Friday, October 31, 2008

A Season of Change

Hurricane season officially runs from June 1st through November 30th. I have read the analogy of the "Chrismas Tsunami of 2004" as it applies to the financial crisis. The tide has gone out and now those that did not seek shelter will soon be overtaken by the wave. This is a good analogy, but I may have a better one.

Someone asked me why I have been so quiet for the past week. It is because I have been quietly observing the writings of others, both in the mainstream and in the gloom and doom crowd. And I have noticed a divergence of opinions over the past week or two. Opinions are swirling fast, yet the markets seem surprisingly calm.

The inflation/deflation debate has picked up steam. And so has the bull/bear debate. I even heard someone on CNBC today say that the bear market clearly ended on October 10th and that we are now in the new bull market for stocks. Interesting.

What we are IN right now is the eerie calm that you experience in the eye of the storm.

Here's my analogy: We (everyone in the world) are all on an oil platform in the middle of the Gulf of Mexico. Somehow we managed to fit 6 billion people on a square mile of manmade real estate, but that's beside the point, it's called "suspension of disbelief". Anyway, we have just ridden out a major Category 3 hurricane. It washed away most of our supplies, wiped out much of our safety structure, demolished our satellite links and communications, and left us in a bewildered state of half-panic, half-relief. At the moment we can see blue sky overhead, and people are finally starting to come out of hiding.

As the people come out they are talking. And debates are forming in every corner of the platform. Some people are saying we survived the hurricane, let's call it Hurricane Hank. Other people are saying that we've only survived the first half of Hurricane Hank, and that we are right in the eye of the storm. Just over the horizon lurks the ominous eye wall as the stalled Hank gains energy and moves from a 3 to a 4 to a Category 5.

The Eyewall of a Hurricane

There are even a few in the group that think the storm is gone and have set out for land in the few small lifeboats that remain. Don't be surprised if they are never heard from again. I am here to tell you that we are currently sitting in the eye of the largest financial storm ever to come our way! Hunker down folks, because the next wave to hit is going to be unlike anything we've ever seen before. And it is coming soon. Remember, we are right, smack dab, in the climactic closing act of a season of "CHANGE".

I have a new mathematical equation for you. Here it is:

This ariticle + This post = FreeGold

"VALUE" is the term that I use to describe both real things that people want and need as well as the human effort that makes and gathers those real things. VALUE covers both goods and human effort. "FIAT MONEY", on the other hand, is only a temporary proxy for VALUE. As VALUE passes from one person to another, it must move quickly through the proxy FIAT MONEY, or else the exchange of VALUE between the people will favor one over the other. And for those that choose not to pass VALUE quickly, they sit exposed to the scam that is FIAT MONEY. And as FIAT MONEY is exposed as the scam that it is, it quickly moves into VALUE. This quick movement is called velocity, and it has the effect of raising the "price" of the destination.

"STOCKS AND BONDS" are proxies for FIAT MONEY, in the same way as FIAT MONEY is a proxy for VALUE. Actually, they are a "DERIVATIVE" of FIAT MONEY. And beyond STOCKS AND BONDS, there are "DERIVATIVES OF DERIVATIVES". This actually goes on and on much deeper than you would believe. But as each of these are exposed as scams, they strive to reach VALUE. So a DERIVATIVE OF A DERIVATIVE, must go into a DERIVATIVE, and then go into FIAT MONEY before it can finally reach VALUE. And right now we are in a stage of velocity where FIAT MONEY is the destination whose price is rising. But it is not the FINAL DESTINATION.

As Denninger's post shows, there is a revolution under way. It is a revolution against the scam of FIAT MONEY and DERIVATIVES. And Price explains how all VALUE exchanges happen in the present, not in the future. FIAT MONEY and DERIVATIVES are scams meant to trick you into giving up VALUE in the present for a promise of a return of VALUE in the future. That scam has now been exposed.

So as all the FIAT MONEY seeks VALUE the world over, it will ultimately end in FreeGold. That is my simplest explanation. To get there you must think through the amount of DERIVATIVES and FIAT MONEY that will be bidding on the limited supply of real VALUE. Remember, VALUE is real things and human effort. And your "savings" are the extra VALUE you create above and beyond what you need and want. Those "savings", the world over, will overwhelm the limited supply of gold.

And believe me when I tell you that this show is coming very soon to a theater near you!

In closing, I will leave you with a few ANOTHER (QUOTES!)...
The US$ is soon to become a " regular paper currency"! To this end, holders of US dollars and US$ assets, must make a decision that will impact all assets, worldwide! To this end, assets will move to "physical gold " and cash dollars" first, driving up the dollar against all currencies. Then the dollar will be sold as it is deployed into real things.

Everyone understands the implications of this. Or do they? In reality, when the US government needs money, it doesn't sell debt! It "TRANSFERS" the obligation of it's citizens to pay future real production ( taxes ) as a "backing" for it's newly printed currency! As this process has been going on for decades, it has built up a debt of "real production payments" that it's citizens can never pay. Further, as the world reserve, this currency is held thru proxy "by every single person on this planet" that uses paper to trade anything!

From the day of our birth we are taught to value all things using the one factor alone, currency! Can one contemplate the value of all possessions in other terms? Do you not have to think first as to "how many dollars is that worth" then "how many dollars is this worth" to compare two items? If it is deep within our mind, that we can know value only in terms of paper, to this I ask, can one know value at all!

Some say, "gold fall because noone was buying it". I say, "gold fall because many were buying it"! They buy as the "trading market" was made "much fat" with added paper! Understand this: The US$ price of gold could only fall if a market existed for paper gold priced lower each time of offer! If the price did not fall, this paper market "could not function" as "it would not be profitable to the writer"! It was, for many years, in the good interest of all, for the dollar to find a gold price close to production cost. That time has now much passed!

Think about that last one. Paper gold markets like COMEX are ONLY profitable to the sellers when the price is falling!

And finally...
This change in "World reserve currency" will be "the unfolding event of our time"! As in conflict, the deployment of forces/assets is never a final decision! But, for persons of simple thought, such as I, we do well to "follow in the footsteps of giants"! Today, this trail does show deep prints from the weight of GOLD! For myself and my country, I stand with the proof from the past, I stand with gold! I thank you for your effort, "for all your days, walk tall with wealth"!



Anonymous said...

dear sir, can you please contact me once at

didn't find your email on this site


Anonymous said...

In addition to the second half of the hurricane, there's a tsunami speeding toward your Gulf of Mexico! Just to make your analogy a bit more exciting!


FOFOA said...

Dave, I thought you would appreciate the Hugo Salinas Price link about existing in the eternal present, since Time does not exist!

mr pinnion said...

The 'this post' link doesnt work :(


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