Saturday, October 20, 2012

Debriefed #7 – Jeff

This one is a little bit longer than the others for a few reasons. First of all, YouTube lifted my 15 minute time limit. Also, Jeff has been here almost four years and yet I know almost nothing about him, so we had a nice long conversation. And because of this, he got to ask me a few questions, so perhaps the extra time is just a little bit of my Debrief. ;) In any case, I'm obviously not going for length here, so I'd love to hear your feedback regarding the length. Should I have cut it tighter? Our whole conversation was about 50 minutes, so I cut out half of it.

Also, here's the link to the video response from Silverfuturist mentioned in the interview. Once again, a hearty welcome to my 90 new silverbug YouTube followers! And to Joe, thank you for your kind words.

Sincerely,
FOFOA

276 comments:

«Oldest   ‹Older   201 – 276 of 276
costata said...

DP,

RT @JamesGRickards: Main takeaway from #GoldSymposium in #Sydney: Chinese are buying gold mines in Western Australia faster than lawyers can write the contracts

Nice set up for a trade war in the future. The body of law that gave the Australian government the legal right to all gold here was suspended not repealed. The Chinese must know that they could lose their rights to the inground gold here in a New York minute.

costata said...

Indenture,

...the US will fight for $ Reserve Status till the end even if it means destroying the lifestyle of Americans?

My answer would be yes. I would be warmly receptive to the slightest shred of evidence that the USG gives a toss about American citizens.

costata said...

RJP,

"In working on this project, I was personally shocked when I discovered that we absolutely NEEDED armed rednecks in order to set Zombies free-- free from their own, personal Hell on Earth."

LOL hilarious! Thanks.

costata said...

Michael H,

Thanks for the compliment.

Edwardo,

Thanks for the link about the HKMA. The speculators should research the Asian currency crises of the late 90s and the response of the Swiss to the prospect of becoming a new reserve currency.

Wasn't it Bruce Krasting who predicted that FX speculators would break the SNB's peg in short order?

VtC,

Great post in response to ANT and dec. In relation to China as I remarked in an earlier thread I don't think they had a choice about continuing to accumulate USG paper. IMO capital flight reversed the flow of (demand for) US dollars.

The PBOC has been caught between a liquidity squeeze in their banking system and policies to contain inflation. I suspect they are desperately trying to avoid pushing the $IMFS toward collapse. Curiously no one seems to have restated Triffen's Dilemma as an antithesis in regard to other currencies.

What an unmitigated disaster this Ben Bernanke is for the world. If you delve into the economic theories this fellow (and his colleagues) subscribe to it becomes apparent that they actually believe these are the right policies to solve the problems.

Milamber,

Agree on Diamond. I forgot about Lan Pham because she was posting infrequently at one point. I hope she posts more material. IMO a fine mind and good analyst. Looking forward to your response when you have time.

I am afraid the bright light of my hard money knowledge would burn your eyes!.

If that isn't DP he's been cloned by the illuminati as part of a psy-op.

costata said...

Wow, I own page 2. Bye for now!

victorthecleaner said...

costata,

What an unmitigated disaster this Ben Bernanke is for the world. If you delve into the economic theories this fellow (and his colleagues) subscribe to it becomes apparent that they actually believe these are the right policies to solve the problems.

This is too HMS for my taste (if this was this sarcasm, perhaps you left out the ... tags). What you hear from the FOMC is just the usual BS - they have to tell you something about why they are QEing: To rescue the mortgage market, to induce more bank lending, to drive investors into stocks, ... we heard them all. The issue is they cannot tell you the truth: If the ROW stops buying US bonds or even starts selling them, they are the only ones with pockets deep enough to buy... pretty much according to FOA's script of 12 years ago, no?

Victor

victorthecleaner said...


I wanted to say that you should highlight your sarcasm with [sarcasm]If Ben thinks this solves it, he is an idiot[/sarcasm]. I wrote < > brackets, and blogger took it for actual sarcasm...

Victor

victorthecleaner said...


About a year ago, when he explained the Euro to people, he was often quite good, but it seems he has figured out that prostitution pays better than teaching.

http://www.youtube.com/watch?feature=player_embedded&v=kdPkaCTdxBU

Victor

answer2me said...

Costata,

I dont care for martins soap box economic theories either, but also think he is spot on with his cycle theory and timing models. If you combine his ECM with freegold theory an even bigger picture emerges. It seems that freegold could be cyclical itself. I have some of His writings that where given to the attendees in Philadelphia that you might jot have access to. I would love to collaborate if you are interested.

Bjorn said...

ROFL RJP I clicked your DNA link at breakfast and my kids made me play it 5 times in a row. Seems to be some redneck DNA going on here too, even though they don´t understand a word.

costata said...

VtC,

No that comment about Bernanke wasn't intended to be sarcastic.

The reason why it is important to understand that Bernanke is a "true believer" in his economic theories is that it helps to dispel any shred of doubt about whether these guys will drive the US economy right off the cliff.

I wish guys like Bernanke, Krugman et al in the mainstream of conventional economic theory knew what they should be doing and were consciously using the wrong approach for some reason.

I'm not interested in the explanations that the MSM trots out to J6P. These policies fit with their eoonomic training and teachings. Bernanke was chosen for this role because his policy responses suit the PTB and vested interests with influence. Think about how much money there is to be made from being massively short on the US dollar prior to HI.

(BTW a young Ben Bernanke and Mervyn King shared an office when King was an academic in the USA. DP, take note! What I'm saying here applies to the UK in spades.)

I realized some time ago that crediting these economists with knowing what they should do (or dismissing them as idiots) keeps the hope alive in some minds that (1) they may elect to change course or (2) they may be replaced with people who know what they are doing when it is realized that their theories are wrong.

Neither will happen. All the acceptable replacement candidates for Bernanke's job are from the same school of economics. The US Treasury people have their own agenda. From their perspective HI is a viable solution not a problem. Same deal with the CBO.

Remember all of these Federal government people have immunity provided they don't betray their USG paymaster. They are not accountable to American citizens under the law.

You have to delve deeply into their school of economics to understand how bizarre their beliefs are. I'm talking "neutrality of money", "debt doesn't matter", "general equlibrium" and so on.

People deride "freegolders" for suggesting that the outcomes many here anticipate are inevitable. It would be just dandy if the general public could understand the life cycle of the $IMFS and the other material here and in the A/FOA archives. Unfortunately even committed, intelligent people struggle mightily to grasp it.

The economic theories of these guys are yet another sound foundation for the "inevitability" of HI and Freegold-RPG.

/rant over

costata said...

answer2me,

Broadly agree with your observations. Cycle theory is also an excellent fit with the timeline/life cycle description of the $IMFS. I've noticed a fit with Strauss-Howe gernerational theory, Krondatieff's work and RE cycle theory as well.

I'm engaged in a project with Aaron at the moment to create a basic proof for the Euro Freegold-RPG architecture that uses some Keynesian/Marxian theory to show an economist colleague of his that it is viable in their terms. If it stands up to the intended recipient's scrutiny it may have some value in other quarters.

Down the track I would welcome the opportunity to explore some of Armstrong's cycle theory work with you.

Cheers

costata said...

I'm sorry for hogging the comments. My plans for today were postponed so I have been at a loose end for the past few hours. I couldn't resist one more comment as this post fits so perfectly with my exchange with VtC about Ben Bernanke.

What Ben Bernanke Will Do When the Accelerated Price Inflation Hits

(My emphasis)

Many are familiar with the Ben Bernanke book, Essays on the Great Depression, which is a compilation of writings about the Great Depression by various economists. Fewer, however, are aware that Bernanke contributed to a work on inflation, Inflation Targeting.

This second book may provide us with important clues as to how Bernanke will act if price inflation begins to accelerate. And, indeed, it appears that some time in 2013 a perfect storm of actors may develop to push price inflation much higher.


Too Little Too Late is the short answer if you don't have time to read this short post.

FOFOA said...

Matrixsentry wrote:

"OK, I want to add HardSocialist to the list of people who need to be de-briefed. This guy is a visionary! He is the toast of Twitter!"

Bjorn responded:

"@Matrix
I assumed it was one of DPs personalities. :-) If it´s not, then I heartily second your motion."


Then Costata wrote:

"I am afraid the bright light of my hard money knowledge would burn your eyes!

If that isn't DP he's been cloned by the illuminati as part of a psy-op."



I'd like to give a warm welcome to H. M. Socialist who left a comment here in response to the above comments today. Thanks to that comment, I was able to use my superpowers and exclusive access as blog owner-operator to track his nefarious activities. He probably didn't even know he was opening himself up to such scrutiny by simply exercising his freedom of speech… but he was!

I, too, had a good idea who this despicable infiltraitor was, and so I thought, "HA! Got you now, sucka!" But lo and behold, he must also be a master hacker, or else Costata's right and he's an agent of the Illuminati.

I thought for sure that he'd reveal himself as either a fake name of someone we know, or at least someone I am aware of through my vast database of supporters and stalkers. But he's not. He's not DP. He's not even over there in the "old world". He's right here in the New World, the great USA. I won't disclose his location because I don't do that, but I will tell you that he is in one of those wretched "blue states" (but then again, so am I). :-/

So… who the bretton woods is H. M. Socialist??? I have dug deep in my memory bank of who has donated from his region that he could possibly be and come up dry. I do not know. He's not a spoof account of anyone we know, as far as I can tell. He's someone totally new, IMHO. So I would like to add my vote for an interview with our newest "subversive" arrival. All you need is a webcam, and you know how to reach me! ;)

Sincerely,
FOFOA

FOFOA said...

Sorry about the multiple posts to the email subscribers. Had to get the Twitter link to work. ;)

costata said...

Just had to share this find! It appears that we can toss the "Chicago Plan" in the rubbish bin. As described it simply won't achieve full reserving.

The Myth of Full Reserve Banking

From a comment by Andrew Lainton here:

http://www.debtdeflation.com/blogs/2012/10/22/the-myth-of-fractional-reserve-banking/#comment-39911

... It also exposes a flaw in the ‘chicago plan’ – full reserve banking – recently promoted by the IMF in that loans created from term deposits (which would be allowed) would create reserves of equal value in other banks which could then be lent out.

From an email from Dirk Bezemer im sure he wouldnt mind sharing

‘ Here is another problem, Andrew:

Suppose an alphabet of banks A,B,C,…Z. Suppose bank A can lend while banks B,C,…, Z are all ‘loaned up’ – they have lent just so much to the public as their reserves allow.

What if bank A, with enough reserves to lend millions, does so, to the point where also bank A reaches its limit? And what if the borrowers draw down the loan and spend the money? All very likely to happen.

Now millions in deposits find their ways through the economy and onto bank balances of banks B,C, …Z, all in excess of reserves.

Meanwhile bank A still has the same capacity to lend – all its deposits have been transferred to other banks, after all.

So it does the same thing again. And again.

What will the central bank do to stop this? I cannot stop bank A – bank A is operating by the rules. It cannot destroy deposits in banks B,C,…Z. The deposit are not theirs.

Ergo, their will de deposit=money creation in excess of reserves and loans will be funded by deposits – all the disasters that full-reserve money was trying to avoid.

Dirk’

So perhaps a better title would have been ‘The Myth of Full Reserve Banking’

duggo said...

Dear FOFOA
As a student of the concepts here and gradually reading through the "must reads" I would like to make a rough analogy of how (so far) I see the concept of Currency versus Stored Wealth.

As an arbitrary value let's say an ordinary house is valued at one ounce of Gold. The house can increase decrease in terms of currency but will remain, whatever the currency value at one ounce of Gold. On the other hand Silver, also as a currency, will also tend to fluctuate against the price of the house much the same as currency.

N'est pas?

FOFOA said...

Hello Costata,

Maybe "money = credit" is nothing new. Maybe "money = reserves" is the flawed (and relatively new) premise.

Maybe physical plane reserves are the "real capital" backing the creation of credit (real money). In Freegold bank liabilities are backed by CB liabilities which are backed by CB reserves which are gold. Gold, the ultimate backing, is essentially owned by the currency holders, not the bank. Even if there's no "gold window", CB currency defense is the ultimate "window" between the currency issuer and the users. But in Freegold, the public (savers) can also purchase those same reserves that ultimately back everyday credit (real money), changing the value of that backing relative to credit (real money), in that currency zone, at any time.

Just thinking aloud…

Sincerely,
FOFOA

Bjorn said...

FOFOA

Perhaps HMS is you when you´ve looked too deep into the bottle of Chocolate port? That would be a spectacular inteview. Sober Fofoa debriefs drunk Fofoa!

Altough I wouldn´t put it entirely past DP to fly across the atlantic just to confuse us. ;-)

Oakay Nobmilka said...

RT @Bullionbasis: India Knight is an example of what's wrong with this country: vacuous & expensively schooled, but taught nothing. Like a rambling old aunt.

#MatchMadeInHeaven?

Barry Michaelmore said...

The house can increase decrease in terms of currency but will remain, whatever the currency value at one ounce of Gold.

...

This is your final answer?

(-1 for #SpeedReading)

duggo said...

@Barry Michaelmore.
I'm sure you are very pleased with yourself for being so clever but you really should get over yourself.
For someone like myself and other newbies who have decided to "come in from the cold" and learn something your comment doesn't help.

Barry Michaelmore said...

What is so special about a house (or a quality toga & leather sandals?) that is not at the same time special about silver?

The only thing that is always at a fixed parity with an ounce of gold, in terms of value, is another ounce of gold.

N'est pas?

Edwardo said...

Hi Aaron,

The reason I brought it up was simply because I came across what looked like the exact same photo somewhere else on the internet. It had me thinking that the original caption on this site must have been a joke.

freegoldfuturist said...

Per FOFOA's suggestion, I named my handle freegoldfuturist, but that doesn't mean I can't also be the silverfuturist (I explain below.) FOFOA, thanks for posting my videos, I am getting some new perspectives in my comments. As the silverfuturist from youtube, I see the future as a series of chapters in a book - but I don't know the order of the chapters, or even which chapters will be omitted. The last 4 years have not happened like I expected, and the next 4 years won't either.

For silver - many people in silver expect a "Hunt Brother's moment" in a currency crisis like 1980 when the solution wasn't certain. The 2011 silver price action was something many gold people didn't predict for example. Listen to the big silver pundits like Mike Maloney (not counting big opinion without big net worth pundits) - the plan is to use silver as the ultimate trading vehicle, timing the super spike in price and then dumping the silver quickly.

I think the future solution will involve gold (Freegold for example) but before the solution I don't think any of us can predict the details, we certainly didn't since 2008. In addition - that solution might not be the final chapter to the crisis. For example, with a billion Muslims in the world, a crisis could cause them to revisit what their holy book says about silver as money for a brief period of time (or even longer.)

How much gold vs silver people own is a point of discussion in these forums... these metals are like "Fight Club" I don't talk about fight club.

Woland said...

Good morning, Costata;

Thanks for the yen explanation. All the better as a place to
exchange unwanted dollars for a better store of value, then.

Regarding your opinion on Bernanke, until I read, and accepted
a certain passage by FOA in response to Cavan Man's question,
I would have agreed with you. Now I don't, because I side with
FOA on this issue. It hinges on whether, whatever he may SAY,
Bernanke is simply FOLLOWING in the footsteps of Greenspan. IF
you accept this, then you must reconcile yourself to either
agreeing, or rejecting, FOA, in USA Gold (02/18/01) 19:34:02MT
msg # 45876. There is no choice in this matter, IMHO.

Woland said...

typo - (01/18/01) remainder is correct.

duggo said...

@ Barry Michaelmore
In future I shall resist coming back to your comments in the same way that I would resist turning my back on you near a swimming-pool.

If you want to be really pedantic feel free but please do it by yourself.
Don't answer my comments.

Barry Michaelmore said...

So you agree then - the future value of houses will have more in common with the future value of silver (or togas & sandals), than with the future value of gold.

Good good.

Kelton Sweet said...

I'm finding the writing style difficult. Perhaps I lack some fundamental understanding of economics. Regardless..... so.... the advice is to "buy gold!"?

Woland said...

FOFOA:

OMFG! R U saying what I THINK you're saying?????????

(an amusing aside: looking at who's following (not a follower
of, just following) HardSocialist, we find both the Fed and the
U.S. Treasury. Check it out, man!

Michael H said...

For the google-challenged, here is the url for the article RE: Bernanke that costata referred to above (October 23, 2012 11:34 PM)

http://www.economicpolicyjournal.com/2012/10/what-ben-bernanke-will-do-when.html

Bjorn said...

@duggo

I think you will find some helpful comments regarding the relativity of value if you wade through the comments section of Todays quoteunquote "gold"

<

Bjorn said...

Hehe saw one of my own comments regarding technicals in there as well. I guess I was somewhat off on the timing there. Still think it´s heading for a RHS-like formation though, only slower than I thought before.

Michael H said...

... and since the archives are still down, here is an excerpt from the FOA comment referred to by Woland, from the regular archives:

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.

(MH – skip the description part as it has been posted before, and the joke about the new-money-Aussie with the 14-meter boat)

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! You see, in real life, we must often take on the appearance of that world around us. This action isn't lying or cheating so much as it is trying to act out a play that is essential in dealing within our hugely diverse society. A society, by the way, that is mostly made up of people that aren't "the good ones" as we so often perceive ourselves to be.(smile)

This line of comment now lays a foundation that takes me to politics. As I have come to understand the captain at the helm,,,, the driver of the corporation,,,,,, the general at the controls,,,,, they are all just like us. Working outside our personal moral standing standards, they must function using a diverse crew that's usually not of the same thought. Do these leaders lie and cheat if the stress becomes great enough? Of course, how do you think the ,,,, workers of different moralities are jostled to perform,,,, the job gets done and profits get made,,,,,, ! Do these bosses all get caught? No, the ones we extol as "good ones" don't. Does the democrat tax and spend? No more than the republican borrows and spends! Is your group's moral or business objectives correct for the country? Only if they apply to the whole diverse society. Otherwise, you are imposing a will upon others.

(1/2)

Michael H said...

Now, with that overview in mind:

Is Alan Greenspan doing everything he can to oversee a fiat banking system while functioning within our political society? I can answer that with .9999% certainty. Yes! In fact, throw a few extra 999s on that answer (smile).

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)

TrailGuide

(2/2)

Woland said...

"Ah'v always relied on the kindness of strangers." Thank you
Michael H

matrixsentry said...

Thank you Michael H!

I am not sure when it happened exactly, certainly a couple years ago, but when I laid down this particular bag my understanding clarified in a manner that simply surprised me. Reminds me of when I put on my reading classes and all of a sudden I realize how much detail I have been missing in the dim light.

Another benefit, at least for me, was the ability to dump the venomous negativity I held in reserve for those at the controls like the Bernank, even ordinary bankers in general. The problem is leakage. This nasty stuff leaks into the other areas of your life and personality. It pollutes each and every precious day on this earth in some way, and I as well as the people around me are no better for it.

It works for me to believe a very smart person like Ben Bernanke is simply doing his very best to play the cards he has been dealt. No evil intent, no ignorance. I prefer to believe he knows what is coming in the sense that he knows what he is doing cannot possibly fix the system.

IMO he is waiting for an organic solution to present itself and is keeping the lights on until it arrives. He does not want to be the initiator that provides the final detonation sequence to a system that was never planned and a way of life that simply evolved. That task is way outside his job description and is more in line with the job description of the one that appointed him and at whose discretion he serves.

Thora Splaura said...

@Barry:

If your friend has read as much as he says he has read and cannot see how relevant your comments to him were perhaps it will be a little time before he will understand what he is reading.

Greetz!

Lord Sidcup said...

I am the only one who finds GATA's evidence completely laughable? While agreeing that what they think is happening, is happening.

Lord Sidcup said...
This comment has been removed by the author.
Michael H said...

Lord Sidcup,

GATA has caught a big fish but they don't know what it is.

FOA (04/23/01; 20:30:04MT - usagold.com msg#67)
Replies and Custodial Gold

,,,,,,,Two French men were fishing in a boat, just off of Nice. Several other boats were within close sight, always watching to see if these guys found anything. All of a sudden Henri hooks a huge one and brings it to the surface while Pierre nets it. Both of them look at the fish in the net and hesitate, not wanting to bring it onboard. "What is it", Henri asks? "I don't know, can't make it out, but it's a good one, I'm sure" says Pierre. By god, whatever you do, don't haul it in. If we can't name it the other boats will laugh at us. Let's just keep the net in the water, pointing at it and talking loud while we circle the boat. Eventually, one of the other boats will get a look and blurt out it's name,,,,,,,,,,,,,

,,,,,,, Eventually, the ruckus attracted hundreds of other boats (the miracle of marine radio and the internet) and they stormed in close to see the news. During all this action, none of the other boats saw the fish very well, therefore no identifying name was mentioned. Eventually, tired from throwing out various possibilities of the significance of the catch, Perre and Henri pulled the thing in for all to see.,,,,,,

,,,,,, To their amassment, no one else knew the exact name or significance of this exceptionally fine fish! You see, there just wasn't enough details about it, "floating around" (smile) to know it's purpose. But still, all hailed the duo as superior fishermen and brought them drinks and dinner in port!,,,,,,,,

The moral of this story: In this game of life, we all fish from time to time. But, to a sportsman, the size or type doesn't matter because it's the art of catching that counts. Besides, every catch has a name and we will eventually find it's "namer". (bigger smile)

Jeff said...

Bernanke doesn't have any latitude, IMO. No matter what he says his actions aren't in much doubt.

FOA (10/15/01)

It's no accident of nature that our world monetary structure embraced derivative expansion as it has over the last ten or twelve years. I think we can say that this modern creation of risk management began around 1988 or so...

The record of derivative evolution meshes seamlessly with the recent need for supportive dollar currency measures; a strategy of maintaining a failing system that was ending earlier than expected...

The US could not physically save the dollar, then, with gold backing or the production and sale of real goods. In the course of all the previous dollar expansion, the gross liabilities of taking dollar asset conversion into anything real, and originated locally in the US, would have made us economic slaves to the world for decades. The only answer was to let the dollar kill itself while you create an illusion of risk dispersion in the form of derivative protection; a form of backing if you will. With this "illusion of risk dispersion" in hand, called a derivative hedge, the world currency system and its denominated assets, continued on...

This derivative buildup has effectively removed US fed policy from being a controlling factor in dollar use and expansion. Gone were the days when the Fed could force everyone to disinflate with us. Today, if we slow our money printing, the outside liabilities would crush our banking and ,therefore, our economic way of life...

It's no wonder that Alan Greenspan has commented so often on the need to control derivatives yet has no workable plan to counter their function. Truly this dynamic was created to counter his function and few can understand this! In effect, the dollar was placed on a one way street that required it to be inflated into infinity. All as a means of protecting dollar originators; the US banking system. Dollar leverage, that is actually US liabilities, is now built up endlessly. This all points to a nonstop, end time need for an uncontrollable inflationary expansion by our fed...

Now, we will follow this trend in an accelerated fashion, until all derivative process is exposed as nonfunctional outside a massive hyperinflationary policy. Our wealth is and was nothing but an illusion of safety and created in our own minds.

DP said...

Bjorn (et al),

If you think I'm the only one around here with fun-lovin schizophrenic tendencies, perhaps I ought to stock up on some bridges. Are there any in particular you like? :-)

H. M. Socialist said...

BWAHAHAHA! You do not find me, I find you! I have agents all over the globe and my eyes are everywhere! I am one who is known by many different names. H-mizzy-sizzle. Big Pappy. The Hard Sizzly-poop. I am droppin rhymes in these money printin' hard times, sleezin' wit my leveraged gold bets while you quantitatively easin'.

@Jeff

That is a good question and a hard one, but ultimately I think it is you FREEGOLDERS that pose the biggest threat to humanity, since FREEGOLD is simply an elite plan to enslave the people with FIAT CURRENCY. I think it was designed by the reptilian alien master race inhabiting the moon, either that or vampires. I am still researching this.

In any case it does not matter because the force is strong with the silver liberation army! We shall foil your evil plot by making Apple pay us lots of fiat for our silver so they can make their iCrap! PWNED! Then we can then use that fiat to buy the iCrap we want, & also more silver.

BWAHAHAHA SO LONG FREEGOLDERS!!

Greetz,
HMS

ampmfix said...

What an imbecile, amazing...

Edwardo said...

Costata,

Yes, I think BK thought, or was biased to think, that the specs (and what little specks they are) would break the Swiss peg.

VTC,

Regarding The Federal Reserve lying about their actions, I believe it was Fed Chairman Arthur Burns who offered, in so many words, that it was not part of the remit of people holding his post to tell the truth. Clearly those who followed him agreed.

RJP,

That was &*^#! hilarious. Had I been imbibing some beverage as I was reading your zombie quip a terrible mess and a sore nose would've ensued.

Cottonbelt said...

@ costata et al re: Bernanke ... I believe he (& Greenspan) knows exactly what they are up against but (arrogantly) believe he/ ‘ they’ can manage the coming collapse - his playbook completely aligned with his 2004 speech and appears to have plenty of ‘ammunition’ left

http://www.federalreserve.gov/boarddocs/speeches/2004/200401033/default.htm

… riding along this ‘river that is our currencies timeline’

Aaron said...

What an imbecile

I'm not so sure about that ampmfix. ;-)

HMS, you've got to be the most hilarious troll I have ever seen hit this blog.

H-mizzy-sizzle

Oh, that's good.

/SleepingVillage/ said...

Hahaha! The Hard Sizzly-poop.

FWIW, I too think Mr. Bernanke is simply doing what he has to do. I believe that under the surface, and just barely under, they feel things are much worse than they let on. Every time the poor guy speaks, he looks and sounds like he's about to break down - very little confidence. I would think a man of his experience and intellect would be more comfortable/confident if he truly believed in what he was doing, and knew it would work.

I sense desperation and carefully worded statements lacking conviction.

MUST.KEEP.CONFIDENCE...UGHH:) Fuck! where's the Zanax????

I wouldn't want the job, that's for sure.

When I read yesterday that BB was not gonna go for another round, I instantly thought "this thing is falling apart soon". My girl thinks he will resign before the end of his term, and she may be right.

So I'm with Costata on his timeline, but I'd be surprised if it takes the full two years.



Oh yeah, great interview, Jeff:)

burningfiat said...

I nominate for the next debriefing...

The legendary original gangster:

H.M. Socialist, AKA The Hard Sizzly-poop AKA FrancisHoardCoppola AKA PoopyJim!

Respect Bro!

:D

/Burning

ampmfix said...

I didn't say who was the imbecile Aaron ;0), we say over here that the one that smells the poop first, owns it (not talking about you of course! it was a real pleasure seeing you in person).

poopyjim said...

Hm... it appears as though my machinations have been exposed to the light of day. Congrats for figuring it out burningfiat, you are quite the sleuth.

However, I am NOT FrancisHoardCoppola - I don't know who is responsible for that one.

Michael dV said...

btw
It has been a while since we had a full report from The Committee To Ensalve

Edwardo said...

John Williamshttp://www.jsmineset.com joins the mid-decade HIITUSA (the acronym stands for hyperinflation in the USA and is pronounced hit oosa) chorus. Halleluja!

Woland said...

A day or two ago, I proposed an "in house troll" to fill the
"quiet times" which sometimes occur. DP came back with
a comment which I shan't repeat, but which was, as usual,
hilarious. What we got exceeded both "expectations and
guidance" to such an extent that I can only marvel, and say,
"A star is born". A Freegold rapper! Whoodathunkit!

burningfiat said...

Jim,

Haha, I love it! You do awesome parody with the HMS character. Must come from all the talking with silverbugs and HMS's on twitter. Nice work.

Would have been amazing if you were also behind Francis AKA the perfect paperbug and antihoarder...
Now, who's really behind Francis then? Hmmm...

#PutsOnThinkingHelmet


DP said...

+1 for "not me guvna"

Dr. Octagon said...

Today I came across this statement for the first time: "Legendary oilman T. Boone Pickens famously calls America’s oil imports ‘the greatest transfer of wealth in the history of the world.’

Famously? At first, I was intrigued. But I quickly found out that he thinks these imports of oil into the US and exports of currency out is a transfer of wealth out of the US, not into the US. Sigh.

Woland said...

Doc 8s - UBtMe2DPunch!!

freegoldtube said...

Welcome freegoldfuturist!!

For those of that don't know it, freegoldfuturist aka silverfuturist has been on a role as of late. 3 out of his last 4 videos he has mentioned FOFOA, this blog, and has related his talking points to the freegold paradigm.

Here is his latest video which he posted just moments ago:

http://youtu.be/sCFAgGc7TPU

Welcome Joe

Marc said...

Aaron,

Thanks for welcome and link to Just Another Hyperinflation Post. I have figure a good way to read the long post. Print them, go to backyard and have cigar.

I have leaned for a while that we are in a deflationary depression but that the Fed along with Gov was extracting the deflationary part out via printing. But, if based on PM, it is deflationary.

We will continue to see both deflation in items that don't trade easy and inflation in items that freely trade with end towards hyperinflation for sure hyperinflation using PM as measure.

I don't understand where it is mentioned that US Gov will forces Fed to monetize any and all debt.

Based on pure fiat currency, I understand this. But, based on Fed's debt based fiat system, the more they print, they more debt we go in. But, have read a bit lately that they are looking at just writing off debt owned to Fed which would than be pure fiat. Am I missing something?

Isn't there a way the Fed can help the debt balloon? The Fed for first time is paying banks to sit on excessive reserves. They could stop paying them to do this and could even go to a negative rate say -1%. This would encourage them to look for ways to distribute.

This action would help by increasing MS 10+ trillion and velocity of money.

Anyway, thanks again. Look forward in corrections to my thinking from you and others. This is a great board and have much more articles to read.

Mike said...

sign of the times?

http://oreo.itracmediav4.com/v?uuid=f36f9bf2-3699-4a29-99c0-c28f8f65a0ef

Michael H said...

Marc,

There is debt and there is debt.

The first is credit money or bank balance sheet money which exists out in the economy and is a promise to pay cash (federal reserve notes or FRNs) from an entity who cannot print cash.

The second is base money which is created by the Federal Reserve only, and is a promise to pay FRNs from the one entity who can print them.

So while both credit money and base money are 'debt', the first can be defaulted on while the second can always be met by printing physical cash.

Recently FOFOA discussed this with Aquilus and 'T' in the section under 'QE3' on

http://fofoa.blogspot.com/2012/10/think-like-giant.html

victorthecleaner said...


I think it was mentioned here that a few days ago, the federal auditors told the Bundesbank to assay part of their gold reserve.

As Evans-Pritchard reports in the Telegraph, as a side effect, it was revealed that they relocated some 940 tonnes from London to Frankfurt just after 1999, but simply didn't tell anyone.

The numbers in that Evans-Pritchard article don't add up though, and the original source is missing, too. Does anyone here have any better reference?

Victor

Marc said...

Thanks Michael,

Promise to pay FRN when you can't print can lead to problems...lol. Never connected that 90% of money creation is based on promise to print while not able to print.

Michael dV said...

I have just been watching Porter Stansberry's newest infomercial. It is, as all of these presentations seem to be, very long and I quit at the sales pitch:
http://pro.stansberryresearch.com/1210OILDWPDW/LOILNA82/

Fofoa suggested about a year ago that a couple of guys responsible for China's reserve management could become very popular if they quit buying treasuries and bought gold...they have. This is the thrust of PS presentation.
I wonder if, instead of 'backing their currency with gold' as most, including PS and Rickards suggest...that they might copy the 'style' of the Euro! Why not.? We here all realize the power of holding gold as a reserve rather than offering to exchange it at a fixed rate, Just because we are a minority that does not mean we are wrong and surely the Chinese must see this.
How odd would it be if freegold was ushered in, not by the Euro but by China?
They have after all urged accumulation within their borders...we know the advantage of that! They are gathering up gold at a rapid rate. They only surprise is that it is China.
Thoughts?

Bjorn said...

MdV

Surprise? Big Trader? Nudge nudge, say no more?

Michael dV said...

Bjorn
but who knew BT was might turn to FG! Just because he is associated with Another in our historical record is not an indication of how the gold would be put to use.

costata said...

Hi FOFOA,

Part 1/2

Your comment at October 24, 2012 1:38 AM contains some interesting thoughts. I'm wondering how we factor in the use of sovereign debt as risk free reserves in the banking system. I'm wondering if that was a crucial error of judgement as well.

As you know I have been trying to find material discussing the gold standard at a higher level of reasoning and perception. A lot of the hard money goldbugs are presenting a children's fairytale when they discuss the gold standard. IMHO the two questions that need to be asked about the gold standard is (given all of the flaws we have discussed here): Why did it work as well as it did? and Why did it persist for such a long period of time?

Some time ago I came across an economist/analyst by the name of Nathan Lewis. He presents a perspective on managing currency under a gold standard that I had never seen before. His analysis may hold the key to the matters you have raised.

The following is an oversimplification of his arguments but to kick this off I'll put one of his most important insights into one sentence. A fixed gold exchange rate functions like a currency peg. Put another way - you manage your currency and don't try to "manage" (manipulate) gold.

(As an aside, as per the extract Jeff quotes at October 24, 2012 6:47 AM factors into any discussion of currency management as well:

It's no wonder that Alan Greenspan has commented so often on the need to control derivatives yet has no workable plan to counter their function. Truly this dynamic was created to counter his function and few can understand this!


Let's revisit your comment.

Hello Costata,

Maybe "money = credit" is nothing new. Maybe "money = reserves" is the flawed (and relatively new) premise.

Maybe physical plane reserves are the "real capital" backing the creation of credit (real money). In Freegold bank liabilities are backed by CB liabilities which are backed by CB reserves which are gold. Gold, the ultimate backing, is essentially owned by the currency holders, not the bank. Even if there's no "gold window", CB currency defense is the ultimate "window" between the currency issuer and the users.

But in Freegold, the public (savers) can also purchase those same reserves that ultimately back everyday credit (real money), changing the value of that backing relative to credit (real money), in that currency zone, at any time.

Just thinking aloud…

Sincerely,
FOFOA


Continued/

costata said...

/Continued

Part 2/2


Let me inject a few other thoughts for discussion. (My changes in bold.)

Maybe floating exchange rate "money (of unknown value and sovereign debt) = reserves" are the flawed (and relatively new) (premise(s).Maybe physical plane reserves are the "real capital" backing the (issuers) of credit (and base money).

I’m leaving the money = credit aspect out of this to avoid opening a different can of worms. Now let's look at the modifications above in regard to the rest of your comment:

In Freegold bank liabilities are backed by CB liabilities which are backed by CB reserves which are gold. Gold, the ultimate backing, is essentially owned by the currency holders, not the bank. Even if there's no "gold window", CB currency defense is the ultimate "window" between the currency issuer and the users.

But in Freegold, the public (savers) can also purchase those same reserves that ultimately back everyday credit (real money), changing the value of that backing relative to credit (real money), in that currency zone, at any time.


No changes required IMO. (But bear in mind I’m dog tired so I may be missing something). I would add that if gold was the risk-free asset for banks instead of sovereign debt then both banks and the public would have the whip hand on the currency issuer and at least in one respect their interests would be aligned. Both actors would (should?) seek to have a sound currency.

Looping back around to the issue of currency management under a gold standard currency peg. The two tactics Nathan Lewis describes for managing the value of a pegged currency are buying and selling base money only for gold and/or bonds. Under the logic of this doctrine governments have screwed up the system royally in several ways. For example by the change in the way that they use sovereign debt and more generally manage their currencies.

If the currency is stable AFAICS it's okay for the banks to use it as a reserve provided they have gold as an alternative. It's not okay to use sovereign debt as a reserve for several reasons we can explore in more depth later.

This is probably a lot to digest but I would like to make one final observation. Presented as a new, improved gold standard (the public and banks hold the gold not the state) I think some of the gold standard advocates might understand the Euro Freegold-RPG architecture.

Cheers

costata said...

Hi FOFOA,

A phrase just came to mind after I posted the comment above. Euro Fregold-RPG from a gold standard perspective is Float The Gold and Fix The Currency (..with a "crawling peg" of 2 per cent per year in the case of the Euro.)

Peter said...

Yes.

Great video, freegoldfuturist!

Bjorn said...

MdV
But it is an indication that the Chinese were and are familiar with the FG concept. So why be surprised that they are preparing for it (and perhaps turn out to be the trigger)?

Or did I misinterpret your comment?

Marc said...

I find Silverfuturist's first posted video interesting.

http://www.youtube.com/watch?v=2VOGT69ZXqE&feature=plcp

I also wondering since silver is so important in today's world for products would world Govs really want this to be used as money...based on that causing silver price to increase.

Motley Fool said...

Poopyjim

I think you are being a bit unreasonable. 10,000 GSR sounds like a stretch. Perhaps 6000-8000. ;)

TF

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