iftttwall

It took literally minutes following our report from yesterday that in addition to the ECB and Fed, it was the Senate’s turn to finally shine the spotlight on the most notorious electronic currency with a hearing titled “Beyond Silk Road: Potential Risks, Threats, and Promises of Virtual Currencies” next Monday, for Bitcoin to tumble 25% from its all time high just shy of $400, to $290 within 12 hours, in large part answering our rhetorical question if “the one thing that can finally end the dream of BitCoin holders arrive soon: when the government, and existing monetary authorities, start taking it seriously.” They appear to be doing just that, which is why additional upside from here may be in the eye of the Cray supercomputer-armed NSA beholder.

So yes: Bitcoin is volatile. Very. That much is clear. But what is not so clear, and perhaps a key reason for this volatility, is just what the fundamental, or intrinsic value of BitCoins is when one strips away the pure euphoric momentum to the upside or downside.

To answer that question, we go to Raoul Pal, head of the Global Macro Investor, and his November 1st recommendation to “Buy Bitcoins”(when BTC was $210 so nearly a 100% return in 1 week) which among other things attempts to “value BTC using a macro framework” or, in other words, the first supply-demand driven fair value assessment of BTC.

His take, and price target, in a nutshell:

A fudge, but not a stupid one

 

Let’s use a broad guesstimate. One Bitcoin should theoretically be worth 700 ounces of gold or pretty close to $1,000,000, if we adjust existing supply of both to equal eachother.

 

One BTC is currently worth 0.14 ounces of gold.

 

That gives BTC an upside of 5000 times to equal the current price of gold, supply adjusted. Clearly, I and everyone else believes that Gold may well be much higher than here in the next 5 to 10 years, thus versus the US Dollar the upside for BTC could be multiples of that.

 

Now, before you shake your head, simply go back to the chart of Gold versus the US Dollar and just recognise that it has risen 8750% since the 1920s. And just remember that Microsoft rose 61,000% from its IPO to it’s peak.

 

Considering what we know about the world, I personally believe that Bitcoin may well explode in value as more and more people begin to use it.

 

If you stuck $5,000 into Bitcoins and each Bitcoin did go up to a gold equivalent of let’s say, only 100 ounces of gold (not the potential fair value of 700), then at current prices your Bitcoin stash would be worth $3.3m.

 

Now that’s what I call a tail-risk option. It’s either worth zero or it’s worth a truly outstanding amount of money.

 

I bet you never thought you’d see this in a macro publication. But I’m serious. This just might work.

Read on in the attached pdf below (link)

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/OHeTcqLlWyk/story01.htm Tyler Durden

It took literally minutes following our report from yesterday that in addition to the ECB and Fed, it was the Senate’s turn to finally shine the spotlight on the most notorious electronic currency with a hearing titled “Beyond Silk Road: Potential Risks, Threats, and Promises of Virtual Currencies” next Monday, for Bitcoin to tumble 25% from its all time high just shy of $400, to $290 within 12 hours, in large part answering our rhetorical question if “the one thing that can finally end the dream of BitCoin holders arrive soon: when the government, and existing monetary authorities, start taking it seriously.” They appear to be doing just that, which is why additional upside from here may be in the eye of the Cray supercomputer-armed NSA beholder.

So yes: Bitcoin is volatile. Very. That much is clear. But what is not so clear, and perhaps a key reason for this volatility, is just what the fundamental, or intrinsic value of BitCoins is when one strips away the pure euphoric momentum to the upside or downside.

To answer that question, we go to Raoul Pal, head of the Global Macro Investor, and his November 1st recommendation to “Buy Bitcoins”(when BTC was $210 so nearly a 100% return in 1 week) which among other things attempts to “value BTC using a macro framework” or, in other words, the first supply-demand driven fair value assessment of BTC.

His take, and price target, in a nutshell:

A fudge, but not a stupid one

 

Let’s use a broad guesstimate. One Bitcoin should theoretically be worth 700 ounces of gold or pretty close to $1,000,000, if we adjust existing supply of both to equal eachother.

 

One BTC is currently worth 0.14 ounces of gold.

 

That gives BTC an upside of 5000 times to equal the current price of gold, supply adjusted. Clearly, I and everyone else believes that Gold may well be much higher than here in the next 5 to 10 years, thus versus the US Dollar the upside for BTC could be multiples of that.

 

Now, before you shake your head, simply go back to the chart of Gold versus the US Dollar and just recognise that it has risen 8750% since the 1920s. And just remember that Microsoft rose 61,000% from its IPO to it’s peak.

 

Considering what we know about the world, I personally believe that Bitcoin may well explode in value as more and more people begin to use it.

 

If you stuck $5,000 into Bitcoins and each Bitcoin did go up to a gold equivalent of let’s say, only 100 ounces of gold (not the potential fair value of 700), then at current prices your Bitcoin stash would be worth $3.3m.

 

Now that’s what I call a tail-risk option. It’s either worth zero or it’s worth a truly outstanding amount of money.

 

I bet you never thought you’d see this in a macro publication. But I’m serious. This just might work.

Read on in the attached pdf below (link)

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/OHeTcqLlWyk/story01.htm Tyler Durden

While most pragmatists knew well in advance that optimism over an Iran nuclear programme deal emerging out of Geneva was very much displaced, few anticipated what the actual reason for the failure would be. Indeed, most had expected that the staunchest opponent to the deal, Israel PM Netanyahu who moments ago appeared on Face the Nation and made his case (saying Iran would have given up “almost nothing”) would have used his influence over the US as a key member of the 5+1 group of nations (US, Russia, China, France, Britain and Iran) to block any Iranian detente with the US, even though none other than John Kerry has been urging for the Iranian deal for weeks. So when news hit that it was France who had scuttled a deal with a last minute block, many were surprised.

FT reports:

“There was a possibility to reach an agreement with the majority of 5+1 but there was a need to have the consent of all and as you have heard . . . one of the delegations had some problems,” Mohammad Javad Zarif said in a Facebook post referring to the six nations involved in the talks – the US, Russia, China, France, Britain and Iran. Three days of intense negotiations in Geneva, which went into early Sunday morning, failed to produce an interim agreement over Iran’s nuclear programme despite earlier optimistic predictions.

 

France appeared to be concerned that the proposal, which involved Tehran halting key parts of its nuclear programme in return for modest relief from tough international sanctions, did not apply the brakes hard enough on the country’s agenda.

…

 

Iran’s negotiating team was blessed last week with the strong support of Ayatollah Ali Khamenei, Iran’s supreme leader and ultimate decision maker, who urged hardliners not to weaken the diplomatic team during nuclear talks and said they were “children of the revolution”.

 

But the top leader’s official Twitter account on Sunday reposted his comments from a speech earlier this year in which he had condemned France’s alleged enmity toward Iran. “The officials of French government in recent years have shown explicit hostility toward the Iranian nation. This is a thoughtless and imprudent move,” the tweet said.

This means that once again the traditional narrative of Iran as an intransigent, obstinate negotiator falls apart, even if there had been an ulterior motive: the removal of Western sanctions against the improverished nation. So it will be up to the west to come up with yet another provocation that makes Iran seem like an irrational actor on the international arena.

However, a bigger questions arises: why did France break away from the US-led negotiating axis, just to side not only with Israel but with Saudi Arabia.

Many ordinary Iranians, including the reform-minded public and those educated in the west, expressed outrage at France and accused it of trying to appease Israel and Saudi Arabia, which have been against any nuclear deal that would give Iran the right to enrich uranium.

 

“French cars occupy Tehran’s streets but instead France stabs Iran in the back,” said Mina, a 32-year-old businesswoman.

 

“France’s alliance with Saudi Arabia against Iran is nothing new and we had seen it during the Iran-Iraq war [1980-88] when the Saudis paid France to give fighter bombers and missiles to Saddam [Hussein] to kill us,” said Narges, a university student of politics.

 

“We should boycott French fries and baguettes in a symbolic move,” said Mahdi, an electric engineer.

 

Even Iran’s hardliners who are in principle against any deal attacked France. Fars news agency, close to the elite Revolutionary Guards, ran a headline: “Tough negotiations in Geneva and a French gun-wielding frog.”

Which should at least partially answer the nagging question about who it is that Saudi Arabia has picked to fill the diplomatic void in the aftermath of the deterioration in relations between the oil-rich nation and the US.

Then again, a Saudi Arabia alligned with a France, which by implication is now operating against US interests should result in some truly comic events in the international diplomacy arena very soon. We can’t wait to find out just how Hollande’s socialist government proceeds to entertain the world with its foreign policy foibles.

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/qwXpGuDmfn0/story01.htm Tyler Durden

When we previewed the initial “massive devastation” aftermath of typhoon Haiyan yesterday, when the casualties resulting from the strongest storm to ever make landfall were “only” 1200, we had a feelilng that the final tally would be far worse. And so it is: a day later, the incoming reports confirm that by the time the final death toll is calculated it will probably be one for the record books, because at last the dead had risen to a massive 10,000 and were increasing exponentially.

The latest tally comes from Reuters, according to which, “one of the most powerful storms ever recorded killed at least 10,000 people in the central Philippines, a senior police official said on Sunday, with huge waves sweeping away coastal villages and devastating one of the main cities in the region.” “We had a meeting last night with the governor and the other officials. The governor said, based on their estimate, 10,000 died,” Soria told Reuters. “The devastation is so big.”

“From a helicopter, you can see the extent of devastation. From the shore and moving a kilometer inland, there are no structures standing. It was like a tsunami,” said Interior Secretary Manuel Roxas, who had been in Tacloban since before the typhoon struck the city. “I don’t know how to describe what I saw. It’s horrific.”

Needless to say, Haiyan makes Sandy pale by comparison: 70 to 80 percent of structures in its path as it tore through Leyte province on Friday, said police chief superintendent Elmer Soria, before weakening and heading west for Vietnam.

“People are walking like zombies looking for food,” said Jenny Chu, a medical student in Leyte. “It’s like a movie.” As rescue workers struggled to reach ravaged villages along the coast, where the death toll is as yet unknown, survivors foraged for food or searched for lost loved ones.

 

Witnesses and officials described chaotic scenes in Leyte’s capital, Tacloban, a coastal city of 220,000 about 580 km (360 miles) southeast of Manila which bore the brunt, with hundreds of bodies piled along roads and pinned under wrecked houses.

 

The city lies in a cove where the seawater narrows, making it susceptible to storm surges.

 

The city and nearby villages as far as one kilometer (just over half a mile) from shore were flooded, leaving floating bodies and roads choked with debris from fallen trees, tangled power lines and flattened homes.

And just as in the case of Sandy, the biggest threat from the storm turned out to be not the winds but the water surge which gave the storm a tsunami-like feel and flooded all low-lying territories.

Most of the deaths appear to have been caused by surging sea water strewn with debris that many said resembled a tsunami, leveling houses and drowning hundreds of people in one of the worst disasters to hit the typhoon-prone Southeast Asian nation.

 

About 300 people died in neighboring Samar province, where Haiyan first hit land on Friday as a category 5 typhoon, with 2,000 missing, said a provincial disaster agency official.

 

Nearly 480,000 people were displaced and 4.5 million “affected” by the typhoon in 36 provinces, the national disaster agency said, as relief agencies called for food, water, medicines and tarpaulins for the homeless.

 

International aid agencies said relief efforts in the Philippines were stretched thin after a 7.2 magnitude quake in central Bohol province last month and displacement caused by a conflict with Muslim rebels in southern Zamboanga province.

And when disaster strikes poor nations, looting is sure to follow, as does martial law.

Looters rampaged through several stores in Tacloban, witnesses said, taking whatever they could find as rescuers’ efforts to deliver food and water were hampered by severed roads and communications. A TV station said ATM machines were broken open.

 

Mobs attacked trucks loaded with food, tents and water on Tanauan bridge in Leyte, said Philippine Red Cross chairman Richard Gordon. “These are mobsters operating out of there.”

 

President Benigno Aquino said the government had deployed 300 soldiers and police to restore order and that he was considering introducing martial law or a state of emergency in Tacloban to ensure security. “Tonight, a column of armored vehicles will be arriving in Tacloban to show the government’s resolve and to stop this looting,” he said.

 

Aquino has shown exasperation at conflicting reports on damage and deaths and one TV network quoted him as telling the head of the disaster agency that he was running out of patience.

 

“How can you beat that typhoon?” said defense chief Voltaire Gazmin, when asked whether the government had been ill-prepared. “It’s the strongest on Earth. We’ve done everything we can, we had lots of preparation. It’s a lesson for us.”

 

…

 

Many tourists were stranded. “Seawater reached the second floor of the hotel,” said Nancy Chang, who was on a business trip from China in Tacloban City and walked three hours through mud and debris for a military-led evacuation at the airport.

 

“It’s like the end of the world.”

 

Six people were killed and dozens wounded during heavy winds and storms in central Vietnam as Haiyan approached the coast, state media reported, even though it had weakened substantially since hitting the Philippines.

It is truly stunning just how brittle the stability of society becomes once the “just in time” amentites everyone takes for granted, disappear without a trace.

Worst of all, the Philippines could be just the beginning: Vietnam is next, as is the very densely populated region of southern China. “Vietnam authorities have moved 883,000 people in 11 central provinces to safe zones, according to the government’s website.”

Raw video of the storm via Bloomberg:

Finally, some additional photos of the aftermath.

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/_Y24g1tFsrM/story01.htm Tyler Durden