react to shadows. Interest rates move up ONLY WHEN bond prices go down. Because in order to bring a bond to par value, the YTM is a FUNCTION OF THE BOND PRICE.
Again, interest rates are a derivative of bond prices. If the Fed could control interest rates, why does it have to manage the supply of bonds and not interest rates?? Because interest rates are a FUNCTION OF BOND PRICES. The ONLY WAY interest rates move up or down is when BOND PRICES move up or down. Interest rates don't move up or down and THEN bond prices move up or down. It's the other way around! To argue otherwise is to say both the cart and the horse pull each other forward. No, the cart moves BECAUSE the horse moves...the horse doesn't move because the cart moves. Likewise, rates go up ONLY WHEN bond prices change.
Last edited by Gaddafi Duck; 10-24-2014 at 11:56 AM.
You're making my head hurt (or maybe it's the beer I was drinking?). From what I understand this is the important point. The Fed can put downward pressure on rates by printing money and buying bonds for more than they're worth. I'd buy a $100 bond at 1% if I can turn around and sell it to the Fed for $150. But the catch is that this short term downward pressure causes long term upward pressure by devaluing the dollar. Eventually the Fed will print so much money and prices will be rising so fast that no one will want to buy bonds, even if the Fed is offering to buy them with more newly printed money.
But even if that is hard to understand, the following is easy: THERE IS NO MAGIC CURE. You can't print and borrow and somehow find a magical way to get away with it. If it was that easy every country would do it.
But that's not your problem.
Oh, this again, EVENTUALLY ONE DAY we'll see hyperinflation.Eventually the Fed will print so much money and prices will be rising so fast that no one will want to buy bonds, even if the Fed is offering to buy them with more newly printed money.
So would it be naive or cynical or just plain ignorant to think that somebody who has the power to do so would?But even if that is hard to understand, the following is easy: THERE IS NO MAGIC CURE. You can't print and borrow and somehow find a magical way to get away with it. If it was that easy every country would do it.
pcosmar's lie : There are more votes than registered Voters..
So, it has now been seven years since the original prediction issued forth from Zippyjuan's digital lips. And five more since this thread documenting the disastrous reverses anyone following his prediction would have experienced. What has happened in those ensuing five years?
So, ZippyJuan, so concerned for the Long Term and so concerned about the Wrongness of Peter Schiff and his predictions:
Are you ready to be a Real Man and admit your prediction was not, in fact, right? But was, instead, wrong?
Just curious.
Never attempt to teach a pig to sing; it wastes your time and annoys the pig.
Robert Heinlein
Give a man an inch and right away he thinks he's a ruler
Groucho Marx
I love mankind…it’s people I can’t stand.
Linus, from the Peanuts comic
You cannot have liberty without morality and morality without faith
Alexis de Torqueville
Those who fail to learn from the past are condemned to repeat it.
Those who learn from the past are condemned to watch everybody else repeat it
A Zero Hedge comment
So will Zip have to dig into his RPF paycheck to cover his bond losses?
Disrupt, Deny, Deflate. Read the RPF trolls' playbook here (post #3): http://www.ronpaulforums.com/showthr...eptive-members
https://finance.yahoo.com/quote/tlt
Update on progress since then. As of the date of this thread (October, 2014), TLT was valued at $122.05. As of today, it is $120.71- pretty much where it started. After taxes, a person would have lost money in that time. Before taxes, made zero. Fantastic returns! Then look at what happened in 2015 when the Fed started to raise interest rates. The value fell- going from 138 to 120- a loss of 13%.
Had you instead have invested in the S&P 500, which was 1,955 at the starting date and is 2,658 today you would have gained 703 points or 36% (not allowing for any dividend distributions or taxes). Terrible choice!
Last edited by Zippyjuan; 01-30-2019 at 11:06 AM.
Haa Ha!
Haa Ha!
You really have no strategic sense, Juan-o. That ole concussed noggin of yours is hosed. I lobbed you a total slow pitch. You should have hit it out of the park. All you had to say was one of a million different options amounting to “no big deal, I called it wrong, but that’s investment for ya. Shrug.”
Instead, you are doubling down! I think you really do believe your own bologna!
You’re high in your own supply!
ZROZ is a better proxy for actually owning 30-year bonds. The return will be similar. ZROZ is in some ways actually closer than the bonds themselves to my/Harry Browne’s advice to “get as long duration US bonds as possible” because no coupon extends the effective duration.
Long term bonds have done well this last decade. That’s just how it is, however you try to spin it. You thought they would do poorly. They haven’t. They did ridiculously sensationally for the first two years after your prediction, and then did respectably for the next five (with some big volatility for sure!). In order to make you right, they must at some point actually go *down*. By, like, a lot. To make up for their huge gains in the first two years.
And at at some point they will! I promise. Maybe in fifty years. And then you will be able to be smugly self-assured at how right you were. Because you weren’t wrong. You were right.
Right?
(Someday gold will go up too and that will make Peter Schiff likewise retroactively right about everything. Right?)
I know now this is really mathematical and complex for your damaged brain, but don’t worry just rest your weary head. Everyone else reading will understand. You don’t need to.
Sure, if you wait long enough. Bonds were rising the past decade because interest rates were falling. Now they are both headed in the opposite direction. People have different preferences for their investments. If you think bonds will do well, go for it. They would not be my choice. Their long run of gains is over for now. (ZROZ also shows zero gains since the beginning of this thread. It has gone from 139 to 112 since the Fed started raising rates).
Had you bought and held 30 year bonds in October 2014, you would have yielded 3.0% a year. https://ycharts.com/indicators/30_ye...y_rate_monthly If you invested in that fund, you would have gotten zero return. (before taxes and transaction costs are included of course).
Last edited by Zippyjuan; 01-30-2019 at 12:15 PM.
Oh. Thank you, Professor. Thank you for that Revelation.
This from a poor brain-damaged thing that has yet to admit, and will never admit, that seven years ago it made the exact same statement and that that statement turned out to be R-a-n-g: Wrong.Their long run of gains is over for now.
Over the next ten years bonds may be a safe haven. They may outperform every other asset class (as they did during and after the 2007-8 crash). Interest rates may half and then half again.
Or, interest rates may double and double again. Bonds may perform horribly, due to runaway inflation eating their value alive. If they do, let me tell you what: gold is going to perform splendidly.
So one way or another, you're going to (continue to) be wrong-o, Don-o Juan-o. You may as well go back to Mexico now.
They're not sending their best. Seriously.
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