Thursday, October 16, 2008

FreeGold is In The Works

Here's a good radio interview with Jim Willie discussing some of the info from my previous post:

Click here for the audio.

I would like to discuss a couple of Jim's topics. First, from the first half of this audio, I want to take a look at the EU, Russia, (Japan?), and Middle Eastern plans to replace the dollar with something else as the world's reserve currency. I would like to put forth a theory that they all might be planning this... but only one of them has the Ace of Spades.

Now think about Dubai.

What do you know about Dubai?

Here's a little reminder:

Even Donald Trump is building a hotel there! Click Here

So what does Dubai have to do with FreeGold and Jim Willie? Well, Dubai has spent the last 10 years building "the future". And now the future is almost here!! Think about when Another was writing in 1997. Look at the "before picture" above. Do you understand? What Another predicted didn't happen back then. Now they are ready for it IN SPADES.

Dubai now has a fully operational stock exchange! Gold and oil will all be traded through this exchange.

The UAE has the Dirham, but they are supposedly close to a unified Dinar for the Middle East. (Many currencies in the ME are called the Dinar, derived from Greek meaning "give").

The point is that I believe we will soon have a big surprise out of Dubai, one of the seven emerates in the United Arab Emerates. Dubai is going to be the equivalent of New York City in the new world, as far as international commerce and glamour is concerned.

And in this world... FreeGold! Remember, they may get less gold per barrel under FreeGold, but all gold is worth more, and that includes the 200 Tonnes they have accumulated since Another's warnings were delayed by 9/11 and Alan Greenspan. Our folly has given them untold wealth in the past 10 years, while what WE thought was wealth was just a desert mirage.

I am sure Jim Willie's "source" is correct about the plans in Europe, Russia and Japan. But right now, the Arabs hold all the cards. They have oil, they have gold, they have a currency in the works, and they have a shiny new exchange and a shiny new city.

None of this was true when Another was writing. "Oil" has had ten years to prepare since Another first saw this coming. Now "oil" is ready, and the rest of the world is failing. The EU may have plans... Russia may have plans... but the Arabs have a shiny new city, currency and exchange to go with their oil and their gold.

Look out world... this is the hidden news of tomorrow! And you heard it here first.

The other thing I would like to discuss is Jim Willie's comments about silver versus gold. Jim has clearly placed himself in camp with the likes of Ted Butler and Jason Hommel. But this is in clear contradiction with what Another and FOA said, as well as a growing contingent.

With the gold/silver ratio at a record 83:1 today, this has become a hot topic. People like Jason, Ted and Jim are telling you to play the ratio... exchange all your gold for silver. DON'T DO IT.

Jim's rationale is that the CB's can't sell silver because they don't have any. Therefore, they can't drive down the price. Ted and Jason proclaim the relative scarcity of silver. But here are some messages about silver that were posted in the last 24 hours from people I respect... all in line with the (THOUGHTS!) of Another:

From Jim Sinclair:
10. Exchange Traded Funds will not return the assets upon which it is based to you.
11. Sliver will demonstrate the fact that it is more industrial a metal than precious.
12. Silver is not a currency because it is simply too HEAVY to settle debts or to be universally fungible.
13. Silver performs best when there is reasonable industrial demand and distrust of currency. When this happens rounding up the gang and their money will have a lot to do with which party is elected.

From USAGold:
Randy ( 16October2008; 15:03)
Some thoughts for Topaz

This is in response to your 4:17 commentary regarding silver’s market behavior being torn between “money” and “commodity”:

“Those who watch the red (or green) Ag line on it’s daily meander across the screen will be aware of her price tendency one minute to resemble and track Gold …and otoh at times to resemble her commodity cousins.
She just can’t seem to make up her mind - am I a commodity …or am I money!”…etc…
I’m going to put some thoughts out there as an opening premise that you might not immediately agree with, but just bear with them for a bit and we’ll see whether it all stitches together in the end.

You said, “If the free market held sway, I think you’d find it would come down squarely on the side of ‘money’…”

Since that premise leaves ample room for the consternation you’ve expressed, let’s simply try the other premise on for size — that silver is an industrial commodity first and foremost over any other role at which it may dabble. (And frankly I think it is appropriate to take this commodity-oriented view of silver because, whereas central banks are not shy about making use of gold reserves, they do not similarly hold silver.)

And with this premise being at odds with the one you initially hold, let’s gently ease into to by imagining it none the less remains a close race, with the commodity play dominating the monetary play by a slim margin of, say, 52% to 48% among bidders averaged over time.

For the sake of brevity and simplicity (but which I hope is still adequate to be instructive) we’ll limit our musings to what would be the naturally expected outcome of silver’s performance on the price-setting futures markets. Granted, it’s a dodgy business, but for the time being there is no getting around the fact that the futures markets hold sway with regard to the price quotes that make the headlines.

With central bankers pumping liquidity in the face of a credit seizure and an imminent economic downturn, there is certainly a mental tug-o-war in a silver investor’s mind regarding whether they should seek a monetary safe haven (from expectations of currency depreciation and/or financial system default) versus whether they should run away from a commodity that will almost certainly experience less industrial demand during an economic recession.

Looking at the downdraft in the wider commodity complex, our opening premise that silver is foremost a commodity goes a long way toward explaining it’s general price direction at the moment — with short sellers dominating the futures markets.

But we can’t forget that there is a significant camp of investors who steadfastly believe silver ought to perform more in line with its ancient (bimetallism) monetary kinship with gold. There are inevitably days in which the commodity camp players are largely on the sidelines according to the ebb and flow of economic and financial news, times at which the silver monetary camp can get the occasional upper hand in dominating the action on the futures market and thus setting the day’s price performance. These monetary silver boys would generally choose one of two alternatives. They would either simply go long silver, or more likely they would be bewildered by the current 83:1 silver:gold ratio (compared to the ancient monetary/currency kinship between 12:1 to 15:1) and would therefore go long silver while simultaneously shorting gold in an expectation that the ratio will eventually narrow.

This goes a long way toward explaining how you can witness the flip-flopping days of performance for its split personality.

But of course, with the majority of participants trading silver according to industrial commodity, downward pricing pressure will tend to win out in the current market environment. And on the other side, there is a larger (deeper pockets) contingent of participants who turn to gold as the foremost monetary safe-haven, thus putting upward pressure on the silver:gold ratio, overwhelming the silver camp’s lesser efforts at shorting gold. And eventually, in drips or in droves, the participants in the silver money camp capitulate their loss-making positions — they sell their silver contracts and unwind their gold shorts, thus driving the ratio to new heights, perhaps even to ratios large enough and tempting enough to lure in the next herd of silver monetary sheep to be unceremoniously sheared.

Steer clear of those meadows, or at least step nimbly, my friend, it’s a minefield out there!


Ender ( 16October2008; 15:48)
Sir Randy, can’t help but view your public thoughts

When the Ender looks at these two metals, it appears that there is a commodity - along with a monetary - function. IMHO, anyone would do well to hold either metal until the system breaks.

There is one significant difference between the two, one is a reserve asset on the books of the banks and the other is not. This is a significant distinction in the realm of monetary function. Gold stands ready to bailout the system, silver does not. If a bailout is required, CBs will not wait in line for Silver, but rather use what they already own – free and clear – to perform the job.

Silver will do very well if gold cannot perform the function.

Trade silver, save gold.

I must say that I agree with the above. I still have a considerable amount of silver myself. But it was all purchased BEFORE I discovered the truth that ANOTHER spoke ten years ago. And I would add that I have read dozens of opinions on this subject, and I find the opinion that Another spoke to be the most likely. Not just because it came from him, but because of thoughtful analysis based on all my readings.

That said, I would simply encourage you to not panic about the silver you already hold. It is much better than dollars or even Dinars. But I would encourage you to put all future efforts into gold. That's if you find what I say to be at least a little bit credible.

Silver may hold value, but gold will explode!

Remember, the future is known by nobody. It is only a collection of probabilities. And my goal is to identify the most probable of these.

I will post more later hopefully. Be sure to check comments if you are looking for updates. Sometimes will put new "finds" not worthy of a post in the comments section.

One final note. This does not make me in the least bit happy. I support Israel and I am at odds with these developments. But to survive in this world, you must look at reality without bias and then react. In this case, the only thing to do is to buy physical gold with any money you have that you do not need to live on for the next 6 months to a year. That's it. It is how it is and it is as simple as that.



FOFOA said...

New article from Jim Willie.

FOFOA said...

"Oil" on the move.

OPEC calls an emergency meeting NEXT WEEK. OPEC will meet next Friday instead of mid-November.

FOFOA said...


We are witnessing the disintegration cited in my recent forecasts. It is a systemic failure, marred by lost confidence and trust in the entire financial system. Expect foreigners soon to pull the rug from under the American syndicates in control. Several key meetings have already concluded, totally unreported in the US press, which occurred in Berlin Germany. Consider it the Anti-G7 Meeting. Implications are profound, and involved the Shanghai Coop Org tangentially, since its member nations possess so much new commodity supply. Consider it the Anti-NATO group. An important and powerful alternative financial system is soon to spring into action, including high-level bilateral barter. Those who expect the current US Regime to continue their financial terror are in for a big surprise.

Expect defaults in the COMEX with gold & silver, whose prices for paper vastly diverge from physical, to the anger of foreigners watching. They hold massive precious metals assets. Disparities now contribute to powerful forces, sure to break the current system. Grand systemic changes come. THE RESULT WILL BE A BREATH-TAKING DISCONTINUITY EVENT.

Ironically, the more inner anguish felt on the falling gold & silver prices, the closer we are to a new financial framework, with the USDollar relegated to a Third World role. A REPLACEMENT GLOBAL RESERVE CURRENCY HAS ALREADY BEEN DECIDED UPON. Its launch awaits the proper moment. The Americans are last to know, as usual. The US leaders are under the illusion of being in control!

(From Jim Willie's new article)

FOFOA said...

This story makes for a convincing argument for silver at the current gold/silver ratio. But make up your own mind.

Remember this. In order to settle debts on the scale existing in today's world, the metals will have to move. Even at historic ratios, gold moves and settles much bigger debts. Also, those with the biggest debts and those with the biggest hoards have only gold now. So the mobilization of metals will likely flow with gold. Silver will have much to overcome in order to function at the highest levels.

Anonymous said...

The US rating agency Moody's has warned that Dubai faces a "systemic increase in debt" after borrowing abroad on a huge scale to fund its construction boom, raising the risk of a financing crunch unless richer neighbours in the United Arab Emirates offer support.

By Ambrose Evans-Pritchard
Last Updated: 12:07PM BST 14 Oct 2008

Dubai has relied on international borrowing to drive its breakneck expansion, pushing its debts to well over 100pc of GDP. The picture is now darkening fast as crude oil futures start to price in a protracted downturn across the Gulf region.

The Emirates rushed through a guarantee of all bank deposits over the weekend to forestall a wave of withdrawls from smaller lenders.

Neighbouring Qatar said yesterday that it was injecting up to $6bn in fresh capital into its banking system to restore confidence, suggesting that the gas-rich state may not be in a position to provide yet more captial for Western banks. Barclays raised £2bn from Qatar as recently as June.

Moody's said it is hard to assess the contingent liabilities of Dubai because the operations of the booming city-state are less than transparent, but it has identified $47bn (£27bn) in debts accumulated by state-linked companies.

The sheikdom, ruled by the horse-loving Makhtoum family, has staked its future on plans to become the tourist, transport, and finance hub of the Middle East, encouraging outsiders to buy apartments in the plethora of new tower blocks sprouting like poplars across the sand. Citigroup warned last week that a number of Dubai developers have been caught in a severe squeeze, with a growing risk that projects may not be finished.

Moody's said the relentless rise in leverage raised through state firms may leave Dubai exposed to "financing and geo-political risks".

Abu Dhabi, the big brother of the UAE group, controls the world's biggest wealth fund with an estimated worth some $900bn. However, it is not entirely clear whether Abu Dhabi would feel itself obliged to bail out Dubai if that were ever necessary.

Anonymous said...

Guess Dubia had better "free up" some gold then!?

FOFOA said...

This adds an interesting dynamic. Imagine Dubai is like the younger brother to "oil". Suppose Dubai is now in a little over it's head (thanks in no small part to the "American-caused" credit crisis). Suppose it is rich in gold (under a FreeGold system), but up to it's eyeballs in Fiat debt, possibly even to some Western banks. Now suppose that big brother "oil" views Dubai as it's shining city in the sand, with big hopes for the future of Dubai as the oil trading center of the world.

What would be the best way to "bail out" Dubai without having to dig into your $900bn Trust fund?

Perhaps now is a good time to spring your 12-year-old plan on some of your "oil" neighbors and let them in on the action.

Perhaps it would be even better to get started before the elections in America, considering it is a statistical tie at the moment. Of course this assumes that you favor a certain candidate and that your actions next week would presumably help him to win. But perhaps that would be just a side benefit to your main purpose.

Yes, this adds an interesting dynamic. Thanks.

Anonymous said...

How much gold does Dubai have ? I realise they have recently opened a new commodities exchange.
Do you see a migration there from Comex?

Great Blog very interesting .Many thanks

FOFOA said...

That's a good question. I don't know, but let's speculate. What do we know?

Dubai sprang up from the desert because of the wealth of oil in the region.

Another said that "oil" has been converting it's excess profits, it's wealth into gold for the last 20 to 50 years.

When you build a city, you don't liquidate your wealth, you leverage it!

The leverage used to build Dubai likely exists in the international banking world in dollars, because there are more dollars on this planet than any other currency.

If the dollar were to lose it's oil backing, and thereby it's reserve currency status, the value of the dollar would plunge in relation to all else, because there are just so damn many of them out there.

If oil asks (bids) for gold in exchange, it will drive up the value of gold to where it should have been all along in this world.

If this happens, all that dollar leverage could be paid off with a very small amount of gold.

Let's try a little experiment. Think about Dubai as "oil's" baby brother again. According to Another, "oil" should have about 300 million ounces of gold by now (probably more). So let's say baby brother only has 3 million ounces. 1% That's mostly inheritance.

Right now that's worth $2.4 billion US dollars. So let's say Dubai is in debt for $150 billion after all this building construction. What will this look like after the OPEC meeting?

Let's say FreeGold happens. Now Dubai's gold is worth $300 billion US dollars.

Out of 3 million ounces, it will take only HALF of that to pay off the ENTIRE CITY! Debt free.

And, with the remaining 1.5 million ounces, they are not only debt free, but they have $150 billion worth of gold in addition to a beautiful city worth more than $150 billion.

So their net worth went from ($150b - $2.4b) negative $147,500,000 to positive $300,000,000+. That's a big swing! I hope I will see a swing like that in my little world!

As for a migration from COMEX, I don't know. Another said that gold will go into hiding for a while. I agree with that. As COMEX fails there will not be a public exchange to track the movement from $800 to $100K or more. It will happen in backroom deals. As everyone knows gold is worth a lot, but they don't know how much. There will be very little trading until the high bids start coming in. And they will.

I suppose it is possible that they open a gold window in Dubai. But I'm not sure that would be to their advantage. I would also guess that oil trading will be different there. Paper oil rules here in America. Remember a few weeks ago when the price spiked? I imagine there will be many benefits for those that now control the utility of money.

Anonymous said...

Dubai Gold and Commodities exchange.
There was an interseting interview on Financial Sense the other week with the Chairman of the exchange.

FOFOA said...

Thanks for the contribution. This is how I learn. Feedback is good and I encourage others to contribute as well. I can't and don't find everything and discourse helps ideas develop.

I found this interview through Google. It is older than what you referenced. If you have a link that would be great. And on the exchange's site, it is interesting that they are proud of the largest gold physical delivery. Is this kind of pride lacking in Chicago?

Media Releases
DGCX concludes largest ever physical settlement worth US$25.20 million

Some highlights from the interview I found dated July 19, 1008:

"And you have, of course, the financial centers in London, New York, Chicago, Tokyo, Singapore, etc., where you have a mixture of the two within a robust banking and regulatory environment."

It is my opinion that the robustness of our exchanges in the US has eroded along with the confidence of the world. Thanks to this crisis, our exchanges have become a joke (in my opinion).

An exchange services the sellers of real goods and the buyers of real goods. New York and Chicago have turned into more of a casino environment where "betting" is the name of the game and the actual physical buyers and sellers find themselves at the mercy of the system.

A new, fresh approach to trading would likely be very appealing to the traders of "real" good in my opinion.

"There are other exchanges within the whole MENA region, but we're the only commodity derivatives exchange in this region which operates a price discovery platform, a trading platform, and, this is the most important part, a clearing function within the region."

"From the last figures that were reported, all of the U.S.-based investment banks now have offices in Dubai." I guess this means now the US Govt. has offices in Dubai since they are now owners of those banks. And we should probably strike the word investment from that sentence, since they are now banks, not investment banks.

"We have the three key economic instruments on one exchange, i.e., gold, crude oil and currencies." And soon they will have the Gulf Dinar currency?

"So to manage your exposure, particularly currency exposure, or to hedge against inflation or energy price risk (and gold tends to be regarded as a safe haven in times of economic uncertainty), DGCX provides those three key economic instruments.

Up until very recently, the largest contract we had was our gold contract, which at the end of last year, if we look at our portfolio of contracts, accounted for approximately 80% of the business that was transacted on the exchange. Gold was the very first contract that we listed.

Gold seems important to them.

And finally:

Vulcan: I presume that where you are in the time zone of the world is of enormous importance to you.

Wall Morris: Indeed! We're either three or four hours ahead of the UK - depending on time of year, of course. When our markets open at 8:30 in the morning, the Far East is open. But since our markets are open until 11:30 at night, they are open even when the U.S. is open. So we bridge all the time zones with our market hours.

Vulcan: Do you see India and China as potentially very large markets for your products?

Wall Morris: Yes, they are potentially huge markets. But until such time that they are able to open those markets up and allow exchanges like us to access their populations, that won't be the case. Saying that, though, the DGCX has entered into a Memorandum of Understanding with the Shanghai Futures Exchange in order to share information on product development, etc., and so we can better understand how our respective liquidity pools, if you like, operate, and in preparation, potentially, for such a thing happening.

Anonymous said...

Found it !there is a transcript here

or you can listen to the show.
Seems they have another gold/comms exchange exchange?
PS.The guy interviewed is British has around 30 years experience in the PM matket.I would listen to the interview regarding "shortages" it is very interesting.

Anonymous said...

Listen to the broadcast here.Ian McDonald Chairman of the Dubai exchange.

Financial Sense has some great guests every weekend on the broadcast show.

Anonymous said...

Yes this is the exchange in the Financial Sense interview they have two!?

FOFOA said...

Very interesting indeed. That website is an advertisement for the exchange. This is apparently a "growing market" at the very time that the dollar faction is a "dying market". All you have to do to get a handle on the future is look at trends.

"Oil and gold can never flow in the same direction." But watch as gold flows from the West to the East and then ultimately to the Middle East. If this is the case, then oil will flow mostly to the East.

We could stop this trend cold in it's tracks, but we won't. We will hyperinflate the dollar in a last ditch attempt to preserve the status quo. Unfortunately, the status quo is already gone. Just look around. Our markets are manipulated in the short term and failing in the long term. Business is looking for a new center. Oil is the key. Gold it also the key.

I am listening to Puplava right now. His part is interesting too.

Did you see this this this and this?

Anonymous said...

Greatly appreciate your perspective would you consider posting here please?

Mostly UK?European I am sure they would be VERY interested in your "thoughts" and blog many thanks.

SatyaPranava said...

I'm curious to hear your case in support of Israel. I know it sounds like a loaded question, but just curious to hear your perspectives on Israel (since that is where some of my background is). don't worry about offending me at all).

SatyaPranava said...

i'm 'bumping' this, so that I can get a reply if you ever answer this one (since i now have a blogger account). ;) i won't be offended if you don't ,but am quite curious.

FOFOA said...

I did answer you and I left it up for a day or so before deleting it. I do support Israel's right to defend itself. I do not view Israel as an enemy.

SatyaPranava said...

ok. i didn't realize there was an answer up here before. I was hoping for more depth on the israel issue, and surmise that there is much more depth in your head on the issue.

in short, my opinion is that israel, like most other vassal states, even if the country is a regional power-broker, answers to the Anglo-American and Franco-Germanic (include vatican, spain, EU on this one) overlords.

israel has been taking many actions which are seeming to seal its fate in the coming years as well, though we'll see. many of her leaders are very corrupt and have their orders through Washington and Paris.

anyway, knowing your thoughts on israel just helps me better understand your broader philosophic approaches to geopolitics and geoeconomics.

but if that is your position in general, that's fine too :)

thanks for sharing. Also, I believe Israel is being setup as a nice focal point for world attention if/when a 3rd world war begins.

but we'll see.

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