Friday, March 26, 2010

The Whistleblower

Last night, after returning from the CFTC, GATA released these explosive emails detailing the ongoing manipulation in the silver (and gold) market, by JPMorgan Chase.

To me, this feels like finally seeing the Grand Canyon, after years of only hearing about it. You hear about how big it is, and you truly believe it is big. But until you actually see it, until you lay your eyes on the detail of the landscape and on the sheer depth and size of the canyon, you never really know.

From GATA:

On March 23, 2010, GATA Director Adrian Douglas was contacted by a whistleblower by the name of Andrew Maguire. Maguire is a metals trader in London. He has been told first-hand by traders working for JPMorganChase that JPMorganChase manipulates the precious metals markets, and they have bragged to how they make money doing so.

In November 2009 Maguire contacted the CFTC enforcement division to report this criminal activity. He described in detail the way JPMorgan Chase signals to the market its intention to take down the precious metals. Traders recognize these signals and make money shorting the metals alongside JPM. Maguire explained how there are routine market manipulations at the time of option expiry, non-farm payroll data releases, and COMEX contract rollover, as well as ad-hoc events.

On February 3 Maguire gave two days' warning by e-mail to Eliud Ramirez, a senior investigator for the CFTC's Enforcement Division, that the precious metals would be attacked upon the release of the non-farm payroll data on February 5. On February 5, as market events played out exactly as predicted, further e-mails were sent to Ramirez while the manipulation was in progress.

It would not be possible to predict such a market move unless the market was manipulated.

In an e-mail on February 5 Maguire wrote: "It is common knowledge here in London among the metals traders that it is JPM's intent to flush out and cover as many shorts as possible prior to any discussion in March about position limits. I feel sorry for all those not in this loop. A serious amount of money was made and lost today and in my opinion as a result of the CFTC's allowing by your own definition an illegal concentrated and manipulative position to continue."

Expiry of the COMEX April call options is tomorrow, March 26. There was large open interest in strikes from $1,100 to $1,150 in gold. As always happens month after month, HSBC and JPM sell short in large quantities to overwhelm all bids and make unsuspecting option holders lose their money. As predicted by GATA, the manipulation started on March 19, when gold was trading at $1,126. Last night it traded at $1,085.

This is how much the gold cartel fears the CFTC's enforcement division. They thumb their noses at you because in more than a decade of complaints and 18 months of a silver market manipulation investigation nothing has been done to stop them. And this is why JPM's cocky and arrogant traders in London are able to brag that they manipulate the market.

This is an outrage and we are making available to the press the e-mails from Maguire wherein he warns of a manipulative event.

Additionally Maguire informed us that he has tape recordings of his telephone communications with the CFTC, which we are taking the appropriate legal steps to acquire.

* * *

From: Andrew Maguire
Sent: Tuesday, January 26, 2010 12:51 PM
To: Ramirez, Eliud [CFTC]
Cc: Chilton, Bart [CFTC]
Subject: Silver today

Dear Mr. Ramirez:

I thought you might be interested in looking into the silver trading today. It was a good example of how a single seller, when they hold such a concentrated position in the very small silver market, can instigate a selloff at will.

These events trade to a regular pattern and we see orchestrated selling occur 100% of the time at options expiry, contract rollover, non-farm payrolls (no matter if the news is bullish or bearish), and in a lesser way at the daily silver fix. I have attached a small presentation to illustrate some of these events. I have included gold, as the same traders to a lesser extent hold a controlling position there too.

Please ignore the last few slides as they were part of a training session I was holding for new traders.

I brought to your attention during our meeting how we traders look for the "signals" they (JPMorgan) send just prior to a big move. I saw the first signals early in Asia in thin volume. As traders we profited from this information but that is not the point as I do not like to operate in a rigged market and what is in reality a crime in progress.

As an example, if you look at the trades just before the pit open today you will see around 1,500 contracts sell all at once where the bids were tiny by comparison in the fives and tens. This has the immediate effect of gaining $2,500 per contract on the short positions against the long holders, who lost that in moments and likely were stopped out. Perhaps look for yourselves into who was behind the trades at that time and note that within that 10-minute period 2,800 contracts hit all the bids to overcome them. This is hardly how a normal trader gets the best price when selling a commodity. Note silver instigated a rapid move lower in both precious metals.

This kind of trading can occur only when a market is being controlled by a single trading entity.

I have a lot of captured data illustrating just about every price takedown since JPMorgan took over the Bear Stearns short silver position.

I am sure you are in a better position to look into the exact details.

It is my wish just to bring more information to your attention to assist you in putting a stop to this criminal activity.

Kind regards,
Andrew Maguire

* * *

From: Ramirez, Eliud [CFTC]
To: Andrew Maguire
Sent: Wednesday, January 27, 2010 4:04 PM
Subject: RE: Silver today

Mr. Maguire,

Thank you for this communication, and for taking the time to furnish the slides.

* * *

From: Andrew Maguire
To: Ramirez, Eliud [CFTC]
Cc: BChilton [CFTC]
Sent: Wednesday, February 03, 2010 3:18 PM
Subject: Re: Silver today

Dear Mr. Ramirez,

Thanks for your response.

Thought it may be helpful to your investigation if I gave you the heads up for a manipulative event signaled for Friday, 5th Feb. The non-farm payrolls number will be announced at 8.30 ET. There will be one of two scenarios occurring, and both will result in silver (and gold) being taken down with a wave of short selling designed to take out obvious support levels and trip stops below. While I will no doubt be able to profit from this upcoming trade, it is an example of just how easy it is to manipulate a market if a concentrated position is allowed by a very small group of traders.

I sent you a slide of a couple of past examples of just how this will play out.

Scenario 1. The news is bad (employment is worse). This will have a bullish effect on gold and silver as the U.S. dollar weakens and the precious metals draw bids, spiking them higher. This will be sold into within a very short time (1-5 mins) with thousands of new short contracts being added, overcoming any new bids and spiking the precious metals down hard, targeting key technical support levels.

Scenario 2. The news is good (employment is better than expected). This will result in a massive short position being instigated almost immediately with no move up. This will not initially be liquidation of long positions but will result in stops being triggered, again targeting key support levels.

Both scenarios will spell an attempt by the two main short holders to illegally drive the market down and reap very large profits. Locals such as myself will be "invited" on board, which will further add downward pressure.

The question I would expect you might ask is: Who is behind the sudden selling and is it the entity/entities holding a concentrated position? How is it possible for me to know what will occur days before it will happen?

Only if a market is manipulated could this possibly occur.

I would ask you watch the "market depth" live as this event occurs and tag who instigates the move. This would surly help you to pose questions to the parties involved.

This kind of "not-for-profit selling" will end badly and risks the integrity of the COMEX and OTC markets.

I am aware that physical buyers in large size are awaiting this event to scoop up as much "discounted" gold and silver as possible. These are sophisticated entities, mainly foreign, who know how to play the short sellers and turn this paper gold into real delivered physical.

Given that the OTC market (where a lot of the selling occurs) runs on a fractional reserve basis and is not backed up by 1-1 physical gold, this leveraged short selling, where ownership of each ounce of gold has multi claims, poses a very large risk.

I leave this with you, but if you need anything from me that might help you in your investigation I would be pleased to help.

Kind regards,
Andrew T. Maguire

* * *

From: Andrew Maguire
To: Ramirez, Eliud [CFTC]
Sent: Friday, February 05, 2010 2:11 PM
Subject: Fw: Silver today

If you get this in a timely manner, with silver at 15.330 post data, I would suggest you look at who is adding short contracts in the silver contract while gold still rises after NFP data. It is undoubtedly the concentrated short who has "walked silver down" since Wednesday, putting large blocks in the way of bids. This is clear manipulation as the long holders who have been liquidated are matched by new short selling as open interest is rising during the decline.

There should be no reason for this to be occurring other than controlling silver's rise. There is an intent to drive silver through the 15 level stops before buying them back after flushing out the long holders.


* * *

From: Andrew Maguire
To: Ramirez, Eliud [CFTC]
Cc: BChilton [CFTC]; GGensler [CFTC]
Sent: Friday, February 05, 2010 3:37 PM
Subject: Fw: Silver today

A final e-mail to confirm that the silver manipulation was a great success and played out EXACTLY to plan as predicted yesterday. How would this be possible if the silver market was not in the full control of the parties we discussed in our phone interview? I have honored my commitment not to publicize our discussions.

I hope you took note of how and who added the short sales (I certainly have a copy) and I am certain you will find it is the same concentrated shorts who have been in full control since JPM took over the Bear Stearns position.

It is common knowledge here in London among the metals traders that it is JPM's intent to flush out and cover as many shorts as possible prior to any discussion in March about position limits. I feel sorry for all those not in this loop. A serious amount of money was made and lost today and in my opinion as a result of the CFTC's allowing by your own definition an illegal concentrated and manipulative position to continue.

Bart, you made reference to it at the energy meeting. Even if the level is in dispute, what is not disputed is that it exists. Surely some discussions should have taken place between the parties by now. Obviously they feel they can act with impunity.

If I can compile the data, then the CFTC should be able to too.

I would think this is an embarrassment to you as regulators.

Hoping to get your acknowledgement.

Kind regards,
Andrew T. Maguire

* * *

From: Andrew Maguire
To: Ramirez, Eliud [CFTC]
Sent: Friday, February 05, 2010 7:47 PM
Subject: Fw: Silver today

Just logging off here in London. Final note.

Now that gold is undergoing short covering, please look at market depth right now in silver and evidence the large selling blocks in a thin market being put in the way of silver regaining the technical 15 level, which would cause a short covering rally and new longs being instigated. This is resulting in the gold-silver ratio being stretched to ridiculous levels.

I hope this day has given you an example of how silver is "managed" and gives you something more to work with.

If this was long manipulation in, say, the energy market, the shoe would be on the other foot, I suspect.

Have a good weekend.


* * *

From: Andrew Maguire
Sent: Tuesday, February 09, 2010 8:24 AM
To: Ramirez, Eliud [CFTC]
Cc: Gensler, Gary; Chilton, Bart [CFTC]
Subject: Fw: Silver today

Dear Mr. Ramirez,

I hadn't received any acknowledgement from you regarding the series of e-mails sent by me last week warning you of the planned market manipulation that would occur in silver and gold a full two days prior to the non-farm payrolls data release.

My objective was to give you something in advance to watch, log, and follow up in your market manipulation investigation.

You will note that the huge footprints left by the two concentrated large shorts were obvious and easily identifiable. You have the data.

The signals I identified ahead of the intended short selling event were clear.

The "live" action I sent you 41 minutes after the trigger event predicting the next imminent move also played out within minutes and exactly as I outlined.

Surely you must at least be somewhat mystified that a market move could be forecast with such accuracy if it was free trading.

All you have to do is identify the large seller and if it is the concentrated short shown in the bank participation report, bring them to task for market manipulation.

I have honored my commitment to assist you and keep any information we discuss private,however if you are going to ignore my information I will deem that commitment to have expired.

All I ask is that you acknowledge receipt of my information. The rest I leave in your good hands.

Respectfully yours,

Andrew T. Maguire

* * *

From: Ramirez, Eliud
To: Andrew Maguire
Sent: Tuesday, February 09, 2010 1:29 PM
Subject: RE: Silver today

Good afternoon, Mr. Maguire,

I have received and reviewed your email communications. Thank you so very much for your observations.

* * *

More on yesterday's CFTC hearing:

A few observations by someone who caught most of today's CFTC hearing via telephone conference call. ...

1) The plug seems to have been pulled on the CFTC's Internet video feed just as GATA Chairman Bill Murphy was called to speak. (The audio feed on the telephone conference call was not interrupted.) Was it just technical inadvertence? An urgent test of the Emergency Alert System? Or something more sinister? Of course we hope it was the latter as we await an explanation from the CFTC...

Videos of Bill Murphy speaking at the hearing yesterday:

Bill Murphy of GATA Reveals Whistle-Blower in Gold Price Suppression

Other sites discussing this:
Zero Hedge


Martijn said...

Clever Europeans

Europe would provide more than half the loans and the Washington-based IMF the rest, which would only be triggered if Greece runs out of fund-raising options.

The size of the loans and interest rates were left unclear, and the EU didn’t spell out what would force it to step in.

“The definition of the emergency case is very fuzzy,” Juergen Michels, chief euro-area economist at Citigroup Inc. in London, said in a note to investors. “As all euro area countries will have to agree unanimously on the activation of the facility, the activation of the fund is very uncertain.”


Martijn said...


If the IMF or any other organ would take over any responsibilities from the Eurogroup it would be bad.

Anything that signals powerlessness is bad for us.

We want the members of the Eurozone to show total obedience to the convention.

Martijn said...

Same here.

In order for the IMF to step in unanimity is required which will involve difficult negotiations.

Martijn said...


What was ment here?

The very fact that a major portion of the US gold stock has been changed in status in a way that would allow it's movement (ownership); means that the US has now entertained the same position as England is doing regarding gold and the EMU with Europe.

onasip123 said...

I recently discovered your blog and I appreciate the subjects you have brought to my attention. I've been reading all your recent posts and have gone back to all your earliest osts and reading those from the begining.

I don't understand alot but I'm learning. This gold and silver suppression is quite amazing. Is it possible that this price suppression could go on virtually forever? How long can this price suppression last?

Martijn said...

You see, the drama is in the political game and that game is what will determine how soon and by how much
the "real value" of gold is displayed.

Everything is political after all.

Gordon Gekko said...

"How long can this price suppression last?"

As long as the majority is stupid enough to keep buying paper Gold.

Martijn said...

Gold, from times past was a wealth asset more so than it was in the form of money. Granted, it became the fastest moving form of wealth, but as it traveled on the road it was still simply seen as a tradable wealth. It has been American and Western ideals that made gold a lend able money and forced it's competition against failed currency systems. We set currencies in fixed gold amounts and then inflated the currency. No wonder gold competed against currencies.

This is exactly how we made our paper currency in the first place; by creating debts (ownership receipts) against gold. Using paper (digits now) has its advantages, but we have been stuck ever since!

In that sense freegold (gold free of fiat attachments) is truly a revolution!

Jeff said...

Price suppression can go on for as long as the paper PM market goes on, as GG says.

The effect on physical is fairly clear. Someone is accumulating physical as below-market prices, so they aren't complaining loudly about the manipulation.

So JPM wins paper profits and someone wins physical gains.

What happens when the large buyer stops buying, either because they bought ALL the physical, or they feel they have enough? I doubt the big buyer would be happy to see the price hammered far lower by paper manipulation which is no longer offset by physical uptake. Maybe supply will simply not go into the paper market? Mines sell directly to buyers?

Martijn said...

Geithner Remarks on IMF Currency Roil Foreign-Exchange Market

Geithner was asked at a Council on Foreign Relations event in New York yesterday about People’s Bank of China Governor Zhou Xiaochuan’s call for a new international reserve currency. He said while he had not read Zhou’s proposal, he understood it as a plan “designed to increase the use of the IMF’s special drawing rights. And we’re actually quite open to that.”

...In his earlier answer, Geithner said increased use of SDRs should be “rather evolutionary, building on the current architecture, rather than moving us to global monetary union.” SDRs are a unit of account at the IMF used for member countries’ reserves with the fund...

Zhou said, in an essay posted on the PBOC’s Web site, that the International Monetary Fund’s special drawing rights offer “light in the tunnel for the reform of the international monetary system.” He said the SDR has yet to be “put into full play due to limitations on its allocation and the scope of its uses.”

The US really seems to believe to stand a chance in playing the IMF-card against the Euro.

Jeff said...


I think the IMF card is quite dangerous for Europe. Many in the EU see the potential but the Germans simply don't care. They like a falling euro, and they don't like the EU very much anyway since Germany does the heavy lifting.

Martijn said...

I'd rather do some heavy lifting than let someone else in control.

But as indicated above: it's all political. Nothing has been written in stone yet.

Martijn said...

As we were saying?

As long as the Euro can stay behind the dollar on exchange rates,,,,, our trade deficit must grow,,,, our internal manufacturing sector must weaken,,,,, and our financial structure must have ever more money aggregate expansion to stay solvent. This is the deadly cycle we are in. To escape, we would have to lock down our money expansion in a way that, today, would crash the dollar and cede it's reserve function to the Euro. Our bet is that we will inflate until the system fails completely. Truly, the ECB and most of EuroLand has made the same bet.

Martijn said...

Or did he mean "behind" the other way around?

We have but to notice the reverse reaction present in today's exchange rates, compared to years gone by. All at once, the currency must have inflationary policy to keep the exchange rate up.

I think not, what do you say?

Martijn said...

...This is not the first time investors have picked the bones of a dying economy. The examples are there for reference. During the fall of Rome, traders flocked into the city to trade property and do deals,,,,,,, even as hell approached from the north. Today, the world is biding up our currency in the same insane attempt to catch the last trade before the golden goose is gone....

Martijn said...

This is exactly how we made our paper currency in the first place; by creating debts (ownership receipts) against gold. Using paper (digits now) has its advantages, but we have been stuck ever since!

Not completely true. The $US - a pure fiat holding no gold backing - was an important step, without which the freegold concept most likely would not have been thought of.

Evolution all the way it seems.

Martijn said...

Did any of you guys read wikipedia on Brown's bottom?

The advance notice of the substantial sales drove the price of gold down by 10% by the time of the first auction on 6 July 1999...

...To deal with this and other prospective sales of gold reserves, a consortium of central banks - including the European Central Bank and the Bank of England - were pushed to sign the Washington Agreement on Gold in September 1999, limiting gold sales to 400 tonnes per year for 5 years.

A fabricated excuse for the WA?

Hence the involvement of the BIS?

capt goodvibes said...

And now it turns out the IMF have refused to sell their 190 tons of gold to Eric Sprott.
So they clearly have no physical, this is just a ruse because CBs are short via leases which will never be returned.
This snowball is really starting to pick momentum.

Museice said...

capt goodvibes:

The Sprott story is very interesting! India has stated they are interested in the gold but has not stepped forward for their second round. China didn't act fast enough in the first round and now Sprott steps up and says, "I want it" but the IMF says "No"?

Way strange! The possible reasons for this are very small. Occam's Razor - The IMF has no physical and the sale to India was a paper sale of physical gold India already possessed (leased).

What do you think FOFOA?

costata said...

Hi Muse, Capn Goodvibes,

Re: Sprott and the IMF

Did you ever see that Monty Python skit about the Cheese Shop that had no cheese?

I picture Sprott asking initially for LBMA good delivery bars and gradually working his way down to 1/10 oz coins until the shop assistant behind the counter at the IMF finally admits they have no gold after all.

capt goodvibes said...

Did you say cheese, Sir?

costata said...

Sigo Plapal,

At the risk of over-simplifying these matters, your fine observations suggest to me the following:

1. The US Mint has been preparing for a breakdown in the Comex gold market since at least January, 2009.

2. The LBMA now takes its cues/direction from Europe instead of NYC or DC.

Incidentally, it occurs to me that in a Freegold environment the London Fix would be a credible way to announce a new price regime after physical gold sales resume. After all, the Fix is just a consensus view of the LBMA members rather than a figure on a trading screen like the Comex!

3. As you point out the US Mint continues to price silver based on the Comex. This would indicate that silver is expected to trade mainly on the Comex after a disruption. Don't you think? Perhaps under different trading rules. Do you share Another's or FOA's or neither's views on this silver matter?


FOFOA said...

...Coincidentally, GATA learned this week on the best authority that a financial house far bigger than Sprott also recently tried to purchase gold from the IMF, also was refused, and wasn't very happy about the refusal...

Martijn said...
This comment has been removed by the author.
Martijn said...

These stories are going to have to come out.

Brown's bottom too.

I truly wonder how much longer this can continue. Things just might speed up faster than we think at some point.

Martijn said...

If the IMF has only leased gold, what interest would China or India possibly have in buying it?

They don't gain any physical as it's only bookkeeping, while their buying does drive the price.

Why not maintain lower prices and try to get physical elsewhere?

costata said...

Capn Goodvibes,

Suggested video

How can anyone called Baron Lord get elected to public office in a constitutional republic?

Martijn said...
This comment has been removed by the author.
Martijn said...

What is your take on the "too good to be true" argument regarding freegold?

If you were a government, would you let a shift of wealth happen were most of the people loose most of their wealth, why some of them gain a lot?

Perhaps not?

One possible option would we to get everyone to buy as much real stuff as possible, and take on huge debts. That way they'll have little savings loss to worry about and do own something in the real world.

Perhaps you could encourage them to buy houses?

Sigo Plapal said...


I am definitely not gnostic but to answer your points:
1. That's pure speculation on my part that they expect a disruption of COMEX. The mint had to change their pricing policy in '09 because they had to halt sales for several weeks in '08 as mkt prices were rising faster than they could change them under the old pricing policy. What's curious is that someone had to think "hey, let's use London Fix". What was their reasoning?

2. To be fair, London has been trading gold a lot longer than NY has, London is The City, right? ;) And you are 100% correct, the London Fix price is what the members say it is at those 2 times of the day, a snapshot of price in time, if you will. As for NY's involvement in this? Hmm... I see JPM, HSBC, and GS included.
3. I'm not sure that the mint gets silver prices from COMEX. Their site just says "market prices". To me, that could me the physical market price, COMEX, LBMA, etc. I'm not sure that I feel the same way about silver as FOA does, so here's how I see it, FWIW: I like it a lot. At this point in time, a diversified portfolio is gold, silver, platinum, palladium. Hence the name, SiGo PlaPal (I pronounce it see-go play-pal which is much easier to pronounce than AgAu PtPd). And I'm not an investment guy that can give investment advice. I'm just an individual trying to hang on to what I've got. But I see potential for any of these other 3 metals breaking into a low earth orbit before gold does its anticipated moon shot. Pt and Pd is the most speculative to me so I haven't dabbled there yet. I suspect the silver market might be the first to break out and it's the easiest to obtain right now.

Sigo Plapal said...


I think the link to your vid is broken. Was this the video of him banning cameras at his town hall meeting? How arrogant!

Sigo Plapal said...

"One possible option would we to get everyone to buy as much real stuff as possible, and take on huge debts. That way they'll have little savings loss to worry about and do own something in the real world.

Perhaps you could encourage them to buy houses?"

Exactly! And a new car (cash for clunkers) and appliances (energy star rebate). A revaluation gets everyone under water on their house back up.

frycook said...

from trader Dan's latest over at -

My question - Is FOA squirming after all the ridicule he heaped on these guys????? Something about "hard-money socialists" wanting to have their cake and eat it too??

>>>Those of you who have been watching or viewing the CFTC meetings on the metals markets will understand when I give a public heart-felt thank you to my friend Bill Murphy and his sidekick Chris Powell for all the hard work and dedication that they have provided to the cause. They and GATA have been ridiculed and pooh-poohed by many "analysts" in the metals markets and derogatorically dimissed as "tin-foiled hat" conspiracy theory advocates, and yet they have persisted and now, come what may, they have had a chance to make their case heard openly at the highest levels of enforcement within our futures markets. The CFTC does not invite ninnies to testify. Hats off to you both guys! Your critics owe you a deep apology but somehow I doubt you will see that based on the character of some of those who have condescendingly ridiculed you. Your facts and evidence were never disputed by these bomb-throwers – their entire case consisted of ad hominum attacks.<<<

Martijn said...

Is FOA squirming after all the ridicule he heaped on these guys

What ridicule om what guys?

frycook said...

Hello Costata,

It took awhile but I’ve been busy raising chickens out here in the country.

I see huge holes in FreeGold theology even though I regard some form of FreeGold as a potential eventuality. One interesting dilemma is how the institutional mechanisms will work given what the theology requires - the hammer of the past and the anvil of the future to fashion manacles on currencies through international law – at least at the level of non-enforcement of gold contracts to keep physical separate from paper claims - while at the same time positing a very simplistic dualism – Euro vs. Dollar and BIS vs. IMF - inside what is arguably a much more complex and multi-faceted world reality.

It can be persuasively debated that the history of power relationships for well over a century is actually about northern-tier countries’ cooperation in exercising domination over the southern-tier ones than the standard Conolly-version of the Great Game being one of East vs. West. Those intel guys are always in the service of the status quo and that concept worked for the rivalries of the times as did Mackinder’s in the next century. It’s been long outdated by the Russian – USA collaboration during the Cold War per Sutton.

Some of the amazing leaps of recent FreeGold faith are that somehow traders will deploy at sub-national levels - via Schachtian autarky? - to keep economies alive when the dollar dies but presumably other currencies still exist and inflate - I wish I could critique the dollar side of this equation but there’s never enough FreeGold detail on the way that part will be managed - and then gold keeps up with said inflation but the dollar (ghost?) can’t be backed with gold or US-owned gold even revalued on the books because international claims would sprout like mushrooms but at the same time somehow we’ll deploy our gold to keep the economy alive but Treasury and Fed gold are not in play until gold reaches some undefined value but our measuring stick is broken in pieces and we can’t even measure anymore so we’ll have a dark period of no gold trading but somehow those sub-national traders will keep the economy alive through it all presumably using gold as settlement …

Ouch, my head hurts.

frycook said...

It’s the old conundrum of $10,000 gold just catching up to past inflation and then $30,000 gold keeping pace with QE to infinity. Almost meaningless - considering the social implications of losing our currency to hyperinflation, no?

There are a lot of dots out there and when they are arranged a certain way they seem to make sense but when portions of the picture are analyzed separately, or the dots are arranged in a different way, other conclusions are possible.

How US gold will come into play is of great interest and a subject we’ve all been dancing with for some years. The plain fact is that even with the depressed functioning of this country and even with the sins of our financial leaders and populace over decades, the US is still integral to the overall function of the world at large and will play a significant role for decades to come – even in severe decline. If the IMF is purely a dollar-faction entity, which I’m lately beginning to doubt, then it will be in the game for some time to come, regardless of its previous imperial mandate and future decrepit status.

That said - the IMF vs. BIS mythology is in need of some sort of update. When you look at the supposed revealed truth of ANOTHER it’s actually pretty simple and all one really needs is a few of the early posts to get the overall picture. The transition from ANOTHER to FOA was not seamless as you may recall. See if you can dig up the debates and speculations theorizing on the nature of the composite characters and those regarding linguistic analysis which potentially revealed something other than an altruistic narrative. I have at least one post highlighted in my archives where ANOTHER himself is speaking in the third person. It got so bad at one point that Randy S was smeared with the broad-brush of the renegade inquisition. BTW, I think he’s the bomb even though he booted me from the forum. I read him daily and respect his analysis. He’s like a golden metronome. One day he’ll probably be on a commemorative gold coin ;-)

There’s so much faith-based psychology surrounding this subject that one can easily hypothesize it’s all being extensively managed - including the dissemination of information regarding endgame dynamics and the potentiality of FreeGold.

Remember, there was a good deal of posing and oddly petulant behavior exhibited by FOA during various hot-periods of Q&A on the old USAGold Forum and he certainly put an elaborate and long-winded spin on the original message. It would have been a much simpler climb without all the brocade. There’s no fundamental reason that the FOA character could not have simply run off with ANOTHER’s storyline and massaged it like a monk illustrating a sacred manuscript during the Middle Ages. Many of us were under the spell for awhile but for some the story-line got old pretty quick and then there were the excommunications and the rebel exile communities and such.

The nature of those disputes revolved around pertinent subjects that concerned readers but were summarily dismissed by FOA. Things like the international drug traffic and big bank money-laundering that is fully-integrated in the financial system, including the BIS. The information recently made popular by the likes of Perkins, regarding the thuggish tactics of the IMF on behalf of international capital, not to mention the much earlier critiques of Susan George et alia in pre-internet days, were well known to those of us who were trying to connect the various dots and visualize how a new power structure could possibly evolve given the incestuous collaboration of central banks in the sordid and murderous affairs of the world. It seemed that there was this FreeGold level of magical thinking whereby a deus-ex-machina was expected to swing down out of the rafters, disrupt the plot and save the day. Stan Lee as CIGA.

frycook said...

These concerns and others were off-limits to the more pristine and utopian view of how the central bankers were actually doing the job of Atlas and Hercules combined and of how the Euro-planners were simply balancing the karmic scales for the world after its long-suffering of the post-war dollar fiat. Nice plot-line but it ignores as much as it reveals about the way things work. IMNSHO, gold doesn’t require that specific good guy - bad guy abbreviation to reach Olympian heights of valuation. It’s rare, it’s relatively private and it’s in our genes perhaps.

We know FOA’s fragile ego was heavily involved in the project evidenced by all of the patronizing and condescending posts he wrote, as well as the string of aliases - FOA, Trail Guide, Sir Douglas. I surmised - and may have posted back then - that FOA had dropped enough clues to reveal that he was a boyhood friend of George Mitchell of Woodlands fame among other things. If that is so, then he was around the upper echelons of the Limits to Growth crowd for what that’s worth. Ah yes, a snip here and a snip there and voila - bonsai humanity in all of its managed glory. The Monkey Bar - an aptly named venue to contemplate such over cognac.

A close reading of ANOTHER’s early postings from a forensic perspective could lead one to surmise that those posts were constructs – some sounding simplistic Asian and others much more Western in grammatical style with some slang thrown in there. It really is a pat narrative with exotic characters and archetypal metaphors – something an intel team might throw together. But one does have to swallow a few axiomatic postulates before the rest of it is plausible – i.e. the LBMA coming clean in 1997 or the later assertion that through some unknown mechanism the BIS would claim any gold at $42 if the US Treasury were to attempt any sort of backing of the dollar. And so on.

That one always raised a flag for me. On the one hand the message was one of might-makes-right and on the other there was an invisible law that would balance the scales on supposed behalf of the noones via the giants. Just like the balance we’ve seen through history where countries give back what they have reneged upon or stolen through force?

It’s conceivable that Another’s posts and their variability were simply a translation difficulty due to routing through different intermediaries who had different styles, a problem similar to that which plagues bible scholars to this day. Who knows, but it’s worth consideration in light of the gravity of the information.

So the IMF/BIS question isn’t at all simple in my view of things. I have no idea how much gold the IMF has or how it will be deployed. I really don’t have the technical details about how the BIS functions or how it is controlled. I can only surmise that the extensive cooperation between Europeans and the US in so many other areas, especially those involving poor nations in the southern tier, is not simply a cat-and-mouse game between these two so-called giants and therefore the proposed dichotomy re: IMF/BIS is just not credible. I’d like to believe that it breaks down to a clean theory-of-everything financial but they appear to be flip sides of the same coin to these eyes.

frycook said...

Just reading the titles of their policy and research documents and drilling down to their personnel gives one a fairly clear picture of two bureaucracies dealing with the same complex world. Maybe the BIS is the boss in the final analysis but the bureaucratic imperative is something to consider as well. See Gary North’s description of that aspect of modern reality at

See ThaiGold post #39376 on 10/19/2000 for other reasons.

Gotta go, take care.

Martijn said...


So you argue that gold will never be for the people and hence become worthless as (e.g. per that lewrockwell article)?

Why then did for instance both Duisenberg and Trichet hint at some revolutionary concept within the euro-architecture, with Duisenberg even mentioning gold?

Or why did the EU lift VAT-taxes from gold?

Was it all to trick us into buying a worthless commodity that they'll later take away from us?

frycook said...

Hey Martijn,

I was just in the middle of responding to your earlier question and it'll be on the way pretty soon.

I didn't get that sense from the article at all but what I do get is something other than FreeGold in Gary North's vision of the universe - which I don't share in many ways. When he calls for enforcement of gold contracts he is not talking FreeGold at all.

I mainly liked his elucidation of the bureaucratic imperative and that's why I referenced it.

frycook said...

Hello Martijn,

First off let me inform you that I’m just an old blue-collar radical who has a deep anti-authoritarian streak from my earliest memories. So you need to take whatever I say with a grain of salt – preferably Himalayan, but Celtic will do – and understand that I’m always re-assessing my own opinions and doing my best to balance individual survival concerns with those of the collective.

I think we all knew who FOA was referring to when he made fun of “hard money socialists” who wanted the paper-markets to function according to the rule-of-law.
I recall the general idea and wish I had time to dig through the archives to quote you chapter and verse. The basic upshot, to me anyway, was that they were naïve to even desire that the paper-markets function as they are mandated by society to function because the game-in-process was giving them additional time to secure the blessing-of-a-lifetime when TPTB would pull the switch and FreeGold would emerge victorious.

It was a cynical position in my way of viewing things, almost a devilish proposition to resist-not-evil because the world is yours for the taking once you see this truth.

Maybe he really believed in a new rule-of-law that would transcend the existing one and thought that made the existing one irrelevant, even though how many of us have been lamenting the break-down of the rule-of-law for how many years now? I guess that depends on when one came to the age of political awareness. I remember old guys who had professionally bound textbooks devoted to interlocking corporations published long before Zbig ever heard of the Trilateral Commission or the Bircher’s published those flow-chart posters of the Council on Foreign Relations. I have a great book published in 1950 called Undermining the Constitution: A History of Lawless Government by a member of the Bars of the Supreme Court of the United States, Thomas James Norton. Some people really do believe in the rule-of-law. Some don’t. In my opinion FOA was very flippant on this subject and undermined his own message with an elitist attitude regarding the necessity of someone holding TPTB’s feet to the fire.

This world is structured around cartels and their affiliated enforcement mechanisms. All of the large entities deal with the logistics of that equation. We know that from the works of Dan Morgan and Jeremy Rifkin and Daniel Brandt and Pete Brewton and hundreds of other investigative reporters before and since. FreeGold isn’t going to change that structural reality. I think the way that FOA presented his view of the world was too sophisticated for my taste, too much of the ‘nothing-to-see-here-move-along’ thing. Well, for those of us not-so-mesmerized by upcoming riches there was that uneasy question about ‘and what comes after this for the poor noones of the world that y’all so eloquently champion’?? Fairness? Justice?

We can pretty much figure how it works out for the so-called giants.

frycook said...

I know this is probably much more than you want to hear but I don’t get out much anymore and pecking away at this keyboard is useful if it helps further understanding.

It’s about what we accept and allow into our minds without critical thought. It’s about those statements from on-high that make no sense at all but somehow we make sense of them by creating a virtual world where they can exist, side-by-side. Like this one recently over at Allow me to just copy this from an e-mail to a friend – some repetition of concept.

Jim Sinclair’s Commentary

>>>“No states of the USA will be allowed to fail and implode, just as no state of the EU will either.
QE to infinity will happen one way or another”<<<

Hey XXX,
I think there's no better example of the schizophrenia that infects a trader's mind than the statement above.

At the same time that he posits QE to infinity which means that our transactional currency will eventually not work due to a loss of confidence i.e. hyperinflation and all that implies, in the same breath he posits that States will not be allowed to fail. The only possible massaging of this statement into some sort of reality-oriented format would be to say that all of our cities, like Detroit, can be allowed to implode and degenerate into failed-cities, but as long as there is some semblance of a rump State-level entity that can still afford to keep some lights on that therefore the State has not failed? That is as goofy a thought process as it gets in my opinion. Sinclair used to say that the US dollar was the "common stock" of the United States. That means all the States of the Union. He is saying that the US dollar is going to fail by saying QE to infinity. Therefore he is saying that the collective entity of the United States is going to fail and therefore he is saying that each of the individual States of the Union is going to fail. Can't have it both ways Jim.
BTW - I also regard his Comrades In Golden Arms patriotic-schtick as a bunch of hypocritical mumbo-jumbo because he advises the tactic of the Sovereign Individual in other communiques. You know, the one about residency in one country, bank account in another, business in another and so on. He reminds me of the faux patriotism of FOA when he waxed martially about his and Another's ancestors standing tall against the bad guys like some latter-day William Tell. And what about those "hard-money socialists" fighting for fair markets and the rule of law? Did he get behind that action? Doubt it, since his posts were always to the effect that we shouldn't even worry about that and should just protect ourselves with bullion.
Well, like I said at the beginning – take it with a grain of salt. Iconoclastically yours,

GG said...

I think we're at a point where it does not matter whether anyone (including Giants) wants Freegold or not, or whether the ECB can get it done/wants it or not (their record so far is nothing to write home about, IMHO) - we'll get there one way or another - but the longer the status quo is forcibly maintained by TPTB, the worse the condition of the global economy be when it comes.

Martijn said...


Thanks for your responses!

I seem to have mixed up Gary North and ThaiGold. The latter foresees a controlled gold price of $US 50 and expects silver to become the thing.

Why did you reference to this comment? Do you share his view?

As for Gary North I do somewhat share his vision of administrative law taking over, which is not to the good of the people. The same seems to hold somewhat, albeit to a lesser extend, for Europe.

However, I am not sure that this alone will stop gold from being revalued world wide. After all it is a domestic event which is not directly connected to gold.

As for the mentioned fairness and justice for the poor: I tend to see it as a different thing. Freegold would mostly affect those holding wealth, which renders the poor out of play. Perhaps not fair, but that is by no means a requirement for the concept. FOFOA has elaborated on this before and I tend to see it likewise.

I think the way that FOA presented his view of the world was too sophisticated for my taste, too much of the ‘nothing-to-see-here-move-along’ thing.
What do you mean by that?

We can pretty much figure how it works out for the so-called giants.
You mean they'll remain giants? Most likely so.

In general I believe that in our modern Western society there are many aspects that deserve harsh criticism. At the same time I think that the way monetary developments will unfold (as opposed to how they perhaps should from an ideological point of view) should be seen in separation from any personal political feelings.

Would you agree to that vision?

GG said...

"but as long as there is some semblance of a rump State-level entity that can still afford to keep some lights on that therefore the State has not failed?"

Just take a look at some of the third world countries (which is what the US is becoming IMHO). This is exactly what has happened there. I am just amazed at the ability of human beings to tolerate exploitation and slavery. And I don't think American citizens are any different from those in these "developing" nations. If they were, they would not tolerate forced passage of legalized gunpoint robberies like the health care bill. "The State" can continue to exist for a long time after the most basic of conditions that [we think] are required for decent human survival have vanished.

Martijn said...

or whether the ECB can get it done/wants it or not (their record so far is nothing to write home about, IMHO)

Why is that?

Gordon Gekko said...


I am referring to the fact that - as FOFOA has mentioned earlier - the ECB might not want to deliberately/be seen upsetting the dollar applecart (and, apparently, as evident over the last ten years, they are willing to tolerate quite a bit to achieve that objective). And even now the IMF is being dragged into the Greece bailout - not a good sign IMHO. They also have tolerated Wall Street perpetrated frauds in Eurozone. Don't get me wrong I'm not counting them out - its just that I am not very impressed with what has transpired since the writings of A/FOA. At some point destruction of the world economy has to take precedence over your petty political goals.

Martijn said...


After reading some more on the German attitude regarding Greece I would not be surprised if Merkel is misunderstanding the situation. Fact is that the German population does feel like paying for Greece.

Off course it could all be gameplay in order to lower the euro too.

Blindweb said...

I've been lurking here for quite some time. There's been quite a few bad posters, but the worst of all has to be this dragonfly who just keeps babbling on and on, and on...
I think it was pretty obvious what Jim Sinclair meant. Obviously he meant in the near term the states won't be allowed to default. I can do the same thing with any statement like that by misconstruing scope and time frame...You're all wrong...Gold will fail too...on a trillion year time line that is!
And who name-drops salt names?? Anyways there's a million other problems with what he said but I won't waste anymore of anyone's time.

One of these days when I have time I need to post a response to that Vegan central planning insanity that Idi posted a couple weeks ago.

wismadche said...


I have been following your blog for several months and am very appreciative of the work you and others are doing here. I am reading through Another’s (Thoughts!) and am reading your posts from the beginning.

A few questions:

Why is fiat money (currency) debt? Is it because it is the only legal tender? To me, fiat currency it is just a piece of paper with ink on it. No one in particular “owes” me anything for it other than the law says that a seller has to accept it for goods and services. If gold and silver became legal tender again (a great! idea you had in an earlier post), would it still be debt since a seller is not obligated to take it in exchange for goods or services? If it is debt and only gold can extinguish a debt, is the Fed the ultimate borrower since it issued the note? So the only way to extinguish the debt is for the Fed to trade gold for a FRN and then burn the currency?

Many of the posts and comments here (over the last year or so) have mentioned that massive changes are “imminent”. Most if not all seem to have been wrong – just the timing, not necessarily the changes. What general timeframe do you now anticipate for Freegold to emerge? Are you still looking for the last contango in Washington as defined by A.E. Fekete?

How do you define hyperinflation? 100%/year? 100%/month?

What is your opinion of Martin Armstrong. I have been reading some of his stuff as well (as time permits). He is very interesting and makes some fascinating claims, but without access to his data, I am hard pressed to take him seriously.

I have read your comments regarding the difference between silver and gold. If I understand you correctly, you believe gold will make the biggest move because it has a long history as a store of wealth (and money even if it isn’t considered that now) and because the heavy breathers (central banks) use it and only it for settlements. Even so, do you expect silver to make a significant move and perhaps a comeback as “money” in a “barter” economy?

I have been thinking a lot about Freegold and the ramifications of gold being valued at $100K or more. For example, who benefits from a sudden, massive rise in the $ price of gold and who is hurt by it? On an individual level, those who have gold obviously benefit and those who don’t get left behind. But on an international level, if the $ is devalued against gold, how will that affect its value against other currencies? Do goods from China and Japan suddenly become 100 times more costly? What about the special case of oil since oil costs $X plus YY oz. of gold? What about the oil producers that aren’t paid in gold?

Who benefits from delaying freegold? Those who are buying gold at the current price are benefitting greatly (I am in no hurry as the longer it takes the more I can accumulate). The paper gold investors are neither helped nor hurt by the delay as they trade on the volatility, not the actual price.

If gold is $100K/oz, who is going to have the cash to trade for gold if someone wants to pay off his mortgage? I am pretty sure that local coin dealers aren’t going to have the cash flow necessary for that.

I have a lot more questions, but this is enough for now. I wish I could sit down around a table with you, Another, FOA, Ender, Costata, and some others to talk all of this through. I will provide the pizza and beer!

Thanks again for all your work.

FOFOA said...

Hello wismadche, and welcome. You remind me of my mom with all those questions! ;) Pizza and beer does sound nice tho.

It looks like we have some old USAGOLDers on here! Hey, does anyone remember seeing this comment pop up on the USAGOLD forum, late in '08? And did anyone else catch how many similarities there are between what he was searching for and this? I count at least 4 points of near perfect similarity, mysterious 20-year time gap notwithstanding.

GG said...

That Johnston Letter was quite interesting. The more I read, the more I am convinced that the BIS faction was all set to make things "happen" at the end of the millennium ,yet somehow it all got delayed. Perhaps they underestimated the facist/criminal tendencies of the US Government (not surprising since absolute power corrupts absolutely) and did not anticipate the 9/11-Iraq brouhaha, and also the extent to which the US oligarchs would go to protect their power?

GG said...

Or perhaps they just underestimated the gullibility of the general public. Not surprising considering the sorry state of our "education system".

costata said...

Hello frycook,

Thanks for sharing your thoughts.


costata said...

Sigo Plapal,

Thank you for clarifying your thinking on silver.


costata said...

FOFOA et al,

Re: Timing

I want to share a few observations on the issue of Freegold's timing.

I have done a few trawls through the A/FOA archives attempting to understand why the Euro Freegold project "seems" to have been delayed several times. I have also spent a lot of time on a work-in-progress. The creation of a series of timelines that attempt to make sense of current events by seeking their genesis in earlier ones.

A wise friend recently reminded me not to confuse perception with bias in analysis. Another seemed to be convinced that the collapse of the US$-Oil-Gold deal was likely imminent. Was he biased or was his perception fully justified by his deeper understanding of the events of the day (circa 1997)?

We know from the recent revelation (to all here?) of the 1945-47 gold discs for oil deal with the Saudis that "gold bidding for oil" was a credible threat.

The House of Saud had acted on this threat at least once before. To recap, the US owned Aramco oil company brokered the deal and the US Mint in
Pittsburgh struck the discs with a design feature that would help to ensure that the discs would not readily circulate in an Islamic country. In other words these gold discs had one purpose, to pay oil royalties. The Saudis demanded gold for oil, the US Govt provided the gold and Aramco paid up.

Scroll forward to 1997. Another pointed out that the US$-Oil-Gold deal had a few unforeseen vunerabilities. The Asians had gatecrashed this party and were buying up under-priced physical gold in volume. The deal was structured on the assumption that technology would lead to vastly increased supplies of mined gold far into the future. It happened for a while but then production increases levelled off. Finally the fractional reserve paper gold trade on the LBMA worked a little too well in suppressing the gold price. They drove the price of gold too close to, if not below, the cost of production.

At the same time, the Euro, the intended replacement for the US$-Oil transactional currency was not yet formally launched and unproven as an alternative to the US$. What grounds did Another have for believing that the Saudi's oil was about to be bid for gold directly, bypassing the US$?

Abdullah, the current King of Saudi Arabia was 21 years old in 1945 when his father demanded gold from the USA for oil. In 1993 King Fahad (Abdullah's half brother) suffered a stroke. Over time, the then Crown Prince, Abdullah, took over the ailing King's duties until 2005 when Fahad died and Abdullah officially became the King.

In light of all of the factors described above could Another have been justified in perceiving that the planned State visit of Crown Prince Abdullah to Washington DC for a meeting with Bill Clinton in September 1998 represented a deadline of some sort? State visits are not arranged overnight. Was this meeting already arranged when Another posted?

With the benefit of hindsight we know that gold did not bid directly for oil then. Is Another's credibility suspect because he made a decision to sound a
warning based on his assesment of the balance of probabilities at that time? I, for one, think not.

Thanks to FOA, FOFOA and other research we have several plausible scenarios explaining how the crisis, that Another perceived to be imminent, was averted.

When FOA began posting in the Trail Guide series it seems that he believed that a crisis was again imminent. FWIW I have a few thoughts to share with you later on how this crisis was also postponed.

frycook said...

Hey Blindweb,

I think that JS is getting increasingly freaked out by the same things we’re all following in the real world and that it’s affecting his ability to communicate. He’s assumed the responsibility of mentoring the gold community but the message is garbled.

For instance, how can the dollar only go to .55 on the index as Jim has mentioned? Is he not saying QE to infinity at the same time? How do you reconcile the two? I’m not into timeline games, that’s Jim’s forte, and I’m not a sophist trying to mangle his message. What does it even matter when the dollar hits .55 on its way to oblivion?

He’s telling us it’s OVER. He’s telling us to get our money out of the hands of intermediaries. He’s telling us that they’re going to burn the dollar. He’s telling us the END IS NOW. Or have we been reading different sites??

All I’m saying is that if it really is over for the dollar then his statement about them not allowing states to default is meaningless to anyone living in those states. If we do go third-world, that is failed states in my book. I can’t picture how we lose the dollar and not go that route - like my home town of Detroit has already. His tone is increasingly over-the-top and it doesn’t jive with a number of other things he’s saying. Don’t you see that?

I’m really sorry if I offended you with all the arcane history and my opinions on things but I’m just trying to think about what the gurus say and decide if they make sense. They're the ones out there on soapboxes. I’ve been reading Jim since he started JSMineset and have noticed a lot of odd twists and turns which I won’t bore you with but I will say that Jim’s prophetic declarations of late and his increasingly obscure and short-handed commentary is an obvious concern and I think that he must be under a great strain as this ugly train comes down the track.

Promise I’ll keep ‘em short from here on out and as infrequent as possible so as not to disturb your viewing pleasure.


Martijn said...

As for Sinclair I do wonder whether QE to infinity and rising rates would not be mutually exclusive. I tend to think so, but Jim probably thinks not.

Trader Dan: Here’s the problem – once it appears as if interest rates are headed higher, the equity markets are going to get much more concerned about such things as job growth and profits but not just profits that have come from cutting expenses but rather profits coming from increases in sales.

I think they'll do everything they can to print those rates down.

Martijn said...

When FOA began posting in the Trail Guide series it seems that he believed that a crisis was again imminent. FWIW I have a few thoughts to share with you later on how this crisis was also postponed.

Makes me curious!

Martijn said...

In goldtrailfive FOA says: Especially if Euroland eventually mints a free floating gold coin; not dissimilar to the K- Rand! Not to be confused with Robert Ms 100 Euro or Germany's new offering; perhaps it will be called the "Euroland" gold coin? In fact, I bet it will (smile).

A curious thing I found some time before is this.

Golden coins with a euro face value. They do however only have legal tender in Belgium.

If they would have had legal tender across the Eurozone it would obviously conflicted with the floating gold price, but now it does so only in Belgium.

Martijn said...

Off course one could find it interesting that they've also minted in silver...

Martijn said...

So the wistleblower had ran into a car.

Still alive luckily.

Sigo Plapal said...

Austria has been minting gold and silver bullion "philharmonics" with a Euro face value since the the Euro was introduced.

Martijn said...

Here is more on virtual currencies.

FOFOA, do you remember that vid on the mayan calander where the speaker argued that money would be replaced by trust.

That was no more than an interesting line of thought, but these developments tend to go in a somewhat similar direction.

Together with the facebook vid from the previous topic it does lead me to believe that we are likely to see more developments in the same direction.

It will not replace gold or fiat, but it might add an extra coordinative layer to our world; sharing that property with fiat and gold.

Martijn said...

And here we can find some of the reasons why we would need extra, or new coordination mechanisms.

Perhaps it's not so much that we need them, but rather that we can use them. All because off the internet.

Most of our organizational forms and coordination mechanisms were build during the industrial period, where we needed to govern large companies putting out products in bulk.

The internet seems to allow society to become less industrial and more organic; resembling more the eco-system that human interaction wants to be.

Martijn said...

By then: it will become known that the only way to stay whole, without bullion relief, will be in aligning one's self within the Euro Zone of financing. Those that started early in resolving some of their political gold debts will be the first to receive backing. England? Swiss? The rush will be on

Would that have anything to do with Brown's bottom?

Martijn said...

So a weak euro indeed seems to make sense:

Notice our General Motor's CFO's comment --------- "the (dollar's) strength is destroying the manufacturing competitiveness of this country.'' -------!!!
This should read --------"the Euro's weakness is destroying the manufacturing competitiveness of this (USA) country.

Martijn said...


On the Dutch bank sales you mentioned recently: Wim Duisenberg provided an excellent political cover for selling into the American paper gold market; as it exists around the world today. His national pedigree demonstrated a distinct flavor against gold as a monetary reserve.

Would that have been set up indeed? Perhaps it was. In later speeches Duisenberg clearly showed to understand gold...

Martijn said...

Just how contrary is it to A/FOA's message for the (paper) gold market to slowly rise without killing the dollar or anything.

They seem to not have deemed that possible and yet it has happened.

Do we know why?

Martijn said...

At the right time the Euro Zone will withdraw from the IMF, leaving the US and its factions as the only support for dollar credit assets held overseas.

So far they've only been discussing asking the IMF for help with their local affairs...

DiverCity said...

frycook, please keep commenting as you see fit. Whether or not I or anyone else agrees it's good to hear critiques of what's posited as an inevitable outcome vis-a-vis freegold.

Martijn said...

MK does not seem to have been that far off: Europe will be no more aggressive than it needs to be. As a casual political observor, I believe that this policy is a mistake that forces Europe to play the inflation game along with the United States, and that is not the way I would have played the game given the opportunity.

Martijn said...

frycook, please keep commenting as you see fit. Whether or not I or anyone else agrees it's good to hear critiques of what's posited as an inevitable outcome vis-a-vis freegold.

I agree. As long as you provide your underlying reasoning and facts it might add a lot to the discussion.

SatyaPranava said...

@frycook: like divercity, i agree completely. please keep commenting.

I've learned so much from those quite knowledgeable here, and hope they are correct, but my intuition and experience has me keeping a slightly contrarian view.

Being the philosopher, I am also quite averse to pithy representations of complex thoughts, so please feel free to expand those thoughts.

Also, frycook, since you've done a good job finding inherent incongruencies in positions taken by many whom we're all reading, I'm curious to know what you actually do see coming down the pike. or, what you see as likely happening.

also, are you still in the US?



SatyaPranava said...

martijn, i had also read that last night about the supposed hit and run.

sounds like this guy has been ruffling the wrong feathers.

did I also read on jesse's blog that his testimony was actually not desired at the CFTC meetings?

if so, how do you (or anyone else) interpret that stratagem by the CFTC?

Martijn said...

if so, how do you (or anyone else) interpret that stratagem by the CFTC?

Looks like the CFTC is there mostly for show and not that interested in doing it's job. A corrupt policeman...

wismadche said...


Interesting letter. Thank you. I still consider myself a newbie.


Thank you for your post about timing. I wasn't being critical about anyone's attempt to time the appearance of Freegold, it just seems impossible to do so with any reliability because even those with inside information and power are competing with others with inside information and power. We should never underestimate the power of ego - especially for those in power. Anyway, I am looking forward to your future posts about timing. Thanks for your research on this.

Martijn said...

Can we boil A/FOA down to a very comprised form, or would that be impossible?

-Trading began in barter, goods traded for goods.
-Gold became the good most traded, and best remembered. Hence people stored the value of other products in gold in the minds. That remembered gold value made gold money. Money is a remembered value, a mental concept.
-As gold was extended by fiat, fiat became the unit of account and the remembered value. Fiat began as representation of gold, but was ultimately stretched away from it by means of inflation. Hence the value concept of money drifted away from it's underlying value.
-The Euro formalized that separation and allowed gold to float against fiat; decoupling the mental money concept from real value.
-In order to match the Euro and compete with it the $US would have to let gold float as well.
-The problem with that is that it might destroy trust in the $US, and hence render it worthless by sending it into hyperinflation.
If the US could somehow find a way to manage the rise of gold without hampering trust in the $US they could remain in lead over the Euro.

What did I miss?

Martijn said...

By then: it will become known that the only way to stay whole, without bullion relief, will be in aligning one's self within the Euro Zone of financing. Those that started early in resolving some of their political gold debts will be the first to receive backing. England? Swiss? The rush will be on
LeSin's post today (# 47852) about someone noting a BIS offer to take England's gold is to the point. (Hi LeSin, how is your French Sorrel growing? (smile)) That was the last offer before a changed position. They would not do it today. Look at your charts and see where this market the time where gold was finally allowed to drop below $280. It is indeed strange that it hasn't fallen much further.
This is the "what for" of Britain moving itself and it's gold operation into the Euro arena. Once safely there, or there in initiative, the ECB and BIS could cash out England's gold liabilities without crashing London's banks

Are we sure Brown didn't buy England into the EU, or at least tried to keep some of it's gold safe?

Martijn said...

Finally I tend to grow more convinced of the EU tactics of boosting the dollar by weaking the Euro.

A high dollar slows US exports, hence increases unemployment which hampers domestic consumption further and hence reinforces the cycle. This decreases taxes while increasing government expenditures. All in all that will hurt the US financial position.

Martijn said...

On the other hand the $US could live "forever" if it had no competitor. While weakening against the $US one could wonder whether the €uro is much of a competitor.

Martijn said...

Any Fed policy that must break the risk transferring dynamic of derivatives, to protect our US banks, will open the door to the ECB's dumping IMF protocols and using the Euro alone as their sole reserve currency.

What effect would that have on IMF-aid (e.g. for Greece)?

Aleksandar said...

Aaah, a worthy critique of FreeGold, at last! I must say that I enjoyed reading the comments tonight, aside the scrolling part past the endles posts of our resident comments-pollutant.

Hello Martijn,

First off let me inform you that I’m just an old blue-collar radical who has a deep anti-authoritarian streak from my earliest memories. So you need to take whatever I say with a grain of salt...

No need to put a disclaimer because you are "but an old blue collar worker" that may like his liberty served with more than just a touch of reality. Quite the contrary actually. And certainly not when you address that clown.

Museice said...


More please! You added a new layer that demanded research. I enjoy learning new material.

And all:
Must read Former Goldman Commodities Research Analyst Confirms LMBA OTC Gold Market Is "Paper Gold" Ponzi

It is a long article but well worth the read. For me this is confirmation that Physical, right now, is required.

"Christian confirms that the gold market is basically a ponzi: "in the “physical market” as the market uses that term, there is much more metal than that…there is a hundred times what there is." And there you have it: as Douglas eloquently summarizes: "the giant Ponzi trading of gold ledger entries can be sustained only if there is never a liquidity crisis in the REAL physical market."

How can this continue? Why aren't people demanding their physical?

idi said...

de facto capital controls arrive on the shores of the USA;

and, former goldman commodities research analyst confirms LBMA OTC gold market is a "paper gold ponzi scheme;"

much on

The dominoes are starting to fall.

Well we are all agreed! dragonfly/frycook owes no-one an apology... least of all to the blathering blindweb.

blindweb; I await your carefully substantiated post on the perils of "vegan central planning insanity."

"One of these days when I find the time." Yep, I've heard that before!

Though I don't know where your allusion to "central planning" comes from though I am sure you will tell us.

Include references to energy and economics to keep the debate within the frame of desired cost-savings for the millions of newly impoverished Americans and others.

Keep it short and sharpen your old canines Hoss!

Martijn said...

Anyone here seen the movie "rollover"?

A/FOA might have...

SatyaPranava said...

it gave me the shivers when i saw the clip back in i think late '07 and early '08. then i think it went viral again sometime later in the fall of '08.

very worthwhile. glad you unearthed it again.

also, i had the same feeling re: cftc, but was hoping for a slightly diff angle. that one is just too obvious. but prob the correct interpretation.

costata said...


Thanks for the encouragement. A follow up soon.

I was prompted to write that comment by my concern that some people looking into the Euro Freegold concept may be (unconsciously?) attempting to time these events or dismissing A/FOA because their "timing" was somehow wrong.

I prefer to think of us as being in the middle of a forest ($IMFS) that is carrying a huge and increasing, fuel load (US$). Thus far every time it looked like the wildfire was about to begin the weather shifted or a spot fire was put out. In other words the danger was merely postponed.

I'll stop here but I feel sure that this analogy could be developed further without losing its potency.


frycook said...

Wow, thanks y'all. I was a bit depressed after the negatory response but am now cheered that some found the long-winded posts worth reading.

I hope that any distemper I have re: FOA does not in any way transfer over to our host who in my view is impeccable. It's hard to imagine the time he? spends on those fantastic posts. Thanks again, FOFOA

@GG 11:23 - Agreed!!

@costata - you're very welcome. Really looking forward to your continued research results.

@Martijn - re: ThaiGold - I never discount his insights, he could be right in the end. re: "separation from any personal political feelings" - I doubt that many plutocrats have any ideology at all and we'd probably be wise to factor that in to all of our analysis.

@DiverCity - thank you, will do.

@Satya Pranava - yes, I'm here in the Texas hill country with Evening Primrose blossoming in the moonlight. Most of my time is spent unravelling the past, maybe hoping that I'll be sufficiently distracted from my pessimistic nature regarding the future. My crystal ball is pretty cloudy these days but I'm keeping an open mind. Here is a decent summary of material I followed closely back in the day that is relevant to the complexity of our FreeGold subject.

hope that comes through as a link - it is really worth reading.

@Aleksandar - thanks for the kind words. I appreciate your phrasing - "that may like his liberty served with more than just a touch of reality." How true!

@Museice - the feeling is mutual, thanks.

@idi - thanks, btw - old fan of Francis Moore Lappe and E.F. Schumacher here. Keep up the good work.


answer2me said...


yours is the voice of reason, thanks for the posts and keep them coming. Here is a thought i have often wondered. It is said that all CB's gold added up is about 18% or 15 million ounces of the total gold out there. Not much if you ask me. Nobody knows how much the IMF has, i am sure there recent sales are a drop in the bucket though. How much gold do the Saudi's have, where do they keep it (in a CB bank, bullion bank, buried in the sand ect..). What is the their world total as a percent? They have been hording gold as far back as the 1940's, how much have they acumulated and are they the true backers of the euro?

Jamie said...

Were the "huge silver short positions" taken over by JP Morgan from Bear Stearns part of the downfall of Bear?! The nominal all time high for silver was experienced DURING the Bear Stearns implosion! I believe banks' bets on silver / gold still affect their success / failure.

frycook said...

Hopefully everyone is following the rich discussion of the subject of the CFTC hearings and whether or not GATA has mis-represented the LBMA situation. has the whole series of assertions and rebuttals as well as interviews and hopefully a debate in the near future.

Also Chris Martensens' site has the original article by Erik Townsend and some blogging on it.

Jantzens' site is covering this too and there are some excellent blog entries over there at

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