Thursday, October 25, 2012

Debriefed #8 – Poopyjim

H. M. Socialist Unmasked!

For those of you who haven't been following the comments the past two days, here are a few links that should explain…

A surge in requests for me to debrief H. M. Socialist

Two comments left by H. M. Socialist himself

H. M. Socialist's Twitter feed

(BTW, I wasn't able to connect HMS to Poopyjim in the stats because he just moved!)



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Edwardo said...

Sir poop a lot aka HM Socialist is my hero!

DP said...

OMG! That actually IS a picture of you when you were a baby, Jim!

duggo said...

Nice interview. I like it when FOFOA gets to discuss something about himself.
Talking of videos and their effect. I have just watched the Silverfuturist YouTube "Silver Better Not be the Money of the People".

I was hanging on to quite a chunk of my Silver "just in case" but this guy has convinced me I really should sell it.

Barry Michaelmore said...

Excellent news duggo!

Winters said...

Good interview poopyjim.

I literally lol'd at "i took a poll and we all said dump her". Big call FOFOA! but yeah seriously, it's probably good you had that fallout before the ceremony since it would have been something else down the track that uncovered the irreconcilable differences.

Also thought the attempt at bringing you out of your Truther stupor amusing.

It is an interesting angle about what other people's partners think about the metal meme.

Does Mrs FOFOA proof read the posts and engage in discussion (someone surely proof reads, your posts have very few grammatical errors) or she just lets you do your thing in the man cave type of thing?

At a basic level my wife understands the arguments but begins to glaze over if I go into detail- she isn't really interested in getting into the detail of world economic shenanigans but luckily indulges my whims of metal purchases. I've already prepared her for the paper-gold-goes-to$200 part of the thesis though so she doesn't freak out if/when :)

re: Does Bernanke know what he is doing?
That FOA analogy of everyone riding the river together until the end...i really like that perspective. I guess I understand how politicians and their lackeys have to tow the party line but it must be a terribly stressful act to play for Bernanke if he isn't drinking his own koolaid. I wouldn't be able to do it myself.

DP said...

At a basic level my wife understands the arguments but begins to glaze over if I go into detail- she isn't really interested in getting into the detail of world economic shenanigans but luckily indulges my whims of metal purchases. I've already prepared her for the paper-gold-goes-to$200 part of the thesis though so she doesn't freak out if/when :)

FWIW, +1 for hard-won acceptance

Bjorn said...

Repost from last thread:

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?

Looking forward to seeing the HMSdawg debrief!

H. M. Socialist said...


poopyjim said...

BTW link to the NY Times article I mentioned if anyone is interested: link

matrixsentry said...


Thanks for another excellent de-brief!

I hope you reconsider and allow the HMS persona to live on. I think HMS is an effective foil for the person who is still largely refining their understanding of Freegold and where the trail is taking us. Perhaps HMS can go into dormancy and then reappear when we need some comic relief due to some particularly bombastic troll.


I also concluded that I did not have it in me to do Bernanke's job if I knew where we were headed. Then I started to actually think it through from his perspective.

One day I happened to be shopping at Walmart near my home. I really hate going to Walmart and usually avoid it all costs, but in this case something really productive came from the experience. A thought occurred to me as I was there observing The People of Walmart: these people are far more representative of average Americans than I am. Not in the sense that many were strange to look at or were acting strangely, but in the sense that they were quite different than me in their propensity to consume and not save. I quite possibly could have been the only one in the store who was a relative super-producer and habitual saver in gold.

I mentally extrapolated this concept to all the big cities in America and all their super Walmarts. Then I started thinking about all the small towns in America that are thrilled to have gotten there first and only Walmart. Still even more smaller towns that haven't earned the right to have a Walmart yet. A new image of America started to form where there were not many me(s) (mini-mes?) running around hoarding surplus productivity and a whole lotta People of Walmart who are just doing what they can to live their lives the only way they know.

I don't know if Bernanke shops at Walmart. But if he does, could he possibly see and feel something similar? If I were in his shoes I would feel a tremendous burden to keep the Walmarts open and functioning for these people.

Later when he is having dinner in a place more representative of his strata in society, could he feel a tremendous burden knowing that many people around him are wealthy in paper and quite poor in gold? So few of them really in numbers, but such wealth! A lot of that wealth goes up in smoke where the trail leads.

Could Bernanke see himself as selfless and noble, fighting heroically to forestall a painful re-alignment that will claim a lot of victims? If I were him, the only thing that would save me from utter depression would be to do everything I humanly could to cushion the ultimate crash of the $IMFS. After all, he did not invent this crazy cobbled together system, he is just along for the ride like everyone else.

Of course he could be a psychopath, have zero empathy for anyone, and simply be a tool installed to harvest as much wealth as possible for his handlers.

I suppose it really depends on the baggage of the observer as to what image resonates. For myself, I used to buy into the ChairSatan view exclusively. I had a lot of baggage. Not so much anymore. I lean more to a well meaning and a more empathetic Bernanke who is just doing what he can to make the transition to a new non-$IMFS as smooth as possible. In that regard I think he is doing a pretty good job considering what he is up against.

Regardless of what motivates the Bernank, I am grateful for the time that I have been given to shuttle my wealth into gold and to facilitate growth of my stack. I find myself cheering for the status quo when I consider that many will be displeased with the onset of Freegold and the resulting loss of exorbitant privilege. I cheer for those who are just figuring this all out and who are stepping onto the trail. They still have time.

costata said...

The Jeff debrief was great but this is the best yet. Thanks Jim!

Bah! So you freegolders want to debrief me eh? Maybe I would do it, but I am afraid the bright light of my hard money knowledge would burn your eyes! You would have to be careful not to watch it all in one sitting or you will truly go blind as the falsity of your so-called freegold is annihilated by the light of my hard money truth!

"We have nothing to fear except fear itself" (and total bullshit).

KindofBlue said...

It's a sad Orwellian world when the word "truther" is cast as a pejorative. Whatever one believes the questions should be 'What's your evidence and rationale?'. Should we all be happy instead to be called "liars" to avoid that awful label as "truthers"?

Nice interview, Jim.

Woland said...

Poopyjim; Bringing those trolling jobs back to America!
Now that's change I can believe in! No more
outsourcing to Germany. Greetz

poopyjim said...

Thx everybody!


You have not seen the last from HMS! But perhaps a hiatus is due. It is hard conjuring up all that stupidity!


I am glad you were not rendered blind by my hard money truth. Of course self-inflicted wounds can be a concern when confronted with hard money socialist rhetoric. XD




I agree. The best trolls are made here in the USA!

costata said...


Talent scout check this out:


DP said...

Quality wrist action - clearly a man who has spent many hours alone with his guitar!

Wendy - that's some nifty finger work eh? I bet he's changed a string or two for the ladies in his time.

JR said...

Michael dv,

but who knew BT was might turn to FG!

I think you are being too literal about Freegold.

The Free in Freegold

Okay, here it is. What you've been waiting for patiently, I presume. This is what gold will be freed from: The fractional reserve banking practice, which is a carryover from the gold standard.

This is the free in Freegold.

So why did the Big Trader buy gold? Because it was obvious that fractional reserve paper gold system that propped up the dollar to extend its timeline, was failing, just as the dollar (another form of paper gold) already had.

It makes no sense for them to be buying gold in 1998 and be thinking about a gold standard. The reason they bought gold is that the last vestiges of the failed gold standard were disappearing.

Back in 1998 Another wrote about China accumulating a lot of gold through back channels that would not affect the price or show up on official records. According to Another, the special ongoing deal between the dollar faction (US and UK) and a few Middle East oil producers was noticed by China. And China wanted a piece of this deal. Here are a few references from Another...

Sir, Some think my thoughts are as "hogwash"? Several CBs use "agents" to buy gold. Some agents, small, some large, some "BIG". They buy much from $365 down, all last year. Even today, it does not show. This world, it is strange, yes? I would say "Big Trader" has little time for "washing the hog"! But you sir have a large shovel and dig very deep!

It is written, "all holes in earth lead to china"!

MH said...

"People are very attached to their silver, it's very emotional for them." This is from the guy who broke up with his fiance because of an argument over gold. "Hey pot you're black" -the kettle.

duggo said...

Dear FOFOA and Costata

Here is an interesting article by Screwtape Files:

Their theme is that Silver is a "pump and dump" scheme

costata said...

Eat this redneck:

JR said...

Michael dv,

A thought: it is more " Governments have agreed to fix the price of gold to clear trade" rather than "a Government imposed a gold standard."

costata said...


Their theme is that Silver is a "pump and dump" scheme.

I think that is a distinct possibility!

RJPadavona said...

Great interview, Jim!

+1 for kicking that lunatic to the curb for wanting you to sell your gold. I'd hate to have seen you become the subject of some bad country song ;)


Aaron said...


Great debrief. You definitely need to keep HMS in your back pocket. Excellent entertainment for when our next troll shows up.

As an aside my wife freaked a bit when I put our life savings into silver. Luckily we both came to our senses. ;-)

Michael dV said...

I guess I am not familiar with the part of the Trail in which it is revealed that the Chinese are revealed to be familiar with freegold. Of course we know of BigTrader but did Another state that BT was gathering gold for FG purposes?
I assumed that they were just doing what the Saudis were doing...saving gold for wealth.
I see freegold as more that that. In freegold we (will) have a system that promotes gold as the SoV. A currency system like the Euro that structurally supports saving in gold.
I also woke up today after posting last night thinking about Rickards. Every thing he says points to a traditional understanding of the role of gold. It backs the currency rather than supports it in a reserve capacity.
Every commentator outside this blog sees gold used in the old way. The more I read about FG the more I am amazed that others do not see the uniqueness of the Euro system but I am convinced that Rickards and Porter Stansberry (and everyone else) see the Euro as 'just another fiat currency'.
My point in the preceding pages is that it is possible that the Chinese DO see the style of the Euro for what it is. The may be preparing for freegold. If that is the case Rickards will look pretty foolish for not at least putting it in his differential diagnosis.

poopyjim said...

Thanks RJP! I could be the subject of another kind of song though!




I was hanging on to quite a chunk of my Silver "just in case" but this guy has convinced me I really should sell it.

Yessss! Good to know my trashing of silver is having some effect. If I've convinced even one person to ditch their silver for gold I've done something positive.

Motley Fool said...

Gold related question I'm sure FOFOA never expected he would have to try and answer : should I dump my fiancé? ^^

Fun interview mr stooge.

Michael dV said...

just saw your comments after the above post was made

burningfiat said...

Wow, great interview Jim and FOFOA! Thx!

Jim, Cool that you didn't bend to the pressure of your ex-fiancé. The modern lot of submissive men could learn something from that!

I agree completely with you on SW patents.

You are the most likeable attorney/gov-stooge I have ever seen... Keep up the fight! Doing Atlas' work!

byiamBYoung said...

Loved the defriefing, PooyJim. I almost sprayed coffee on my monitor when you described the counselor trying to deprogram your beliefs.

I have been trying for a long time to complete a novel about how a person who gradually comes to understand Freegold simultaneously begins to feel great conflict in his personal relationships. I described it once as a 'descent into enlightenment.' One of my scenarios is exactly identical to your experience with the counselor. I just knew that had to have occurred in real life.

As for the novel, I doubt it would sell many copies, and plan to self-publish if I ever get it done. I am writing it as a way to bridge the gap between myself and my family. They all are convinced that I am sitting in the higher branches of the crazy tree.

I figure others might find it useful in a similar way, too. Plus, writing a novel is on my list of things to accomplish, just because.

We'll see if I get it done before the transition renders it moot.


Nickelsaver said...

Poopy Socialist,

"Reason doesn't stand a chance in an argument with emotion".

No truer words have ever been spoken.

Just wondering, are you a US Atty? Or are you GSA?

Jeff said...

The first rule of Freegold is you do not talk about freegold...with fiancees. :)

Michael dV said...

I'm afraid your comment about governments went over my head. How does government fixing the price of gold or declaring a gold standard relate to the issue of China and freegold?

Woland said...

......... unless they be from the asian subcontinent. In that
case, talk of little else. Encourage her parents to come
visit your stash, as you will be expecting a contribution
from theirs on the wedding day. (though it will remain her
property) Happy hunting!

Jeff said...

Michael dv,

The asians figured out 'the deal' and bought physical.

ANOTHER: Well a funny thing happened right after the Gulf war ended. What looked like big money before turned out to be little money as some HK people, I'll call them "Big Trader" for short,moved in and started buying all the notes and physical the market offered. The rub was thatthey only bought low, and lower and cheaper. They never ran the price and they never ranout of money...

A time ago, the Asians were buying great amounts of gold thru South Africa. This alone wasenough to drive the price of physical very high. As cheap oil required low gold, this action was, not good. In addition, during this time, a person in Hong Kong was moving manywealths into much "paper gold" in London. The amount "leveraged" was so large, in physical terms, that delivery would not happen, as no CB would sell that much. This gold paper was purchased from $365 down with intent to buy all at production cost ( below $300US ) .

and this:

The Asians are the problem, by buying up bullion worldwide and thru South Africa they created a default situation on all the paper for the oil / gold trade!

See Victor's blog; he picked out the early posts.


The Trader is at his cross road, one path and more time will pass. The other path and the gold market, “as all now know it” will exist no more.

Big Trader ( again@no lower! ):

Myself and a group are indeed placing open orders for Feb/97 gold on any breaks below $370.00 and will continue to buy each day under that price ( for weeks if allowed ). We can and will call most or all of these contracts if the market doesn’t rise enough for a rollover. Our cost and fees is such that it’s easier to buy paper here than physicals in asia because of the markup and comex is the only area I would trade here .The only problem for the comex will be geting the shorts to deliver enough warehouse approved deposit receipts.Correct me if I’m wrong but they only have a few hundred thousand ozs for ready delivery. I will keep you posted. A note to the Old Man, you may find it hard to “roll off a log”.

Jeff said...

Old Man = Greenspan?

poopyjim said...

@burningfiat, nickelsaver, byiamBYoung

Thx! BTW I lifted the "reason does not stand a chance in an argument with emotion" line from Dave Sim.

Jeff said...

Michael dV, I don't think China wanted freegold to happen in 96. When they figured out the deal, they just wanted gold, cheap. They just bought too much; in the end though, they chose the path that allows more time to pass.

Bjorn said...


Never said it was revealed that BT bought gold for FG purposes. But I do think that the very connection between Another and BT is, as I said, indicative, that BT would be somewhat familiar with the concept. Oh just saw Jeffs comments, and thought about deleting my own, but what the heck...

Finally had time to listen to the debrief. I enjoyed it a lot, even though poopyjim didn´t rave any, and FOFOA didn´t smoke a pipe. ;-)

I think many of us can relate to this gold obsession that we have being something of a strain on a relationship. Thankfully my wife had no trouble with the "gold as SoV" concept. She thought it was a huge improvement from when I was , with very varying results, trying to trade penny stocks back in 2004-2007.

Sir Tagio said...

Great interview, Fofoa and poopyjim! Poopyjim, it must have been difficult to go through that experience with your fiance. You are a trooper and all-around good guy for trying to work it out with her. Finding the right life partner is more important than anything, tho, even gold! Keep the faith! No less an authority than Marc Faber says that your day is coming! (See following, 7:15 - 8:45)

Michael dV said...

Thanks Jeff
I am familiar with all the posts except the last.
Interpretation od Another is not my forte. Understanding his actual words is a challenge enough.
It confuses me that a party who was thinking in freegold terms would be involved in much paper trade. I realize that using futures and taking delivery is a cost effective way to accumulate physical but in the end I do not see a clear enough picture in theses writing to decide the answer to my fundamental question. Is China preparing for a transition to a reserve currency vis a vis a gold standard as so many (who are thinking about these issues) seem to believe like Rickards and Porter Stansberry? Or will China surprise the entire HMS crowd with a currency suddenly revealed to be in the style of the Euro? Have they really see the light? Do they see the advantages that Wm Duisenberg and Mundell and Tollison et al...designed into that currency? Do they smell weakness in the Euro? Do they have plans to snatch the Euro's future from the Euro while it deals with the EZ financial issues?
Could we wake one day to the announcement that they have done a tweak to the structure of their currency..."and btw we have 12,000 tons of gold and our people have almost as much as Indian women so we are going to offer our currency as a reserve. It will be like the Euro".
To us here on our lonely blog ...we would all say 'of course' but to Rickards and the rest...? Suddenly they would be claiming to be fofoa's best friend and mentor.

Biju said...

Jim Rickards going into propaganda overdrive.

Sounds Bull shit to me with all these drama and sound.

poopyjim said...


"People are very attached to their silver, it's very emotional for them." This is from the guy who broke up with his fiance because of an argument over gold. "Hey pot you're black" -the kettle.

I think you're struggling with meaning of the whole "pot calling the kettle black" concept.

You see, I was given an ultimatum. I had to choose between my gold and the woman.

If I had allowed emotion be my guide, I would have sold the gold so as to continue having my emotional needs met by the female, wrapping myself in her warm blankie of feigned motherly affection. The fact that I chose to instead keep my gold ought to be considered a triumph of reason and self-interest over emotion.

Also, you're an idiot.

And Y said...


A nice parable. Thank you.

Naughty Slumdog said...

To good or to bad, economics/finance is supposed to be a science, you know, between mechanics and biology .The more we think at economics as a science, that deserves be treated objective, not bend to emotions, moral judgment and beliefs ,the more we can understand it better and make better use of our lifes. Linking monetary design to political beliefs is like the Pope ruling that sun rotates around the earth and not vice versa. It is like USSR ruling out genetics, as a “bourgeois” and “fake” science, as it did not belong to its ideological grid, that lead to near famine.
Seeing honest and intelligent people falling in the trap it is not fun. I understand that politicians need some fake science to get elected and some bling-bling professors marketing their drops of wisdom, but the ordinary people should be deeply skeptical about such matters, otherwise we go back to times when we prayed for the sun to go up.

Naughty Slumdog said...

Couple of questions to Hard Currency

How can gold keep up with the number of transactions that are increasing exponentially ( driven by complexity of modern life and growing number of people? From where comes ALL THIS GOLD? Will the currency appreciate continuously – and if so, can we talk about a hard currency, or about an insufficient currency supply, with the related economic effects?

The whole history shows depreciating currencies. They even depreciated the metal coins by reducing their weight (debasement, if I am correct). I really don’t get how in this will be avoided in future, do somebody believe that mankind would become so virtuous ?
And some practical issues: does hard currency agrees to link gold to currency and allow any owner of a USD bill to take away the respective quality of gold from Fort Knox? Without right to take away the gold and depose the bank note, we cannot talk about hard gold backed money. Hard money means that arabs, russians and chinese can take over US gold reserve. Frankly, strange…

Michael dV said...

you are correct...that WAS a dramatization. Rickards does not usually talk like that...scripted I'm sure...

Winters said...

Interesting viewpoint Matrix. While extending the run of the exorbitant privilege is logical in one sense, it's a double edged sword where the nation's industry is recycled to scrap metal and more and more land themselves onto the food stamp program and other benefits.
When the final HI event happens, it will be a much harder adjustment and rebuilding timeframe that it otherwise would have been if the brake and spur function had been allowed to occur earlier...(the end of WallE comes to mind where everyone has devolved into fat blimps unable to walk/feed themselves due to the largesse from the company)
so if he is a closet metal stacker he must still be terribly conflicted I would think.

poopyjim said...

@Bjorn Thx! Sorry, I only rave on the Internet (usually).

@Sir Taglio

You are a trooper and all-around good guy for trying to work it out with her.

Eh, I wouldn't go that far. I am quite a flawed individual. Ultimately I simply prioritized my own self-interest.

Finding the right life partner is more important than anything, tho, even gold! Keep the faith!

I disagree. In fact, there is much to be said for remaining single. And in fact there are those who would argue that this is the superior choice. See e.g.:

1 Corinthians 7:38 So the person who marries his fiancee does well, and the person who doesn't marry does even better.

Indenture said...

poopyjim: Nice. It's your life. You definitely did the right thing.

poopyjim said...

+1 thx Indenture & nice tune too.

Michael dV said...

I'm not sure I can agree that there is much science in economics, sure they use math but so do astrologers.
Your second post tells me that you have a good deal of reading to do about economics in general. You ask about gold being used for exchange and worry about the quantity of gold.
These sound like questions one might ask if they thought the end of the world was coming and we had nothing else to use to exchange among ourselves for trade. I simply don't ever see myself exchanging gold for anything other than currency and then the currency for purchases.
The other part of your question asks if there is enough gold. Because the price of gold is arbitrary then the price can go much higher to fill the need for a certain dollar (or Euro) amount of gold.
the question about Ft Knox implies that the government is involved.
Here we see a system of gold valued outside the government and without its involvement. If the government wanted to influence the price/value of the currency it could enter the market and change that price. For the most part we here see the market setting the value of gold and supplying the gold for exchange with other parties.
good luck. Getting started is not easy...

Aquilus said...

Michael dV/Naughty Slumdog

If I read Naughty's comments correctly, I believe in the first one his point is that monetary policy should be divorced as much as possible from politics and in his second comment
he is saying that hard money concepts are out of touch with reality (since he is addressing his questions to a mythical "Hard Currency" guys).

So if I read them right, I see them as re-affirming the contents of this blog in his own words.


Michael dV said...

It is very possible I did not interpret the comments/ questions correctly.

Naughty Slumdog said...

Michael dV

Biology is a science and so is history (or it should be) and does not use mathematics, but objective, unbiased and systematic observations. My point is that it should be detached from unavoidable arbitrary treatment that resides from political influence.

It would be a mess if economics / finance would get from public arena the same treatment as history, don’t it ?


I am light years away (or rather thousands of pages behind) the concept of free gold (err, I do not even use capitals!). My comments / questions came the hard facts of life. The reason why I post here is because there are educated and honest people writing about their views.
And correct, the comments were for hard money camp.


Yes, the dollar is magical. Just invoke the genies: CIA-Wall Street-USNAVY-OIL-USAAF-SatelitesTelecom a couple of times and you will see the global power of such spell. However, no spell lasts forever and should not be used for wicked purposes. Even the genies might get pissed if abused …

M said...

On the links list on the blog, one of them is titled "My Summery" and it links to the post "how is that different from now".

Who's summery is it ?

Winters said...

FOFOA's summary - comment February 22, 2011 11:34 PM. The link pops straight down to it in FireFox but I find it doesn't always work on my iPhone ios5

anand srivastava said...

Naughty Slumdog

The reason why I post here is because there are educated and honest people writing about their views.

Agreed completely. There are a lot of very intelligent people here. The Signal To Noise ratio is off the charts. I have followed several other blogs, but haven't come across another blog which has such high SNR with an equivalent amount of comments per day. Paul's comes very close, but there Paul is the most prolific commenter. And here FOFOA rarely ever comments. The reader's themselves police the discussion. I enjoy it a lot here.

costata said...

Does anyone know when Brodsky and Quaintance climbed onto the 100 per cent reserve bandwagon?

Herewith a reiteration of our proposal of a transmission mechanism to a fully-reserved banking system, gold standard and fully-funded federal debt in the US:

> The Fed purchases all existing bank assets via the creation of base money on a one-to-one basis (i.e. deposits are replaced with base money which reduces bank leverage to 1)

> Banks are commensurately required to lend only against time deposits they can source (banks become credit intermediaries, not creators)

> Simultaneously, the Fed purchases Treasury’s gold at a price which would fully fund Treasury’s outstanding debt (yes, unfunded liabilities remain unaddressed)

> The Fed then guarantees the exchange value of its existing base money liabilities against the gold it then holds in reserve (a classical gold standard)

罗臻 said...

Hugh Hendry lays out the deflation argument for hyperinflation.

Bjorn said...


I agree that we cannot be sure about what "China" knows and does not know, and what they will do, but

"Could we wake one day to the announcement that they have done a tweak to the structure of their currency..."and btw we have 12,000 tons of gold and our people have almost as much as Indian women so we are going to offer our currency as a reserve. It will be like the Euro".

Yes I think it´s a distinct possibility, and I´m sure the HMS crowd will be VERY surprised. I won´t be, except perhaps for the "we are going to offer our currency as a reserve part". That would surprise me a bit. But probably that´s just because I can´t separate the words "reserve currency" from the current system in my mind. I´m sure that´s not the meaning you intended.

I like the expression "international trade currency" better.

Perhaps the Euro and the Yuan can/will be somewhat equal in that department for a time before the global market makes a definite choice?

FOFOA said...

Costata, maybe in July?

DP said...

fractionally-reserved lending, supported in time by theoretically infinite supplies of fiat base money

Exactly. Fractionally reserved fiat is not problematic in the same way fractionally reserved gold is.

costata said...


Thanks for the pointer. I'm going to have to log off now but I'm going to review that July discussion at the first opportunity. I have a few hunches about where the discussion of fractional reserve banking is going off the rails.

Let me give you one example. Banks lending money creates two kinds of "money" - persistent and temporary. The principal is temporary. Paying it down destroys it. Only the bank's net interest margin is a persistent addition to the money supply - a very small addition each year compared to the total money stock.

Under the 100 per cent reserve concept how do we destroy/reduce the money supply? We don't have debt repayment to automatically accomplish the task. (Bear in mind a bank can't arbitrarily decide to retain a paid out loan as an asset in its books. Once debt is repaid the temporary money ceases to exist.)

This reduction in the total money supply is market driven in the existing FRB system and the banks can't arbitrarily prevent this from occurring. It allows the demand side to express itself (wisely or not). That's one of the virtues of the current system not one of its flaws.

Also as Bezemer showed in the e-mail to Andrew Lainton I posted in the previous thread the "Chicago Plan" simply won't prevent deposits being created by banks. Perhaps Q&B's formulation resolves the isssue in the Chicago Plan somehow (but I doubt it).

duggo said...

A question to the Old Hands on this site.

In which form do you advocate holding Gold? How would a "Giant" hold his Gold?. If the Giant holds his Gold in a commercial Vault should we do the same or is it better to store it in a tin buried in the garden or some other hiding place?

Phat Expat said...

"...and btw we have 12,000 tons of gold and our people have almost as much as Indian women."

My emphasis. That's funny; spoken like a true outsider.

Peter said...


The real question: "is BullionVault safe?"

duggo said...


Just posted at Screwtape Files:-

"So my test result currently confirms the statement from the interview - namely that the HSBC vault contains no Chinese gold bars. This seems to directly support the idea that China may be keeping the lion's share of gold output from their refineries, and is also consistent with FOFOA's ideas about China and Gold. Interesting - I had never noticed the absence of Chinese gold bars."

Woland said...

Hello duggo:

A human giant might well follow the example of a divine one,
as in Vishnu's Sree Padmanabhaswamy Temple in Kerala.

anand srivastava said...


Saw your video. Very interesting.

I agree with you on a lot of things including the copyright and patent issues.

Patent on Software is like patenting mathematical formulas. The funny thing is that software guys first copyright their code then DO NOT RELEASE it. They then take patents on some very obvious things and prevent other people from using those blatantly obvious ideas.

I also agree that Silver is going down against gold, maybe 10,000 GSR looks to be at the high end, but 2000 looks like at the low end. I was thinking this was ridiculous in the beginning, but slowly realized it made sense. Luckily didn't put anything much in silver. My ratio is less than 1:2 silver:gold by weight at present :-). Will get rid of the little I have. I don't think silver is a good enough hedge for gold. In fact in India, probably there is nothing that can hedge gold with gold shops around every corner. It is going to be more liquid than any other physical object. I think it will be a better value during the crisis than liquor and Euro, at least in India.

I also commend you on making the really rational and difficult decision of parting ways with your fiancee. I guess the difference between a saver and a spend thrift is too much to exist in a marriage. It could make you go crazy. And that too when you know a crisis is coming.

I have been lucky that my wife is as thrifty as me. She had been against me putting money in stocks, but has had no trouble with gold. My trouble is that I always go all in :-). I had timed the 2008 bottom, and would have put lots in it, but well chickened out. She doesn't like the fact that I sold our house for you know why :-). But she does believe me enough that there must be something brewing, even though she doesn't know what is happening.

You do need monetary compatibility, even if complimentary temperaments are better.

anand srivastava said...

I giant can own the vaults. Can we do that? No.

So keep the gold with you, as much as you think is safe with you, but not more. You can also store them in unmarked deposit boxes distributed in different places. Chose places that have a lot of them in one place rather than only a few. There is safety in numbers.

Well this is all common sense. You could even try putting some part of your gold with commercial vaults, but I would be wary of them, specifically because somebody knows where your gold is. They also charge a lot of money to keep the gold safe.

They might be useful for people who are very large shrimps, not big enough to own a vault, and not small enough that they can hide all of their gold in unmarked deposit boxes. This way they have a chance of getting their gold across through the chaos of the crisis. For these I would think that buying land might be a better use of the excess money.

Woland said...

Just thought I'd pass this along. While reading a Zero Hedge
piece this AM by Steven Einhorn, I came across a new definition
of MMT - Magical Money Tree. I like that. BTW, he strongly
advocates a very significant gold position in the article. Cheers.

Motley Fool said...


Physical. A promise remains just that, regardless if the promise to to deliver grain or gold.

Even those with the best of intentions (let's assume bullionvault has good intentions) may find themselves unable to deliver on their promises.


Peter said...



I'm sure their intentions are good. But if for some reason they themselves go bankrupt they will have to distribute the gold held in custody.

Got whole LBMA bars?

The website says you can withdraw in small bar/coin form, but you already know they don't stock them - they get them from the market on request. Unless they can't.

costata said...


The ranty bits of this comment aren't directed at you but the quote you posted from our friends at Screwtape Files jibed with some earlier thoughts I was thinking.

There's a persistent belief that "official" gold held by a central bank and/or Treasury is somehow more important to a currency zone than the privately held gold of the citizens in that zone. (Bretton Woods gold standard period thinking IMHO.) Hence:

This seems to directly support the idea that China may be keeping the lion's share of gold output from their refineries...

Err derr Yes. Which China are we talking about? The China government or the China defined by hundreds of millions of Chinese residing in China (and elsewhere)? What a great way to mask your currency zone accumulating gold. (And think about the notion of a currency zone. What are the national "borders" of the US dollar?)

Great strategy - encourage your citizens to buy gold and pretend that the MSM is right. The gold acquired by private citizens is somehow different from state acquisition of gold because that's firewalled. The false dichotomy promulgated by the IMF that there can be monetary gold and non-monetary gold.

In reality all of this currency zone gold is going to be recognized as one pool under the Freegold-RPG regime. If you think of the privately held gold as an annexe of the Central Bank vaulted gold it should change the perspective, n'est pas?

It wouldn't surprise me if China's state sector was exporting locally mined gold under its control to depress the price of gold strategically. It would help to explain the extraordinary volume of gold refined and traded in Switzerland reported in that article I linked recently.

Woland said...

Hello Fofoa;

I just re-read your reply to Lee Quaintence, in response to
Costata's question. I must say, that reply should be given
a MUCH more readily accessible location on the blog than
it now has. In a way, it should be linked to Ari's 5 part
HOF series on banking, because it would be of great benefit
to a new reader to encounter that long reply early in the
quest to understand Freegold. Truly outstanding!

I remember J.P. Morgan's 2 dictums (the first of which can
cause such confusion): "Gold is money; everything else is
credit", and the second, the requirements a borrower must
possess: Character, Capacity and Collateral, the 3 C's.

Raymond said...

FOFOA and Poopyjim,

What a nice interview.

I loved that in the second part of the video, you also discussed some of the blog's current topics.

Raymond said...


Back in the previous thread, you posed some questions about the old gold standard.

What I might say about that is, you'd have to take into account that in that period, the amount of gold being newly discovered and pulled from the ground increased considerably, with the North American gold booms around the 1900's. And perhaps that allowed the amount of redeemable paper notes to be increased, and this money supply was not being restricted, until after the big gold discoveries of that time had ended.

Sir Tagio said...

I think we are crossing a mainstream Rubicon when big-time Hedgie Gods like Einhorn and Hugh Hendry recommend owning some portion of a portfolio in gold, as occurred yesterday at the 2012 Buttonwood Gathering, hosted by The Economist, and refrenced by Woland. Next thing you know, this might even become accepted wisdom at Bloomberg {sarc}. The Z/H link is here:

Jeff said...

Most of those hedgies are paper traders.

Hugh Hendry:"And if you are bullish gold why don’t you buy gold ETFs, gold futures or gold bullion.”

milamber said...

Real quick, wanted to make sure everyone saw this.

Transcript of 1944 Bretton Woods Conference Found at Treasury

A Treasury economist rummaging in the department’s library has stumbled on a historical treasure hiding in plain sight: a transcript of the Bretton Woods conference in 1944 that cast the foundations of the modern international monetary system.

The Bretton Woods Transcripts

The Bretton Woods Transcripts
Edited by Kurt Schuler and Andrew Rosenberg

The Bretton Woods Transcripts, edited by Center for Financial Stability (CFS) Senior Fellow Kurt Schuler and CFS Research Associate Andrew Rosenberg, offer the reader a front row seat at the conference that shaped the international monetary system for nearly 70 years. The Bretton Woods Transcripts were never intended for publication, and give an inside perspective of what participants at this major international gathering said behind closed doors.

The Transcripts reveal an untold story from World War II, as well as the vision of luminaries such as John Maynard Keynes, future presidents, prime ministers, and other world leaders. Despite a war still waging in 1944, delegates from 44 nations worked tirelessly in Bretton Woods, New Hampshire to construct a financial system that would promote growth, minimize global imbalances, and foster stability.

back to work...


duggo said...

@ anand srivastava
@ Motley Fool

All solutions regarding the storage (hiding) have their benefits and drawbacks. Sovereigns in the UK do not carry any Capital Gains Tax whereas in France you are taxed on the purchase AND on the sale. Storage at home is open to loss by burglary, fire, loss of life, coercion. Storage with BullionVault and Goldmoney can make transportation across borders simple as you do not need to carry anything with you. Italians are banned from taking Gold out of the country. Gold is far cheaper to store with Goldmoney and Bullionvault than Silver so Gold has another advantage. In the UK vaults have been broken into by the police under the guise of protecting the public from terrorism etc.. Non of the strong box holders get their valuables back.
No solution is 100%.
So for me the solution is a combination of "physical in-hand", BullionVault and Goldmoney in countries separate to your citizenship and where you live.

Woland said...

Well, James Turk is hyperventilating over at KWN about the
German gold, but there are some EXCELLENT FOMC transcript
quotations provided in the piece, which at least demonstrates
1 thing. If Thomas Ostrom Enders represented the Treasury's
"institutional knowledge" regarding the importance of gold in
the 70's and 80's, Edwin "Ted" Truman represents that same
knowledge today. He seems far more assured in his grasp of
the details than anyone else in the meetings. Including Alan
Greenspan. Have a look. Cheers.

Motley Fool said...


For me a 'cute' solution is burying it somewhere far far away. That eliminates most of "loss by burglary, fire, loss of life, coercion".


Raymond said...

To Ore Em',

I still owe you some thanks for referencing the writings of A. Del Mar in the "Think like a Giant" thread.

Some of his books can still be found on the net in PDF form and make for some good reading.

Also this links to Naughty Slumdog's comments. Del Mar in his work "A history of money in ancient countries", shows that throughout history, people have been using many different worthless things as currencies. For example, baked pieces of clay, cut wood, and most widely, stamped copper coins. Each of these things, when issued by an authority and protected against counterfeiting, functioned well as medium of exchange, to lubricate trade. Gold was in most of history too scarce as a resource and too soft and easy to wear down for use as a currency. Gold may still have had its use as a store of value, or in international trade, even then.

duggo said...

@ Motley Fool

A lot of Romans did that. UK metal detecting enthusiast and farmers find their "safe" stashes every year.

Sir Tagio said...

@ Motley Fool, duggo

Hard to beat the Jean Valjean solution. Every once in a while, he had to make a trip to the forest to commune with nature.

vizeet srivastava said...

poopyjim, gr8 interview.
I had loan on my property which I sold after my brother convinced my wife and I have some saving in gold now.
I can tell you my wife is more happy than I am because we live in a much better rented accommodation now and I am loan free and still saving more.
I am very bad reader so don't really go through long post of this blog but I think I understand the concept of freegold.
I think being an Indian I can give some perspective about gold here.
In India people/god(temples) have lot of gold and most of that will never come out no matter what happens to the world.
But gold in India is not just because of religious or cultural reason. There are lot of transactions on which people don't pay taxes so they can't put their money in bank. They use gold or land as saving instrument. Farming is an unorganized sector which employes most of the people and so they also save in gold which makes a huge market consisting of gold. So FreeGold as a reality exists in India and will exists even if gold goes down in price. In that case I think in the black markets gold will immediately get de-linked to market price because that market cannot die. It even existed before India had imported restriction on Gold/Silver.

MH said...


Oh good let's name call... you're a worthless leach on society you poop lover!

poopyjim said...


Good job ignoring the substantive point I made in that comment prior to the insult. You know, the part where I fully rebutted your initial baseless accusation that I was being hypocritical in my characterization of silverbugs as being emotionally attached to their silver. Of course I completely understand why you chose to ignore that particular portion of the comment, because it would involve admitting you were wrong.

It is because this accusation was baseless that I called you an idiot, and judging by your most recent comment my initial assessment was correct. It's also screamingly apparent that you are emotionally attached to your silver, as you are obviously butt-hurt by my calling out its cult-like, populist enthusiasts.

As far as my being a leech, well, unfortunately there are limited opportunities in the private sector in the US. A great many of those employed in the US, probably a majority, are leeches either directly or indirectly from USG, as USG employs many private contractors and provides funding for e.g. higher education through subsidized & guaranteed loans, housing, health care, etc.

The public sector is simply too massive, and needs to be cut down before there can be any real opportunities in the private sector. Before I ended up at USG, I had a small business which failed. So am I a leech? Yes. But I'm not going to cut off my nose to spite my face; I didn't choose the current economic paradigm.

But yeah, keep fighting the good fight w/the SLA! Silver swords & shields bro! Crash JPM! Down w/the elites! Zzzzzzzzzzzzzzzzzz...

Michael dV said...

The enthusiasm for silver would be funny if it were not for the consequences of being wrong when they ring the bell, stop the music or the SHTF...choose your metaphor. I have tried, in my efforts over at ZH to remind people of this consequence and the arguements why but alas I was rebuffed. All we can do is take comfort in knowing we tried poopyjim. And then give what succor we can to those who's silver chains rattle down tomorrow's streets in our cities of gold.

Michael dV said...

vizeet there is a vibrant underground economy in Indian using gold as a medium of exchange? I would love to learn more about this. Thank you for your comments and I encourage you to read more. What do you think will happen if gold is suddenly re-valued upward?

jojo said...

LOLZ...Butt Hurt

Great interview His Poopiness!

All future debriefers should consider a question or two to ask of FOFOA so he can slowly be debriefed as well. Speaking of de briefs, briefs or boxers FOFOA??

freegoldfuturist said...

The interview with Poopyjim was classic. His highball GSR prediction creates balance between the lowball 8:1 or even 2:1 or even LESS than 1:1 kind of lowball predictions during 2011.

I think for a period of time it is very possible for the GSR to become the highest ever recorded GSR. From my reseach the GSR has been in the triple digits, but quadruple digits runs into Bix Weir territory (from the other direction.)

This debrief inspired me to make a video:

I can see by the comments... Poopyjim doesn't pull any punches. I would love to see Poopyjim go at it with silver luminaries such as BrotherjohnF or Bix Weir. Especially BrotherJohnF, who does hit pieces on other youtubers who he thinks are anti-silver shills.

burningfiat said...


When some of us laughed of PoopyJim and called him a stooge or leech, it was actually tongue in cheek and ironic. I think most of us here recognise that this systemic flaw of too many employees in the public sector is indeed to blame on (yeah!) the system, not the individual who sees an opportunity to make a living.



Michael dV said...

thanks for your comments and review of mine...
I could also see the USA eventually saying "hey, we need to get with this new way of styling currency. The Yuan and the Euro both use gold more efficiently so we are going to do so as well".
This would have to come after the value of the dollar is gone, for to do so now would mean the destruction of the current dollar and that cannot be.(though I suppose they could try to do a change over in which they attempted to preserve most of the entitlement promises with promises in new dollars.)
That would give us 3 major currencies, all FG type ie styled on the Euro's use of gold. How we go to physical only gold sales I cannot see clearly but at that point we would have most of what we discuss here. We'd have competing currencies using gold as a reserve and gold used as a SoV. We'd have a freegold world.
It seems likely to me that this is the plan. In the past 2 years we see numerous countries moving some of their reserves to gold. Countries are taking on fewer treasuries and buying gold bullion. (It is not clear where all the gold is coming from.) Why else would so many countries be accumulating gold? Sure it is a good SoV but in the IMF$ system it does not pay a yield and aside from having no counter party it is a second rate 'investment'. I think we are witnessing a move to Euro style currencies across the board. It is happening right now and has been for about 2 years. Whether it is going to be sprung upon us suddenly or it is a slow process that will take years for the reveal I do not know but nothing else makes much sense even in a world in which all the talking head say otherwise (ie they talk about 'gold backing'.)
For me this blog has provided a clarifying lens through which I now view the economic and political world. Without what I have learned here I would be like the fish who does not know he is wet. So thank you fofoa and I remind all that our hard working host will need a bit of wealth to carry forward into the future, please donate to him. My best guess is that fofoa, more than my savings of many years of work, will determine the outcome for me and my family in the years to come.

anand srivastava said...

Michael dV:
Gold is not really used as a medium of exchange. What really happens is that the people who are earning money want to avoid taxes, so they show less income. With the excess income they buy gold, as they cannot show that income. There is a whole underground economy, which involves black money. The black money is really dealt in cash, but it does not stay in cash for the most part. It either goes into land or into gold. Mostly into land.

There is also a lot of corruption in high places. The illegal money made at those places goes into foreign tax havens, into land, or into gold.

So Gold is a really convenient store of value. This is mostly the reason why gold is being imported in India in large quantities. Much of this gold goes into jewelry. Normally when these politicians bureaucrats get caught we find that they have lots of gold in addition to lots of cash. Gold bullion is also stored in these places.

Lots of criminals/politicians will also make donations to their temples in the form of gold ornaments to their Gods, to get pardon for their crimes :-).

KindofBlue said...


You got a hat tip from Max Keiser:

"So my test result currently confirms the statement from the interview – namely that the HSBC vault contains no Chinese gold bars. This seems to directly support the idea that China may be keeping the lion’s share of gold output from their refineries, and is also consistent with FOFOA’s ideas about China and Gold. Interesting – I had never noticed the absence of Chinese gold bars."

Any comment? :)

Peter said...

My best guess is that fofoa, more than my savings of many years of work, will determine the outcome for me and my family in the years to come.


You are FOFOA! You will determine your own outcome.

All of us FOFOAs will help each other navigate the trail.

Vive la superorganism!

jojo said...

Hi. Not sure if you are aware that ration is after freegold. Gold being revalued 40x or more is how 4 digit GSR's are possible.

where'd your polo and hermes go?

Max De Niro said...


If Bix Weir and BroJohnF are considered luminaries in any field, then that field is doomed to eternal darkness. Those two guys are the epitome of anti-conceptualism and pure fantasy. You are far more illuminated than any in the silver field that I have seen - including Sprott, Keiser, Turk etc - at least as far as their public words go (which I don't think for a moment are the "truth").

Max De Niro said...

Sorry, I meant to address that last comment to freegoldfuturist..

freegoldfuturist said...

Hi jojo! I didn't want to overexpose my estate sale threads.

For the revaluation - I think unseen factors will surface to keep the GSR from rising above the triple digits. For example, 1 billion strong Islam rediscovering what its holy book says about money when a global currency crisis hits.

Nickelsaver said...

Short and Sweet

"Silver IS money"

J Murphy said...

Scott Minerd Chief Investment Officer at Guggenheim on revaluation and the collapse of Bretton Woods II -

freegoldfuturist said...

Thanks for the vote of confidence Max De Niro!
My name is also "Joe" so I figured you were addressing me.

I used the term "luminaries" in regards to number of followers, not in regards to knowledge or truth. Considering that I believe the price of silver is moved by supply and demand (unlike many luminaries who belive the price of silver is moved by phantom forces,) what those luminaries say influences (or is it influenced?) their followers to create more silver demand - hence they are luminaies simply by having an audience. My audience shrank after silver fell and I became more critical, I don't want to have any luminary-kind-of-label as there are a lot of people who have had the wrong timing and lost money in this market.

Aaron said...

Hi freegoldfuturist-

You mention in your video that certain events have to happen for such an explosive GSR and that is correct, but that event isn't what Benny B does with his printing press. The event we are looking for is gold usurping Treasuries as the reserve asset of Central Banks in a physical-only market. Gold’s future purchasing power is a result of this phase-transition. Silver gets left behind with everything else so not only would the GSR explode, so would Gold-Bread ratio, Gold-Peanut butter ratio, Gold-Land ratio, etc.

ps. Love the title of your video 10000:1. Talk about Kicking the Hornet’s Nest!

Max De Niro said...

Thanks Aaron,

You've beat me to it, and bettered me at it.
I would simply add - price follows function. Treasuries only retain such a price as they do due to their current function. Change gold's function, change gold's price. Silver's function would only be reduced - there would be no more confusion for some as to its monetary role, or lack of, as the case would be.

Bernanke is correct: gold is not money, it is simply an asset, and yes, people do hold it out of tradition - the tradition of wealth preservation through time by giants.

FrancisHoard Coppola said...

Some of my minions have alerted me to this most recent post in this den of thieves.
It's also come to my attention that there are new people being drawn to this Evilness.

It's for those new people that I post. They may still be saved.

New people:
Understand this devil who goes by FOFOA (pronounced foff oh uh)advocates hoarding.
Hoarding is Evil.
If you hoard shiny yellow rocks, you are a selfish evil hoarder. Why you ask?


When you hoard, you are evil...oh wait, I said that.
What I mean is, if you hoard, you keep all your money to yourself. How is the rest of society supposed to grow and get better if you keep your money away from society??
The better, truthier way to go is to either give your money away or invest it in things like local businesses. Society needs your savings to grow.
It's the right of every person born to share in the wealth of everyone else is one expected to get rich??
It's easy to see that the super rich all clawed their way there by hoarding and being selfish. If the government didn't force these big companies to hire people, no one would have a job and these business owners would be even more rich- they'd have everything!
Imagine if APPL had been allowed only one employee as Mr. Black shirt wanted???? That man would have taken over the world.
Instead, due to common sense and our blessed politicians, he was forced to hire people.
He was forced to share his company and money with regular people. There's thousands of Chinese workers who now make big bucks and have an awesome job/life- all thanks to government and truthiness making him do it.
AND, there's millions of us SMART people who keep buying shares of his company stock and WE keep getting richer cause it keeps going up.

So you see, investing and reinvesting your cash is the honorable way to live. By putting your money into your 401 or the stock market is the only honorable way to save for your future.

Sure, times look tough but when we get old and need to retire, there will be all those behind us in years that will be paying into the system to take care of us.
So there really is no reason to Evilhoard your money under the mattress. Get it out there working for you/me/us!

DP said...


Little known fact! In many languages money is literally silver! Zzzzzzzz....

Aaron said...

FrancisHoard Coppola!

When you hoard, you are evil...oh wait, I said that.


Nickelsaver said...


Please don't laugh at my pony

He might get the idea you're laughing at me. Not that I mind, but he is very sensative.

freegoldfuturist said...

Thanks Aaron for the reply.

When it comes to gold I am heavily influenced by Eric Janszen of iTulip, and I think his scenario is most likely at this point in time. He sees gold playing a role in the new monetary system, but in a different way than FOFOA. I am not proficient enough yet in FOFOA philosophy (even though I have read many of the posts in the past few year) to compare and contrast iTulip vs FOFOA. Thanks everybody for giving me links to previous FOFOA posts that go deeper into the points you are bringing up.

Motley Fool said...


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


Ps. Reposted, due to writing at wrong post.

Dante_Eu said...

@FrancisHoard Coppola:


Or to put it simply:

If you hoard, you ain’t worth!


You contribute nothing to society!

And Y said...

Someone needs to do a TED talk on Freegold/RPG.

poopyjim said...


As per our discussion on gchat, my call of 10000+ is short term i.e. we'll reach a point of absolute capitulation where silver is hated. But in the long term after the dust settles, I like your ratio.

duggo said...

Hi Silverfuturist/freegoldfuturist.

Love your videos. A common sense look at things from a auction buff.

I've switched from Gold to Silver because it makes sense not because I have become a follower of a religion. Many internet followers of Gold and Silver treat them as "religions" to be defended at all costs. If you post a negative comment on a Silver site you are called a Troll, likewise on a Gold site. As you have said on a previous video "it's dangerous to attack the herd". Keep up the good work. I like your freedom of thought. None of us are right all the time but who cares. We all make mistakes. The secret is to see when you have made a mistake and change.

duggo said...

Sorry I should have said switched from Silver to Gold. Too much wine,,,,as usual.

freegoldfuturist said...

Aaron, thanks for the links, which I followed to one of "Another"'s posts. Considering CBs have been net buyers of gold since 2009, I am still trying to decypher the post:

"In any event, LBMA has traded so much paper/oil/gold that any rise in the currency price of gold will implode them. The CBs must become the full primary suppliers of gold or the system as we know it is done.

One last note: No form of paper wealth will survive the financial crush once the CBs stop selling!


Motley Fool said...


I had misunderstood that to be your long term call.

If we are talking shortly after the $ collapses I think your estimate is way too conservative. The chaos will likely damped industrial production significantly, and industrial demand for goods using silver will wane temporarily.

Adding the selling pressure of desperate weak handed silverbugs and it would likely be pushed to the level that most mines would shut for a while.

For this chaotic period a GSR of 20-30,000 is not unreasonable.

Of course the long term fundamentals are good, and even better in freegold, being that is an environment that will foster production and inventiveness.

So the GSR will likely revert to 6-8k after the fallout.


Motley Fool said...


"One last note: No form of paper wealth will survive the financial crush once the CBs stop selling!"

ANOTHER agreed with that sentiment. His popular saying for that was : All paper will burn.


freegoldfuturist said...

Motley Fool: The CBs stopped selling gold and became net buyers in 2009. The paper wealth far from burned.

What does TF stand for?

Max De Niro said...

TF = The Fool, not what you were hoping for!

Keep reading and thinking Joe, you'll get your answers....

Edwardo said...

The Silver bug and HMS crrowd are a law unto themselves, and, as such, are, in the main, unreachable via appeals to well reasoned argument. n fact, they are, as testament to theiir unrelenting perversity, apt to decry strong arguments as deeply suspicious by their very nature. The last silver "believer" t I tried to present the salient facts to made the comment that I had presented a very intellectual argument as if an un-intellectual presentation were preferable. There is no known antidote to such obstinate obtuseness at least that I know of.

Motley Fool said...


I seem to have misunderstood your previous. The burning paper comment is in relation to the final collapse of the $.

TF - The Fool :)

Nickelsaver said...

I think it's wrong to view silver as it relates to gold via a price ratio. Silver is much shinier the gold. Silveristhenew money. It doesn't have that unfavorable yellow tint to obscure it's reflection.

Silver IS money. But not why you think. I have discovered the missing pieces which, if you will put aside your confirmation bias, I will enlighten you.

poopyjim said...

Hi Joe,

I watched your video. The arguments I hear from you are common silverbug arguments. Referencing the historical performance of silver does not take into account the unique circumstances that exist today. You talk about deflation forming the basis for some kind of high G:S ratio. It will be, in a sense, but not deflation of the dollar. I agree w/FOFOA that we will have massive deflation with a different numeraire: GOLD. We know what Bernanke (or his replacement?) will do, it is a done deal.

Silver & gold's fundamentals form the basis of my call for the 10000:1 ratio. Specifically, as others have noted above, gold has monetary fundamentals while silver's fundamentals are exclusively industrial. Silver's price presently is FAR in excess of it's industrial value. My call is only that silver's price will eventually reflect ONLY its industrial fundamentals, with a significant overcorrection as we transition into the new system. Please, silverbugs, explain to me what FUNCTIONAL role silver will play in the next monetary system and WHY. If you cannot do this, there are NO monetary fundamentals for silver, and in buying silver, you rely either upon its industrial fundamentals, or upon the greater fool.

Then there is the common silverbug retort of "who can predict the future? You don't know what will happen in the future!!!" Well yes, of course, ANYTHING is possible. I could open my front door right now and find a hot naked lady waiting to bed me. It's not impossible, therefore we can assign it a certain probability. Now, the odds of silver playing a role in the next monetary system might not be as low as the odds of me opening my door and finding a naked woman, but they sure are close.

I would love to see Poopyjim go at it with silver luminaries such as BrotherjohnF or Bix Weir. Especially BrotherJohnF, who does hit pieces on other youtubers who he thinks are anti-silver shills.

As much as I would love to be the target of a hit piece, I am not too interested in engaging the likes of BrotherJohnF or the other silver surfers. It would be kind of like me showing up to a knife fight with a squad of marines, a couple snipers, and air support. Sure it can be fun and gets my blood boiling a bit, but overall it's not an effective use of my time, and the arguments that are made for silver tend to be shallow, boring, conspiratorial, and quite often emotional.

At least the magic money tree (MMT) proponents can point to the last 30-40 years of int'l support for the dollar as evidence for their oddball worldview. And the deflationists can point to strong deflationary forces, as well as the structure of the present system, as support for their claims. You silverados have nothing; you are just lacerating yourselves and jumping naked into a tank of hungry sharks. You have no cards, no dice, and if you don't head on over to the camp of real savers before TSHTF you are going to be mercilessly annihilated. That's my call.

Also, the case against silver has already been laid out by far greater thinkers than me, such as costata and FOFOA, just to name a couple. I am merely peeking over their shoulders to get a glimpse of what they see.


Franco said...

poopyjim said:

"Silver's price presently is FAR in excess of it's industrial value."

Could you explain more about that?

MH said...

My point was this: In your mind you are very likely to be right about the future. Greed and fear tell you to take advantage of the opportunity by buying gold while it's undervalued. In the mind of the silver saver (or any other form of saver) the exact same circumstances exist. Nobody tries to lose capital (although government's and central banks love to piss away fiat). Emotion drove your decision to choose gold no matter how you skin the cat. I think you certainly made the right choice, but that's irrelevant. Just because you think a group of people is wrong and you are right, that does not change the driving force behind the action. I didn't mean to insult you so much as laugh at the irony of the statement. Unfortunately I thoroughly lack diplomatic skills, and so I was more insulting and less coherent than I intended to be. So in that spirit; You remind me of Clayton Bigsby:

Woland said...

OR SOCRATES???? I didn't think so. So what did they think
monet was?? ELECTRUM. finis. (see, everybody wins!)
"thank you and goodnight".

MH said...

I'd like to hear more about how the hardcore free-golders see the transition from today to $55,000 gold going?

I'd also like to hear from poopy how he sees the transition from today to $5 silver going. I'm of the impression that we face serious cost-push inflation over the next few years, and under those circumstances I have a hard time seeing any commodity go down in terms of dollars.

So hear's the reason for my questions: I don't think that we are going to overnight see gold revalued 25-50X. Can you imagine how quickly all the gold savers would try to exchange their gold for other forms of value if that did happen? Please anybody point me towards compelling arguments otherwise. Forgive me if I've missed some pivotal articles or comments, I haven't read the comments on very many articles, and I could have been more thorough in my reading of the archives of Another and Friends.

poopylover said...


While an emotion like greed may ultimately underly every investment decision, there are rational processes by which one decides how to best service one's greed. In my view, silverados generally are herd thinkers and fail at the whole "rational" thing.

Of course it's not like that wasn't clear before, so nice prevarication and way to double down on the insults. I'm lovin' it.

I'd also like to hear from poopy how he sees the transition from today to $5 silver going.

Did you miss where I said "in real terms"? Do you understand what this means?

You are beneath my contempt and a waste of my time. I'm through with you.

Also, RTFB.

MH said...

I realize I've made the mistake of comparing things in dollar terms. Poopy and everyone else are speaking in terms of relative dollars so my statement "I have a hard time seeing any commodity go down in terms of dollars" was stupid, and also not what I meant. I mean that most commodities will likely go up in relative value because under any circumstance where gold ends up revalued multiples higher most commodities are also going to fare well because options are limited and savings will flee for real value.

Michael dV said...

I do not think I would be in a hurry to exchange gold for other wealth items even if the transition was swift. A fundamental thought here is that gold will rise in price and stay high. We do not subscribe to the usual 'bull market in gold' idea that you must get out at the peak of hysteria.
I am interested in your comments about Janszen's views. He was an early influence on Fofoa and the guys he wrote with (the Widemers) were my initial influence. How is his view different? Fofoa has the Euro to point to as an example of current use of gold in support of a currency. I have come to realize why this is a superior use of gold. With traditional gold backing when you fix a price it is ALWAYS too high (and you wind up having to take on too much gold and you hyperinflate your currency) or too low(and you have to sell all your gold and wind up with none) the latter being the usual scenario.
Does Janszen have another way gold might be used by a central banker defending his currency?

poopylover said...


The cost of mining silver is what, $5/oz.? 750 million oz. are mined each year, 500 million are consumed by industry - supply overhang.

Though I'll point out I am no expert nor do I care too much about the inner workings of the silver market. It is enough for me to understand that it is not a monetary metal, and has no monetary fundamentals.

Michael dV said...

One more thing...
during the period between September 2010 and May 2011, I was heavily into silver and made a good deal of money. I thought it was going up because of the failure of the dollar. I was not well read but I was making money and didn't bother to put much thought into it. That Sunday afternoon ( I will never forget the feeling I had looking at the Kitco site on my iPhone) when silver dropped 6 dollars was a real wake up call. I got out of my AGQ (2x silver ETF) over the next few days and fortunately preserved many of my gains but that experience led me here (eventually). I am now very comfortable with un-leveraged gold and I have developed patience. I also had silver in hand which I have also traded for gold.
This is an extremely important issue for wealth preservation. I know from your earlier YouTube videos that you understand why silver cannot be a monetary metal. France discovered this fact in the late 1800s (I think I correct on that time frame) and now all the central banks act as if they believe this fact. Spreading the word to your audience is the greatest service you could ever provide them. It is tough medicine but I really do not want to see even the idiots get hurt.

ampmfix said...

Ok on silver not being a monetary metal, but it is still one of the most important industrial elements, so if under FG gold to oil might be 500:1, forget about preposterous ideas like 10000:1 GSRs. Once the energy component of oil is replaced (that will come, nuclear fusion, fuel cells, PV cells, etc...), the CHEMICAL utility of oil is way not much higher than silver's. Ok?

MH said...

Feel free to be done with me poop lover, but I'm mostly interested in learning. I too thought my original point was implied, which is obviously why I didn't spell it out for you at first. I'm sorry I've insulted you, I think you're a man on the right track. But I have to ask again, what circumstances would it require for gold to be revalued as high as you say, and how long will that take to play out in your mind? Why wouldn't savings go to what you consider irrational places in addition to gold? Is the rest of the world all of a sudden sane?

Michael H said...


In any event, LBMA has traded so much paper/oil/gold that any rise in the currency price of gold will implode them. The CBs must become the full primary suppliers of gold or the system as we know it is done.

One last note: No form of paper wealth will survive the financial crush once the CBs stop selling!

Keep in mind that ANOTHER started writing in 1997, and the context was completely different from 2009.

For in-depth reference, see these three sources:

1. The timeline in Jeff's comment

2. The blog referenced by Jeff in said comment.

3. Victor's piece, "The Gold Forward Offered Rate (GOFO) – Fever Chart of the LBMA"

Here is a synopsis:

Starting in 1980, the rest of the world (ROW) (from a USA perspective) decided to support the dollar by supporting a low gold price, in order to keep the dollar oil price low to help their economies, and because there was no alternative currency that could be used to settle world trade at that time.

The strategy worked, but by the late 90's it had become to obvious a trend and three problems developed.

First, the bullion banks (BBs) had expanded the volume of paper gold (unallocated bank liabilities denominated in gold ounces) way beyond what was prudent based on their reserves, on the expectation that CBs (non-FED) would continue to lease gold and backstop said BBs if their loans went bad.

Second, hedge funds and other players hopped on the downward-gold-price-trend bandwagon and continued shorting gold even below its production price.

Third, China got interested in gold and starting accumulating physical, draining reserves from the system.

ANOTHER was writing at this time. Faced with the three problems above, European CBs had to keep supplying the market with gold to keep the dollar alive until the Euro's launch, but after that it was anybody's guess as to what would happen.

In the end, enough gold was supplied (eg by the BoE) to keep the gold market orderly as it made its transition from bear to bull, but it was a close-run thing. It very well could have been a catastrophe.

Ore em' said...


You're welcome, and thanks for the heads-up on his .pdf's, I'll try to track them down (although finding the time to read them is Another problem all together!).


"Vive la superorganism" sounds like a fantastic t-shirt.

J Murphy

That was a fantastic article - he could have been lifting that right from FO/FO/A!

Davincij15 said...

Dam right!

All paper money that ever existed is still valuable and everyone who held gold has gotten wiped out! In fact people should hold government paper, like treasures and debt notes because they never default.

(If anyone points out that the US Government defaulted in 1933 when they promised to pay gold for debts at $20 a oz and restructured at $35 a oz to foreign central banks only, and once again in 1971 to the central banks. Those are LIES all LIES!)

Quantitative Easing Explained
(MORE Lies!)

I agree with you!

Only num nuts believe in Hyperinflation! IT WILL NEVER HAPPEN!

Let me prove it.

People said in 1920s that the banks did not have the gold to cover all the paper money. That was a lie because if they didn't 10,000 banks would have collapsed and the government would have had to nationalize gold. Those people where wrong because they could not put a date on it and it never happened.

Another example is in the 60s many Austrian economist and other central banks believed that the USA printed more currency than gold they promised at $35 an oz and they would run out of gold and/or default.

Since none of those people who made this call could not give a date the where also wrong because it didn't happen.

Thus logically you are correct no one can put a date on hyperinflation since it's a loss of confidence thus it will never happen and in fact the dollar value will go up.

HOOK up with bonds and the dollar people, you're going to be RICH!!!

You know the great thing about the money supply is that it's increasing on an exponential curve thus it will increase rapidly in quantity, and, as you know, also in value. :)

Some fool sent me this statement....

"If you do not own a single ounce of PHYSICAL gold and silver, you should ask yourself why you value fiat currency that bankers can create of thin air more than monetary forms that have held their value for HUNDREDS OF YEARS. "

Has anyone heard Gold is KING? NO, it's cash baby!

you're right!

We will never stop using dollars to pay taxes and buy food just like people still use denarius and the 3800 different supposedly dead currencies that are still around today. No currency has ever had a loss of confidence EVER! Thanks for pointing out that truth.

I liked how you pointed out that people who see the dollar going to zero are acting like fortune tellers it's like saying someone who eats lots of arsenic will die. You can't know that will occur for sure. No one can predict future events based on historical occurrences thats just fucking dumb.

You are also right if I had a trillion yen from 1942 I'd be so rich!
Everyone knows after they lost the war the value of the notes went up in value!

I like how you agreed with me that the United States of America Never defaulted like some of those crazy truth tellers say it occurred 1933 with gold nationalization and revaluation and again in 1971.

I'm glad you agree it's all LIES!

You see all those people that have gold and silver will need dollars and I will be handing on to my dollars to sell to those poor physical asset holders.

I don't understand how people don't see when money is created to bail out banks and governments it's causes the value of the money to go UP big time.

If you stop feeding trolls and they will go away.

byiamBYoung said...


"The cause of the euro debt crisis is the misconstruction of the euro that allows all members of the European Monetary Union (EMU), currently 17 sovereign nations, to print euros and force them on all other members."

Is this true?

/SleepingVillage/ said...


Have you met ART?

Stop snorting Bath Salts, they're for bathing.


costata said...


"When you hoard, you are evil...oh wait, I said that."

I cracked up when I got to that line too.


Great find on Bretton Woods. Thanks for the link.


An interesting fun fact about the gold standard era for you. Hardly any of the additional gold discovered was coined or turned into any type of bullion or "money". The majority of it went into jewellery.

Those big discoveries lowered the cost of jewellery and helped to make the wearing and use of gold in ornamentation affordable for a wider cross-section of society.

In many ways the gold standard period is more correctly viewed as a key evolutionary development period for central banking, banking in general and international trade. Gold currency doesn't have magical properties as some of the goldbugs seem to think (as I'm sure you know).

vizeet srivastava,

Thanks for posting. It's always interesting to read about local conditions and attitudes.

Michael H,

Great summary of the circumstances specific to the late 1990s that prompted Another to make the "burn" comment about "paper". It would be good if FOFOA could work this summary into a post somehow. A lot of people make the mistake of not considering the context and timing.

costata said...


"The cause of the euro debt crisis is the misconstruction of the euro that allows all members of the European Monetary Union (EMU), currently 17 sovereign nations, to print euros and force them on all other members."

Just plain wrong. The individual CBs issue Euro but the seignorage is shared according to a formula based on the relative weighting of each economy in the EMU.

Hence if Spain's CB "prints" Euro a larger percentage of the seignorage is credited to Germany than Spain. It's a system - the ECB Eurosystem (of central banks) - not a ragtag collection of central bankers holding hands when the mood takes them.

No one is "forcing" Euro on anyone else. FWIW my default setting when I read anything about the Euro/EU on ZH is: "Okay, let's see what they got wrong today!"


costata said...

Actually I have to correct something from my last comment:

No one is "forcing" Euro on anyone else.

No one except Mrs costata who gave it a shot with every EU retailer in sight a few months back.

Beer Holiday said...

@Costata and China watchers

Paul Keating's "After words" is full of speeches which expand on the interview of his you posted here in the past. I'd love to know what you think of it.

I think Keating felt that the $IMFS (not his words obviously) really broke down in Asia when the IMF destabilised Indonesia. The main function of the dollar system in this region was the stability and trade it brought through US foreign policy.

I'm trying to put his words into the freegold language, so there's plenty of room for error in that process.

In the 90's, it was clear that those days were long gone, and that some new trade settlement architecture was needed, and that China would have a large part in deciding what that was. China would be the new source of stability and trade.

I was surprised to find that the rise of China, and a new system of international settlement was something he had talked about in speeches for many years going back to the 1990's.

vizeet srivastava said...

Michael dV,

Anand answered your question about how black market operates in India.
I think when gold price goes below production price then there will be producers willing to sell the gold produce to smugglers which will enter in India so people in India will get gold at a high cost. People who will loose there job will be selling gold to get cash.
When gold revalues then possibly it will be too costly for jewellery and so we may see cultural change in India. That's a guess. I guess India will be rich (May not be prosperous because of corruption). I think gold revaluation will bring lot of changes mostly for good.

victorthecleaner said...

FOFOA, plug your ears and close your eyes. It is only one posting, then I'll change topic again.

Take a look at this from The Guardian:

Britain rejects US request to use UK bases in nuclear standoff with Iran

Britain has rebuffed US pleas to use military bases in the UK to support the build-up of forces in the Gulf, citing secret legal advice which states that any pre-emptive strike on Iran could be in breach of international law.

The Guardian has been told that US diplomats have also lobbied for the use of British bases in Cyprus, and for permission to fly from US bases on Ascension Island in the Atlantic and Diego Garcia in the Indian Ocean, both of which are British territories.

The US approaches are part of contingency planning over the nuclear standoff with Tehran, but British ministers have so far reacted coolly.

It is not only that they tell the US behind closed doors to to go it alone, no, they leak the stuff to the press right away.

Contrast this with 2001-3, and contrast the Blair government (left, Labour, Europe friendly) with the Cameron government (right, Tories, euro-sceptic) now.

I wonder what are they going to tell their people when they eventually want into the Euro.


Phat Expat said...

BF (BS; talk about equivocation)
"I think most of us here recognise that this systemic flaw of too many employees in the public sector is indeed to blame on (yeah!) the system, not the individual who sees an opportunity to make a living."

From Jesse (The Socio-Political Continuum):
"The status quo tolerates the corruption and the fraud because they have profited at least indirectly from it, and would like to continue to do so. Even relatively honest reformers within the power structure become susceptible to various forms of soft blackmail and coercion."

And that is representative of every cog in the machine. The sooner the end, the better.

Michael dV said...

Phat Expat
I am indeed a complete outsider to Indian culture. I was using the widely quoted statement that Indian women own 30k tons of gold making them the largest holder of physical gold as a class. Is that not valid? or did I once again miss something obvious? thanks

/SleepingVillage/ said...

Thanks for sharing that, Victor. I find it interesting as to the overall sentiment between the players involved.

I sense a change coming on. Hard to put my finger on it exactly, at this stage, but something feels different than it did even six months ago.

A bit of a glitch in the matrix, if you will.

Now I read something about a $43 trillion lawsuit...

Beer Holiday said...

Oops, meant to put the Costata's link in the above comment:

costata said...

Beer Holiday,

I haven't read that book by Paul Keating. That interview I posted is all the detail I have of Keating's thoughts on Asia, the US dollar and so on. So I can't really add anything more about them beyond what I've said previously.

Just out of interest it's probably significant that Keating was a junior Minister in the Whitlam government and it was Whitlam who pushed through Australia's recognition of mainland China.

I'm absolutely convinced that there are senior people in the RBA and Aussie Treasury who understand the role of gold in a monetary system regardless of what they may claim to the contrary. I don't think Keating is an outlier.


costata said...


Thanks for the link. I'll take a look at it.

FOFOA said...

Hello "Freegoldfuturist" aka "Silverfuturist" aka Joe, and welcome!

Nice videos, and thanks again for your kind words!

Just for fun, if we assume that the price of silver today reflects something meaningful, how much of that price ($32.19 for the record) would you attribute to investment demand and how much to industrial demand? In other words, what would the price of silver be if, hypothetically, most of the investment demand suddenly disappeared?

I remember just four years ago to the day, it dipped down under $9/ounce (only 4 years ago!), and that was while SLV was holding 200 million ounces of investment silver and adding more. How much silver is possessed today for investment purposes as opposed to near-term industrial purposes?

Yes, there are a few big money investors in silver today. How many of them have taken delivery versus owning an easily tradable (exit-able) vehicle like the silver ETFs for the purpose of price (volatility) exposure? I suppose we could say that Eric Sprott, a billionaire, took delivery. But then again the shareholders are really the bag holders of that silver, not Eric himself.

On industrial demand, what proportion of the present demand would you attribute to easy money/debt financed consumerism including USG deficit financed expenditures like the military industrial complex? Could that portion of industrial demand shrink or disappear at the same time as investment demand morphs into an industrial supply overhang?

Silver will certainly protect you from the worst of hyperinflation! Even in Poopyjim's scenario, he's only predicting an 85% devaluation in real terms for silver (only 45% if you bought your silver 4 years ago). It's only when you view it against that which will be simultaneously revalued that it looks like a stunning 99.99% devaluation. But it's not.

In real terms, Jim is only predicting an 85% loss for today's silver investors due to the coincidental losses of investment demand and part of industrial demand. 99.99% is simply the difference between that which gets devalued and that which gets revalued. It's like a seesaw. Gold's Freegold revaluation is due to a subtle shift in its function, while silver's devaluation is also a result of a partial loss of function. This is not a market-based price move he's predicting, it is a phase transition in function for both metals.

One of the points I made in Think Like a Giant was that any "asset arena" runs on money in and money out. This applies to silver. When it comes time for you to cash out of your silver investment, any money coming out of that "arena" must be matched by money going in. We know that there will always be "money in" from the industrial users who need a steady supply. But what will happen if suddenly that's the only "money in" and the investors are all trying to "money out" at the same time?

Anyone is of course free to dismiss this scenario out of hand. It is certainly different from what you hear in the rest of the "precious metals" sphere. But if you are here reading this right now, I should explain that this blog is a tribute to A/FOA, and therefore I obviously hold their Thoughts in the highest regard. So I'll conclude this comment with a few quotes from FOA which can be found in The Gold Trail on pages 3, 4 and 5.


FOFOA said...


Talking about ratios is one way to discuss changes in real terms. Another way is by quoting price predictions in constant (aka inflation adjusted) dollars. I should note that this is what FOA was doing, because he says, "Even if these actual dollar numbers prove incorrect,,,,,, relative inflation adjusted prices will show the exact same ratios to gold. The gain will truly be in gold!" I should also note that at the time he wrote the posts below, silver was $4.40/oz. and gold was $263/oz. for a GSR of 60. So FOA was talking about an 89% silver devaluation in real terms while also predicting Fed printing and "real hyperinflation". So you see, devaluations in real terms have nothing to do with inflation, deflation or even hyperinflation.

Also, Joe, you talked about how small the silver market is and how a single giant could switch strategies from gold to silver at a high enough GSR and practically buy up the whole silver market with a little gold. With this in mind, I'd recommend that you give some consideration to the game theory principles of the Nash equilibrium and the Schelling point, as well as Moldbug's tank metaphor.

Lastly, Joe, I noticed in your video that you observed extreme GSR predictions (on both ends of the spectrum) tending to correlate with the mood of the blogosphere at the time, and that this was the first time you've ever heard such a high GSR mentioned. But I'd like to point out that I first posted the below excerpts and even discussed a potential future "GSR" (that term is not really applicable in Freegold) of 20,000:1 back in 2009 when the GSR was around 70, and FOA wrote the posts more than 11 year ago.

And now I present these only for your consideration. Make up your own mind. Don't let anyone tell you what to think. And luckily for everyone, the 50 cent silver thing makes these posts easy to dismiss out of hand (in case you start twitching from discomfort). But if anyone is that incredulous then they might as well dismiss me, my blog, "The Gold Trail" and Freegold as well, because they are all intimately connected. Silver is not part of Freegold.

FOA (4/19/01; 17:50:29MT - msg#65)

Q: At $30,000 POG the US [dollar] as we know it will be no more, agreed?

----Agreed, but still in use. Just like all those Pesos around the world! But remember, at the very least, the first $10,000 of that figure would represent the current purchasing power of the dollar today. We will most likely get there long before price inflation jumps way up. Once the current dollar gold market fails and gives way to a free physical price, we will see that figure even as our economic function drives all other hard money metals into the toilet. I talking about .50 cent silver. while gold races past its first grand. When we see it we will understand it.----

Q: What advantage would it be to the Power Elite to destroy the dollar?

----Wrong context. What advantage does the Power Elite gain by expending assets to save an already failed currency. Better to do what major players have done for centuries and are doing now, buy gold and evolve your power base to use the next reserve.------


FOFOA said...


FOA (05/15/01; 09:50:11MT - msg#73)
Fed - BIS - ECB - China

Your (Randy's) words:

----China is simply lagging by one Century in performing this act. Many of the other nations of the world unleashed their silver reserves near the arrival of the 1900's when the usage of silver was abandoned as redundant within the banking sector. And in contrast, not surprisingly, global gold reserves have GROWN since those days. Further, the dollar can be expected to suffer a worse fate than silver when it, too, loses its particular reserve and settlement role within the international banking system. And gold? All reasonable signs show that it shall maintain the king position as THE reserve asset par excellence for a long time to come. Get you some. -----

If they are, indeed, going to run with the Euro later and the ECB is marking gold (not silver) as their main "wealth reserve", then it makes sense for China to position themselves this way. It also makes sense because as an addition, Hong Kong has so many dollar reserves they, too, could never unload them. Following the Euro system lead, they could afford to let their dollar reserves burn as long as they had even 15% of that value in gold prior to full "Euro roll-in"...

FOA (06/12/01; 11:23:21MT - msg#77)
A discussion

The big difference today (from the HUNT problem then) will be in the nature of this default. His was brought on by private investors buying a commodity. Today, gold market default and failure will be forced upon the dollar gold world by a sudden lack of "price setting" credibility. And that loss of credibility will stem from the stressed conversion of dollar contracts into Euro denominated units that demand "market based performance" (physical priced valuations) or an escalated (higher) Euro based cash settlement. This all will manifest in a lack of credibility in paper dollar gold trading that can no longer be marked to the market at the same value of physical gold.

This failure of price matching,,,,, this failure of contract conversion into metal,,,,,, this failure in the world gold market to any longer be able to correctly price real bullion,,,,,, will lead to a wholesale dumping of all dollar contracts that have US based performance,,,,,,and start a fall away of all dealings based on present protocols dollar market gold exchange.

As a side note: This will not apply to the paper silver markets as silver will not have the Euro vs. Dollar political struggle. A struggle where the ECB members are trying to loosen their main asset (gold) as a reserve wealth backing to replace the massive loss of dollar reserves. Remember, further back on the trail we covered how these reserve dollars will be simply cast down. In this light, silver trading will bear the brunt of selling in an effort to balance loses from a gold exchange that no longer works. Because silver has no hope of an official free market, its paper pricing system may run amuck until its price plunges to ??? This is the reason so many countries that are contemplating a switch from dollar to Euro use are selling physical silver and buying gold (China, India, etc). It also explains to movement of gold between countries that planned outright Euro conversion....


FOFOA said...


FOA (08/09/01; 10:27:19MT - msg#93)
"everything to do with a gold bull market"

Suddenly the tide has turned and the ECB is seen as ahead of the curve while still in a non inflationary management position; relative to the dollar. Going forward everything the fed does will be seen as stoking US price inflation. Perhaps this is the reason Another said that Mr. D, of the ECB, can and is about to leave. His hard job is done! Only to see Mr G, of the Fed, beating a hasty retreat! Truly, no one wants to reside over the transfer of our US hoard of political gold as prices soar,,,, both of gold and all local goods!

Even further:

This not only has "everything to do with a gold bull market", it has everything to do with a changing world financial architecture. And I have to admit: if you hated our last one, you will no doubt hate this new one, too. However, everyone that is positioned in physical gold will carry this storm in fantastic shape. This is because the ECB has no intentions of backing their currency with gold and every intention of using gold as a "free trading" financial reserve. None of the other metals will play a part in this.

Clearly, the coming drastic constriction in dollar financial trade will trigger a super "print press" response from the Fed. They will not be pushing on a string; rather picking up the ball of twine and throwing it! All the while using the old 1980s "monetary control act" that opens their use of monetizing almost anything and everything. They won't be adding reserves to the banking system in the future; rather buying any and all debts from anyone that needs fresh cash. Believe it!

For the first time,,,,,,,, our industrial production, along with the demand for industrial metals like silver, will fall away even as hyper inflation in prices takes hold.

For the first time,,,,,,,, demonstrating that no other asset is equal to gold, even though promoted to be!

When the coming paper illusion price of gold is destroyed, sending its trading price way up and way down, several times, before shutdown,,,,,,,,,,,,,, the thinner paper markets of lesser metals will be absolutely devastated. Yes we will see $50.00 silver in our time,,,,,, $50.00 for a hundred ounce bar,,,,, that is! No less a relative price decline for the other metals is in store. Even if these actual dollar numbers prove incorrect,,,,,, relative inflation adjusted prices will show the exact same ratios to gold. The gain will truly be in gold!

Gold,,,,,, a wealth for changing times,,,,, a wealth as new as it is old!



duggo said...

@ victorthecleaner

As an Englishman steeped in irony and cynicism brought about by the UK political classes, the Royal family and the "free" press including the Guardian, Telegraph, Independent, Daily Mail, Times etc. and the BBC.

Don't believe any of what you hear or see in the British press. It all has to be processed through the Tavistock Institute (propaganda office).

duggo said...

Just as a little aside I was wondering what followers of this site had as their store of Gold.
Now that I have totally converted to Gold I was wondering what was the best form of "physical" from an international standpoint.
With this in mind I obtained samples of a few Gold coins. Swiss Vrenelis, UK Sovereigns, 1oz Buffalos and Mexican 50 Pesos.

The Mexican 50 Peso is really impressive.

Phat Expat said...

Geographically, I'm partial to Maples, Eagles, Buffaloes, and a few Pandas. The first three for recognition and the last one, because I can. :)

I don't recall who it was that posted the video about the guy panning silver but he talked about auctions and chairs and such. Well, under that video was a link to an auction site that also had online bidding. I observed some of the prices paid for standard BU (both gold and silver) and when considering all the costs (buyers premium, online auction fee, shipping) the 'winning' bids were substantially higher than what you would pay by going directly to various online dealers or your local neighborhood shop. Talk about the madness of crowds. Sheesh...

Which makes one wonder about the upcoming run in silver; wash, rinse, repeat (I believe). However, it is starting to look more and more suspicious with each passing day. Though I have substantially reduced/swapped out my silver holdings, I am looking at a "once more unto the breach..." kind of run. Let's see...

Phat Expat said...

@Michael dV
Aren't you the guy with all the titles? Then I'm sure you didn't miss anything.

Phat Expat
BS Bull $hit
MS More $hit
PhD Pile it High and Deep
MD More Drinks, More Debt, More Drugs

Gunnar Stødle said...


China is no longer net seller of silver and have a long history of silver as SOV money
(silver sycee ingots)I think silver is reestablishing itself as a store of value for the people. Official China may be on the freegold trail, but i believe the Chinese populus is getting back on the silvertrail.

As you said you should think for your self, but expecting the Chinese people to forget their long history of silver as SOV might be a little premature.

DP said...


How about a T with "I AM FOFOA!" and a picture of Spartacus?

(Cue relevant 10min loop on YT)

byiamBYoung said...


Thank you for the explanation. I feel much better now.


Beer Holiday said...


My personal experience has been that the Chinese MSM are pro-gold and anti-silver. In China the link between the official line and the public one is strong.

I've pointed out to Chinese friends that the Chinese characters for bank are "silver market", I've been met with either "Oh yeah, so it is", and " that's because money was once silver here".

The group think in China seems to be that it was a bad time, when silver was money. On the other hand gold is met with optimism.

Back when I was more of a silver bug, it was slightly disheartening.

Gunnar Stødle said...

Bear Holiday

Thanks for your views, interesting.

What makes me think of a silver comeback in China apart from history, is the strong correlation with recent years Chinese net silver imports and the silver price.

I think silver is a gamble and gold is the end.
I am investing in silver and saving in gold.

Gunnar Stødle said...

OPS sorry, Beer Holiday, Cheers:)

Beer Holiday said...

Thanks Gunner, lets hope we'll get at least one more silver bubble.

Cheers and good night :-)

freegoldfuturist said...

"I don't recall who it was that posted the video about the guy panning silver but he talked about auctions and chairs and such."

That was one of my videos Phat Expat. Was I panning silver in my video? Anyhow, you show an important observation about online auctions - they seem to attract the dumb(lazy?) money, as those willing to do some legwork get much better deals at live auctions/estate sales. When silver was on the rise I expected the estate sales to be mobbed by stackers. Nope, just me and the scrappers, and there pickings were getting slim and the deals getting less lucrative so I stopped going. But it made me realize the people screaming "silver shortage" "silver manipulation" had no real world experience with silver atoms, they were stuck in the Internet world of buzz and eBay. In my travels I spoke with a family business that dealt in sterling since the US was on a bimetallic standard about the silver market. I relayed this story to the Internet world, where I was told that a successful multi-generational family business that deals in sterling knows less about the silver market than a youtube channel that started a few months ago. Sure...

freegoldfuturist said...

Thanks FOFOA for the long reply.

"But I'd like to point out that I first posted the below excerpts and even discussed a potential future "GSR" (that term is not really applicable in Freegold) of 20,000:1 back in 2009 when the GSR was around 70, and FOA wrote the posts more than 11 year ago."

FOFOA - yes, you posted about a stratospheric GSR when in 2009, when the GSR was "high" in terms of where it has been in the last few years. I have no doubt that the GSR can hit an all-time historic high with the forces that are in motion, a triple digit number. But that prediction is not good enough, a quadruple or better yet quintiple digit GSR will only be taken seriously! A lot of those posts remind me of the strong language, tone and fantasmatical hyperbole I came across in 2011 for the lowball GSR calls.

罗臻 said...

Re: Silver in China

I see silver sold right alongside gold for investment. It's not as popular as gold because it tarnishes and Chinese like bling. Go into any shop and you see big gold plated Buddhas and other gold statues (including air craft carriers) to show off the gold.

The Chinese don't have any special insight and they herd like all other investors. If gold is a "bubble," which I think only means it's overbought in the short-term based on technical indicators, it's due to the Chinese. If silver does well, it will likely be due to Chinese herding into silver.

Edwardo said...

Diuggo, all the coins you mentioned are well established, and, therefore, good forms in which to hold gold. Mex 50s are, indeed, impressive; they are a bit like the kruggerands of today in that they come with a low premium. I put a premium on low premiums because premiums will get you nothing when the paper gold market is kaput.

Barry Michaelmore said...

Yes duggo, please do keep us up to date with your progress

duggo said...

@ freegoldfuturist

I had the same experience when I spoke to Paul Tustain owner of BullionVault when there was all of the internet hype about the lack of Silver and how Comex was going to collapse and we would all be millionaires overnight.
Paul Tustain said they never ever had a problem getting Silver. In the French flea markets I see tons of Silver cutlery and table ware. You would think all of this would disappear if there really was a shortage. I now try to avoid all internet sites with Silver in their names as they have a vested interest in keeping the hype going.

poopylover said...

A big thanks again to everyone for their kind words. I am focusing more on my detractors but that is the nature of the beast I guess.


+9999 couldn't have said it better myself (literally, I could not have).

@Phat Expat

And that is representative of every cog in the machine. The sooner the end, the better.

If only we could all be as immaculate as you, Phat Expat! Have you ever paid US income taxes? If so, you yourself are a cog and have contributed to funding all the drone bombings, strip-searches, and other unpleasantries people (including myself) object to.

And is the private sector really any better? I used to work for a small firm where my boss actively defrauded people. He literally wrecked marriages and destroyed people's lives by ruining them financially. I actually did quit that job, storming out in a huff because of it. My duties at my present job are completely mundane in contrast. If I were to describe my typical day I'm sure it would bore you to tears. I feel much better now that I'm only a parasite! That's it!

So where in the US private sector can one truly make an honest living? It's difficult to do as a lawyer, I assure you. And surely one would have trouble doing it anywhere in the FIRE sector, where one makes a living through hawking various forms of snake oil. Seems like most jobs which could be characterized as an "honest day's work for an honest day's pay" have been shipped overseas.

And how about all those "savers" who enable all this by saving in gov. debt? They too are complicit. By saving in gold, I am not only helping myself but I am doing more to bring about positive change than I could through any amount of dropping out of the system (I would quickly be replaced) or political advocacy. If you believe in the effectiveness of political advocacy, then I'd urge you to go write-in Ron Paul in November. But I tell you it won't make a lick of difference. The people, despite their protestations to the contrary, want hot food, hot cars, hot porn, and they want it NOW. And if they can get it without the pain of work, all the better. That's the political will, and there's nothing any of us as individuals can do to change that.

And seriously, who among you has never felt compelled to do something that you know is wrong? Who has never experienced any cognitive dissonance? A quote from my favorite author comes to mind:

You will be required to do wrong no matter where you go. It is the basic condition of life, to be required to violate your own identity. At some time, every creature which lives must do so. It is the ultimate shadow, the defeat of creation; this is the curse at work, the curse that feeds on all life. Everywhere in the universe.

--Philip K. Dick

duggo said...

@ barry michaelmore

Tell me why does anyone have an anagram of Michael Barrymore and his picture as his internet persona unless of course you are the self same?

Barry Michaelmore said...

Well, these days I haven't got much better to do with my time than highlight fresh talent, like you!

Keep at it duggo, seems like you're doing awwight. ;)

Edwardo said...

All in all it's just another gold brick in the wall

duggo said...

@Barry Michaelmore
I think you might be vindicated if you could find out if Jimmy Savile was helping out in the mortuary.

Phat Expat said...

@poopylover (how many freaking handles do you have??? and why does FOFOA allow this???)
Spare me with the attempted slight sport. I'm not gonna give you too much detail about my background but I've been around. I wouldn't bitch slap you if I didn't know better.

For the changes coming, law is a dead field and the FIRE industry is dead too. And talk about fields that have phucked up more people than anything else? Bravo, well deserved.

I recall an important lesson from a mentor back in the day "Those who know how will always have a job, those who know why, will always be the boss." Teach your kids the "how" and the "why" and they will never want for anything. Of course you don't need to worry about that; shit, if you ever find your sigo, I bet there's a bible verse to help you with that too. I wonder if you've ever had an original thought in your life. Depressing, isn't it?

I have to say I absolutely hate these interviews. I prefer to have an image in my mind of how these people are, some well-reasoned and capable, than to have them open up and so thoroughly disappoint. Please FOFOA, stop this nonsense and get back to presenting the FG case.

burningfiat said...


Regarding Bullionvault and the likes I stand by my old comment here:

Funny thing is, in the meantime my old bank defaulted...
It went into receivership by the state-owned bad bank (thank god!), and I eventually got my money through the (potentially fragile?) electronic link Bullionvault->Lloyds tsb->SWIFT->My local bank (now State-owned).

Now I'm the happy owner of 100% physical gold savings that I can always access!

So my recommendation is still: Don't keep all of your gold off-site. Have some in your possession.


PS. Fun fact: You can save approx. 8.2 mill. Euros locally if you can find 10 liters of hidden empty volume in your house. @ current €-PoG.

burningfiat said...

Phat Expat,

I don't get your critisism.
Are you saying that:
* Gov-employees are not allowed to be sympathetic to the Freegold-thesis?
* Or Gov-employees are not allowed to own gold?
* Or ....?

I, like you, look forward to the day this fscked up system comes to a halt, but if you get ANYTHING from this blog you shouldn't antagonize individuals for being being guilty of invoking or maintaining this system...
The mechanics of this system so ingrained and in place, that even high ranking individuals like the FED Chairman or the President of USA is more or less helpless to do anything about it (the deficit for instance) even if they wanted to.
The system has to come to its own logical conclusion in time.


Barry Michaelmore said...

I made couple calls duggo - turns out he WAS helping himself in the mortuary!

Apparently he was a gay necrophiliac, until some rotten arsehole split on him.

poopylover said...

Well Phat Expat, I can only hope that one day my achievements will somehow equal yours (whatever they may be), and that my conduct will one day conform to your high standards (which at this juncture, I suppose would include quitting my job out of principle and moving back in w/my parents).

I also hope that one day, I will have an original thought.

For the changes coming, law is a dead field and the FIRE industry is dead too. And talk about fields that have phucked up more people than anything else? Bravo, well deserved.

I AGREE for chrissakes.

Also, I could care less about finding a "sigo". Finding one has never been too much of a challenge in the past. I choose not to do so and I am better off for it.

duggo said...

@Barry Michaelmore

That was a good comeback. You, like me, are more than you pretend to be.


Barry Michaelmore said...

You want me to expand even more?

Boner Parte said...

Vote for Sandheap!

RT @Bullionbasis: Germany: wants his gold here as opposed to there. Sounds stupid? Not at all...

RT @Bullionbasis: All national gold will be used to refinance fiat credit into new gold bonds which will form the basis of the banking system.

RT @Bullionbasis: They will be long term gold bonds which will mature into physical gold. Thusly, the gold will be returned to the people. 50 years perhaps.

RT @Bullionbasis: But deficits must still be brought into order: doesn't matter that fiat credit will be ultimately worthless in exchange.

RT @Bullionbasis: We will get back *our* gold one way or another. Mark my words...

A meaty bass at last!

Well, a thin bouillabaisse then...

OK, so it's a big fat raspberry coulis.

duggo said...

@ poopylover/jim

As a person who is long in the tooth the only advice I can give you is that we all enter this World where the "game" has been going on a long time before we were born. You have to make the best of the hand that you are dealt. Don't get hung up on other peoples ideals. They are usually false. Many small minded individuals are jealous and they show it through spite. Ignore them. You know in your heart where you want to be. At this moment in time you do what you have to do. People can be thankful that within the Government there are people the aim to rise above the cold hand of the state. Responding to fools is self defeating. Rise above them.
I shall now have another glass of rouge.

duggo said...

@ Barry Michaelmore
I have to tell you I'm strictly a member of the boy-girl team. If you wish to expand you will unfortunately get no input from me. However if you are the genuine article I have ever sympathy that the powers that be will always try to crucify someone who steps out of line. Which I presume you did.

holdinmyown said...

Hello 罗臻.:

The Chinese don't have any special insight and they herd like all other investors. If gold is a "bubble," which I think only means it's overbought in the short-term based on technical indicators, it's due to the Chinese. If silver does well, it will likely be due to Chinese herding into silver.

Thank you for this comment. I agree wholeheartedly with the first sentence. They are after all just humans trying to protect their wealth (future purchasing power) like the rest of us. As for the next two sentences I suggest you replace the word "Chinese" with "worldwide shrimp investor/savers".

victorthecleaner said...

Concerning the gold vs silver question, I found Warren James' analysis quite remarkable.


Woland said...

China largest MSG producer, exporter - fact
"River runs black, and Chinese die of Cancer". NYT (look it up)
China largest silver refiner, exporter?..........
toxicity of cyanide processes in silver refining.............
maybe there's a simpler explanation? whoodathunkit?

Totara said...

@ duggo

The best form of physical gold to hold will be dependent on where you live because of the tax laws.

For an Englishman, such as yourself, sovereigns minted after 1837 would be best as they are classified as currency and so are exempt from both VAT and capital gains tax

If you like the weight a Mexican 50 peso coin (ampmfix has this as his moniker), then you should consider buying a quintuple sovereign (or £5 Coin). Those are really quite stunning!

Indenture said...

duggo: There will be no tax on the sale of gold after transition so your form of gold is mostly irrelevant to it's future price. Buy what you are comfortable with. Taxes would dampen the flow so there will be no taxes on the sale of gold.

Indenture said...

duggo: The Gold Must Flow

poopylover said...

Thx Duggo, that's pretty much how I look at it.

Raymond said...


FOA on the goldtrail has said that after freegold payments in gold might still be taxed:

FOA (10/10/01)
"I suspect we will see some push to drop all gains taxes on gold used in official coin (Euroland) form. In place of that, there will be some form of excise tax charged on payments / trades done using these gold coins."

Also on this blog, I remember that, quite some time ago, EU directives were linked which were about allowing different ways of taxing gold.

But, I believe the main point of these comments was that, the way these taxes would be levied would not prohibit the flow.

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