FOA: "They will not be pushing on a string; rather picking up the ball of twine and throwing it!"
I may be crazy, but if there was a contingency plan/how-to manual on throwing the world's largest ball of twine, it might just look like this:
And here are a few twine throwing excerpts from our brain-trust of central planners:
By the authority vested in me as President by the Constitution and the laws of the United States of America, including the Defense Production Act of 1950 [...] it is hereby ordered as follows:
...
Sec. 103. General Functions. Executive departments and agencies (agencies) responsible for plans and programs relating to national defense (as defined in section 801(j) of this order), or for resources and services needed to support such plans and programs, shall:
(a) identify requirements for the full spectrum of emergencies, including essential military AND civilian demand;
(b) assess on an ongoing basis the capability of the domestic industrial and technological base to satisfy requirements in peacetime AND times of national emergency, specifically evaluating the availability of the most critical resource and production sources, including subcontractors and suppliers, materials, skilled labor, and professional and technical personnel;
...
Sec. 201. Priorities and Allocations Authorities. (a) The authority of the President conferred by section 101 of the Act, 50 U.S.C. App. 2071, to require acceptance and priority performance of contracts or orders (other than contracts of employment) to promote the national defense over performance of any other contracts or orders, and to allocate materials, services, and facilities as deemed necessary...
(b) The Secretary of each agency delegated authority under subsection (a) of this section (resource departments) shall plan for and issue regulations to prioritize and allocate resources and establish standards and procedures by which the authority shall be used to promote the national defense, under both emergency AND non-emergency conditions.
...
PART III - EXPANSION OF PRODUCTIVE CAPACITY AND SUPPLY
Sec. 301. Loan Guarantees. (a) To reduce current or projected shortfalls of resources, critical technology items, or materials essential for the national defense, the head of each agency engaged in procurement for the national defense, as defined in section 801(h) of this order, is authorized pursuant to section 301 of the Act, 50 U.S.C. App. 2091, to guarantee loans by private institutions.
(b) Each guaranteeing agency is designated and authorized to: (1) act as fiscal agent in the making of its own guarantee contracts and in otherwise carrying out the purposes of section 301 of the Act; and (2) contract with any Federal Reserve Bank to assist the agency in serving as fiscal agent.
...
Sec. 302. Loans. To reduce current or projected shortfalls of resources, critical technology items, or materials essential for the national defense, the head of each agency engaged in procurement for the national defense is delegated the authority of the President under section 302 of the Act, 50 U.S.C. App. 2092, to make loans thereunder. Terms and conditions of loans under this authority shall be determined in consultation with the Secretary of the Treasury and the Director of OMB.
...
Sec. 303. Additional Authorities. (a) To create, maintain, protect, expand, or restore domestic industrial base capabilities essential for the national defense, the head of each agency engaged in procurement for the national defense is delegated the authority of the President [...] to make provision for purchases of, or commitments to purchase, an industrial resource or a critical technology item for Government use or resale, and to make provision for the development of production capabilities, and for the increased use of emerging technologies in security program applications, and to enable rapid transition of emerging technologies.
...
Sec. 304. Subsidy Payments. To ensure the supply of raw or nonprocessed materials from high cost sources, or to ensure maximum production or supply in any area at stable prices of any materials in light of a temporary increase in transportation cost, the head of each agency engaged in procurement for the national defense is delegated the authority of the President [...] to make subsidy payments, after consultation with the Secretary of the Treasury and the Director of OMB.
...
Sec. 306. Strategic and Critical Materials. The Secretary of Defense, and the Secretary of the Interior in consultation with the Secretary of Defense as the National Defense Stockpile Manager, are each delegated the authority of the President [...] to encourage the exploration, development, and mining of strategic and critical materials and other materials.
...
Sec. 308. Government-Owned Equipment. The head of each agency engaged in procurement for the national defense is delegated the authority of the President [...] to:
(a) procure and install additional equipment, facilities, processes, or improvements to plants, factories, and other industrial facilities owned by the Federal Government AND to procure and install Government owned equipment in plants, factories, or other industrial facilities owned by private persons;
(b) provide for the modification or expansion of privately owned facilities, including the modification or improvement of production processes...
(c) sell or otherwise transfer equipment owned by the Federal Government and installed under section 303(e) of the Act, 50 U.S.C. App. 2093(e), to the owners of such plants, factories, or other industrial facilities.
...
Sec. 310. Critical Items. The head of each agency engaged in procurement for the national defense is delegated the authority [...] to take appropriate action to ensure that critical components, critical technology items, essential materials, and industrial resources are available from reliable sources when needed to meet defense requirements during peacetime, graduated mobilization, and national emergency. Appropriate action may include restricting contract solicitations to reliable sources, restricting contract solicitations to domestic sources (pursuant to statutory authority), stockpiling critical components, and developing substitutes for critical components or critical technology items.
...
Sec. 312. Modernization of Equipment. The head of each agency engaged in procurement for the national defense [...] may utilize the authority of title III of the Act to guarantee the purchase or lease of advance manufacturing equipment, and any related services with respect to any such equipment for purposes of the Act. In considering title III projects, the head of each agency engaged in procurement for the national defense shall provide a strong preference for proposals submitted by a small business supplier or subcontractor...
You can read the full 11-page Executive Order here.
Sincerely,
FOFOA
Great comment, Jeff!...
You guys don't have to worry about being pressganged into being unpaid 'consultants'. Those jobs will go to Buffett, Jeff Immelt, etc. who want to help the G out of the goodness of their hearts...and to protect their position near the fiat firehose of course.
Honestly, the fascist talk gets in the way of understanding what is going on. Yes, this is the Declaration of Hyperinflation, but did you expect the G to just sit on its hands and collapse?
FOFOA: "In parts two and three of my September hyperinflation posts I explained how the US government MUST respond to a currency collapse by printing more currency in order to keep its stooges doing its bidding...
Gonzalo correctly points to "palliative printing" as a wheelbarrow-enlarging event, which comes at the very end stage of a hyperinflation. And he presents it as palliative to the people. But this printing is usually most palliative to the government and its expanding rank of stooges. Sure, there will be "welfare" along the way, but for the most part the freshly printed cash will buy the most goods and services for the first hands it touches. And then less for the second. And even less for the third and so on. And this prime purchasing power will be mostly reserved for the government that prints it."
This EO, IMO, means that the hour is getting late...
549 comments:
«Oldest ‹Older 201 – 400 of 549 Newer› Newest»Jeff,
just google for the PDF from the BCG:
"Back to Mesopotania?". This stuff is much more REAL than this lalala-EuroGold stuff, from some anonymous 13yrs ago.
Oh and since americans are completely unaware whats going on in europe: Mr. Schäuble loved this study so much, that he hired the chief from the BCG (Levin Holle) for his minister staff, paying him only 1/10 of his earlier salary, still that dude accepted.
That's how we play Freegold here in Europe: Just give everybody enough PERSONAL haircut (on everything: bank account, stocks, home, real estate... aprox. min. 1/3 on everything you own) and you "save" a currency. So in a certain sense those Euro-Freegolders are right, the Euro will survive, but gold has nothing to do with it.
But when this happens, remember Gerald Celente "When people have nothing left to loose they loose it" and I am really looking forward to see this sh!t burn down.
Greets, AD
I am with you Gary and I believe most of the board, Desperado hasn't posted in months and was never liked around here, I just ignore all of them trolls: "no hay mayor desprecio que no hacer aprecio"...
Cheers from Spain.
Hi ampmfix,
Does the tic tac tic tac interest you? I know its not for everyone, but it is for me.
This guy speaks german maybe he can explain freegold to you.
@ampmfix: I just spent 2 weeks in Spain, and I loved it. It sure is sad to see what the Euro has done to the place though, don't you think? Nearly 2m empty houses due to the ECB keeping rates low when Germany needed them there the most and Spain desperately needed high rates to cool the building boom. All the banks are zombies. But this isn't the worst of it. Driving past Murcia, Almeria and Valencia I was amazed at the number of windmills (of which a large proportion weren't spinning) and massive solar arrays sucking down the nations wealth in order to satisfy the non-elected EU globalists running the European concentration camp. In Valencia there is a very large windmill factory that has acres of unsold windmill engines all sealed in plastic like mothballed navy ships. Talk about Euro-driven mal-investments, Spain probably got it the worst.
I also saw lots of new stores buying gold with billboards and advertisements in all the expat magazines. Looks like AD is right and Brussels is not only planning a massive wealth tax, but they are sucking the gold out from the population. Those poor Spaniards, it looks like the socialists will have screwed them out of their gold and caused hyperinflation twice. The first time being the Moscow Gold affair.
http://www.youtube.com/watch?v=jyV68xKEj28
Jeff,
I've read an interview with Mundells cupple of months ago and therein he expressed his thoughtsfo a pegging -euro to keep nato and West's hegemony alive. He didn't explicitely say if peg to something but I suppose pegged to Au. The euro might be saved by confiscation, especially in the EUzone and I think it will. As soon as the great coalition CDU/SPD will win next years elections in Germany, this is in the cards. Until then - I don't know, but we have seen them for years muddling trough. About two years ago the IMF took the decision to enlarge the credit worldwide. And they did quite well up to now.
Desperado, AD,Alien
your - and my reflections are not accepted on this board. I think I was the first speaking here about religious contemplation which attracted me enough animosity. Doesn't matter, I don't care as long as it comes from people who are only fixed on FGMonetary theory and nothing else.
VtC,Motley Fool more or less Costata,are very serious people who try to understand what we are speaking about but they don't read Gerrman and their information are one-sided.
Others, which I will not name, are just greedy parrots if I am to be as insulting as they are.
This part of the blog - the comments - is becoming more and more irrelevant for understanding the writings on the wall. At the beginning of his activity FOFOA used to be more communicative but now, he used to comment his daily observations. Nowadays, since the risk of being wrong in daily appreciations has grown he abstains from doing so. So he keeps reaping the same theory under differrent aspects without much - but not completely void of - actual/daily context to the things happening around us. Just one example being the war preparations. Well, that seeems to be of no necessity I expect he has to.
Another funny thing for me was the introduction of Ari. So much applause and expection ... just to hear :get you some! O la,la, did he think people reading at FOFOA just wait for his reccomendations coming NOW? And he is a "contributor".
These are some ridiculous aspects and fully contradictory here: People trying to make a calculation are considered trolls, even if they are heavily engaged in possession, and the parrots are high grade! LOL
I wonder how long can FOFOA manage this concept as FG is not just around the corner, as we all have now seen.
AD, Desperado you may want to go to "the Slog" nothing to do with Au but interesting comments re EU. No always 100% correct but some aspects better analysed.
Yes, DesperadoI've seen the same in 2009 Sept.
It was a very extended voyage around the coast including Portugal. I was amazed, never seen places like that so poor and so rich at the same time. Beautiful Spain, my heart is quite heavy after all I've seen!
Hi JR, I only watch the world cup, other than that soccer bores me a bit, but the tiqui-taqua won us a world cup.
Did you notice AD, Alien, Desperado and maybe the deadfauvi are all German or similar? what a coincidence!
thedeadfauvi
Even the latest proffered theory of wealth confiscation in Europe doesn't matter in the big picture.
Would it matter if it happened and you are european? Sure as hell. But...
Does it address the $debt, the $imfs, the chinese situation, the japanese situation, the uk sitation, the general world trade imbalances? The answer is a resounding no.
So this euro wealth confiscation lalala, as AD puts it, simply ignores the reality that the current world economic system is broken and that change is a-coming.
Yes things are messed up in europe; if you haven't noticed it's still a damn sight better than any third world country and most first world countries, despite everything.
TF
AD, Desperado, and the loudest anti-freegold posters seem to hate, AFAIK, the current political, economic, and monetary system (the $IMF, though apparently Desperado believes the euro is destroying Spain). You don't believe that freegold is possible or even desirable? So you have a very tall order; create a new political, monetary, and economic system that suits you, which you cannot even define, of course. We await your triumph.
It seems the euro architects went to a lot of trouble to create this thing. It hasn't broken yet, despite silly comments like 'Zounds, a Goldman Sachs guy is in the government! That's the end of freegold, then.' Perhaps we should wait for time to prove all things.
Fauvi, if you stood up in church and loudly began calling people idiots for believing in God, you would probably be thrown out. FOFOA hasn't done that, so maybe you should thank him for his infinite mercy. Amen.
Hi Jeff, as I posted above, intuition tells me that GOLD is where I shd be, the focal point, but unfortunately that doesn't mean that FG will happen (although it'd be great since it's the most fair alternative I can think of) ... And here is where I get along with fauvi, AD & Desperado, they've got to the same conclusion as the rest of the readers / commenters at FOFOA's, but they just don't agree that it has to happen anytime soon, it may take a 100 yrs
I have no clue how the system could get along with 2 more yrs of $IMFS crap, but I wouldn't be surprised if Another and FOA had the same thoughts 15 yrs ago.
I believe the ECB/BIS have had the chance to pull the trigger if it really exists, maybe they haven't done so because they don't want to be seen as the current system defeaters', but will they risk the EuroZone imploding because they are good guys? If that's he case and $IMFS figure out a new trick to keep kicking the can down the road, only the chinese when they're fed up and have enough gold will do a FG bid offer mkt, and my take is that it could take a loooooooooooong time
Btw, despite simpatizing with AD et al, I also like JR's quotes, so both of you, pls keep on posting.
Best,
db
For the record. This constant bitching and moaning and woe is us from certain europeans is starting to annoy me.
You don't see me wailing about where I am from do you? And believe me, if you took the time to look up some statistics I think you would shut up for the shame.
Oh our youth unemployment is so high...oh our pensions are being cut, oh we only earn so many euro's now....seriously????!
Consider the chinese workers, the malaysian workers, the african workers, the south american workers, etc. I think it is you who are living in lala land. >.<
TF
Hi db,
Yes, the waiting is the hardest part.
Fauvi, you mean gold confiscation? A fixed price gold standard in Europe? I may not be a serious person but I can see why that wouldn't work. So can you.
Some people here would perfectly work hand in hand with dictators, won't they?
The alleged anti FG people do not say FG is an impossibility, at least I don't say that. I only say it can take much longer than believed, it took longer than A/FOA have guessed. We separately said many things have changed and came unexpectedly. Basta. Do you get it now???? Draghi and Duisberg are not of the same ilk.
Nobody is moaning about pensions here, Motley Fool, I don't give a f...k about it. But I care about suicide rates in Greece and criminality. We were not used to murder and rape, sorry, Europe used to be civilised. Should I comply with the civil order of SA, maybe agrre or admire it?
There is no coincidence that some of dissenters are/understand German. It's a coicidence we are at FOFOA's. Maybe because we are savers, want to inform us and are polyglot?
I repeat it for the records:
FG is a step to a better financial system, were people can plan their lives.
It is not happening out of the strength of Europe.
It may happen when the USA will be crumbling in HI, anarchy, war etc. Not tomorrow, as we've seen it up to now.
The financial world elite will not be helpful.
CBs are preparing for a catastrophe. How or when it takes place is not possible to define.
Many weak hands will give up until then, the cummulation of Au in few hands will be the rule.
There are no politicians working for the benefit of FG. The German ones are the last. Germany as a sovereign country doesn't even exist, it is only an occupied territory where the three West allies have their say. Study the international war treaties re Germany and then you will know what to expect from them.
Politicians have no say in FG and CB work TOGETHER.
Mundell said, not me!
Amen
@ampmfix: I am a Swiss citizen and a renounced US person. I have no dog in the $IMFS/Euro fight. In fact, I think it is probably a big charade just like the Democrat/Republican divide and conquer show in the US. The guys pulling the strings are trying to consolidate power around the world. They want everything BIG because then they have less chess pieces to control. They want big global institutions that they control to dominate the world economies, media and culture. However, they realize that the clock is ticking on the Fiat/Fractional reserve system. If they could have their new SDR world currency and retain political power at the cost of either or both the $ and/or the euro they will accept that. The politicians like Merkel, Sarkozy and Obama are their puppets.
@Jeff: I am NOT anti-freegold, I am as anti-EU and anti-Euro as I am anti-Washington and anti-NWO. However, I do worry that freegold may be used by these guys in order to retain power, and this is one reason I also believe in silver.
Desperado,
The guys pulling the strings are trying to consolidate power around the world. They want everything BIG because then they have less chess pieces to control.
Well said.
The Genius, George Carlin said the same thing .
They want more for themselves and less for everybody else .
fauvi
Well then one part of your complaint I certainly don't understand, timing. Afaik timing is not something FOFOA talks about. Sure I may think it's pretty damn near twelve, but no-one is saying it can't go on for years still.
As to the other part, I agree, everything is not peachy in Europe, and it is getting worse by the day.
Perhaps if you are able you should separate the political and monetary realms conceptually.
The way I see it I agree with you on most things, but I see the underlying structure of the ECB as being able to fundamentally alter things in the right circumstances.
It's kind of like the ocean with a boat on it. Sure on the boat the politicians are screaming and fighting with each other and it's all very entertaining and distracting, but nothing they do will stop the tide coming in.
TF
Jeff,
"We await your triumph."
you dont get it. Have you watch "Life of Brian"? You should (the real title is ANOTHER)
I am not the one to ask how the world should be, nor to tell you the future on how to suddenly wakeup rich without doing anything (the DavidMorgan grouppies are a better place to be, than FOFOA).
But at least I can tell you what is going on right NOW, here in Europe. If FOFOA is talking about those "golden european giants", I can say what a BS. I live here, FOFOA does not and most FG followers never even lived in foreign countries. The only sources FOFOA has are anonymous writings 13yrs old, NOTHING, ABSOLUTELY NOTHING ELSE.
So as said, the only credible FG posters here are MF, VtC & Costata. All others like OneBadAdder, Ari, etc. which appear to be capable of own thoughts, I think have also some doubts about the ANOTHER-Eurogold-storry.
Lots of other just dumb religious followers arround here.
And about that "stay seated in church". Your right, but the dumbest people are the once that freak out, when you tell them "GEORGE CARLIN".
One last funny storry: My wife ask me this morning: "what you did so late last night, being on that forum?", "Yes my darling", "So what are these people are, are they rich?".
Hmmmmm I didnt answer, actually it was the first time since my wife ask that that I actually really thought about that argument. Thinking to myself "No my Darling, they are not, just dreaming to be", so I guess it stays with the old saying: NEVER TAKE A POOR MANS FINANCIAL ADVICE.
Greets, AD
MF,
You said: I see the underlying structure of the ECB as being able to fundamentally alter things in the right circumstances.
Victor's post is also essentially arguing why the US cannot return to a FIXED gold standard, correct?
What makes it so inevitable for the US to not turn to a freely floating gold standard if and when they so desire? After all, they have all the gold they want.
As in, why can't they plan to change their underlying structure so as to align with the ECB?
AD
Haha, I liked your funny story, a lot. :D
I guess I'll stick to listening to say Kyle Bass, who says to buy gold. xD
TF
AD,
Your right, but the dumbest people are the once that freak out, when you tell them "GEORGE CARLIN".
LOL, I would also add dogmatic people too. People may not be dumb, but they can be seriously dogmatic about their belief system, it is extremely hard to shake themselves out of such Confirmation Bias .
It is dangerous to be dogmatic, but it is wise to be PRAGMATIC.
Jeff, not gold confiscation. I would not go so far.
Wealth, paper wealth confiscation, taxes etc.
Don't care myself, of course but they will save their
asses, debtors will win over unsavvy saviors of the middle class, not of the 1%. The 1% will lose less than the middle class!
TDF,
this is already starting to happen: e.g. in Greece the eurocrats just simply put property tax on real estate owners. No matter what the people did, these people are just the easiest to target.
This is today just a "small fee" but it is already happening and trust me, this is just the beginning. The complete opposite of what FOFOA predicted with "printing up more scrip, gold tells you what your scrip is worth".
Greets, AD
e_r
FOFOA covers that in some posts. I can't recall their names though. Perhaps JR will be so kind as to help out.
The essence is, they can't. Their only path is to hyerinflate their debts away and then switch to freegold.
Which for the government is, I suppose, a even better solution, though the people may not agree.
TF
AD,
e.g. in Greece the eurocrats just simply put property tax on real estate owners.
I honestly don't understand how these Eurocrats are any different from Economic Hitmen .
Motley Fool
anonymous communication does not make things easier.
Dear Fool, I cannot separate money from poltics as they are siamese born. Only those having the money make the policy and there has always been a dilemma whether power makes produces money or money produces power. This vicious circle can not possible to broken. We only see some poor actors but they are playing the given roles so therefore we tend to identify them with the aims&results.
And about timing, yes, I know that FOFOA doesn't mention it nowadays, but A/FOA didn't make allegations to take place 30 years later on.
Timing becomes more of an issue due to the degradation of the world as a whole, a moral one, not only a financial one. Every day we continue this charade of lies, general instability costs lives of real people, destiny of real people and lets more and more hate arise. That is the problem I can see and that is the reason I cling to FG.
You see, I am no longer young, I am more or less ascetic per definition, I would not care to spend for myself what I have, but it's about the world we live in and I have no satisfaction in seeing what I see around me. If FG were doable, then I wish it would happen sooner than later and that is my reason why I am NOW so concerned if there are more obstacles in it's way than we see.
Desperado is worried about power/weealth concentration in fewer hands. Me too, but I hope for the best and the current system is too bad. I've seen some fortunes destroyed by political/financial systems in my own family history. Time to see it ending.
I feel exactly like Desperado re the geographic spread of sociopaths, the most maligne roots are not in Europe, these are just dirty opportunists.
jojo,
let me tell you my opinion on silver:
Imagine you have 10Mio.$ in cash todays.
What you do with it?
leave it on the bank? I say, bad idea.
exchange 100% dollar tokens into 100% physical useless yellow stone tokens? I say bad idea. Why? because some anonymous gold bug tells you from the 10Mio$ you can make 200Mio$?
Therefore stacking some stackable commodities, why not?
But if we are talking about $1000. I say, does not matter how you play the lottery or just simply buy your favorite whiskey and enjoy life, up to your choice.
Greets, AD
Hi E_R,
You say:
"What makes it so inevitable for the US to not turn to a freely floating gold standard if and when they so desire? After all, they have all the gold they want.
As in, why can't they plan to change their underlying structure so as to align with the ECB?"
Ummm, that's the point. The USA will ultimately embrace Freegold. But only likely after the current system washes out and gold goes into hiding. FOFOA has even suggested the USA take some steps to get themselves closer to Freegold in Open Letter to Ron Paul.
Here's a dump of some FOFOA comments on this:
===============================================
The legal problems the US faces with regard to past gold history have only to do with controlling gold to avoid real meritocracy moving forward. This is why another confiscation or a new fixed dollar-gold standard are simply not in the cards. Both are attempts to control gold and end-run meritocracy. The world will not tolerate that again. Fool me once, shame on you; fool me twice shame on me.
We can't turn back the clock. But we can move forward. The world would not resist the US revaluing its gold. There is no reason to. FOA said the US would eventually mobilize its gold at a much higher price. That means revalued, at the floating Freegold price. The US will ultimately have to make a market for its own dollars by buying them up with physical Freegold from Fort Knox.
When the trade deficit is no longer possible, the US will have to import all that inflation it has been exporting if it wants to keep oil flowing in. Real goods going out (gold) and less real goods plus some inflation coming back in. That's the reverse of today's trade deficit.
comment to Forum 201
another FOFOA comment from Forum 201
By the way, that's post-hyperinflation I'm talking about. They may well lop 12 zeros off the dollar before making a market for it. Exchanging one trillion old dollars for one new dollar. But gold will still be at Freegold prices (e.g. 55,000 new dollars/ounce) and they will have to make a market for that new dollar or it will continue to plunge like the old one.
That's the choice. You can collapse your currency against the non-economic good gold, killing the paper gold market and driving up the price of physical in advance of hyperinflation by buying it up. This gives you some hope of avoiding the worst of hyperinflation by providing a real outlet for unwanted surplus dollars.
Or you can wait until your currency collapses against economic goods and then you will have to buy back your own currency with your gold, also at Freegold prices. Even if you start a new currency you will still have to make a market for it because your credibility will be shot by that point.
Hi AD,
I don't think FOFOA has only the words of Another. It seems he has some history on his side, and the euro (I know you don't approve of it but it exists). Verifiable.
I don't take advice from poor men or rich men (do you take investing advice from Buffet?). But I listen to smart men and try to make good decisions. And I say my prayers, just in case there is a God.
https://en.wikipedia.org/wiki/Pascal's_Wager
Greets
I know, AD. Tey have even stolen the money in the health system for the bond swaps, they have stolen the money from universities funds, now 6 unis will close their doors and Greece is bleeding, they have a gigantic criminality from foreigners whhich they try to contain in fema-like camps paid by the EU (10M euro!)
No, for the time being I cannot see how the system predicted here works to the benefit of FG.
FOFOA comment to Reference Point: Gold - Update #2
What past transgressions will we be paying for? We've OVER-paid for Saudi oil for 30 years now, with low priced Western gold. And China has been eating up our Treasury paper for a decade now, like they just can't get enough of it. Yes, there is a transgression we'll pay for, but it is not our national debt. It is the entanglement of the paper gold market in the dollar/IMF architecture.
Yes, the U.S. will ultimately mobilize its gold in defense of its failing transactional dollar, as I intimated in the post. But that will be at a much higher price of gold relative to "April 2011 constant dollars". So the gold will go a lot further than it would if we mobilized (physically sold) it today. But it will also be during a crash in the dollar relative to real necessities like food and oil. FOA wrote about this.
I have written in the past that the only hope there is to avoid a full-blown hyperinflation would be for the U.S. to proactively introduce Freegold, even inadvertently. This is not something I just thought of. But I have also pointed out how this scenario has a near-zero probability because the morons in Washington would never think to do that. But heck, it's worth a shot, isn't it?
It is difficult to visualize the coming crash because you have to understand how Freegold and currency collapse can happen simultaneously, yet be separate events. And one can actually absorb some of the other. Quicker, sooner, more open Freegold (less gold in hiding) might equate to a little milder currency collapse.
You suggest the world may say, "Thanks, but you are a day late and many trillion short. We are happy you have joined us at the All Inn, but today, for you, there is an entrance fee."
This will have a lot more to do with the failure of paper gold than paper Treasuries. Treasuries perform by running the printing press. Paper gold performs by delivering physical gold. Try to imagine international claims against the U.S. made up of a "basket" only containing gold and dollars. The dollar is collapsing in value while gold is skyrocketing, and the U.S. has to settle some of these "basket claims" during this dynamic time. Less and less physical gold will combine with more and more dollars to keep the basket even. Can you see the dynamic?
Cont...
cont.
from the above comment to Reference Point Gold:
On a quick search of the archives (I'm not sure this is the best example), here's a taste from FOA:
As most of you will no doubt agree, almost all gold discussion still centers around "the dollar's war with gold". Truly, the evolution of this story will be how that war ended then and now the dollar's war with the Euro began! A very large part of that war strategy, employed by the ECB/BIS, was to let the dollar/IMF faction hang themselves by expanding and supporting the whole arena of this dollar paper gold market. Inflating the gold marketplace with so much "paper gold" that we would eventually have to bankrupt ourselves just to keep the dollar in the war game against the Euro.
Because Saudi Arabia is a member of the BIS and marks its currency to the SDR, we are going to be hard pressed, for oil reasons, not to ship [gold] against demands. Perhaps, oil's continued settlement in dollars is directly tied to gold,,,, Do ya think?
Further, much of the current credit in our modern gold market place is backed with this "legal tender" [the SDR] of the IMF. As we have contended for years, 90% of the entire modern dollar gold market is a paper game first, and that will burn as the dollar loses its position as the reserve currency. All these Giants that are holding physical gold and "credible paper" are going to win big as escalating gold values displace their dollar asset base. There are a few of you smart cookies out there that "NOW" understand what we have been getting at for such a long time.
[…]
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. Then the evolution of SDR use our guide knows so well will be complete. This will leave the SDR interpretation open to only one avenue to finding support: its basket currency function dissolved, gold will have to flow from American based [gold stockpiles]. With most of the present official credit gold leverage built upon IMF protocols, the US will find itself shipping ever higher priced gold to defend an ever lower valuation of dollar exchange rates.
With the world credit gold markets paralyzed in default and dollar credibility placed in question along with American economic stamina; physical gold will return to official hands in Europe in exchange for Euros. A paradox observed as high gold places more demands upon Euros and sends the dollar ever lower.
Aquilus - regarding our discussion of Turkey - if the people deposit their gold into Turkish banks, and the banks are allowed to count this towards their reserves, then who owns the gold at that point? Isn't it the banks? This seems messy to me, as it's no longer unambiguously owned. This is what's putting me off the idea of what Turkey is proposing.
Perhaps it will be clearer to me when the details are fleshed out.
fauvi
The coming superstorm will wash away all that detritus away. Personally I don't think it will take that much longer.
TF
jojo
Fwiw, of $10 mil I would keep maybe $50k in cash and buy gold with the rest.
I am that sure.
I think that is part of the problem AD has. He is not, and doesn't understand how we can be.
Granted he cannot even seem to distinguish between now and the future, so it is understandable he may have difficulty.
TF
Jojo,
not sure I understand you and you me. It's not about me, it's about this horrible world, this dirty matrix we live in, about our children and disruption. I do not need to save anymore, I have nothing to lose now and can go into hibernation with minimal costs (a roof/food) just for survival. The only thing I miss is travelling abroad.
Dear Fool
the moment the tide will wash us clean of our daily dirt I promise to book a fly to SA and hope to meet you. My feeling is that you are (one of the few here) in possession of the most humanistical orintation unrestricted by selfish, mercantilistic interests.
My respect.
Hi, Jojo
I wouldn't waste too much time trying to understand AD, I think he has ADD. %90 gibberish and %10 lucid.
Our German friends here seem to have a chip on their shoulder.
I really dig early 70's Krautrock, though.
TIGER ROCK
Killer early metal fuzzy riffage.
JR,
Thanks for the pointers.
FOFOA says: This is not something I just thought of. But I have also pointed out how this scenario has a near-zero probability because the morons in Washington would never think to do that . But heck, it's worth a shot, isn't it?
But the morons in Washington are really not the power controllers are they? Aren't they all bought and paid for by the big corporations anyway? (doesn't matter what the corporation actually does -- can be finance, automotive, whatever).
So the morons will do whatever the masters tell them to do.
George Carlin rightly nailed it in the video:
Politicians don't fall from the sky. They're just one of us. It is the public who suck. Public is willfully ignorant.
While I am in complete agreement with the thesis that something big and bad is probably coming this way, I can't clearly see how exactly a dollar HI will actually be in the favor of ALL the major global network of corporate controllers.
I am not saying HI is impossible, it is just that may be the tail risk probability that I assign to such an event is not as high as others here.
Perhaps the reason "we" are still suffering the deprivations of the pre-FG world is the incumbents are still fighting tooth and nail not to lose their monopoly.
FOA:"For us to see the whole [monopoly] board we must wade away from shore. Away from all the shallow water traders and into the deep blue. There we can feel the real current. …If you have read most of Another's and my posts, it comes apparent that preparation has been underway for some time to engineer a new currency system. A system that will evolve into the dollars slot once it dies.
Out here, in deep water, we can feel what the Euro makers are after.
Now look back to shore and watch the world traders kick ankle deep water in each other's faces over the daily movements of Euros. From here, up to our necks in blue water, you ask "What the hell are they doing?" I'll tell you. They are trying to make $.50 on a million dollar play! Mostly because they are seeing the chess game one move at a time. (smile) Truly, their real wealth is in long term jeopardy.
…In our time we will all see the Euro become very strong. You will read and hear this. But, Another and I have known for some time that it will be the dollar falling away that will make the illusion complete.
only "time will prove all things"
@jojo
I'm not understanding your logic in choosing silver over gold. Silver market is even smaller- hence easier by the institutions you worry about to corner and retain control/power. Can you elaborate?
North/South East/West Gold/Silver --> diversify
Or put another way, gold is the money of aristocrats, silver of craftsmen.
"Are you saying you think TPTB would choose fiat/paper called SDR over fiat/paper called dollar/imf??"
I have no special insight into what they will choose but I certainly wouldn't rule that out as an alternative outcome in one of their scenarios/plans.
"wouldn't that have to incorporate the other FIAT/papers it is replacing?"
If you want the precise kind of answer that you can expect from Victor or the philosophical perspective that Fofoa offers you won't find it from me. I would say that the components of any SDR that they might come up with would depend largely on the politics at the moment it was created. Maybe it would be the dollar and the Euro but maybe it would be the Dollar, Peseta, Drachma and Euro or maybe it would be ????. To me the overlying issue is what will these guys do to retain power. As in war, all plans are void once the first shot is fired.
MF,
"Fwiw, of $10 mil I would keep maybe $50k in cash and buy gold with the rest."
Sorry MF, wrong decision. jojo was much closer to a wise decision, except he missed to get some of OGWarrenB's stuff ;)
Greets, AD
P.S.
Why you are so horribly wrong? Because you dont have the 10mio. and therefore are greedy ;)
AD,
You said: Why you are so horribly wrong? Because you dont have the 10mio. and therefore are greedy ;)
That's nonsense. Are you saying a human would be less greedy if they had more money? Money has the same chemical reactions in the human brain like a drug. The more you have, the more greedy you become.
The pure concept of money is our shared use of some thing as a reference point for expressing the relative value of all other things. Money is the referencing of the thing, not the thing itself. As FOA said, money is "a value stored in your head!" Money is not something you save. "Money in its purest form is a mental association of values in trade; a concept in memory not a real item… the value is in your association abilities. This is the money concept, my friends."
Moneyness
If I had 10 million dollars I'd say:
"Find your way to the All Inn and pull up at stool, I'm buying drinks and the the spots are filling up fast in front of everyone's favorite mixologist, story teller and advice dispenser extraordinaire - FOFOA."
Hey Fauvi, you wrote:
'Do you think it is correct to insult someone when he asks questions you cannot answer very plausibly?'
Go read his post, and you'll see that he started it (how he has the cheek to criticise Fofoa when he clearly hasn't read what's here is beyond me), and I am perfectly happy to finish it, if it upsets you, you too should consider buggering off to a Euro-whinge board.
He has continued in the past 50 comments too, demonstrating both his ignorance of Another/FOA/FOFOA posts and what has actually been happening in the world over the past few years. I have never seen a purer epitome of the saying 'empty vessels make the most noise'.
Out of interest, if anyone had asked me just 11 months ago what I thought about the Euro, I would have said it was doomed to fail very soon. And if someone had asked me about HI v deflation, I would have said deflation 100%. And of someone had asked me about gold, I would said it's in a a bubble, and will burst soon.
And then I did what AD (and others) seem unable to do: I read lots of stuff, and did some thinking, and changed my mind on all of those issues. Oh, and I went all-in on gold too, both for peace of mind (I trust nothing else)and the potential windfall gain.
I suggest again to the board, just ignore those who just want to come here and moan about the Eurozone/ECB. Fauvi, if you don't like what you see in Greece now, you are going to have a miserable 40 years+ ahead of you, cos that is reality, minus socialist unfunded freebies.
Bring it on.
Missed you too Desperado, your mate AD is just like you isn't he, except not quite as boring.
Not quite as boring.
Not quite as boring.
Damn, it's that echo again.
First, I apologize if my response to AD above has contributed to the zerohedgeification of the comments section. More later.
For now, I'd like to draw your attention to the following comment by Ali Naimi (Saudi oil minister) in the Financial Times yesterday. The following link should get you there even if you have no subscription:
http://is.gd/8yLc20
He basically says the oil price is too high, he wants it lower, he does not understand why it is so high, there is no shortage at all, SA has a lot of spare capacity, and he would love to bring the price down, but there is nobody who needs more oil. Some questions:
Why doesn't he offer 0.5mm bbl per day extra at $40 per bbl for pickup in the gulf? That should get the price down rather quickly.
1) He does not have the spare capacity he claims.
2) His article means "We don't like the US$ and the current U.S. politics, and we let you feel the high price" - he just phrases it more politely
3) Oil is in backwardation right now, i.e. there are currently no arbitrageurs who sell spot and buy the future. Why not?
a) They don't want to because they don't want to take the future that is still denominated in US$
b) They cannot sell at spot because of a lack of shipping and/or storage capacity. This could be caused be speculators who fear a war and who bid up all the oil that is in storage, but storage is full, and the producers cannot sell more oil into the market because of lack of further storage capacity and/or lack of tanker capacity from the golf to Rotterdam/Alabama coast.
Which one is it?
Victor
fauvi
Sure, when the dust settles I'll look forward to that.
Also always wanted to visit Germany and I hear the beer is good. ;)
TF
Hi Jeff,
Make sure you pray to right god and all he wants is a occasional half-hearted prayer. :)
But who knows, maybe you get the best case: perhaps "he" is a gambling "lady" who too appreciates that the value of the bluff in a one-off wager is in convincing the other person to not wager at all, aka bluffing in the hope of not losing.
If I had ten million dollars, I'd do twenty chicks at the same time... and then I'd buy a ten million dollar car.
Wendy,
Belated Happy Birthday.
All,
I just wanted to apologize for my bad behaviour on the earlier thread. Sometimes I lose it for reasons unrelated to the discussion here. It’s not personal. I find it difficult to remain unemotional about some topics (which is no excuse for my outburst of course).
Nice to see some of the trolls at it again in my short absence. Once again claiming that no one has addressed their arguments about the EU, Euro, Freegold-RPG etcetera. Arguments that have been exhaustively discussed and addressed many times in several hundred posts and over 30,000 comments.
Cheers
VTC,
Re: Oil
I think you might find it illuminating to review the geopolitical events impacting on the ME and oil market over the past 12 years and ask yourself whether protecting Saudi Arabia's position as the swing producer explains a great many things.
A desire to keep the gold:oil exchange ratio within its long term range might explain a few things about the market as well.
I would also add that these higher oil prices make the more expensive sources of supply viable. Perhaps that acts as a check and balance on the power and influence of the swing producer as well.
That's my 0.02 for now.
Victor,
Thanks for the link. Very interesting article. And your notes on possibilities are interesting as well. Can they all be true at the same time but not to the same degree?
I think it may be valuable to read between the lines and note what he does not say.
For example, he says:
generate good returns especially in emerging and developing economies (producing nations) .
Paraphrased: lower oil prices mean good returns for producing nations but also encouraging consumption for an all-consuming machine, therefore we need to balance between these two acts to ensure we don't favor too much of what we don't want.
He also says: no rational reason for higher prices .
He establishes there's adequate supply to meet the demand and then some. Other than supply-demand, the factor that can affect price discovery is monetary debasement to ease debt burden. This monetary debasement is not considered a rational reason by Ali Naimi.
These oil games are wild.
Hi e_r,
"While I am in complete agreement with the thesis that something big and bad is probably coming this way, I can't clearly see how exactly a dollar HI will actually be in the favor of ALL the major global network of corporate controllers."
Not sure if you're serious or just making a funny, but in the odd case you are not, FOFOA's most important post is The Debtors and the Savers. I'd take some time to try to understand it.
Thankfully for you, FOFOA wrote a more recent piece called Deflation or Hyperinflation? in which he shed some light on why "The Debtors and the Savers" is his most important post:
...The point of sharing this FOA excerpt was that deflationists, like other groups that have established encampments cluttered with old baggage, tend to miss what is actually unfolding. And for that, you might want to start with my post The Debtors and the Savers. Understanding the balance necessary to keep the peace between these two groups is fundamental to understanding the political will behind the inevitability of both Freegold and dollar hyperinflation.
Rick seems to have a number of hang-ups when it comes to both gold and hyperinflation. His biggest is obviously real estate and the modern home mortgage. He simply cannot seem to fathom how a system designed and managed by The Power Elites could ever deliver a "windfall" to overleveraged, underwater homeowners or shady, uncouth gold bugs. And, frankly, if you don't make the effort to understand what is actually unfolding, there's a good chance it won't
[...]
You see, those Power Elites that Rick thinks are going to support the dollar and its $169 trillion burden (excluding derivatives) simply to make sure you'll work off your $9 trillion dollar mortgage at today's purchasing power are the same ones that will resist personal austerity measures the most. And as all good deflationists know, you simply cannot resist the irresistible without breaking something. And what they will ultimately break in their competition to maintain lifestyle is the value of the dollar, which will actually break quite easily due to the mountainous (think: landslide) shear stress applied to it right now.
[...]
In order to share my view with you, I am going to patiently work my way through Smith's email, correcting errors and explaining the flaws in his perspective as I go:
As we’ve both said, the other issue is, how do the Elites benefit from hyperinflation?
I think we can safely define Charles Smith's "Elites" by his own words as the Financial (Wall Street) Elites, the politically powerful (including politically connected corporations and unions/union pension funds), the "banksters robbing us blind" and "CONgress" along with all the politicians running this country into the ground; basically everyone running the Dollar International Monetary and Financial System (the $IMFS). And he asks how do "they" benefit from hyperinflation? Well, they will benefit, in the same way that those closest to the printer benefit tremendously in all hyperinflations. But more importantly, Smith's core perspective on "the Elites" is wrong. He makes the same mistake Karl Marx made, which I explained in my post The Debtors and the Savers. [I know, this is the second time I've linked this post. It is intentional. I'll probably do it one more time as well.]...
Desperado-
you said " To me the overlying issue is what will these guys do to retain power. As in war, all plans are void once the first shot is fired."
To me, your worries of this are wasted. Who cares. It's done. They have already done whatever they have done to obtain power. They will come out of this being some of the biggest holders of Gold. they will step from the top of this pile to the top of the next pile.
Sure, some will get lost, fall down the side of the hill, but most will be just fine.
It is my view that TPTB, the ones who the politicians and all the names you read about work for, are mostly unknown. If you truly ruled the world and desired to do so, I would think you would keep a very low profile.
It seems to me you are expecting many of TPTB currently to lose their position....so you must think they have not planned for, or have seen this coming. I think that's a misjudgment.
e_r and Vtc,
Here is Peter Schiff's take on higher oil prices from a month ago, maybe relevant;
http://www.youtube.com/watch?v=CPDhJLwXuY4&feature=related
A shorter version below (Schiff start talking at about 2:35 in this video.
)
http://www.youtube.com/watch?v=K132dtSPEaM
@RLP... Now that is some phunny stuff!
As to our German friends... Why are you here? Are you only venting about the unfairness of the Euro and the ECB? Okay, take them out of the equation. What advice do you offer for those of us willing to listen to alternatives?
AD, you seem to think many of us are poor. I am willing to bet I am the poorest on this board. What should I do with my limited savings?
Please share your wealth building strategies so that we may all grow from your expertise. I look forward to hearing your thoughts...
I read an interview with Martin Armstrong today. I don't read much of his stuff, but when I do I'm aware of his different perspective on economics. He doesn't argue the usual hyper vs de flation that I am familar with:
"HRN: Do you think we'll see U.S. dollar hyperinflation?
Martin Armstrong: No, because the economy would not survive long enough to reach the stage of hyperinflation. Everything would collapse before that happens. What's important to understand is that Americans tend to focus on American numbers but Europe is in far more serious trouble. A lot of the European banks are still owned by the governments."
http://www.safehaven.com/article/24880/martin-armstrong-on-the-sovereign-debt-crisis
I am interested in other's thoughts on this.
Thank you for the birthday wish costata, and welcome back. Also welcome back desparado. :D
I'm still thinking on what I would do with 10 million bucks, but I'm having trouble with. What I would do with 10 million that just dropped in my lap today is very different than what I would do if I had accumulated the money over, say, 3 decades.
@Wendy
I don't buy into Martin Armstrong so much anymore. I recall a time where Jim Sinclair used to reference him on a fairly regular basis. That seems to have ended for now. His last reference is January 5, 2012. Apparently Armstrong was calling for $1100 gold at one point. Seems he is out of touch or serving another master?
Reference: http://www.jsmineset.com/2012/01/05/jims-mail-box-2/
More oil. At FT Alphaville
http://ftalphaville.ft.com/blog/2012/03/29/942361/saudi-arabia-resorts-to-jedi-mindtricks/
Chris J Cook writes
In my view we are seeing these reserves being acquired as public and private 'physical hedges' by consumers in response to all of the Iran noise.
My take - I know for a fact that Marc Rich was in Tehran a few weeks ago, and it wasn't to take the air or go clubbing - is that Obama and Khamenei (who is now firmly back in control) have come to an understanding. Marc Rich is one of the few people trusted by Khamenei: don't forget that he was happily flogging Iranian oil to Israel for six years under the Shah, and another 14 years for his friend Khomenei.
That could be why Iran wrote within a couple of days of the election (which gave Khamenei political legitimacy over the Ahmadinejad oligarchic faction) to the 5 + 1 meeting to get the ball rolling again; why Obama suddenly became so clear that Iran were not going to have nukes; and why Khamenei was making comprehensive condemnations of nukes as a sin.
My scenario is that we will soon see Iran backing off - with as little loss of face as possible - to the very same concessions Cheney turned down in 2003 (when Khamenei called the shots) with the difference being that Obama will not insist upon regime change.
Furthermore, my take is that the Saudis and J P Morgan Chase have for three years been using Enron-style Prepay contracts to maintain what was essentially an oil peg against the dollar using distinctly un-open market operations via oil repos.
The problem with this central oil bank strategy is that it requires a continuing flow of funds from muppets into the market as the producers take excess profits out. It is also susceptible to shocks. The Libya spike/shock last year was weathered.
But the inflation hedging muppet money has been pulling out; inventory financing is sparse to absorb excess oil, and once these fleets of tankers - which are IMHO carrying oil of which Saudis are only the nominal owner - reach the US and title is eventually transferred, then things should get interesting.
Marshall Auerback recently made the point that quite a bit of the oil which has already flowed to the US in Q1 has not showed up as US inventory. My explanation for that is that this is because the Saudis nominally still own it.
I have been forecasting a market collapse before the end of Q2 2012, and I stand by that forecast in the absence of a major shock.
Interesting times.
I don't fully understand how the oil-peg works though.
Victor
costata,
I am a bit slow as regards oil - just to make sure I understand you:
The Saudi's are the major ally of the U.S. and they help the U.S. control the price (both up and down) if needed. In order to make this arrangement work, SA needs to retain its status as the major swing producer (although they may loss this position to Russia eventually).
The Saudi-JPM deal alluded to by Chris Cook (previous posting) fits into this picture. It would be the producers eventually screwing the speculators.
But this would mean that the U.S. want oil expensive in US$ - which was rather contentious here not that long ago.
Also recall that there are now 11 super tankers lined up to go from the (Arabian) gulf to the gulf (of Mexico) where there usually are only 6 per year. And people said that this shipment has not yet had any price impact (according to the FT last week). Again, this fits the comment by Chris Cook that the Saudis still own the stuff and it had not (yet) been sold into the spot market.
How is this compatible with FOFOA's interpretation that the Saudis are getting out of the forward contracts. Has the recently shipped oil already been paid for? If yes, it would suddenly enter the market post-refinery in the near future and probably crash the price (again as Chris Cook predicts).
This would mean the Saudis were in a forward-purchase operation in order to fix a (high) price, but now they are getting out and will crash the price. How can this make sense?
And what about the observation that the gold/oil ratio has been rather stable all the time - a rejection of the US$ should lead to a rising gold/oil ratio, no?
Victor
Good and convincing article on gold price manipulation on ZH today:
http://www.zerohedge.com/news/paul-mylchreest-presents-various-visual-case-studies-gold-price-manipulation
For those who still 'play' the market with the few $$ not yet converted to the good stuff you could play along with the manipulation and make a few bucks. After watching Kitco for a couple of years I have been impressed that the price goes up climbing the wall of worry, but with gold it almost always falls in a straight line, bam it is down. This article reviews the times and patterns of what the author is sure is algorithmic manipulation. It may not make a difference to you if the POG is suppressed by some entity but after reading thos article any doubts I may have had are gone.
The gold/oil ratio was not stable in mid 2008 to early 2009, was it?
But thankfully for the US, the price of oil surged and the ratio came back down.
Perhaps it was contentious among some, but that does not mean it was also not obvious.
thedeadfauvi,
Most of the people have no idea who and what Weber and Stark are and if they know they cannot make any connection.
Who is it that matters? There are always the 90% who don't care and who don't know. They will get wiped out. This is one of the truths of history.
Secondly, there are the professional investors. I like to subdivide them into two groups: those that manage other people's money and those who manage their own. The former class care only about relative performance. They will get wiped out, and they will perform about average with this outcome.
Finally, there are those who invest their own money and those that are interested and care. You can bet that they understood the message in my option 3.
If you want to rescue the ignorant masses, fine, do what you possibly can.
Actually I wonder how many many people living under euro regime believe in its strength and future here expressed.
What matters for the (ignorant) masses, I guess, is that the Euro is accepted in transactions and that the ECB can roughly maintain their inflation target of about 2% annually. If you want to call it like that: when interest rates are low, these 2% is the laziness surtax on those who can't be bothered. For now, it is my impression that the ECB has a reasonable chance of delivering on this promise. They just need to move on with a mixture of deleveraging because government debt is not risk-free and monetizing some other bad debt. What matters is that they don't monetize the running budget deficits.
The rest of the laws supported by the EU are completely and outright undemocratic, adopted 1:1 after the Am. ones vave been implemented.
I agree that one can be rather upset with the stupidity and corruption of most politicians. We just shouldn't get too worked up that we miss the big picture.
The big picture in my view is the accumulated international imbalances. The savers have accumulated absolutely incredible amounts of debt of the consumers: U.S. pension funds bought mortgage backed paper, the Chinese bought T-bonds, German savers took their money to the bank who just lent it to the Greeks. It's all the same everywhere.
And you cannot fix it by dealing with the debtors. The debtors just borrow what they can get and then spend it. You can force them into labour camps or whatever you can think of - they will never be able to service or pay back this debt in real terms - even if they wanted. It is too much.
The only way of fixing it is that the savers learn their lesson.
Victor
This latter remark is the reason why the entire hard money agenda misses the point.
As long as the producers continue to lend to the consumers, they neutralize the adjustment process and cause massive misallocation of capital on both sides. The misallocation on the side of the consumer is such that it gets more and more difficult for them to service that debt.
It does not matter whether this debt is denominated in gold or otherwise hard because the problem is that the economy of the consumers gets so distorted that the debt will inevitably fail. It will fail in real terms. Under a gold standard, since the gold to pay back the loans simply doesn't exist, you get a credit crunch and a run on the bank. Under a paper money system, you can create some inflation and some backstop to prevent outright deflationary collapse or you can monetize excessively and inflate the debt away.
But the fact is that the debt must default in real terms. Pick your poison. The hard money agenda just claims that deflationary collapse is the superior poison.
The point is that this is not a solution to the original question. The original question is how can the imbalance be avoided in the first place. And the responsibility for this is with the saver. So this is where the action will be.
Victor
MF,
It's kind of like the ocean with a boat on it. Sure on the boat the politicians are screaming and fighting with each other and it's all very entertaining and distracting, but nothing they do will stop the tide coming in.
!!!!!
ephemeral_reality,
What makes it so inevitable for the US to not turn to a freely floating gold standard if and when they so desire? After all, they have all the gold they want.
I think eventually they will. But first the (old) US$ has to crash. The reasoning is as follows: If the gold price in Euros rises (paper or physical does not even matter at first), this is rather neutral for the real economy and positive for the ECB and the financial system because it recapitalizes them. Since the Euro zone has always had a balanced trade account, there are not excessively more Euros outside Europe than there is other currency inside Europe, and if gold goes up, it affects the Euro and other currencies in the same way.
If the gold price in US$ goes up, this creates a problem for the U.S. Due to their trade deficit over 30+ years, there are way more US$ (denominated assets) outside the U.S. than there is other currency inside the U.S. So if gold goes up in US$, it becomes less and less attractive to hold US$, and this will lead to a decline of the US$ in real terms.
This will eventually create a perverse stress in the trade and capital flows. There are a few indications where things are headed: According to what is called Tobin's q, the US stock market is some 75% overvalued whereas most European markets are about average or below average priced. This is easily resolved if the US$ gets devalued some 50%-70% in real terms while the Euro is not. So the U.S. will probably get a good part of the inflation back that they exported through the previous decades.
If I were them, I would use my gold only after that devaluation.
thedeadfauvi,
The alleged anti FG people do not say FG is an impossibility, at least I don't say that. I only say it can take much longer than believed, it took longer than A/FOA have guessed.
Let me suggest two major factors:
1) Oil has not switched away from the US$
2) China bought a huge share of the running budget deficit of the U.S. over a decade.
By the way, both are major savers who have supported the old system during the previous decade.
And so why don't we concentrate on better understanding these factors and how things might continue. I was trying to get the discussion focused on oil.
Victor
Hello Friends and Enemies,
The centralization of power has been going on since humans began roaming the Earth. There are times when this trend subsides and times when it accelerates. As some of you already know, I still hold a grudge from when power was centralized in America in the 19th century. But these are political, moral, and ethical issues and that is not what this blog is about.
This blog is about taking the facts we have at our disposal, using those facts to think outside the box, and preparing ourselves to be in the best possible position as we enter into a new monetary system. Is this selfish? Hell yes. Selfishness is a natural human action and I'm proud to say I use it to my advantage every chance I get.
Just because we've come to the conclusion that the Euro architecture and its MTM gold are the model for the future does not necessarily mean we believe it to be the pinnacle of moral superiority. We just believe it to be the direction in which the world monetary system is headed.
I have empathy for what the Europeans are going through as their sovereignty is lost. I really do. But, guess what? There ain't nothing you can do about it. Just like there's nothing we've been able to do about the loss of state sovereignty in the US. That's why we refer to ourselves as Shrimps on this blog. In the eyes of the Giants, we're just spineless creatures they can eat for lunch. And in the grand scheme of things, that's a very accurate assessment.
The best you can possibly hope for is the organic, evolving, and decentralizing forces of honest money and honest information pushing us in the other direction over time. Maybe you'll eventually get more honest political representation out of it over the long haul. My advice is to learn to live with that and get over it. Your hated euro is here to stay. Get used to it and adjust accordingly. Another already told you "if you hate the current system, you'll no doubt, hate the new one too."
I don't like much of what Max Keiser has to say, which is why I don't comment on his blog. So if you don't like what FOFOA has to say, then why do you come here? I've watched some German porn in the past and it's pretty twisted, but I had no idea all of you were masochists!
And to whichever one of you Aryan whistledicks was hatin' on one of our most Ancient of Ancient OG's, Aristotle, I say learn some damn respect! He's given you the quote you need to read the most:
"In working on this project, I was personally shocked when I discovered that we absolutely NEEDED paper currency in order to set Gold free. In the perfect world you lapse into in your comments, everything you say is well and good. We don't live in that world, however. My biggest challenge in piecing together my proffered solution was to accept what this real world had to offer and avoid foisting my own preferences onto the world like a square peg in a round hole."
If all Ari ever did was get on this forum and tell jokes about your mama, he would still be a more important contributor to this blog than you. He put his work in a long time ago. As far as I'm concerned, all he has to do is sit back and watch this new gold market together with us, yes? ;)
So to all the haters: Maybe fofoa.blogspot.com ain't for you. Maybe it just ain't your thing:
http://www.youtube.com/watch?v=TxlITW2C_yc
Love always,
RJP
Victor,
You are either speaking exceptionally clearer this evening or I am starting to understand you.
Kudos either way!!
"HRN: Do you think we'll see U.S. dollar hyperinflation?
Martin Armstrong: No, because the economy would not survive long enough to reach the stage of hyperinflation. Everything would collapse before that happens.
^Yeah and if that happens, the dollar will collapse with it which can be considered hyperinflation.
This whole thing is testing my patients. Its testing everyones patients. Gonzalo Lira is going to stop writing. Maybe it will take decades for this whole IMFS to collapse just because of the economies of scale involved.
Desperado,
To me the overlying issue is what will these guys do to retain power.
Precisely. They will first let the dollar crash, print like crazy in order to keep basic supply lines (food, water, energy) going. Once a good proportion of the bad debt is cleared out and they sill have to purchase stuff from the surplus countries, they will mobilize the private gold as well, perhaps even abandoning the capital gains tax on it in the U.S.. The US$ will have hyperinflated and the guys in power will be exactly the same ones as before.
The only difference after the transition will be that they no longer have a free lunch (because some savers stuff it into their mouth), but they will have to work for it. In the short run, it will be the same crooks in charge. But in the long run, it will make a hell of a difference.
Victor
VTC,
Before I comment on your reply I would like to try and kill a notion I introduced in a sloppy piece of writing in a much earlier thread, that is:
(although they may loss this (swing producer) position to Russia eventually).
I should have described Russia as a large producer on a scale that rivals the Saudis in export volume not as a rival for the role of swing producer. I tried to correct this earlier comment in a later thread.
So let me be clear on this; I don't think there is any rival to Saudi Arabia for the swing producer role.
There are many reasons but let's just look at one. In terms of infrastructure alone it would take a vast amount of investment by another country with massive reserves to oust them. It would also take many years to complete the ramp up. If the Saudis crashed the price of oil in the meantime or that emerging rival was crushed by economic and/or military action it would all be for nought.
I see the threat differently. If the oil market is oversupplied then the swing producer can only increase production and drive down the price. Provided it is also a low cost producer it can make up for the lower price by increasing volume. In that situation they have to increase market share at the expense of other producers to maintain their revenue.
In a tight (supply/demand) market the swing producer can influence prices in both directions. So the threat to their ability to keep prices high comes from an increase in overall supply that creates a persistent over-supply of oil.
This game begins to be "interesting" for the Saudis under a couple of different scenarios:
1. Demand cannot be sustained. Obviously if prices are too high it will cause an economic contraction. Likewise an economic contraction could lead to a decrease in demand.
2. Supply cannot be controlled eg. Iraq breaks out of OPEC's control and ramps up production (provided it can produce oil at a similar or lower cost to Saudi Arabia).
3. The developed countries embarked on a Manhattan Project or NASA Man-On-The-Moon scale program of energy conservation and efficiency.
If I read JR's thinking correctly he is trying to suggest that the rise in the gold:oil ratio in 08/09 was putting the status quo at risk. (I'm sure he will correct me if I have this wrong.) The inference being that the Saudis are still able to obtain a relatively stable value for their (over-priced?) oil measured against gold (as opposed to oil exchanged for gold itself under the earlier deal A/FOA described).
I think we can safely assume that the House of Saud realizes that it cannot bid for gold without sending the price much higher and the risk of immediately blowing up the $IMFS.
BTW I see this gold and oil market manipulation as a management excercise designed to accomplish geopolitical and economic aims. I can't offer you a clear desciption of the mechanics of the manipulation. IMO these markets are too opaque to make this possible. Most of the evidence is circumstantial.
As an aside I would also like to make the observation that all of the folks bemoaning the "high cost" to the USG of these wars etcetera have it ass-backwards. As long as the $IMFS exists these wars are free - as in no financial cost apart from issuing IOUs which aren't going to be paid in US dollars with stable purchasing power. HI solves a host of problems for the USG.
costata,
As long as the $IMFS exists these wars are free - as in no financial cost apart from issuing IOUs which aren't going to be paid in US dollars with stable purchasing power. HI solves a host of problems for the USG.
Exactly. Even a good part of the oil is free. Just think about the aggregates. They expand their credit volume, use it to pay for the imported oil and export the debt through the other door.
Saudi Arabia is clever and they make sure they get a fair share of their payment in gold, but this works only as long as someone else (China, Japan) take the paper. This is how the American empire is financed.
With this line of thought, the optimum strategy for the U.S. is to keep the dollar up as long as they can and then, at a favourable point in time, crash it suddenly. The only downside is that this works only once and so has to be done wisely.
Victor
It is very interesting to note the patience threshold of many is being severely tested. I wonder if that is, in part, the frustration experienced by our German 'friends' as they vent on this esteemed board.
One thing is certain, very few will be around for the grand finale as is the case for any bull market; most will be washed out and up long before. People are always their own worst enemy. Step away from the computer, take a walk, smoke a cigar, make love to your sigo; but don't watch or react to each wiggle or waggle in the POG.
PE
"What should I do with my limited savings?"
Trust me, having alot of money does not change life that much, it does basically only two things:
1.) Changes the way other look at you. IMHO If you are keen on that, you are a sick sucker anyway.
2.) Money does not change the character, it only reveals it. IMHO if people are not happy with 10mio, but still seeking more, they are sick in the first place and even more will not make them happier.
"wealth building strategies?"
This typical expression is nonsense, just used to keep you in your threadmill. I guess Ari expresses it best, ENJOY LIFE (and save the REST in hard assets, but that is the last thing to worry about).
Greets, AD
P.S.
You know, you come from nothing - you're going back to nothing.
What have you lost? Nothing! (BRIAN)
AD,
I noticed you have a new blog
http://antifreegold.blogspot.com/
I can see by looking at it that you have a lot to say.
One piece of information that does not fit into the picture is that Another stressed that the Saudis and the Chinese were in the BIS and that he suggested that they would eventually side with the Euro.
Wishful thinking and then disappointed, or just not yet? Let me still repeat that both SA and China were bribed with cheap gold, mainly on a European initiative. So what favour do they owe the Europeans?
Victor
AD:
Thanks and I concur. I believe you have a lot to offer this board and hope you continue to share your views (though I admit to not really understanding your angst when it comes to the Euro). The Euro, to me, is just another medium of exchange, IMHO.
I do believe in saving in real assets (Au, Ag, Pt, Pd) and that is the route I have taken for me and my family (however limited those assets might be). Prost.
Manipulating Comex Gold For Fun And Profit
Long time readers may recall the challenge I made to the silverbug pundits in the silver open forum. I linked and quoted a piece by Tom Szabo in which he described the relationship between the Comex shorts and longs. According to Tom it's the shorts that can force physical delivery not the longs.
My challenge (to those who claim that the longs will over run the shorts one day) was to refute Tom Szabo's analysis. No one took up the challenge. I take this as an admission that he is correct.
I mention this now because I want to compare this situation to gold. If the market structure is the same in Comex gold then the threat of the BBs on the short side is to deliver gold to longs who either cannot afford to pay for it or don't actually want physical gold.
Long time readers may recall that I think of GLD as being somewhat analogous to the BBs having their own CB gold backer. In my opinion this doesn't need to be a perfect substitute in order to succeed. It merely needs to contribute to the perception among leveraged longs of a credible threat by the shorts to deliver.
I use the word 'contribute' because the BBs have other resources to substantiate their threat eg. better data on mine supply, refiner output, the Mints etc. If the conditions are right then the BBs can take down the spot gold price. It's like taking candy from a baby while the longs are leveraged. I think this game can continue until the longs exit voluntarily or they are forced out.
Meanwhile none of the parties accumulating physical gold have any incentive to run the price up. Out of self interest they should support the status quo on the Comex for as long as possible.
I think the same can be said of the oil market. As long as the key players are on the right side of the trade at any given time then, up or down, they can profit. I think we have to look beyond the swings in prices in order to try to deduce the fundamental drivers. To deduce the overriding aims and objectives of the important players.
That's my 0.02 FWIW
Victor,
Ari once suggested to me that ANOTHER may have initially spoken out (anonymously) as a means of sending a message to someone in particular. At the beginning, ANOTHER was worried TS would HTF before the euro had its big day. That oil would bid for gold out in the open. Ari later wrote, in response to someone's question about what had been the most significant event during the time A/FOA were posting (referencing the Brown's Bottom gold sales, the WAG etc…), that the successful birth of the euro was by far the most significant monetary thing to happen then or ever.
Something else he suggested to me was that the name "ANOTHER" came from the fact that Another couldn't pass his message directly. So his friend who posted the first message on Kitco had to think up a name. He simply went with "I'm posting on behalf of ANOTHER."
BTW, there is no one who had closer and/or more private contact with FOA than Ari. Some even thought that Ari was FOA. But after talking to him at length about this, I don't think it was him. Even still, I can confirm that he is smart enough to have pulled it off.
Sincerely,
FOFOA
FOFOA,
still I dont get it, why ANOTHER is supposed to be the ultimate prophet. Duisenberg, Weber,.... they also probably had a different view on the Euro-project how it was supposed to be. But what something was supposed to be 15-20yrs ago, has nothing to do with the present.
No matter what these people thought how things are supposed to work out, let's look at it how it is today: Almost every essential rule is broken, EVERY RULE. To say: "lalala...but Another said..." is completely useless.
Greets, AD
AD,
If the thoughts apparently occupying your mind at present resonated in the slightest way with my thoughts and understanding, you would get more of a response than this.
Sincerely,
FOFOA
Reply to VTC re oil:
I think the real reason for high oil price could be this:
The US is manipulating oil price higher to punish China, to increase the running cost of China's economy for not cooperating on many fronts. The US pays high priced oil with printed paper, but China must pay with real labor/savings.
FOFOA,
that's fine with me. I am here for new perspectives and that's what you do: Show me your fishing rod and I am happy to see if it works out for me as well when I go fishing with my own ;)
Saying this: Your fishing rods are far superior to the ANOTHER ones :D
Greets, AD
AD,
still I dont get it, why ANOTHER is supposed to be the ultimate prophet
And you never will get it because no one here considers him to be a "prophet". He and FOA provided insights into economics, the monetary system, geopolitics and economic history that have helped many of us to identify:
- What we should be looking for;
- To recognize what we are seeing for what it is and;
- To extend a coherent narrative which explains the events that are unfolding.
If you place any value on the comments, links and posts here which attempt to analyze and discuss current events then you should be aware that to some degree you have Another and FOA to thank for any insights that we can offer.
As I said Another is not considered a prophet here and this blog is not a religious sect. It is, in its finest moments, a think tank. At its lowest moments it is a deeply frustrating and emotionally draining excercise in futility.
Suffice to say that many here would not associate your contributions with the finest moments.
costata,
I agree, and thats why I am reading this. BUT:
"To extend a coherent narrative which explains the events that are unfolding."
There are events unfloding "Freegolders" often completely ignore or blind out. I have not read any contribution here on FG about e.g. the EFSF, TARGET2.... This stuff is REAL, why not spend more attention to it? I have the feeling that more thoughts a spent on interpretations of the past than on the present REAL STUFF playing out, instead of using it to put that in perspective with the past.
I have the feeling that it turns into something like the catholic church trying to defend that the earth is a plane, just because the pope said so, ignoring that there are already satellites surrounding the earth.
Greets, AD
In a way I can agree with AD on this. I enjoy the references to the past but am missing the road map or alignment with events as they are unfolding now. It is quite possible that these are present in the posts provided by FOFOA and I am just a tad slow. If that's the case, please point me to an example and I am happy to take it from there.
or another small detail nobody mentioned here: that the ECB reduced the minimum reserve requirement from 2% to 1% on the 18.January this year.
Just a detail and probably not worth noting....it is so unimportant that I apologize to even mentioning it. Me stupid to even bother looking for explanations on that....
Greets, AD
AD,
You are looking at details (good), but you are not abstracting enough, and thus you are not seeing the dots to connect and the big picture.
-- an European living with the euro.
Yannik,
dont take that personal, but BS comments like that can really make me upset. WTF do you smoke?
Jumping off a skycrapper telling people not to worry, because the site is so awesome.
What has to happen before you notice that its a bad idea? Lower the reserve requirements to ZERO?
Greets, AD
@AD
Not sure I understand your abject hatred for the Euro. If you are German, how were you harmed by this currency? Or are you truly embracing the EU project and upset over the suffering by some member nations? Methinks you gotta get over this OC issue with the Euro. Besides, if you have PMs (as you mentioned), it doesn't seem you will be impacted in the long run. What am I missing?
PE,
One thing is my very really personal feeling towards the EU(RO). But this is just a personal _opinion_, but not an argument: It destroys the individual cultures of the nations and their identity and their selfdetermination, sure Americans can not grasp that, since they dont have any. But to give you an example so you might get an idea what I am talking about: It is like some Boston dude without being elected going to Texas and prohibiting guns and beef, because "this is good for you".
The other thing what is REAL FACT: The physical plane in Europe does not benefit from the Euro, the opposite, it suffers (just like probably under any socialist central planning totalitarian regime) that is happening today (and in the end will probably even cost lifes, but who knows, what the future will bring). PERIOD. And this is all that counts, and I dont give a sh!t what some american figures out on some theoretical monetary lalala BS, without living or knowing europe at all in the physical plane.
And all the younger Eurofanatics readers here: If you dont know Europe before the Euro, and believe in that Euro crap "prevent war", "nice to travel with one currency" and all that other propaganda BS, JSTFU.
Greets, AD
tintin,
I think high oil prices are targeted more at Europe than China. As ZH likes to remind us, gas prices in Europe are at all-time highs. And really, any increase in costs for Chinese manufacturing just gets fed to US consumers, who buy the finished product with deficit-spent money anyways.
The Euro skeptics have it all backwards. They blame the Euro for the ills of European countries, which would be far worse off without the Euro. Look at Greece, Germany, and Ireland.
Greece:
Greece had a credit bubble pop, and now is suffering some deflation in the aftermath. Suicides, babies being abandoned, the whole lot – how sad.
The credit bubble would have happened in Greece regardless. Sure, Greek bonds would not have had quite as low an interest rate because bond buyers would have to account for exchange rate risk as well as default risk. But Greece could have gotten around this limitation by issuing debt denominated in foreign currency, like Hungary with their CHF-mortages, and Argentina with the USD-denominated debt. So on the way up, the absence of the Euro would not have helped.
After the credit bubble, a Drachma-Greece would have faced hyperinflation, or at least a large, sudden devaluation. Savers would be wiped out, even if they held foreign currency-denominated bank accounts (see Argentina). Pensioners would have been wiped out. How much worse would things have turned out for the Greeks? How many more suicides, unnecessary deaths, and abandoned children would there be?
Without the Euro, I’m sure the IMF would be glad to step in with loans in exchange for a ‘structural adjustment program’. This would have been a victory for Washington, the $IMFS, and Wall Street. Say what you will about surrendering sovereignty to the EU, but at least control resides on your own continent.
Germany:
Germans are bemoaning the fact that their country is bailing out the EU. The irony of the German situation is that, in the absence of the Euro, the same thing would have happened. Savings would have flooded into the Mark seeking a safe haven, and the Bundesbank would have been forced to print Marks to buy foreign debt to keep the exchange rate under control so that German industry would still be competitive. See what is happening in Switzerland.
They would start by buying European debt, including PIIGS debt, though they would likely have lost their shirts as the PIIGS currencies fell one by one. In the end, Germany would likely be left holding lots of US Treasuries, and would share a continent with some very economically (and now politically) unstable PIIGS countries. Victory for Washington and the $IMFS again.
The benefit of the Euro MTM gold structure for Germany is that it allows for a way out from under the thumb of the USA. Without it, we would all be hearing of how evil the USD is, instead.
Ireland:
Ireland is getting screwed. But their main problem is not the Euro, but the fact that they allowed the Irish banks to force the government to guarantee all their debt. How would this awful development been prevented if Ireland had its own currency?
costata,
Just to be clear: Are you saying that, even though Russia is now the leading producer of crude, they are not the ‘swing producer’ and will never be, because they don’t have the leeway to adjust production up or down as necessary to affect the price?
In the FT-alphaville piece to which Chris Cook commented, the author writes:
”Writing an op-ed is nice but it also shows that you either do not want or can’t produce more.”
But, if all the storage facilities are full, what good would producing more oil do?
costata, one of the scenarios you list in which Saudi Arabia loses control of the oil price is:
”2. Supply cannot be controlled eg. Iraq breaks out of OPEC's control and ramps up production (provided it can produce oil at a similar or lower cost to Saudi Arabia).”
There is another way to lose control over supply, which is the scenario Chris Cook describes. Investors use the investment banks as middlemen to buy oil, and then release it onto the market when they sell. I think this is what Chris is alluding to in that quoted comment, that the tankers heading to the US from SA are only ‘nominally’ owned by SA, i.e. the oil has already been pre-sold and is being delivered to the investors.
Likewise for this oil: ” Marshall Auerback recently made the point that quite a bit of the oil which has already flowed to the US in Q1 has not showed up as US inventory. My explanation for that is that this is because the Saudis nominally still own it.”
It is nominally owned by SA but has been pre-sold to investors.
So now investors, aka muppets, now control the oil supply. That is why all the storage facilities are full. The bad news is that the investors are likely to exacerbate price swings, and buy on the way up and sell on the way down.
Heaven help us, if ‘investors’ now are the “swing producers”!
some 1:1 quotes from an EU(RO) architect Mr. Jean-Claude Juncker:
"We decide something, put it out there, wait a little to see what is happening. If nobody screams and no riots happen, because most have not even understood what we are doing, we continue, step by step until there is no way back".
and here's another one from last year:
"when stuff get's serious, you simply have to lie".
Great to have such non elected "representatives" for the nations of Europe.
Oh about switzerland: I guess the savers of Switzerland understand very well, that this is a great idea, their savings are now worth 20% less and there salary just dropped 20% as well. The only person making a great deal is Philipp Hildebrand, with his wife made a dollar trade just before hubby pressed the printing button.
The real ideocracy are the idiots cheering when their currency is debased. And before somebody says "those stupids, they should have bought gold": In Switzerland you have a property tax on gold. I dont know if anybody pays it in CH and it is not much, but it exists.
Greets, AD
Regarding Phat Expat's question about the euro (March 30, 4:56 AM):
As a European (but not within the eurozone, thank God!) my main problem with the euro currency is not economic but political. I don't know how it would be in a Freegold future, but in today's system, the common currency can't work without massive political integration. What we're seeing at the moment is the result of the lack of such integration. To put it in simplistic terms, Germany and Greece not having the same government prevents subsidies flowing south on the scale needed to counteract the lack of exchange rate adjustment and balance out the differences.
Now, I don't want closer political integration. Just about nobody I talk to in Europe wants it either. More especially, we really don't want the kind of integration where power is centralised to the unelected and undemocratic European Commission, whose main ambition seems to be to keep power as far away from the people as humanly possible. But though no one except the elites want it, still it keeps coming, the inevitable march of "ever closer union". If this is a coincidental consequence of the euro, or if the euro was devised specifically as a tool to bring it about, can be disregarded for the moment. The fact remains that the euro is inextricably linked to the death of European democracy and European diversity.
That this political side of it is ignored, or worse, sneered at as an irrelevant sideshow, is what I personally find most upsetting about this blog and the comments. (But not enough so, apparently, to keep me from coming back to read it again and again. :) )
As an aside, while I'm commenting anyway (which I very rarely do here), I have to say thank you to Victor for your recent comments, as well as for your latest efforts on your own blog. You have helped my understanding immensely! At least at my current (limited) level of insight, you are much clearer to me than FOFOA, or any of the other commenters here.
Regarding FOFOA's distinction between Another, FOA and Ari:
Would any of you like to meet FOA? It is really quite easy! Just
go to the archives, (1/08/01) 19:34:02, msg. #45876.
You will get the benefit of a WONDERFUL Texas style story, which
by itself is worth the "price of admission". You will also learn
what it really means to be a "realist".
Woland, can you please provide a link to the webpage please, I am looking in the FOA archives, but the msg numbers are much lower, I can't find it.
Hey AD,
I agree fully with you that statements like »euro prevents wars«, »it's nice to travel with one currency«, etc. are prime examples of populism and should be considered as food for the masses and dismissed totally in regard to euro's effect on real economy in Europe itself and its global implications.
A few weeks/months ago, you've posted a link to an article that dealt somewhat with Target imbalances and the exposure of the Bundesbank to banking sector. These imbalances are the result of growing distrust in the interbank markets and reflect the growing dependence of european commercial banks on the ECB funding. I believe the reason it gets published (and irritates you) so much is an archaic (barbarous! ) belief (traced backed to the gold standard) that the central bank should hold assets that are sellable (1:1 euro for euro if possible) in order to draw down the money supply (some would argue »that changed the nature of money«) they themselves created when first purchasing these assets.
I know that Jens Weidmann expressed concerns in this regard, but if we check the Bundebank's history we see that their balance sheet was growing exponentially from 70's up until the launch of the euro (1998). I wonder what assets they were accumulating… maybe dollars? So, nothing new for them.
cont.
Any Central Bank aka currency operator is concerned primarily about 2 goals: the value of the currency they issue and managing the reserves. Unfortunatelly government bonds are not reserves, they are actually derivatives of currency (because that is exactly what bonds promiss – more currency). The same currency the Central bank aka currency operator issues. The only reserves a currency-operator really has are foreign currency and gold. Of these 2 only gold is credible at this point in time.
My take on these EMU gov. bonds purchases and LTROs is that the ECB has managed to do 2 things. On one side they have made the european banking sector more homogenous and dependent on the ECB actions and on the other side they have strengthened their grip on problematic EMU members. You can argue that this is of course all heade into a direction of less democracy (Greece, Italy,…) or it could be circling the wagons before the final ka-boom. In panic, a coordinated and prompt response may prove vital.
One more thing about those 2 goals: the value of the curerency has been steadily falling as per ECB mandate of 2% per year. ( on emay argue that is not the same for the whole union).
The other one , the managing the reserves part: if you divide the total balance sheet (excluding gold) of the ECB with the value of gold holdings of the ECB you get a ratio that is around 6. This ratio is the same as in 1999, 2000, 2001, 2002, … 2008, 2009, 2010, 2011, 2012. This is pretty stable I'd say.
Casper
woland, i cant seem to find that date, can you put up a link?
Nickelsaver:
Just go to FOFOA's link to USA GOLD archive search: Type in the date
(01/1801) and scroll to the time (19:34.02) msg # 45676. Don't go
to the FOA link. I am a computer illiterate, and cannot provide a link.
Hope the above helps. Cheers.
If I understand Fekete correctly, "backwardation" (in gold) is the signal the market gives us that the sellers of gold (the CB's, the BB's, the shorts, and the naked shorts) have realized that there truly is a shortage of physical gold. And they have realized it will be more beneficial to them in the near future if they keep their physical gold and settle any outstanding contracts in dollars.
Red Alert: Gold Backwardation!!!
Dollars Bidding for Gold? Or Gold Bidding for Dollars?
When you think about the message that the lease rate sends, it is directly tied to the liquidity the dollar desperately needs. On Sept. 29, 1999 the message was "lease us your gold, PLEASE, and we'll pay you handsomely for it." Today the message is "we don't need to borrow your gold, and if you insist on lending it to us, it'll cost you."
Now, if I am a liquidity creator for the dying $IMFS - a bullion bank - how do I create dollar liquidity? I take a piece of unencumbered physical gold (owned or borrowed) and I fractionalize it. I sell it off to the extent that the probability of a delivery demand is lower than my physical reserves. And in the process, I am creating DEMAND FOR DOLLARS because my "golden tickets" are bidding on dollars. Remember what ANOTHER said...
Date: Fri Jan 23 1998 19:01
ANOTHER (THOUGHTS!) ID#60253:
All modern digital currencies do not go into an investment, they move THRU it... There is an alternative. Gold! It is the only medium that currencies do not "move thru". It is the only Money that cannot be valued by currencies. It is gold that denominates currency. It is to say "gold moves thru paper currencies".
This is the key to EVERYTHING!!! It is not "gold liquidity" that the bullion banks create... it is DOLLAR LIQUIDITY. Dollars bidding on MSFT stock set the value of that stock. If dollars are frantically bidding on MSFT (high velocity), the stock skyrockets. If dollars stop bidding for MSFT all at once (low velocity), the price falls to zero. This is true for everything in the world except gold.
Gold bids for dollars. If gold stops bidding for dollars (low gold velocity), the price (in gold) of a dollar falls to zero. This is backwardation!
Fekete says backwardation is when "zero [gold] supply confronts infinite [dollar] demand." I am saying it is when "infinite supply of dollars confronts zero demand from real, physical gold... in the necessary VOLUME." So what's the difference? Viewed this way, can anyone show me how we are not there right now? And I'm not talking about your local gold dealer bidding on your $1,200 with his gold coin. I'm talking about Giant hoards of unencumbered physical gold the dollar NEEDS bids from.
[...]
The dollar NEEDS voluntary bids from private physical gold to survive. My guess is that pool of REAL bids of size is bone dry and cracking. And "dollar liquidity" is just a cheap façade at this point. This is why the dollar NEEDS a rising gold price.
OK, so we Know the $IMFS needs the $PoG to rise, yes?
Does anyone dispute that if the $PoO does not rise as well, the Gold/Oil ratio explodes upwards, outside its $IMFS historical band and off to freegold we go? ?
Freegold is in effect the revaluation of oil, and other real things, in gold terms. These real things deflating in when measured against gold.
Here's the link Woland is sending us to (msg# 45876), but I don't quite see the "WONDERFUL Texas style story" described there.
Nickelsaver: OOPS!! My mistake. The POST occurs on 1/19/01
and is a REPLY to Cavan Man (1/18/01) The CORRECT date/time
is 1/19/01 at 16:53:56 MT. Sorry.
Ah - msg# 45944 here.
USAGOLD (01/18/01; 19:34:02MT - usagold.com msg#: 45876)
To FOA. . .A challenging question from the C-Man. . . .
FOA: "The fed must create an inflation on top of an inflation. To not do so, they will immediately concede the currency world to the 'old world's' new currency and it's physical friend. Gold! Even most Euro doubters are beginning to see this new light. . ."
Including me. I saw in the Economist the other day that Goldman Sachs is calling for a euro price this year of $1.22! Bold and telling. . . This is a currency price based on "an inflation on top of an inflation". . . .Yes?
Cavan Man called today. And as is frequently the case the conversation got around to you and Another, the economy, currency values, etc. It is always good to hear from this fellow knight and traveller, and in the midst of the conversation he asked, as I have come to learn is his customary fashion: "Why doesn't Greenspan do something about this. He must see what's coming." I tried to answer that question, but I wonder how you would respond. Here (Greenspan) is a man who spent his middle years as one of us. Then he became Fed chairman charged with the responsibilities of lender of last resort and something changed. . .Or did it? I answered the question as best I could but it is one that does not lend itself to an easy answer. And perhaps only Alan Greenspan himself could answer it to real satisfaction. I venture a guess that he might respond smiling slyly with "I didn't know there was a problem." (Thought of that after I hung up the phone, Cavan Man.)
FOA, I wonder if you, or perhaps Another, have any thoughts on this. I think the question might open the door to some interesting discussion. If anyone else would like to take a stab at it, I think we might all gain by your thoughts. And I hope I am not usurping prime posting privileges, C-Man. It is a good question and I didn't want to take the chance that you might pass on a great Forum opportunity. (I hope you don't mind.) Now you've stimulated us all.
P.S.(and an aside) An editorialist asked this morning: "What do you get when you cross the Chairman of the Fed and the Godfather." Answer: An offer you can't understand.
Casper,
thanks for your explanation:
"These imbalances are the result of growing distrust in the interbank markets and reflect the growing dependence of european commercial banks on the ECB funding. I believe the reason it gets published (and irritates you) so much is an archaic (barbarous! ) belief (traced backed to the gold standard) that the central bank should hold assets that are sellable (1:1 euro for euro if possible) in order to draw down the money supply (some would argue »that changed the nature of money«) they themselves created when first purchasing these assets."
than let me put a question concerning that: TARGET2 is supposed to be a clearing system, yes? But it is used/acts today with rising imbalances as a "special purpose vehicle", yes?
Why? But rather on whose books should these numbers appear? And why dont they appear there?
Greets, AD
Might as well post the response
USAGOLD (01/18/01; 19:34:02MT - usagold.com msg#: 45876)
To FOA. . .A challenging question from the C-Man. . . .
Michael,
Thank you for inviting me up here, on stage. I'll offer some frank discussion to Mr. Cavan Man's challenging question. Only, I hope my oratory doesn't drive the audience from their seats. (smile)
---------
Hello everyone,
I assume you were all given and have reviewed USAGOLD's #45876. Good, then we can get right into it.
C/Man's permanent question is; "Why doesn't Greenspan do something about this? He must see what's coming."!
This crosses all the endless boundaries of political vs human wants and needs. Any answer to such a question exposes our own reality of just how much we all live together and compete together. As I mentioned before; we all are floating down the same river of life,,,,, bickering and debating, living and working,,,, even taking each other into court and war,,,,,, and doing all this as our floats ride the same current of water to it's destine end.
To better understand my replies, let me profile myself a bit. In both the physical and mental image.
The physical:
Am obviously a male and in the second half century of my life.
Have been married only once, to the same wonderful woman for several decades.
I am religious, understand the bible and do physical deeds to convey that knowledge to others.
I strive to live a moral life in every physical sense.
Am in good health and work at treating others as I want them to treat me.
The mental
By some gift of destiny, I know the people world around me. Perhaps better than some?
At all times I am intensely aware of the diversity of human life we all must operate within.
Myself and each of us have our right and wrong codes we live by and these are not always the same.
Yet, and because of this, society as a whole must function thru consensus or make war.
I fully well understand a successful person's (and nation's) feeling that they alone made their way in this world thru hard work and self sacrifice,,,,,, and I admire that pride and courage.
I also well understand that, by far, 99% of these people got where they are at with luck and good fortune,,,,,, more so than their special talents or moral good deeds.
And too, I bridge boundaries of thought, without judgment, in order to promote a common good.
1/2
So,
From that "heavy" description, I'll lighten the room a bit with a true short story I find most remarkable for it's human clarity, scope and definition as it applies to all of us (smile):
------I was once at a bar in a very exclusive, very private country club. In this part of the club there were no waiters, only a large team of bartenders that always stayed behind the bar. They would be fired, on the spot if they walked onto the small club floor. By code, this area required members to get their own drinks for ourselves and others. Kind of a step-down from the "big life" so as to bring us back to "regular status". The talk was very friendly and no business discussed.
A new guy, who I'll refer to as "newguy", had just come of age (new money) and wanted his place in the group. I think he was Australian, if my memory is correct. Standing at the bar, within a crowd, he boasted openly about his new boat, 14 meters+/-, and how cheap it was to operate. Conveying a sense of wealth availability. "At this rate I could have several",,,,,,, he said this with a smile and an honest intent. But I (and other older men) knew his motives were as usual for fresh money. After a short chat, he felt like he was fitting in and really making his position felt.
Then, (I'm laughing as I recall this) another much older member strolled up for a drink, just catching the tail end of newguy's talk. Now, you have to understand, this other fella was world class wealthy, but you would never know it. His way was always light and easy. He poked his head into
the group and told newguy,,,,, in a low gravely voice:
---"Boy, you made a good decision on that one! I also down sized to one of those little boats. Saved me a tonne of aggravation. Hell, I now have the rest of my slip rented out to two other members. Good for them for having the space,,,, and good for you for doing the same. You know, the world doesn't need attitudes like we used to have. Good un Mate! (as he walked away)------
Ha! Ha! Ha!,,,,, everyone around newguy kept a straight face as he kept the beer mug at his lips, while looking at us over the top. Then he lowered the glass and said with a straight face,,,,,, ----"He's right, ya know!"----
Ha! Ha! Ha!--- then we all had a great laugh -----------
Ok, where was I?
That story not only tells us who we are in society, but how we react against competition in society. Sometimes the act is extended into a life long play. The above little interaction is carried out in board rooms and on the street,,,,,,, at the CIA and between nation states. No matter if one is rich or poor,,,,,, buying and selling countries or teacups,,,,, operating businesses or pickup trucks,,,,, we all do our part to "puff up" as a defense against the world we perceive is out there. We adapt into
the social and business flow that's at hand. The norm of the occasion,,,,, and the political reality that's in our world around us. Our personal codes of life are often at odds with the consensus of the diverse world we must operate in. Such is life!
2/3
You see, a nations rules, laws and moral requirements are never more than a consensus vote from changing. In such an environment, no leader can function for long at his own or our own standards. The office, itself is a reflection of power groups pushing their own position and that requires us to make our personal codes just that, personal codes. Not public codes.
Any person of clear vision could stand upon the highest mountain, look 360, and see that this country is not the same body it started from. Our codes of conduct, perceptions of right vs wrong and even our attitudes of wealth have all been diluted from other sources. This is not to say it's
good or bad, as this dilution often comes from foreign political perceptions that preceded our nation' history. In some ways, it predates many generations. Right or wrong, good or bad, some of these accepted political directions have been used a long time.
Mr. G. is not trying to make us something we as a group are not. He cannot. His objective is to support, prolong and protect our financial system as it must operate in it's present evolution. Make no mistake, he and every leader in his position understands that fiat money systems are always in evolution. There is not and never has been a status quo when it comes to a nation's money. Recent history is ripe with such change, even during the usage of gold within the currency stable.
I can assure all of you that our fed chief does not confuse a strong vs week dollar with a stable fiat money system. This current strong vs week dynamic, happening over the span of 20+/- years is little more than wafting from bank to bank as we ride the river that is our currencies timeline. Our
dollar is evolving even as our society evolves. It's use as a world reserve and even as a medium of exchange was never written in some code of world conduct or acceptance. Circumstance and consensus will change any currencies worth regardless of who manages it's trip through time and space.
So, there you have C-Man. I wish you had asked earlier? Because; "I didn't know there was a problem." (smile)
3/3
@AD:
I really don't understand why you are so upset?
Everyonea wanna print...everyonea gonna print...and then some.
Freegold will be a result of all that printing.
So, relax, take a deep breath, put your feet up and enjoy the melodies. After all, music soothes even the savage beast.
Offspring - Time To Relax
Gretts\Dante
Woland,
That was a good find and also appropriate to the discussion at hand.
I stumbled across this blog in 2009 by accident while looking for something altogether different. At that time I was what we affectionately call a "Hard Money Socialist" and I was looking to be the best and most informed hard money socialist I could possibly be. I immediately noticed that FOFOA was a different cat so to speak and curiosity got the best of me. At that time the blog was relatively new and the archive was not near as daunting as it is today. I read all the posts and then tackled the source material that FOFOA was citing.
Looking back now, I clearly did not fully comprehend RPG and Freegold. I considered Freegold to be a possible outcome that was very appealing but not a preferential result for TPTB. I believed that the TPTB, principally the US and the big power banks, would ultimately engineer and implement any monetary system to replace the failing $IMFS, and therefore would likely choose some sort of gold standard where they would maintain control.
I kept FOFOA in my blog list and whenever he posted a new article I would read it. Like a good soup, the individual ingredients started to meld into something quite pleasing. Much has been written about the "click" moment and how some get it relatively easy and others get it only after pounding their heads against the wall, seemingly endlessly. I was somewhere between those extremes.
The point of all of this is that I have read every single word posted by FOFOA, many of them numerous times. My understanding and therefore confidence of RPG/Freegold has been organic and truly is directly proportional to the time I have sacrificed in study and contemplation. It is clear to me that the vocal German contingent have not done their homework, nor do they seem inclined to do so. There is 4 years of material on this blog and it will take anyone a considerable amount of effort to simply read every post, let alone the Another/FOA archives. It will either require someone to commit considerable time and effort or it will require someone to "click" without all the work.
I do not see any commitment from AD whatsoever. Even worse, I do not see him being in the "early click" camp because he is driven by emotion and per-conceived ideas and biases. I deal with people just like him everyday in my profession, otherwise intelligent people that are consumed with their own egos. It matters not the logic that can be brought to bear when debating with these people, they will simply descend to any depth in reasoning required in order to preserve their certainty that their position is correct. Eventually, such a person can be rendered into a whining 3 year old who professes to believe in such things as Santa Claus, the Easter Bunny and the Tooth Fairy.
The comment section of this blog is not a better place with the likes of AD. Honestly it is a far worse place, more like Zerohedge every day. It is becoming tedious for me to actually read it every day for fear of wasting my time reading AD and his pathetic bullshit. I also particularly resent those that enable him, either in a subtle manner or by actively encouraging him to post.
I feel I have some sort of ownership in this blog because of the time I have devoted to it and the understanding I have gained from it. A Troll like AD is equivalent to someone who comes along and spray paints graffiti on your brand new building or keys your classic car's brand new paint job. His intent is put his mark on your property.
(continued)
The more this Troll is fed, the longer he stays to eat. It really is that simple. This blog is about furthering our understanding of RPG/Freegold and it is not whether or not RPG/Freegold is a valid thesis. This blog was created with the understanding the thesis is valid and we who participate here are exploring it in its entirety.
This blog does not challenge the likes of AD to come here and debunk the thesis, and I am being generous to AD. He really isn't here to debunk, he is here to deface. If he were genuine in his intent he would start his own blog and would present his own thesis. Then we would be free to go there and explore it for ourselves and decide whether a.) we understand it and b.) agree with it. Nope, AD is a punk and must feed his ego by defacing the the property and ideas of others. To quote Charlie Munger, he's a "jerk."
So I come here every day hoping the Jerk has become bored and moved on to his next cherry paint job. I find I spend less time reading and more time scanning past AD and his enablers. I know they will eventually leave but it I'm like everyone else, I am selfish. I want my blog back. I wish the enablers would simply ask themselves a few questions: why are you here? What is this blog about? What do you hope to gain by interacting with the likes of AD? Does interacting with AD advance the purpose of this blog? Do you want to advance the purpose of this blog? Is there a better place for you to spend your time?
This post is to the enablers. I will not acknowledge AD or any of his German friends for the reasons I outlined above.
Woland and Nickelsaver,
Yay!
================
matrixsentry,
Well said! But who are you talking about? :)
AD
Are you implying that these numbers should appear on the Bundesbank's assets side? Normally a commercial bank has to go through the repo to obtain short-term liquidity but we have all heard reports that certain members of the Euro-system Central banks have lent funds to commercial banks under their oversight (Ireland, Greece, other maybe).
It is clear that in this case Bundesbank could be seen as creditor to these CBs, but we must also understand that all these funds have flown into German banks otherwise these imbalances wouldn't occur.
It is now a few weeks from the second LTRO operation and it would be interested to see how this will affect these Target imbalances.
But for the record: these sums are small change in the big picture. Euro will not collapse and even if it did there would be massive inflows of funds to Germany, which would enable the BuBa to counteract and absorb extra funds that have been created thus far and WEAKEN the soaring NewDeutschMark.
Casper
@MatrixSentry Agreed
@Dr Octagon
Just saw your reply on Turkey. Here is my thinking there: As people deposit gold in a Turkish bank, that becomes part of the reserves.
Now, the bank can turn around and use fractional reserve lending on the lira value of that gold, and lend in liras, and to me that it perfectly ok because there is no redemption in gold - therefore Turkish CB can always print to cover bad debt.
As for the title of the gold: as long as gold depositors are the only ones allowed to ask for gold, and loans are not made in gold, I don't see a problem.
That's because since gold is not loaned, title is less important. Why? Because all the newly lent money based on that gold as reserve is really claims on lira and not on the gold reserve. Does that make sense to you?
matrixsentry: As one who hasn't "clicked" yet, I find that I learn much, much more from AD:s irreverent questionings, or rather from the replies he gets from those generous souls who take the trouble to answer him, than from any number of repostings of FOFOA's writings. If one aim of this blog and comment section is to spread understanding of the Freegold concept to those who haven't gotten it yet, then AD is a valuable contributor.
(Every Sherlock Holmes needs a Watson, every Dr House needs a diagnostics team, every elf lord needs a hobbit. We, the uninformed masses, need someone to ask the silly questions and bring the whole thing down to our level!)
Anyone read Eric Janszen's latest free commentary in iTulip.com. He had correctly picked the Gold bottom in 2001 and Housing bubble and Stock market top in 2007, but is now scared about something bigger - he calls Ka-Poom theory.
http://www.itulip.com/forums/showthread.php/22124-Ka-Poom-Theory-Update-Two-%C2%96-Preamble-Theory-of-a-Sudden-Adjustment-Eric-Janszen?p=224969#post224969
I had always like Eric Janszen's down to earth style. Also our Ari's financial poem's are also delightful.
MatrixSentry, as you would expect I echo your sentiment.
Thanks to Woland and NS for the FOA link.
NS...see what you've done ;()
ADD,
Did you read what Michael H wrote to the EU skeptics? READ IT! please.
Here... I'll make it really easy for you;)
"The Euro skeptics have it all backwards. They blame the Euro for the ills of European countries, which would be far worse off without the Euro. Look at Greece, Germany, and Ireland.
Greece:
Greece had a credit bubble pop, and now is suffering some deflation in the aftermath. Suicides, babies being abandoned, the whole lot – how sad.
The credit bubble would have happened in Greece regardless. Sure, Greek bonds would not have had quite as low an interest rate because bond buyers would have to account for exchange rate risk as well as default risk. But Greece could have gotten around this limitation by issuing debt denominated in foreign currency, like Hungary with their CHF-mortages, and Argentina with the USD-denominated debt. So on the way up, the absence of the Euro would not have helped.
After the credit bubble, a Drachma-Greece would have faced hyperinflation, or at least a large, sudden devaluation. Savers would be wiped out, even if they held foreign currency-denominated bank accounts (see Argentina). Pensioners would have been wiped out. How much worse would things have turned out for the Greeks? How many more suicides, unnecessary deaths, and abandoned children would there be?
Without the Euro, I’m sure the IMF would be glad to step in with loans in exchange for a ‘structural adjustment program’. This would have been a victory for Washington, the $IMFS, and Wall Street. Say what you will about surrendering sovereignty to the EU, but at least control resides on your own continent.
Germany:
Germans are bemoaning the fact that their country is bailing out the EU. The irony of the German situation is that, in the absence of the Euro, the same thing would have happened. Savings would have flooded into the Mark seeking a safe haven, and the Bundesbank would have been forced to print Marks to buy foreign debt to keep the exchange rate under control so that German industry would still be competitive. See what is happening in Switzerland.
They would start by buying European debt, including PIIGS debt, though they would likely have lost their shirts as the PIIGS currencies fell one by one. In the end, Germany would likely be left holding lots of US Treasuries, and would share a continent with some very economically (and now politically) unstable PIIGS countries. Victory for Washington and the $IMFS again.
The benefit of the Euro MTM gold structure for Germany is that it allows for a way out from under the thumb of the USA. Without it, we would all be hearing of how evil the USD is, instead.
Ireland:
Ireland is getting screwed. But their main problem is not the Euro, but the fact that they allowed the Irish banks to force the government to guarantee all their debt. How would this awful development been prevented if Ireland had its own currency?"
Archangel Thunderbird
find that I learn much, much more from AD:s irreverent questionings, or rather from the replies he gets from those generous souls who take the trouble to answer him, than from any number of repostings of FOFOA's writings.
Maybe you should ask yourself why that is, and maybe whether you are reading FOFOA close enough, especially when those re-posting are often directly illustrative of the logical flaws espoused by the meddlesome souls who inhabit these parts? YMMV but I spend most of my time re-reading old stuff and going "Oh!"
Biju,
I read through the Eric Janszen link. When it came to the interesting part of his thesis, the info is only available to his subscribers.
But I don't see anything novel other than the name "Ka-Poom". Isn't he simply just talking about a boom-bust cycle because of malinvestment of capital and labor, which has been sourced through cheap credit?
I can't read what his "alternative explanation" is, but if it is going to be that there is going to be a bond market crisis in the US, I think FOFOA has already dealt with that topic in great detail in his Moneyness post.
I think a forced crisis because of the trade deficit in the physical plane is a serious threat to the dollar, than the nominal debt servicing. (which the planners have already showed the willingness to monetize whatever it takes).
AD,
I have not read any contribution here on FG about e.g. the EFSF, TARGET2....
For target2, please see here, here, and hare.
Summary: The target2 balances reflect the cumulative balance of payments surplus of Netherlands, Germany (and probably Finland, Luxembourg, Austria) relative to the south. This is a consequence of their trade surplus during 1999-2010. During that time, however, the trade surplus was offset by a capital account deficit when the north purchased the debt of the south. Since 2010 they have been unwinding this capital position, causing a capital account surplus which leads to the balance of payments surplus that you are observing in target2.
Again, what you see is the foolishness of the savers of the past and that they have been panicking since 2010 and changing their government debt for intra-Eurosystem base money.
Why? But rather on whose books should these numbers appear? And why dont they appear there?
The target2 balance indicates that, say, a German commercial bank has a reserve balance with the CB of Greece, say. Although the Eurosystem enacts the same policy, the accounting is done separately for all the national CBs, and the cross entries show up in the target2.
We did discuss target2 because this highlichts a balance of payments mismatch, and this is indeed relevant to the theme of the international imbalances.
We have not talked much about the EFSF because, in my opinion, this is just a can kicking exercise. Let the politicians shout at each other on the boat. It is safe to ignore them. Just watch the tide coming in (to paraphrase our honourable fool).
AD,
The physical plane in Europe does not benefit from the Euro, the opposite, it suffers
I am not sure you are seeing the forest - you just bumped into a single tree. I'd say the suffering is because of the imbalances and because the savers have extended more and more credit lines to the debtors who are now in trouble servicing this debt. The suffering is not because the Euro is the common currency for transactions. Michael H has given an excellent response to which I have nothing to add.
quotes from an EU(RO) architect Mr. Jean-Claude Juncker:
I don't think Juncker has anything to do with the Euro. He is one of the major can kicking politicians. Let him scream on the boat, ignore him, and watch the tide.
Victor
Got HMS?
Eric Janszen says A return to the Bretton Woods international gold standard is inevitable
"Thirty-seven years ago the world’s economies started on the circular track back to Bretton Woods. We will sooner or later be back where we started, with international transactions guided by a fixed gold price."
The Gold Must Flow
"So no, it's not a flaw of sharing the same currency that the PIIGS can't balance trade with others in the euro's core. It's a flaw of the current system which existed long before the euro was even born. Within the current system, the euro does remove the possibility of local currency collapse as an alternative adjustment mechanism, but honestly, that's part of what they wanted with the euro. The current system is one of irreversible debt-buildup and gold-debt which sterilizes the flow and price of gold."
=============================================
comment to Hair of the Dog?
But what everyone is getting wrong is that a shared currency is simply a standard. Like a meter or a foot, or a minute. It's how you use that standard that matters. If you have less "standards" flowing in then you spend less "standards."
Expenditure is the adjustment mechanism in a fixed exchange rate zone like the eurozone. It is Goldman Sachs and the 66-year old $IMFS that has enabled the circumvention of the adjustment mechanism in Europe, not the euro. The same goes for the US states.
The Privateer writes, "The claim is that the obvious message of the European debacle is that a sovereign government must have full control of ALL aspects of monetary and fiscal policy if it is to prevent the type of sovereign debt debacle now engulfing Europe. As yet, no argument has been put forward for the opposite proposition."
Here's one: Under the $IMFSystem when relatively small currency zones have control of "ALL aspects of monetary and fiscal policy," hyperinflations are relatively common. Hyperinflation is the adjustment mechanism in floating exchange rate zones under the $IMFS. This is exactly why the euro severed its link to the nation-state... Because a) we are still living under the $IMFS and b) Europe has a living memory of hyperinflation.
If you think austerity riots are bad, you should see hyperinflation riots!
Is it me the only one thinking that the oil tankers story may be connected to the recent EO and constitute an extra reserve if HI is to happen in the near future?
AD,
I think we can even risk a guess as to how the target2 will eventually be squared. Eventually, the German CB will purchase gold in the market. This would create the necessary 'inflation' of the money supply in Germany that reflects their accrued surpluses, but without diluting its value (simply because the reserves are increased when they do this).
At the same time, the Greek CB will sell off a part of their gold into the market, acknowledging the required contraction of their (base) money supply.
In aggregate, this means that the German balance of payments surplus will eventually be paid off in physical gold. This will, however, happen only after the revaluation. Everything else would be a waste of the precious reserves (and be impossible for political reasons).
But perhaps such a calculation with a guess of the freegold price underlies the ECB's allocation of funds? Perhaps this explains why the German CB is so relaxed about this issue?
Victor
db,
Is it me the only one thinking that the oil tankers story may be connected to the recent EO and constitute an extra reserve if HI is to happen in the near future?
FOFOA suggested that Saudi Arabia might be unwinding the oil forwards. He said this could be done only at a time at which this is favourable for the US as well and at which they would accept it. Makes sense, doesn't it?
My only objection is that everything can equally well be interpreted as preparations for a war in the Middle East.
Victor
A bunch of german nihilists broke into FOFOA's apartment and peed on his rug. They believe in nothing. But at least the replies to that behavior are helpful?
https://www.youtube.com/watch?v=7L2qP-xQ_7o&feature=relmfu
Give us the freegold lebowski, or we cut off your chonson!
JR,
I agree Eric Janszen does not speak about
- paper Gold and physical Gold going their separate ways
- freegold. His site is unusually quiet about this, even when certain members are aware of it.
He is talking about a different paradigm from last 30 years. He speaks a peak of Gold price around $7000. But it is tough to ignore him, since he is man of deep research and had made the most accurate calls, I have known.
The opportunity cost of playing to "not lose" is of course denying oneself the chance to "play to win." Playing to win, aka embracing the tough issues in lieu of a more superficial, easier "path," can make all the difference.
Don't conflate atheism or agnosticism with materialism and ethical nihilism. And don't forget that true believer's reject Pascal fallacy too - perhaps its not so much where you end up, but that you took an honest journey to get there that really matters.
Biju,
Janszen is arguing we are going back to the gold standard, which is a different paradigm than the $IMFs we have been under for nearly some 40 years. EJ says the new Gold Standard will be at a higher fixed price than gold is currently valued.
Yes, EJ does not understand the paper/psychical gold divide. He only sees credit has grown, and thus gold's currency price must grow because gold must ultimately be restores as the base with the credit references (the Gold Standard).
That's the who problem right there - trying to make the base which the credit references a SoV.
As Motley Fool so perceptively noted:
FOFOA's dilemma: When a single medium is used as both store of value and medium of exchange it leads to a conflict between debtors and savers. FOFOA's dilemma holds true for both gold and fiat, the solution being Freegold, which incidentally also resolves Triffin's dilemma.
The Return to Honest Money
JR,
In reply to your comment, I was serious about my question. Apologies, sometimes I lose the big picture view when focusing on the minutiae.
I can sympathize with matrixsentry's views. In FOFOA's own words:
I am up on a hill with a wide view of the valley. In this post I am attempting to share the framework in which you, too, can see what I see rolling in. It is a tsunami called currency collapse coming in, following a violent financial and economic earthquake, which in our case will end in probably the most devastating hyperinflation the world has ever seen.
I think if people miss this big picture view and easily get lost in the minutiae of everyday events (which I'm susceptible to as well), it is going to be a frustating exercise to read through FOFOA's materials and they're going to hyperventilate ;).
Over the course of my brief time spent here (I have started commenting only recently) - I think Costata nailed it in his comment:
It is, in its finest moments, a think tank. At its lowest moments it is a deeply frustrating and emotionally draining excercise in futility.
I can empathize with your sentiments e_r,
But in all honesty, new FOFOA posts are like Christmas morning for me all over again, so maybe I'm different. :) I guess at the end of the day, people should do what *they want* because value is subjective - I know what I will do because I know what I value.
==============================================
It is, in its finest moments, a think tank. At its lowest moments it is a deeply frustrating and emotionally draining excercise in futility.
Ash taught me a lot, but mostly why I am posting: 1) to share with others who might be interested (not to share with the uninterested), and 2) to challenge myself to learn more/understand enough to post responses. I've learned far more in reading the comments and interacting by trying to remember/locate on point FOFOA's discussions than I did in reading the stuff the first time. And I really geek out on the what he posts the first time.
You can't change a lot of stuff, but you can, to some degree, chose your own goals and motivations. So do that - you won't find happiness in trying to change other people, but you might find a glimpse by turning things inwards.
Its your ship, the air is clean, the breeze firm and sea looks kind - take the wheel captain and set it on *your* path.
There is a road, no simple highway
Between the dawn and the dark of night
And if you go, no one may follow
That path is for your steps alone
...but that doesn't exclude feeling all warm and fuzzy when you see someone finally go "ohhhh"
VtC,
you remember the first time you tried to explain me the reason for the T2-problem, claiming that it is that stupid german citizens saving in PIGS bonds, what they should do? Now you changed that explanation, still not having it straight... in fact you are completely wrong on your predictions on how that T2 turns out in terms of gold.
So here's an english version, since it appears to me there is some real lack at FG in understanding the euro-system at all (amazing for those selfentitled monetary hobby "experts" hailing the €):
http://www.target-2.de/up/datei/target_2_pilferage_of_the_deutsche_bundesbank_22.02.2012.pdf
Greets, AD
Dante,
"Freegold will be a result of all that printing.
So, relax, take a deep breath, put your feet up and enjoy the melodies."
No it wouldnt, if you wanna know what happens when money dies, I guess you should read more history or head over to Doug Casey.
You bet, that you proud stack of 20Krügers will not save your ass.
Greets, AD
Please don't cite Doug Casey, who is very ethically challenged, IMO. Or maybe AD is planning to move to a golf course community in Argentina when HI kicks in, with all the other rich suckers...er, real estate investors that are buying into Casey's third world Disney land.
Here's a little truth on Casey:
http://ferfal.blogspot.com/2009/06/doug-casey-on-argentina.html
http://ferfal.blogspot.com/2011/08/moving-to-cafayate-salta-in-argentina.html
matrix,
"A Troll like AD is equivalent to someone who comes along and spray paints graffiti on your brand new building or keys your classic car's brand new paint job."
you mean I am defacing your holy altar? Sorry for that.
But I have a proposal for you: just wear your FOFOA T-shirt, and RLP can maybe borrow you that FOFOA baby hat, will probably make you feel much better.
Greets, AD
Jeff,
Thanks for the FERFAL links. Much more realistic than peachy "wine & dine & fine living" BS.
I think this guy Jeff Berwick ended up buying a property in Cafayate.
These anarcho-capitalists are juvenile, IMHO. Jesse wrote a piece on Ayn Rand a year back and he nailed the immature and an underdeveloped moral philosophy of anarcho-capitalism.
JR,
I don't think Eric Janszen means by "return to Bretton woods", it is going to be exactly like previous Bretton woods, but I think rather a free market approach.
He has refereed this to mean USA is going to re-open the Gold window and buy and sell Gold.
Not a fixed Govt/International agreement.
Even though Eric has not explained much about paper Gold, he has always advocated only physical Gold. He has most in Bullion Vault - in many millions by my estimate, bought in 2001.
BTW if anyone don't know him, he is a venture capitalist/ex-CEO of several companies and in my opinion a very ethical person.
He recently sold all his Silver bought for $100,000 in 2001 at (approx $4/oz) for $48.5/oz in May 2011. He is the best out there with regards to timing and has sold all his Silver holdings. He considers Silver a mostly industrial metal(90% industrial) and expects Silver to stay at in low $20's/oz.
He has not sold any of his Gold and don't think he will in the foreseeable future. He has prognosticated that Gold will hit $2000/oz this year 2012.
e_r,
I had the misfortune to work with someone very high up in 'libertarian' intellectual circles. I quit because I could see what was coming. That person is banned from working in that business again, and being sued by the government for costing taxpayers half a BILLION when they blew up the business through sheer greed. I know these types very well.
AD,
sorry but there is no language that would be rude enough to describe this utterly brain-amputated inconsistent nonsense pamphlet PDF that you linked.
There is a basic problem out there in the depth of the internet. There is just such a huge amount of noise and meaningless nonsense out there. And you need to find a way of cutting through this garbage and to focus on those pieces of information that are at least consistent and meaningful. Yes, I mean it. That's a basic social skill.
I don't think I have anything to add or to correct as to what I wrote on target2 above.
I also think that all this hard money posturing only distracts from the true issue. You will not get any money back from Greece. They have eaten it. It is gone. It is no longer there. You can lock them all up and force them to work in the coal mines for you, but even then they will not be productive enough to pay you back in real terms. It cannot be done. Get a grip on reality.
The problem is that Germany (and many others as well) have irreversibly wasted a good part of their surpluses. It is gone. This was the $IMFS participation surtax for the uninitiated. Your gullibility has been successfully exploited. You have been ripped off. The money won't come back in real terms. Never. Get over with it.
Victor
When the physical gold market goes no bid, and physical concomitantly ceases to flow, it will require someone, likely a major CB, to step in and coax it out of hiding by making a two way market at a vastly higher fiat denominated number.
How is physical flowing now? By how I don't mean how is it able to flow, but, rather, how would you describe the quality of gold's flow with respect to facilitating global trade?
WTF Ayn Rand was a minarchist who was openly and vehemently hostile to AC, in what world do you live in? Like this -> "THE NATURE OF GOVERNMENT" by Ayn Rand.
===================================
As nicely as I can say it: Please stop, Jesse is a huge blowhard and has *no* idea what he is talking about.
Here's a hint - "freed market" is not "no law." Rather, the positive case for "free markets" is the recognition that competition in legal services is better than a forced monopoly in legal services.
Its not that G doesn't provide any services that are needed, its that there are services G provides that would be provided better if there was competition as opposed to a forced monopoly. Its an efficiency argument, not whatever retardo ideas Jesse doesn't understand.
Start here: Libertarian Anarchism: Responses to Ten Objections. Then go here: A more in depth examination
=================================
P.S. - yes he is also the long running editor of J.A.R.S., so we can go all crazy Randian if you want. But then we will have to involve and MF and Jeff Allen and etc..., and that will get off topic. So instead, maybe you could just read the journal. There's lotsa good stuff there. Here's an excerpt from one of my favorites
The A Priori
Consider first Rand’s rejection of Mises’s apriorism. Admittedly, Mises tended to describe his apriorism in Kantian terms, as the imposition of innate categories on inputs from an unknowable reality; but there is nothing in the notion of the a priori that requires such an interpretation. There are two forms of reasoning generally called a priori that Rand herself could accept (if not under that label). One form of Rand-compatible a priori reasoning is validation of propositions by showing that they are, or follow from, conceptual truths.
Hi Edwardo,
How is physical flowing now?
Not well, which is why the price is rising.
The price of gold today is unstable. Anyone with eyes can see that. Worse, it's rising. Which means the flow of physical gold in the quantities needed (at today's gold price) to lubricate global trade is drying up.
"Gold has always been funny in that way. So many people worldwide think of it as money, it tends to dry up as the price rises."
But the flow of physical gold WILL be reestablished. The world demands it. It doesn't care how high the price goes, only that the flow is guaranteed. Only the $IMFS seems to care about how high the price goes. And, apparently, that is because the $IMFS is the main printer of paper gold. Flow WILL be credibly and sustainably reestablished, which means paper gold WILL be discredited. Flow is sustainably and infinitely guaranteed at a floating, physical-only price. What that price is in today's world is anyone's guess because we haven't had such a market in centuries."
It's the Flow, Stupid
===============================================
Gold demand is generally inelastic in currency terms because its primary use is as a wealth reserve. This is in contrast to industrial metals where demand is relatively inelastic in weight terms. In other words, gold flow by volume should be observed to decline as the price rises while gold flow by value might remain steady. Yet India's gold intake has risen from $4.1B in 2002 to $33.8B in 2011. That's an 824% rise in demand in currency terms at the same time as the price of gold in dollars rose only around 600%. And this while running a trade deficit:
This has to be putting tremendous pressure on anyone working to delay Freegold, assuming such an effort even exists. I guess it's a good thing there are only 1.2 billion Indians.
India's Gold
Lotsa folks may disagree, but to paraphrase Bill James, Ayn Rand is a libertarian in the same way I would be an astronaut if you shot me into space.
JR,
I don't want to steer the conversation away from the subject of this blog -- therefore I am not going to post more replies after this, on this subject.
Ayn Rand's Galt Gulch is libertopia, and it's just that. Utopia. Not reality. You can post hundred different links from Mises, Rothbard, Rand Journal -- whatever. It is not going to change the simple fact.
Libertarianism is like communism. In both cases we'd have a utopia if their ideas could be translated into the real world, but neither belief system can, so we end up with tyrany when we try. Human beings bring an evolutionary mindset that won't permit either ideology to be implemented perfectly, or even well enough to function. As Shakespeare wrote in Julius Ceasar "the fault was not in our stars but in ourselves".
Two fundamental flaws in Libertarianism are its complete disregard for public property and game theory.
I am not arguing for a forced monopoly. Rather monopolies will naturally get formed if nobody does anything about it. This is because human systems deteriorate due to manipulation. It is like entropy.
Name calling Jesse instead of actually seeing the human flaw in free market ideology is not an argument, IMO.
Great post e_r,
I agree e_r, you have done a wonderful job of proving your point - you have erased any confusion about whether you know what you are talking about. No wonder you like Jesse so much!
P.S. - Mises was a minarchist too!
P.P.S. - I agree you don't understand basic economics either - "Rather monopolies will naturally get formed if nobody does anything about it."
I have said this here once before, but will say it gain, that the
"inventor" of the "invisible hand", Adam Smith, who believed
that many agents, small in market power, would achieve a goal
beneficial to society as a whole, was ALSO the author of the
following statement; "Men of the same trade seldom gather,
whether for merriment or diversion, but the conversation soon
turns to a conspiracy against the public, or some contrivance to
raise prices". You may agree or disagree with either proposition,
but in my personal view the conflict between these opposing
forces is just what FOA was describing in the message Nickelsaver
was kind enough to post a while ago. There is no end to the
struggle continually playing out between these opposing forces,
as each pursues, then overplays the advantage they have gained.
Michael H,
Re: This comment - March 30, 2012 7:05 AM
http://fofoa.blogspot.com/2012/03/ball-of-twine-open-forum.html?commentPage=2#c7509402736629904460
Exactly my thoughts on Russia. They cannot ramp up production quickly. They may be at their maximum output. Putin committed some years ago to maintaining production levels not increasing them.
If there is enough oil to allow speculators and/or investors to take large physical positions then we may already have an oversupply situation relative to current demand. If so, then how can Saudi Arabia control prices? The only lever they can use is lowering production to keep the price high (which chokes their revenue).
If they raise production to maintain their revenue then it could lower the price of oil. Would gold follow oil down in price? Perhaps yes, perhaps no. It depends on how the paper gold players interpret the signal from a falling oil price.
I would also add that the recent assertiveness from the BRICS could be a game changer IMHO. I think cutting Iran off from the SWIFT system was a strategic blunder. It has been clear to me for a long time that one of the aims, if not the overriding aim, of the Euro Freegold-RPG architecture is to ensure the continuity of world trade during a collapse in the $IMFS.
Trying to dictate who can trade with whom is a game that you play when you have the largest, growing economy and the ability to absorb any surplus. In a world where all the growth in demand is coming from developing countries blocking their trade opportunities puts them in an untenable position. They cannot co-operate. The price is too high.
I think Jim Sinclair nailed it when he said SWIFT should have been used as a negotiating tactic - a threat. But not a threat you act upon.
Returning to oil for a moment. Perhaps the Saudis think that taking out Iran can leave room for Iraq to expand to fill the gap in supply and maintain their position at the top of the OPEC heap. I intuit that the BRICS may prefer to hedge their bets by spreading them around a "multi-polar" world.
Cheers
Thanks, JR. I think what I am pondering is exactly how is physical (in size) moving on any given day to day to facilitate global commerce? I understand that it (physical) isn't flowing well, ergo the consistently rising price, and I have a sense, to a greater or lesser degree, of the role that physical has played in connection with the oil trade, but, what of other forms of commerce? What are the mechanics of the movement of physical that facilitate the vast array of global trade on any given day? My apologies if I am missing some crucial nugget (pun unintended) that you have already provided that sheds light on this (technical) question.
It's true... I feel greeeeat!
Much better than when I was hanging around the automatic earth, zerohedge, paul krugman, steve keen, mish shedlock, karl denninger, barry ritholz, robert prechter, matt taibbi, mises institute, cato, the economist, the wall street journal, the new york times, nassim taleb, peter schiff, etc...
What can I say? Sometimes my sheer joy invokes an urge to try and inject some levity into the comment section. I admit to having little else to offer. Some might find this behavior a nuisance, but at least it lets others know I'm listening...
Hell, not everyone is cut out to enjoy life! I imagine it would be especially tough if one was consumed by the epic failures of their forefathers. Such concerns might lead to feelings of deep and bitter self loathing, and perhaps an irrational terror involving encirclement. "Encirclement I say! Can't you see? They're all out to get me, those lying thieving bastard cheats! They stole it from us... golem, golem..."
If I was in that situation, I'd probably find the nearest bridge to live under so that people wouldn't see my true ghastliness. I'd need a good van to park down by that river though...
I saw this posted by one of commentators in Itulip's behind paywall.
http://online.barrons.com/article/SB...958775246.html
But more recent Treasury data show China has been selling Treasuries outright. And while the markets have been complacent to the point of snarkiness, MacroMavens' Stephanie Pomboy thinks that's wrong. Unlike other Cassandras, she's been right in her warnings -- notably in the middle of the last decade that the U.S. financial system was dangerously exposed to a bubble in U.S. real estate. Hers was a lonely voice then because everybody knew, of course, house prices always rose.
As for the present conundrum, there's an $800 billion gap between the $1.1 trillion the Treasury is borrowing to cover the budget gap and the roughly $300 billion overseas investors are buying, Pomboy calculates. Banks, corporations and households have been doing little to fill that gap, preferring higher-yielding securities, so "it would appear the heavy lifting has been done by long-only bond managers extending duration and specs rushing to cover their shorts," she writes.
But Pomboy has little doubt that the Fed will step in to fill the gap left by others. In other words, debt monetization, a fancy term for printing money to cover the government's debts, which in polite circles these days is called "quantitative easing."
"Having pushed interest rates to zero, launched QE1 and QE2, there's no reason to believe that the Fed is going to allow free-market forces to destroy the fragile recovery it has worked so hard to coax forth now. And make no mistake, at $800 billion, allowing the markets to resolve the shortfall in demand would send rates to levels that would absolutely quash this recovery…if not send the economy in a real depression."
But her real concern is a bigger one. "The Fed's 'need' to take on an even more active role as foreigners further slow the purchases of our paper is to put the pedal to the metal on the currency debasement race now being run in the developed world -- a race which is speeding us all toward the end of the present currency regime." That is, the dollar-centric, floating exchange-rate system of the past four decades since the end of Bretton Woods system, when the dollar's convertibility into gold was terminated.
The U.S. has benefitted because other countries needed dollars as reserves and for transactions. No other market has near the depth and liquidity of the U.S. financial system, the linchpin of which is the Treasury market. Not even the loss of America's triple-A rating by Standard & Poor's reduced the attraction of U.S. government obligations.
But other nations are beginning to push back. Brazilian President Dilma Rousseff Thursday criticized not just the U.S. but also Europe and Japan for creating a "tsunami" of cheap money. That has had the effect of forcing up currencies of emerging economies, which threatens to "cannibalize" those countries, she added. Not that this criticism is something new. In 2010, Brazil's finance minister blasted the U.S. for provoking a "currency war" with the Fed's second round of quantitative easing, QE2.
http://online.barrons.com/article/SB...641336544.html
Our friend, Stephanie Pomboy, who heads the MacroMavens advisory, offers some other inconvenient facts about the Treasury market: Uncle Sam is borrowing some $1.1 trillion a year, while our foreign creditors have been buying just $286 billion.
"I'm no mathematician, but that seems to leave $800 billion of 'slack' (of which the Fed graciously absorbed $650 billion last year.) Barring a desire to pay the government 1% after inflation, there is NO profit-oriented or even preservation-of-capital-oriented buyer for Treasuries," she writes in an email.
"For the life of me, I can't understand why NOBODY is talking about this???!!!"
Having known Stephanie for a few years, I can't recall her being this agitated since 2006, when she insisted the financial system's hugely leveraged exposure to residential real estate posed grave risks. She was called a Cassandra then, but both ladies' prophesies turned out to be right.
The U.S. fiscal situation hasn't mattered as long as the Treasury could readily finance its deficits at record-low interest rates. Even after the loss of America's triple-A credit rating from S&P, Treasuries rallied and yields slumped to record lows.
That's no longer happening. For what ever reason, assurances by the Fed Chairman aren't impressing the bond market. Neither is weakness in the commodity markets. Maybe Stephanie is on to something.
@Woland,
Just a quick follow-up/observation on the monopoly quote you posted.
One thing missing in Adam Smith IMO is that without government coercion/intervention, all monopoly is at most local.
A great description of that can be found in Mises' Human Action at Monopoly Prices
Here's a relevant teaser passage:
Every single seller would see his own proceeds increased if a fall in the supply at the disposal of his competitors were to increase the price at which he himself could sell his own supply. But on a competitive market he is not in a position to bring about this outcome. Except for a privilege derived from government interference with business he must submit to the state of the market as it is.
JR,
Your statement: you don't understand basic economics is called AD HOMINEM, a classic logical fallacy. Rather than proving why the statement is wrong, you resort to a personal attack. If this is the best you can come up with, there cannot be a two-way conversation.
@AD
Ach ja, the good ole days. Well, the game now is about protecting yourself. Irrespective of your derision towards the Euro, it is here, it is now, and it's not going away (maybe too much Farage?).
Germany was altered long ago as the Greens and the Social Democrats started to build momentum among your (misguided?) populace. The days of Kur, Social Welfare, Vacation, Medical, etc... are over. Long live austerity, envirofanaticism, and lax immigration for the dilution of the German people. I get the frustration and that is, in part, what has taken place in the US as well.
But, irrespective, as others have mentioned, we are now entering the "What's next?" phase and maybe that will be Freegold. That seems to be as viable a mechanism as any I can find and one that will hopefully allow a transition that is less disruptive than other alternatives. And for that reason, I am here, to learn from those far beyond my abilities and to drop a link or two that hopefully is of use to the community at large. I am still looking for a road-map or something that will help to provide 'signs' that we are reaching a point of transition. If I were to have any gripe with this site, that would be it. Maybe FOFOA has already put that out and I have missed it? Great, point me to it. Otherwise I remain a devoted reader of this blog to glean insight from many outstanding members that will help me to recognize the moment PRIOR to transition. I wish you well on your journey.
Woland
the link you gave is not to comment by FOA. It does discuss him briefly but there is no Texas style story.
Hi, my name is Nickelsaver.
I am a Freegold liberated hard-money idealist/easy-money practitioner.
The Freegold Twelve Steps
1) We admitted we were powerless over devaluation—that our investments had become unmanageable.
2) Came to believe that a Power greater than the $IMFS could restore us to sanity.
3) Made a decision to turn our savings over to the care of Gold as we understood it.
4) Made a searching and fearless inventory of our monetary perspective.
5) Admitted to ourselves, and to ANOTHER human being the exact nature of our misunderstandings.
6) Were entirely ready to have Freegold remove all these defects of currency.
7) Humbly searched all FO/FO/A post and comments.
8) Made a list of all FO/FO/A archives we had read, and became willing to read them again.
9) Took direct delivery of Gold wherever possible.
10) Continued to take personal inventory, and when we produced more than we needed, promptly bought physical Gold.
11) Sought through self-denial to improve our position in physical Gold as we understood it, seeking only for more knowledge of Freegold, and the knowledge to be prepared for the coming transition.
12) Having had a fiscal awakening as the result of these steps, we tried to carry this message to others, and to practice these principles in all our affairs.
PE,
"Germany was altered long ago as the Greens and the Social Democrats"
jep, looks like we are observing it the same way. It was bad enough when having these people like Cohn-Bendit in the national parlaments, attempting to destroy the middle class, but at least at that time, they had to justify their attempts. What is so frustating is that now exactly these type of people running the complete EU(RO) totalitarian show (together with the goldmansachs crew), completely without any kind of democratic entitlement. ALL EU parlaments are socialists (except Farage) THAT IS THE REALITY. "European golden giants"? Comme on, how stupid diluted is that? I mean that is the most stupid illusion I ever heard from an american mouth. I cannt think of anything more ridiculous.
Greets, AD
Michael, the correct link was also posted a bit later, and also NS pasted the entire post within this thread starting at 8.44.
I'm just doing some 'study' for financial industry exams. Just got to the bit on 'alternative investments'.
Gold got two mentions, firstly gold coins were mentioned in the same line as vintage cars, medals, paintings and fine wine. The second was a mention as a commodity, with no distinction made between any of the commodities.
Just made me think again that there is no way gold is now in, or will ever be in, a traditional bubble. The masses are selling their gold for cash, and the poor saps with wealth are stuffing it into whatever mainstream investment is flavour of the month, driven there by the system itself. How the West was lost eh?
I have emailed the BoE with 2 questions:
1. Why are their accounts denominated in US Dollars.
2. Why were the Bank's gold holdings transferred to the UK Govt over may years ending in 2005 (if I recall correctly).
There must be a reason, but will they tell me the truth?
@Phat_Expert, you wrote:
'I am still looking for a road-map or something that will help to provide 'signs' that we are reaching a point of transition. If I were to have any gripe with this site, that would be it. Maybe FOFOA has already put that out and I have missed it?'
My view is that the 'signs' you are looking for are here already. We can see the Fed and other govts using QE to buy up any and all debt as it goes bad, and just to keep the govts funded.
We see BRIC countries moving away from the dollar, reducing treasury holdings and looking at bilateral trade deals, cutting out the dollar. We see the gold price rising steadily.
I don't think anyone on the planet can predict when that actual 'point' of transition will be, we'll all have our own views for how long the $IMFS can limp along. The recent E.O. does seem to indicate that the US Govt know it is coming in the not too distant future.
My view, FWIW, is that the business cycle is turning sharply downwards right now, and so we'll have one almighty round of QE around the globe again, which will keep things afloat, but only for a few years, and the next time we go down in a few years time, the game will be up, as even more QE causes currency crises/systemic collapse leading to a freegold recapitisation of the world.
So my estimate of 'transition' is mid 2016. Seems a long way off, but does it seem like 4 years ago the sub-prime mess was just getting started?
But if you have your gold, you have your peace of mind just in case it happens this Sunday evening.
VtC
thanks for the answers.
I'm also watching the oil market, unfortunately it is to opaque for me to start some action to understand it. It would be very generous from you to try to explain it as far as you can in layman speak.
It is of course one of the keys to the next steps in monetary policy also coupled to the BRICS initiatives.
Have you heard that Weideman refuses to accept the new Greek bonds? What does that mean in terms of FG?
Am I wrong when seeing it as a policy drift between BuBa and the German gov?
Which repercussions does that have re ECB?
@VtC: "But the fact is that the debt must default in real terms. Pick your poison. The hard money agenda just claims that deflationary collapse is the superior poison."
Not so. The hard money agenda says that those imbalances could never have built up without soft money. The hard money agenda says that the cleaning out of mal-investments through a deflationary collapse is the only way to clear the markets and the distortions caused by this soft-easy money. This is also the essence of the gold standard.
You also have spoken a few times about how if the ECB just maintains that 2% inflation target than everything will be blue skies. First of all, we all know that one of they ways TPTB rob the rest of us is by hiding the signals and the information we need to be able to determine real inflation. As we know, their 2% price inflation can actually be 8% or higher monetary inflation with through suppressed and manipulated signals.
Since this CB managed fiat-fractional money that has been used for decades now (financial repression) has facilitated the debt bubble, once the bubble bursts super producers are not going to accept long term contracts denominated in this kind of currency, possibly not even short term contracts. And apparently you would also deny them contracts denominated in gold, meaning that they would be forced to accept contracts in soft money once again (not).
Jim Sinclair in his latest KWN interview was talking about how the US (and Europe) was shooting itself in the foot with the Iranian SWIFT ban, and he says that the rest of the world will end up creating alternative systems. We Swiss are very aware of how the US used SWIFT to secretly monitor intra-Swiss money transfers during the UBS tax/bank secrecy rape.
So I wonder what happens when/if the ROW decides to circumvent BOTH the Dollar AND the Euro by setting up their own "BRIC++" bank (with their own SDR's) running their own SWIFT. IMO, this would be as big a threat to the $€IMF the Saudi's no longer accepting dollars for oil. I say $€IMFS because through all the derivatives, swaps and repos the entire western banking system is joined at the hip. Not nearly as much so for the ROW.
@JR: I agree with you for once! Jesse is a New Deal loving liberal (or worse).
@AD
""European golden giants"? Comme on, how stupid diluted is that? I mean that is the most stupid illusion I ever heard from an american mouth. I cannt think of anything more ridiculous."
Not sure who you are referring to; please expound.
@Gary
Well 2016 isn't exactly that far off. And since I have been with this from 2000, I can wait a little longer. ;)
I am not concerned about timing so much as I am about WHAT to look for. Sure, I'm familiar with such terms/effects as QE, LTRO, CDS, $IMF, ECB, BIS, blah, blah, yuck... :) BUT, that doesn't get me any closer to being able to define a tipping point. That is what I am searching for. Any sound theory should be able to provide a swag as to what/when that might be. So far, I haven't seen it. Not here, not there, not anywhere (sorry Doc Seuss). You would think I am asking for the Grand Unification Theory. lol
I continue to stack, to purchase pm's with every available cent, on a regular basis. So, it's not that I don't believe... And, at the very least, if this turns out to be 'just' another generational Bull Market, well, I will profit from that as well. Thanks for your thoughts...
Phat Expat is not concerned with the "timing", is looking for the "tipping point" and is "familiar with blah, nlah, blah". A true FG student! He even "believes" and might even profit from a generational Bull Market. Nobody answering him cause everybody is very polite as long as he us not some f...... Aryan. LOL. Sorry for my zerohedgeising contribution, I couldn't keep it for myself. I will wash out the stinking rug imediately.
Ayn Rand's Contribution to the Cause of Freedom
After living through the Russian Revolution, and the economic chaos and political repression that came in its wake — events she would later dramatize in her novel We the Living — Rand fled the Soviet Union for the United States in 1926 to begin her career as screenwriter, playwright, and novelist. Dividing her time between Hollywood and New York, the fiercely anticommunist Rand began to develop a philosophy of ethical and political individualism, and to make the acquaintance of such leaders of the libertarian "Old Right" as John Flynn, Henry Hazlitt, Rose Wilder Lane, H.L. Mencken, Isabel Paterson, Leonard Read, and a fellow refugee from European totalitarianism, Austrian economist Ludwig von Mises.
Rand's chief popular success came from The Fountainhead (1943) and Atlas Shrugged (1957), two epic philosophical novels on the model of Dostoyevksy that quickly established her as one of the century's most controversial authors. The enthusiastic audience these works brought her enabled Rand to build a politico-philosophical movement based on the system of thought she would call "Objectivism," and Rand's attention accordingly turned thereafter to nonfiction; she would devote the remainder of her career to editing a series of Objectivist periodicals and to penning philosophical essays, political commentary, and cultural criticism.
Rand always stressed the importance of placing political arguments in a wider philosophical context, insisting that she was "not primarily an advocate of capitalism, but of egoism," and "not primarily an advocate of egoism, but of reason."
Rand's influence on the libertarian movement is incalculable; despite her own frequent antipathy toward that movement and even toward the word "libertarian," Rand played a crucial role in helping both to create new advocates of laissez-faire and to radicalize existing ones; Rand encouraged libertarians to view their standpoint as an alternative to, rather than a branch of, conservatism, and to base the case for liberty on moral principle and not on pragmatic economic benefits alone. Rand's influence on popular culture is likewise enormous; an oft-cited Library of Congress survey of "most influential books" placed Atlas Shrugged second only to the Bible.
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cont.
Because Rand called big business a "persecuted minority" and dismissed the military-industrial complex as "a myth or worse," she is often taken as a naïve apologist for the corporatist elite; but she also condemned the "type of businessmen who sought special advantages by government action" as the "actual war profiteers of all mixed economies"; and it's easy to forget that most of the businessmen characters in Rand's novels are statist villains.
As Chris Sciabarra reminds us, Rand likewise grasped the symbiotic relationship between militarism abroad and neofascist politics at home; in an era when many of her followers are enthusiastic supporters of American military intervention overseas, it's worth remembering that Rand herself opposed US involvement in World War I, World War II, Korea, and Vietnam.
Perhaps the most controversial aspect of Rand's philosophy — her rejection of altruism and her embrace of ethical egoism — is also one of the most misunderstood. Despite her sometimes-misleading rhetoric about "the virtue of selfishness," the point of her egoism was not to advocate the pursuit of one's own interests at the expense of others', but rather to reject the entire conflictual model of interests according to which "the happiness of one man necessitates the injury of another," in favor of an older, more Aristotelean conception of self-interest as excellent human functioning.
It was on such Aristotelean grounds that she rejected not only the subordination of one's own interests to those of others (and it is this, rather than mere benevolence, that she labeled "altruism") but also the subordination of others' interests to one's own (which she labeled "selfishness without a self"). For Rand, the Aristotelean recognition of properly understood human interests as rationally harmonious was the essential foundation for a free society.
[...]
In an era when libertarianism and Aristoteleanism were unfashionable enough separately, Rand had the audacity to defend their systematic fusion, and identified Enlightenment liberalism's roots in the Thomistic recovery of Aristotle at a time when this connection was less widely recognized than it is today. (Though Rand's followers have sometimes intemperately proclaimed her the greatest philosopher of all time, Rand always firmly insisted that Aristotle was the greatest and that Thomas Aquinas was the second greatest — her own atheism notwithstanding.) Whether her specific versions of libertarianism and Aristoteleanism, and the specific terms on which she attempted to unite them, were ultimately the most philosophically defensible ones is perhaps less important than the example she set in making the attempt.
THE WINNOWING OF AYN RAND
Egoism and Rights
Rand sets out to found a classical liberal conception of politics (including strong individual rights to negative liberty) upon a classical Greek conception of human nature and the human good. Such a project is not unprecedented; one can find broadly similar syntheses in thinkers as diverse as the Salamanca Scholastics, John Locke, and John Stuart Mill. But Rand, in addition to having little use for the various theoretical frameworks in which these earlier efforts were embedded, adds to her ethics a spirit of heroic exaltation drawn from Nietzsche and the French romantics.
Classical liberalism’s “thin” conception of politics is often thought to be at odds with the Greeks’ “thick” conception of ethics. If there is an objectively best way of life, or at any rate a family of best ways, then why should we value, as liberals do, the freedom to choose ways of life that are not the best?
Rand offers two answers. One is that being self-directed is an essential part of the good life, so that a way of life forced on someone from without no longer counts as best. But her other and more characteristic answer appeals less to the welfare of the potentially coerced and more to that of the potential coercer; to deal with others by force rather than persuasion is to betray one’s own nature as a rational being, and thus to make not only one’s victim but oneself worse off. (Rand here embodies what Douglas Den Uyl has called the “supply-side” aspect of Greek ethics.)
Central to Rand’s ethics is the idea that the nature of our self-interest is something that has to be discovered on the basis a consideration of our nature as rational beings, not something that we can simply read off our desires. Rand’s delineation of the content of our self-interest includes, crucially, both the thesis that there can be no genuine conflict between self-interest and morality, and the closely related thesis that there can be no genuine conflict between one person’s self-interest and another’s. [1] These claims may strike many today as implausible — one of Rand’s recent biographers calls the second thesis “eccentric” — but they were shared by nearly every major thinker in the first two thousand years of moral philosophy, from Socrates, Plato, and Rand’s beloved Aristotle, through the Stoics and Epicureans, and onward through Cicero to the aforementioned Scholastics. [2]
[...]
Rand’s notorious reference to big business as a “persecuted minority” (Capitalism: The Unknown Ideal, ch. 3) likewise jars with our real-world experience of “capitalism,” as we see the corporate elite lining up for tax-funded subsidies, protectionist regulations, bailouts, mandates, monopoly contracts, war profits, eminent domain giveaways, and other state-granted privileges.
Rand was not unaware of any of this, of course; on the contrary, she sharply condemns “men with political pull” who seek “special advantages by government action in their own countries” and “special markets by government action abroad,” and so “acquire fortunes by government favor … which they could not have acquired on a free market.” [8] Likewise, while readers often come away from Atlas Shrugged with the vague memory that Dagny Taggart was fighting against villainous bureaucrats who wanted to impose unfair regulations on her railroad company, in fact Taggart’s struggle is mostly against villainous bureaucrats who want to give her company special favors and privileges at its competitors’ expense. Moreover, most of the workplaces depicted in her novels are run by vain and incompetent bosses (like James Taggart in Atlas Shrugged or Guy Francon in The Fountainhead) who have to be continually flattered or outwitted by their subordinates.
Rand would deny, of course, that these are problems with capitalism. Government favors to business are directly incompatible with capitalism as she understands it, while incompetent and tyrannical bosses would be unlikely to thrive in a genuinely competitive market.
Yet as I read Rand, she once again wavers — this time between two conceptions of capitalism. On the one hand, she defines capitalism as “full, pure, uncontrolled, unregulated laissez-faire” in which “all human relationships are voluntary” — thus identifying capitalism as a 100% libertarian social system which by her own admission seems never to have existed in history. (Call this ideal capitalism.) Yet on the other hand she describes capitalism as a historical reality, saying for example that it “has created the highest standard of living ever known on earth.” (Call this historical capitalism.) How can capitalism have had all these wonderful results if capitalism has never existed? [9]
Rand’s answer, evidently, is that historical capitalism has been at least an approximation to ideal capitalism. But there is reason to doubt that this is so. Rasmussen speaks of the “heightening sense by many” that the current Democratic administration is ushering in a state of affairs in which “active state intervention in the economy will be more the rule than the exception”; but such intervention — usually on behalf of business interests — has arguably already been the rule for some time, with the present regime representing more a shuffling of the details than a major step toward greater statism.
[...]
Nor do we find a laissez-faire utopia when we turn to 19th century America; even if we set aside, as we shouldn’t, the fact that women and nonwhites –i.e. a majority of the population — were largely excluded from participation in the market, that market was heavily burdened by tariffs, banking regulations, monetary monopolies, postal monopolies, corporate subsidies, licensure laws, land seizures, cartelization schemes, censorship laws, anti-union laws, and Hamiltonian “internal improvements.”
Of course I don’t mean to deny that the United States and other countries generally identified as “capitalist” generally owe their prosperity to their free-market elements rather than to their statist and corporatist elements; but from a radical libertarian perspective that’s a bit like saying that the seriously ill owe what vitality they have to the respects in which they are not diseased.
The magnitude of the gap between corporatist reality and the free-market ideal was the subject of a previous Cato Unbound symposium in which I participated, so I won’t go into more detail now. But if that gap is greater than Rand assumed, then the use of a single term, “capitalism,” to cover both may be inadvisable. [10] More substantively, if Rand indeed underestimated the magnitude of the gap, then her defense of ideal capitalism may not translate as readily as she thought into a justification of various features of historical capitalism. [11] How much of her vision of titans of industry heroically striding across the economic landscape, their pyramid-shaped companies of the less-talented dangling from their pockets like watch fobs, is an artefact of competition-strangling regulations that prevent the flattening of corporate structures, the proliferation of small businesses, and the emergence of workers’ cooperatives?
A related concern about Rand’s vision of a “capitalist” society is the role she envisions for government: that it should be confined solely to the protection of rights, and “resort to force only against those who start the use of force.” In effect, Rand proposes to assign the job of rights-protection to a coercive monopoly insulated from competition, with all the informational and incentival perversities to which such monopolies are subject — and then demands that it not act like a monopoly. Rand described anarchism as a floating abstraction, but the charge might more justly be leveled against “limited government.” [12] (Ironically, one of the central messages of Atlas Shrugged — that the way to defeat an oppressive regime is not through violent revolution but through the mass withdrawal of consent — represents a distinctively anarchist approach to political strategy.)
a little bit OT, but entertaining:
tonight on the european TV channel ARTE (german&french) there will be a documentation on:
"John Law - The guy, that turned paper into money"
I guess a MUST SEE for people here.
http://programm.ard.de/Programm/Jetzt-im-TV/john-law/eid_287247609611729?hour=20&datum=31.03.2012&list=main&first=1
Greets, AD
http://www.youtube.com/watch?v=ADv5-Pen1L4
'Jesse is a New Deal loving liberal (or worse).'
What could possibly be worse, Desperado? Hang him high! You are a frustrated idealogue; no wonder you are miserable.
Since we do seem to be going on a Randian sidepath after all, I will say this; theory is fine. Debate, discuss, but understand that implementing a rigid, extreme philosophy that does not take into account human nature will always result in something very different from the ideal. Desperado will say the gold standard works fine, it's the people that screw up. Freegold theory understands this and uses human nature to its' advantage, but some of its proponents here are still given to unrealistic ideas.
Jeff,
"implementing a rigid, extreme philosophy"
I think nobody wants that, in opposite to "Non-Randians". It's those "liberals" socialists who want to force others into their crap/believe/religion of their view "of a better world".
Greets, AD
Yay Jeff,
Debate, discuss, but understand that implementing a rigid, extreme philosophy that does not take into account human nature will always result in something very different from the ideal.
Unmask the ideology, find what's valuable and move on. Nobody is perfect, we all do dumb stuff and and have silly thoughts. But those flaws don't preclude great insight and brilliance at times as well.
That's the beauty of the Superorganism:
Superorganisms exhibit a form of "distributed intelligence," a system in which many individual agents with limited intelligence and information are able to pool resources to accomplish a goal beyond the capabilities of the individuals.
JR,
Yes, but can the Superorganism collectively put in place a construct that is resilient to the pervasiveness of "Termites"?
http://www.welt.de/finanzen/article106142019/ESM-kann-gegen-deutsche-Stimme-Geld-abrufen.html
thats how we play Freegold in the Eurozone.
Greets, AD
And now for something completely different
Hi Nickelaver,
"Yes, but can the Superorganism collectively put in place a construct that is resilient to the pervasiveness of "Termites"?"
Yeah, it is called society. Social cooperation is what happens, the distinction is between free and forced association. The point of Human Action is:
The law of association makes us comprehend the tendencies which resulted in the progressive intensification of human cooperation. We conceive what incentive induced people not to consider themselves simply as rivals in a struggle for the appropriation of the limited supply of means of subsistence made available by nature. We realize what has impelled them and permanently impels them to consort with one another for the sake of cooperation. Every step forward on the way to a more developed mode of the division of labor serves the interests of all participants. In order to comprehend why man did not remain solitary, searching like the animals for food and shelter for himself only and at most also for his consort and his helpless infants, we do not need to have recourse to a miraculous interference of the Deity or to the empty hypostasis of an innate urge toward association. Neither are we forced to assume that the isolated individuals or primitive hordes one day pledged themselves by a contract to establish social bonds. The factor that brought about primitive society and daily works toward its progressive intensification is human action that is animated by the insight into the higher productivity of labor achieved under the division of labor.
Social cooperation - humans compete not just to consume, but to produce for one another.
Social Cooperation
This seemingly simple idea leads to counterintuitive conclusions. As a result of expanding cooperation, human beings compete to produce, not to consume (as other animals do). Mises expressed this with my favorite sentence in Human Action: “The fact that my fellow man wants to acquire shoes as I do, does not make it harder for me to get shoes, but easier.” The expansion of cooperation also necessarily means we can deal with strangers at great distance – a further incentive for peace. (See Steven Horwitz’s previous column on this subject.)
Unfortunately, the emphasis on cooperation is not what nonlibertarians are likely to “know” about free-market economics and the normative freedom philosophy. They are more apt to associate these with “rugged individualism” than “social cooperation.” I have no doubt that a major reason for this is that our opponents who know better want the public to have a distorted sense of the genuinely liberal worldview. When President Bill Clinton declared (disingenuously) in his 1996 state of the union address, “The era of big government is over,” he followed up that sentence with this: “But we can’t go back to the era of fending for yourself.” But human beings have always been social/political animals. There was no era when men and women fended for themselves individually. The choice was between free and forced association.
have a good weekend, J.R.
The gravitational pull of complete, logically consistent systems of
thought on the human mind is generally irresistible. Unfortunately,
we must live with the consequences of Godel's two incompleteness
theorems. In short, we are generally better off by taking a clinical,
as opposed to an axiomatic approach to problems. It has certainly
improved the science of medicine. I believe that Freegold, as set forth
in Aristotle's 5 part HOF series, is just such an approach, based as it
is on the human being "as we find him", not as we wish him to be.
Having said that, I will crawl back into my shell, and heretofore be
just a listener, rather than a speaker. cheers.
In my country, Ukraine, the National Bank even make advertisement on boards in the capital city Kiev that the National BANK is buying gold: http://www.nr2.ru/kiev/380422.html
JR,
With all due respect, and I am not trying to pick a fight here, but your argument seems to be a little circular.
"Yeah, it is called society. Social cooperation is what happens, the distinction is between free and forced association."
Without delving into your long diatribe. You are basically saying that society (which is the superorganism) can do it because "it jus' happen"
@Jeff: "What could possibly be worse, Desperado? Hang him high! You are a frustrated idealogue; no wonder you are miserable."
Miserable, moi? You are projecting. I have a great life, my grandson and his parents are coming by this evening. I am still devoted to my wife of 30 years and I have a challenging job that pays well. I have cast off my chains of US person enslavement and for the first time since I was in college I will file no 1040. My gold is considered legal tender in the country I live and thus is capital gains tax free. My neighbors all have assault rifles in their closets and must perform target practice for the militia once a year. My country also used to have banking secrecy until it was raped by the $IMFS progressives. It still manages to have some of the lowest taxes in the western world. But most of all I have the satisfaction of seeing that my social and economic beliefs have not only been honest and true, but correct. Just like Ron Paul told you.
Progressives and New Dealers can no longer hide from the consequences of 100 years of their policies. The decline of the dollar correlates perfectly with the rise of these progressives as does loss of liberty and the rise of the slave state. The Fed and the Income tax have enabled the progressive rape of society. And now the bill is coming due, and it is the progressives that are miserable. Just look at their desperate actions in this Trayvon Martin case. Simply depraved.
Desperado,
wenn ich mich richtig erinnere, lebst Du in der Schweiz?
So what is your take on Mr.Hildebrandt screwing the people being so dumb to trust in holding the franc?
Dont you also see the bubble on real estage in Switzerland?
What is your take, what will happen to Switzerland, once the $IMFS will blow up? Or when the € breaks up?
Greets, AD
victorthecleaner said...
db,
Is it me the only one thinking that the oil tankers story may be connected to the recent EO and constitute an extra reserve if HI is to happen in the near future?
FOFOA suggested that Saudi Arabia might be unwinding the oil forwards. He said this could be done only at a time at which this is favourable for the US as well and at which they would accept it. Makes sense, doesn't it?
Victor, I haven't looked for this information because I don't know where to find it or if it's even available, but if you were to guess -- how far out in time do you think SA engages in forward sales denominated in $US? If they were to stop accepting USD denominated contracts today -- given the opaqueness of the OTC market -- any idea on when large orders (sovereign size) would cease to flow? How far out in time do consumer nations typically pay and producing nations typically accept?
--Aaron
ps. I have really enjoyed learning from you this past year -- and your comment above on how savers enable debtors was just dynamite.
Put another way, if SA is indeed settling up, how far into the past do you think the deal might have been brokered?
Gary,
2. Why were the Bank's gold holdings transferred to the UK Govt over may years ending in 2005 (if I recall correctly).
They, too, expect HI?
Aaron,
If they were to stop accepting USD denominated contracts today -- given the opaqueness of the OTC market -- any idea on when large orders (sovereign size) would cease to flow?
I don't know. The FT article said, just related to charters of supertankers from SA to the US, that usually one ship goes every two months, but now they have nine lined up to go asap. That would make it 18 months.
But this is probably only a part of the volume. Also, what is stopping now is perhaps just the price fixing operation Chris Cook alluded to. I don't know that much about oil, perhaps others (costata?) can comment as well.
Victor
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