Wednesday, May 19, 2010


h/t Capt Goodvibes


Unknown said...

Yes, I love gold...

Martijn said...


Germany has had it with naked shorting of Gold, and specifically noted bank manipulation of gold prices via naked shorts beyond intent or ability to deliver.

Per Denninger

@mortymer001 said...

Chinese people do not in general read English mainstreem newspapers or know who is G.Soros :o)

Martijn said...

Somewhere else I said it would be next friday, but it's next tuesday instead.

Anyway, gold needs to be lowered by quite a lot if we are to trust Harvey Organ.

I guess he is probably right on this call, we might just see lower gold at the start of next week.

@mortymer001 said...

Same conclusions here :o)
Today I was thinking about the journey of roughly 2 years I am following events from gold perspectivity and how it affected my actions. Following was the one of how much of the exposed info what has leaked has reached those whose actions are needed is out there. Observations are that Gravity can not be stopped. Over weekend I looked at huge storms passing by standing on the shore of big lake. If one understands the dynamics in play then it is mind blowing. I was happy to get some nice fish and not get wet. :o)

Martijn said...

Chinese people buying gold is an excellent way to silenty transmit wealth (and power) to the east.

No wars will have to be fought, Americans will simply wake up poorer someday in the future.

As a sidenote gold is likely to increase wealth diversity in the US, as I don't think many of the poor are buying now, while some of the rich are.

Mark_BC said...

George Soros says we will see a gold bubble? How can this be? As FOFOA has explained, gold can't ever be in a bubble. Its value can go up and down but it can't be overvalued because gold's value is simply what people are willing to pay for it, and when everyone loses faith in paper money then they will be willing to pay a lot for it. I see this current dip as a great buying opportunity.

ebikeguru said...

"I see this current dip as a great buying opportunity."

$1200 a dip now eh! Marvellous!!

GoldSubject said...

Now that is some serious eye candy! :-)

They don't mess around in China. They know what's going on.

I agree with Martijn: the Chinese will indeed reap the rewards of this gold in future -- in a very big way. Meanwhile, folks "in the know" in the West can barely convince a single friend to buy some gold. C'est la vie!

MetalStack said...

The company I work for has 2 offices in China, and I manage a girl in Beijing. We had an interesting conversation last week about all of her friends who are investing in gold. She said that she knows many people who are buying and they all make around $7-10k USD per year.

And Y said...

I wonder what the "ultimate" in Soros' comment really means. What is the "ultimate" bubble?

costata said...


"I see this current dip as a great buying opportunity."

I wish I had the insights I have now (in part thanks to this great blog) when we first started buying gold.

When I bought at around $650 I missed the dip that followed, same again at $800 and then $950. Markets punish the novice, but gold has been kind to this simpleton.

stibot said...

Soros & Bubble: he expects money flow into gold like FOFOA. That is why Soros buys gold now and he calls it a bubble.

seeweed said...

I'll trust the judgment of any country that would have Timmy, Hank and the boys doing a rope dance...

Unknown said...

It's game over for euro...

costata said...


FWIW I think the analysis you have linked to (by Christopher Laird) is one of the shallowest, silliest pieces of work I have read this year.

I have often found value in reading Laird's work but this is rubbish.

What do you think FOFOA?

FOFOA said...

Hello Costata,

I stopped reading him when he started incorporating UFO's and 2012 into his analysis last December.


Unknown said...

@Costata and Fofoa:

Really? UFO's? I missed this brilliant article... :-S

Thank you to notify me. I will not read anymore of his texts.



ebikeguru said...

"Meanwhile, folks "in the know" in the West can barely convince a single friend to buy some gold. C'est la vie!"

SERIOUSLY!!! I had 2 refuse to even listen just last night!!! 1 as he is UBS, and the other because AU is "as high as its ever been and must go down now"...

The UBS guy actually said "yeah but it doesn't pay interest" haha I just love hearing that when I am up easily over 30% this year :)

I also said to him last night that I think that NOW is the moment to buy the Euro, as it will be the best interim currency survivor,(up to 1.2518/USD this morning!!!) once everone realises California et al. have no gold and that the reason the US markets are tanking is not because of Europes problems, but BECAUSE OF AMERICA's PROBLEMS...and as long as Angela and her buddies doesn't /*** it up of course.....

But anyway, he looks really short term for his clients so will be staying in the USD till August he reckons...(best of a bad bunch etc etc).

He also reckoned the byebye/crumble moment for the USD will most likely be the November elections...unless it becomes obvious before that that Bazza is going to lose congress...

:) Excellent. 4 more monthly pay checks to buy gold with :)

KnallGold said...

At least the stated goal of a higher $ has been accomplished quite well, don't you think so?

And the sharks, well, as we need them still (to eat the $), only denying them entry into Europe, isn't that a "good placement" of a blood smell elsewhere? But the euro can still be shorted (see above for that)...

If the parasite got bigger than the host, it can only eat itself, no? What we need here now is only a bit a bad press about something in the USA...

And on the ban of naked shorting, I had the thought hey, wouldn't that be a sneaky way/step towards FreeGold???

Mark_BC said...

I am wondering if someone can comment on this article which compares the total amount of money in the world to the amount of gold and comes to the conclusion that gold is now overvalued. Something seems fishy to me about it though and I wonder if someone can pick it apart more. It seems too simplistic.

Based on the graphs provided, in 1970 when Bretton Woods ended there was about 80,000 tonnes of gold in existence, and roughly $200 billion in the global money supply. This gives $2,500,000 per tonne in 1970 dollars.

Comparing this with 2008 of approximately 160,000 tonnes and 5 trillion dollars, this gives $31,250,000 per ounce in 2008 dollars which, when you account for inflation, would compare with $14,000,000 if you brought the 1970 value forward.

This would suggest to me that if you do a simple comparison of how much capital gold was worth then versus now, per ounce it should be worth twice as much now (31 vs. 14). What does the actual price reflect? In 1970 it was $35 an ounce, and brought forward this is $200. Considering that an ounce should be twice as valuable today, then the price of gold should be $400 an ounce. We are now at $1200. This would suggest that it is overpriced.

However, somehow I think their analysis of the money supply is lacking. I don't think they considered the impact of the huge derivative market in distorting the money supply picture, basically, that most of the money around now is phony. Apparently the "value" of all the derivatives floating around is 10X the entire global GDP. This would tend to throw the above analysis out of whack a bit. Can anyone help clarify this for me? Thanks.

FOFOA said...

Hello Mark_BC,

Paul van Eeden makes a similar argument in Gold is over $1000 an ounce - Now what?

You can read my response to Paul's article in Fair Value Gold?

And then please read Gold: The Ultimate Wealth Reserve


costata said...


Taking cues on the price of gold from the COT report could lead to some grief. From Ed Steer of Casey Research (link below):

"You will carefully note, dear reader, that every day in this engineered sell-off in both gold and silver, a new low is set... and more brain-dead tech funds are forced to puke up their longs... and the bullion banks either take the tech fund longs and keep them for themselves [no change in open interest] or they take that long and close out one of the short positions they hold [open interest falls by one]. Only traders in the Commercial category [read bullion banks] are allowed this outrageous privilege... as traders in the Non-Commercial and Nonreportable category of the COT aren't allowed to do that." (My emphasis)

FOFOA said...

Hello Costata,

Just remember those are paper longs the tech funds are puking up, not physical. Those of us that went to the trouble of getting our hands on some physical are holding it tight. Every day the price of gold on the COMEX drops is one day closer to separation between paper and physical. Every up-day on the COMEX is a day more of delay until the inevitable.

Don't forget the FOA passage you, yourself posted:

"This stampede out of "paper physical" by the "big boys" will first discount that medium [COMEX] as all the selling comes to play. Then the real buying of physical will ensue. It seems every Gold bug sees only half the trade and has great faith that contract law will favor a short squeeze. Yet, none of them see where it's the long that will be dumping and forcing the discount!

"Whether the paper market was about to default and burn then (as we thought it could have) or next year, the point of all this is that its destruction is politically written in stone!

"Still, not one Western Gold bug in a thousand fully grasps the impact of this.

"Most of them frantically search for a ray of light that shows how our "price discovery" paper market will advance in value.

"So how will these big derivative players [the bullion banks] make out on their paper gold shorts?

"I think they will make a fortune because they understood Another better than the Western Gold bugs!"

Every paper long tech fund they burn is part of the run away from paper gold. Embrace it! They needed those tech fund longs because now they will have to start trading the paper market on no volume, amongst themselves, just like the NYSE, until one of them blinks because it is no longer a convincing price discovery market for physical and then COMEX goes to zero.

Look for low open interest [in paper gold].

Yes, "Taking cues on the price of gold from the COT report could lead to some grief..." for the $IMFS.

The end is near.


Mike said...

volume has to completely collapse before that happens, 160k+ comex trades everyday is far from a paper collapse.

i still think this is years left in the making, a lot longer then some might be waiting to hold on for. i wish i'm wrong though.

most will get rid of the small amount of gold they have because of this wait, but it will be their loss in the end, patience will be the hard fought victory.

some might even sell their gold into the paper collapse while the MSM says the gold bull is over when the real price discovery is just around the corner.

FOFOA said...

Hello Mike,

Patience is the last 12 years. This collapse is multi-dimensional and it is happening now. It is not just about one thing, like paper gold volume. There are many fronts collapsing all at once right now. They are all fractal, meaning they will happen on different scales leading up to the big event. When COMEX dries up it will not be gradual. It's called the Waterfall Effect.

"A fractal can be split into parts, each of which is a reduced-size copy of the whole, a property called self-similarity."
- Wikipedia

"When a major pattern as critical as this WATERFALL EVENT is concerned, it begins to show up in short term levels of activity before the big one happens... The fact that we have seen a WATERFALL EVENT intraday warns that this pattern is going to manifest itself in higher levels of economic activity."
- Martin Armstrong

"In "How ALL Systems Can Collapse Overnight", Martin Armstrong uses the concept of entropy. Entropy is the amount of chaos, disorder or unknowable elements in any system..."
- The Waterfall Effect

As my friend Belgian (yes, the same Belgian from the archives) wrote to me in an email yesterday, "Time for 100% pregnancy has definitely come ! :)))"

And as hedgie Michael Krieger (the same one quoted in Hair of the Dog) also wrote yesterday, "I wasn’t going to write this week so this will be extremely brief. The entire charade that has been propagated on humanity is coming completely unglued and there is absolutely no stopping it..."

More here, here and here.


stibot said...

"Every day the price of gold on the COMEX drops is one day closer to separation between paper and physical."

If this is the case, why PHYS has fallen 4 % against GLD during last week?

Mike said...

PHYS is still a paper derivative of Gold

Jeff said...


Armstrong is basically a believer in cycles and waves. I am surprised that you agree with him, while you dismiss E wavers, etc. I have viewed your analysis as basically fundamental, and agree with it on that basis. What am I missing?

I have never found waves/cycles credible. I just don't believe the past can predict the future.

FOFOA said...

Hello Jeff,

I also find Chaos theory attractive. I think both Chaos theory and cycles are tools to help us explain things that seem to defy simple cause and effect. It is not that the world is perfectly deterministic down to the minute detail, but the future is the sum of the past.

That is, the future on any given scale is the sum of the past on that same scale. So I think that fractals and cycles can help us to identify emerging patterns of behavior that sometimes lead to high impact, low frequency events.

Time moves forward like a massive train. Some politicians believe they can turn that train on dime, at a whim, but they can't. The track is already laid. To this extent the future is deterministic. We are headed to Freegold. Sometimes there are choices of a couple different tracks, but you can't just turn a train in any direction you want and head off the track.

So if you can identify the emergent pattern and the final destination, you don't really need the details of the path to get there. But the timing is still tricky. I think that cycles can offer a few clues as to the timing of large, inevitable events.

As for EW, I think Armstrong's view of cycles is far more nuanced. But I am not a technical analyst at all. In fact, I don't have a very high opinion of TA, period.


capt goodvibes said...

EW, a la Prechter, may be more useful if gold replaced $US as the base, IMO.

Martijn said...

"History is the present unrolled for understanding, the present is history rolled up for action."

Jeff said...

A billionaire goes all in gold:

I have mixed emotions because this seems like big speculative money. Thoughts?

Unknown said...

How to Profit From the Coming Aussie Property Crash and Banking Crisis

@mortymer001 said...

SatyaPranava said...

costata, i know you and one other person are from Oz. but i'm curious to know if you have some good sites specifically about the economy there. i have friends in queensland and NSW, and Victoria who ask me all the time what's going on there and i'm just not knowledgeable about it so specifically.

do you or anyone else have any suggestions for them?



Unknown said...

Satya - There aren't many I am aware of, however I do follow these two Australian-centric blogs:
A Contrarian Investor's Journal with a focus on Australia
by Dr Steve Keen largely focusing on the Australian property bubble

Anonymous said...

pw Top 100 Private Server Online

costata said...

Hi Satya,

I second Luke Garratt on Steve Keen's blog. It is mainly focused on the housing bubble in Australia but the deeper agenda is to refute Neo-Classical Economic theories, warn of the dangers of excessive debt and malinvestment etc. Be warned though Steve does not seem to see any role for gold in resolving systemic problems.

There is an online business publication called Business Spectator that produces some good articles. If you register, it's free, they send out e-mail summaries of their latest articles.

Bron Suchecki, an Exec at the Perth Mint, has a good private blog that is gold focused.

Other than that it is very hard to find Australia specific material.

If FOFOA and the other commenters don't mind I am happy to post links for you on anything that I find particularly informative about the situation in Australia.

If it starts to interfere with the flow of the discussion here please send FOFOA an email address and I will contact you direct on the condition that it remains a private communication.


capt goodvibes said...

Steve Netwriter has a very information rich blog, based in NZ, which covers Australian economic topics very closely.

He posts a lot of links and articles before I see them anywhere else.

SatyaPranava said...

thanks luke, costata, and good vibes

(oh and kudos to games entertainment and hobby for his attempt at...SPAM :) ).

costata, i would like to know more specifically about Oz's situation as i'm considering med school there. thanks. if you (or fofoa) think the info is too much here, let me know and i will definitely send through fofoa.

thanks again,


dojufitz said...

Re: Australian average Melbourne home prices versus Gold.

I did some basic research on this from 1970 - 2008.

Average price of homes in terms of Gold over this period was 310 ounces.

It came way down in the late 70s during the last Gold bull market to end in 1980 at 63 ounces of Gold.

What will it end with during this Gold bull market?

30oz? 15oz? 5oz? 1oz?

1\2oz?? lol!

costata said...


That's a very interesting number. Thanks.



Unknown said...

Interview with Nick Leeson on Gordon Brown, GATA and Gold

costata said...


IMO a brilliant analysis of GLD by Reg Howe with some snippets that may be news to some readers.


"Speaking at the October 2006 dinner of the Committee for Monetary Research and Education (audio available at, Pierre Lassonde, former president of Newmont Mining and past chairman of the World Gold Council, made a couple of interesting disclosures about GLD's gold.

First, most of it was then stored in HSBC's London vault, but HSBC was in the process of constructing a new vault just outside London expressly to accommodate GLD's expected growth. Second, he had actually visited the vault and seen the gold."

Desperado said...

In this daily bell piece Europe Braces for Chaos they talk about how the elites have pushed the seizure of national sovereignty:

..."This too-clever body of Euro-crats welcomed Greece, Portugal, Spain and Italy (and numerous other countries) knowing full well that it was creating a great regional divide that could only be fixed, eventually, by desperate and risky actions to create a political union that currently does not exist.

What right did this tiny elite group have to play with hundreds of millions of lives in order to realize their misguided and impractical goal of melding Europe together into one regional lump – apparently to serve as a stepping-stone for world government? Those who did the deed were quite aware of the unworkability of the EU. And they were quite prepared, nonetheless, to risk all for ... what? For personal aggrandizement and to generate the increased wealth and control that sociopolitical and physical consolidation can yield. And yet what need is there for EU-style regionalism with all its fascistic faux-cheer that masks a vision of the future, as George Orwell wrote, "of a boot stamping on a human face – forever."

This Booker column from the telegraph echoes exactly the same sentiments: The euro crisis is a judgment on the great lie of 'Europe'

..."What we are witnessing here is a judgment on the entire deceitful and self-deceiving way in which the "European project" has been assembled over the past 53 years. One of the most important things to understand about that project is that it has only ever had one real agenda. Everything it has done has been directed to one ultimate goal, full political and economic integration. The headline labels put on the various stages of that process may have changed over the years, such as building first a "common market", then a "single market", finally a "constitution". But by far the most important project of all was locking the member states into a single currency.

This was always above all a political not an economic project, to be driven through at any cost, which was why all those "Maastricht criteria" laid down to bring it about were repeatedly breached. But as expert voices were warning as long ago as the 1970s, when it was first put on the agenda, there was no way economic and monetary union could work unless it was run by a single all-powerful economic government, with the power to raise taxes."

@FOFOA, as a conservative Swiss I hope the Euro dies a quick and painless death, irregardless of whether it has stronger underpinnings than the dollar.

@mortymer001 said...

FOFOA, what are your thought about post-freegold time?

SatyaPranava said...


I wrote a paper some 13 odd years ago in a seminar on nationalism discussing just this this scenario (inevitability of political union). For those students of history (and other disciplines) politics and economics have always been inextricably intertwined. Anyone with any background in policy knows this. My argument (though i'm sure banal by any stretch) was that political union must follow economic union, as it always has in history.

And for those who want to read about that inevitability, and its purposive construction, the words of the President of Columbia University can help, here are his comments in the New York Times....


SatyaPranava said...

also @ desperado,

after now reading that article, I am tempted to pull a page out of the handbook given to me by FOFOA (and my physics professors over the years). There's little doubt in my mind that massive centralization and TBTF institutions are doomed for the very failure their rhetoric attempts to deny. But yet mother nature cannot create a forest where someone expends great energy in creating a garden until that negentropic force has been removed.

I also believe that any EU is doomed to fail. The problem is that it may not happen in our lifetimes. Those who are building the EU garden have placed a lot of historic energy into the project and will likely continue to do so until mother nature (cultural, geologic, climatic, economic, social, etc) overwhelms the negentropy and reasserts her tendency toward entropy again. Such is the way the universe works (at least as I understand it). but these processes take place on a scale which is much longer than human lifetimes.


Desperado said...

@Satya: I am not a NYT subscriber, nor will I ever be. But what is happening now with the ECB also closely parallels the formation of the Fed in 1913 and the establishment of US income tax. There is now hope that the the EU can be stopped before it is too late, but as you say the elite have a lot at stake. So I guess we can hope for a summer of discontent all over europe while praying that the left doesn't find a megalomaniac to seize power.

In related news, we have this revelation:

"Data just released show that the SNB increased its holdings of foreign currency by an extraordinary CHF28.5 billion in April – almost CHF1 billion a day. This means that, in the first four months of this year, Herr Hildebrand had gobbled up CHF58.9 billion of a money nobody else much wanted to own – on top of which we have to add what is likely to be a sizeable sum of flight capital ‘absorbed’ in the first turbulent weeks of May (€9.5 billion on Wednesday morning alone, according to market rumour).

Making a simple estimate that the overall intervention this month has at least matched that undertaken in April (a decidedly conservative guess), the Bank will have amassed around CHF80 billion so far this year, a total of which the mighty PBoC would not be ashamed and one, even more remarkably, equivalent to around 45% of the Confederation’s entire private national income for the period.

Not only has the SNB therefore seriously diluted its existing citizen-shareholders’ equity stake in their own country (think about it), it has gone some good way into turning the Swissy into the Hong Kong Dollar of Europe, since fast approaching 70% of the asset side of its balance sheet is currently being held in the form of forex (160% of the monetary base, 38% of M1), putting the once-proud Swissy well on track to degenerating to mere currency board status.

With Hildebrand maintaining the stance in the Swiss press that reserves were, if anything, too low, before his shopping spree – and with the ECB’s ability to create extra Euros being both essentially limitless and in inverse proportion to its Northern members’ desire to hold them – the Swiss are in danger of selling out their remaining economic and monetary independence in the name of a mercantilist desire to buffer their admittedly important exporters from the malfeasance of their neighbours’ governments."

All these Euro purchases in April, and we aren't even talking about the even bigger interventions in May! Why, oh why couldn't Hildebrand have bought gold instead of Euro's for these interventions??? It pains me to say it, but it really looks to me like the Franc will get sucked down the toilet with the Dollar and the Euro.

SatyaPranava said...


nor am I a NYT subscriber, nor will I ever be, nor does one need to be.

You may want to go read that article. I think you might be highly interested in it.

SatyaPranava said...

also, desperado, I think that article will provide some excellent proof for you relating to your allegation about the timing and structure of both the FED and the ECB (though not executed on the same time scale, obviously).

Desperado said...

@Satya, when I click, the article is for "subscribers only". I can't be bothered to put in a fake email address to get the "free subscription", and I don't want to add to their "eyeballs" in any case. I didn't mean to demean or insult you, I just despise the NYT, one of the principal propaganda organs of the elites...

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


you neither demeaned nor insulted me in the least, it was just my rhetorical way of saying I hear what you're saying, agree with you, and trust me that you'll want to read that article.
i have the PDF if you want to temporarily place an email address in here (i hate to make fofoa the go-between, though that is a possibility).

but it's strange it's not letting you access the article, as i'm not a subscriber and it let's me go straight to the article.

Either way, here is the gist of the article:

"DR. BUTLER PROPHESIES "THE UNITED STATES OF EUROPE"; Certain to Come, Says the Head of Columbia University ;- Thinks the Federation Will Be Modeled After and Instructed by the United States of America.

By. Edward Marshall.

October 18, 1914, Sunday

4257 words

"THE United States of Europe. Dr. Nicholas Murray Butler, President of Columbia University, firmly believes that the organization of such a federation will be the outcome, soon or late, of a situation built up through years European failure to adjust government to the growth of civilization."

and there's no doubt that the NYT has been a propaganda piece for the elites for a long time now...but sometimes it's still amazing what they put in their paper, as is the case with the above interview with dr. butler in 1914.


S said...

It pains me to say it, but it really looks to me like the Franc will get sucked down the toilet with the Dollar and the Euro.

Perhaps that is on purpose...

No chance a polictical union in europe happens IMHO. Simply look at what Germany is doing re traidng limits etc. The philosphical underpinnings of the North are so totally inconsistent with the South is it unbridgable. Why would a German subjigate itself to the likes of Cyprus. The entire point of the euro was to make it a non policitcal currency iof my reading of FOFOA is correct. Politicizing the currency does nothing for the bloc. Freegold is the bridge not political union, no? Perhaps the FG bridge leads to closer cooperation, but the IRish votew and the internal issues in Flanders are merely two examples of why the Euro experiment is doomed. I would also be very wary of suggesting amodel after the likes of the US is optimal. Imagine for a moment a 30yr hence retrospective that conculdes the US rebublican/capitalist model is as suboptimal as fuedalism.

SatyaPranava said...


we agree that such philosophical and cultural foundation is not shared. i think we just slightly differ on the notion of politicization. in my understandings all currencies are political, especially insofar that a clearing mechanism is needed and regulations about those mechanisms are (historically) to be created.

Freegold can be a bridge, the question is will it (for many on here believe the answer is an unequivocal yes). I'm still not so sure, but there are aspects that I love about it. I actually hope FG does happen, and that war and further centralization do not. However, history (while only being a perspective of looking backward) does not suggest that is the norm. History suggests further consolidation of power until there is an overshoot of ecological (or economic-, political-ecology) capacity. This being unless there is some type of event which would derail such a trend, consistent with punctuated-equillibrium theory.

Also, i'm not suggesting a model of europe based on the US now would be in any way constructive, although there seem to be parallels, esp. these past few weeks. But that article was written in 1914, on the eve of the first Great War, and shortly after the Fed and income tax were created in 1913 (also mentioned above).

Before those events, however, the US was an excellent model on which to base other potential societies and economies. also, these plans no doubt went on for years beforehand (i've seen evidence in the past that such a union was talked about openly going back to the 1820s), and arguments have been made they go back further. So these were essentially before the US became global hegemon, but still after the politcal and economic (and sociocultural) fabric was beginning to change.

S said...


Origins of the League

A commemorative card depicting President of the United States Woodrow Wilson and the "Origin of the League of Nations"The concept of a peaceful community of nations had been outlined as far back as 1795, when Immanuel Kant’s Perpetual Peace: A Philosophical Sketch[5] outlined the idea of a league of nations that would control conflict and promote peace between states.[6] There, Kant argues for establishment of a peaceful world community not in a sense that there be a global government but in the hope that each state would declare itself as a free state that respects its citizens and welcomes foreign visitors as fellow rational beings. It is in this rationalization that a union of free states would promote peaceful society worldwide, therefore there can be a perpetual peace bound by the international community.[7]

I don't contests that the idea is an old one. However, the analysis is entirely myopic - lest we be shocked coming out of CU (Princton in the form of WW followed) - if you believe that the American Century has crested and a new one is upon us as many luminaries profess such as Brez, Kiss etc...

I think I have my history correct in asserting that there were many back in the 1700-1800 who clamored for trade unions, even spawned a political ideology that underpinned the east west paradigm. That trade union movement perhaps marks the acceleration of hard and soft colonial expropriation (materials first then labor) as a regulatory/legal arbitrage. Many who continued to espouse the old paradigm ended up bankrupt (the companies) and labor unemployed all becasue of the inability to see that the paradigm had been undermined fatally.

There are many people out there who would take said "strategist/theorist" to task for failing to see that the integration apradigm is exactly wrong. Instead there is a disaggregation theme powered by information velocity.

oldinvestor said...

Before the United States became truly united, with the principle firmly established that the states were subservient to the central government, we had to fight a great and extremely bloody civil war.

I do not think anyone has the heart for that these days, and I see the main thrust of culture as moving toward more local national and cultural groups wanting more local authority, not less.

FOFOA said...

You guys might find this interesting. Especially Desperado...

SPIEGEL: In the past, the bankers at the Bundesbank, Germany's central bank, were vehemently opposed to any political interference -- for example, when the government wanted to take control of gold stocks. At the moment even larger taboos are being broken -- yet there has been little outcry. Why is that?

Pöhl: The president of the Bundesbank, Axel Weber, is in a bind. He has been issuing warnings about these kinds of developments for some time and he continues to do so. But of course it is difficult to keep this up in the face of a political majority.

- From Former Central Bank Head Karl Otto Pöhl

Speech by Mr Ernst Welteke, Outgoing President of the Deutsche Bundesbank, 3 February 2004...

"The gold reserves have been accumulated from external economic activities over a prolonged period. Hence, it is appropriate to manage this asset in a manner which safeguards its underlying value. Future generations should also be able to derive benefit from this asset. I will soon be taking up talks with the Federal Government and the parliamentary parties on the specifics of how to manage this asset."

Speech by Professor Axel A Weber, President of the Deutsche Bundesbank, at his inauguration as Bundesbank President, Frankfurt am Main, 12 May 2004...

"Ladies and gentlemen

"That part of the Bundesbank’s reserve assets that is held in gold has frequently been the object of [political] desire. And so in the present difficult budgetary situation there is no lack of suggestions on how this asset could be used.

"The Bundesbank decides on gold sales in accordance with the gold agreement it concluded with the other G-10 central banks. [CBGA/WAG] The use to which the valuation gains realised from possible gold sales is put is decided by Parliament within the framework of the statutory regulations governing the use of the Bundesbank’s profit. It is only the realised valuation gain that can be distributed. The precise amount depends on the gold price and the dollar exchange rate at the time of the sales; if the sales option now included in the new gold agreement of the G-10 central banks were to be exercised in full, a sum of no more than several billion euro would accrue within five years given the present market situation. By way of comparison, we might consider that the federal budget for 2004 amounts to €257.3 billion, €29.3 billion of which is financed by means of net new loans.

"Consequently, sound fiscal planning disregards any sizeable financing potential from the gold reserves or any significant relief for the federal budget. Mr Eichel, I am pleased that you yourself made this fact clear at our first joint press conference in Berlin two weeks ago."

Now the Swiss -->

Speech given by Mr Hans Meyer, Chairman of the Governing Board of the Swiss National Bank, at the Swiss-American Chamber of Commerce, in New York on 1 October 1999...

"Reform of the monetary constitution...


FOFOA said...


"Reform of the monetary constitution

"A monetary constitution comprises all regulations concerning the currency on a constitutional and statutory level. Our present monetary constitution still dates largely from the time of the establishment of the Swiss National Bank almost a hundred years ago. We are currently in the process of adapting it to modern requirements. These endeavours bear a direct relation to the reform of our fundamental law, the Federal Constitution, which was recently brought to an end.

"A central issue of these reform efforts, to which I shall restrict myself in the following remarks, concerns the severance of the Swiss franc’s link to gold. In actual practice, this link has been outdated for decades. It is, moreover, in direct contradiction to our commitments as a member of the International Monetary Fund. With the severance of the gold link, we will be free to act according to our own discretion with respect to the evaluation and utilisation of our gold holdings. The question therefore arises how to use this freedom of action.

"In attempting to answer this question, one must bear in mind that monetary reserves are of course indispensable for a central bank in fulfilling its tasks. This is particularly true in the case of a small, open economy with a significant financial sector. Currency reserves consist primarily of freely disposable foreign exchange reserves and of gold holdings.

"In retrospect, we have to remember that our freely disposable foreign exchange reserves have undergone a substantial increase, particularly after the transition to freely floating exchange rates a quarter of a century ago. At the beginning of the nineties, we therefore decided to limit future expansion to the extent of nominal economic growth. By international standards, we thus have a comfortable level of reserves.

"As regards gold holdings, it must be decided what proportion will still be required for monetary policy purposes in future or, conversely, what proportion should become available for other public uses. This is basically a question of how an important part of our national wealth is to be usefully employed. Both fundamental considerations and a comparison with other countries may be helpful. However, in the final analysis there is a discretionary decision to take. We have come to the conclusion that it would be appropriate to maintain around half of today’s gold holdings of approximately 2,600 tons as currency reserves.

"In principle, we are in favour of removing the other half of this gold from our balance sheet. However, we are willing to accept that, in a broader perspective, it may not be appropriate to outsource. In such a case, the gold holdings would have to be managed according to special criteria by external specialists under the responsibility of the National Bank.

"We have of course always been fully aware that any discussion of these problems is a sensitive issue. In consideration of the necessary legal adjustments on a constitutional and statutory level, we had no other choice but to lay bare the situation in detail.

"I should like to underline once more that we do not underestimate the significance of abundant currency reserves. The sky, however, cannot be the limit. It will be in our own interest to exercise the necessary diligence when converting part of our gold holdings into interest-bearing assets. This includes close contacts with institutions with which we entertain friendly relations."

Compare Swiss gold then to now. It is more than half gone, just like England. 2,600 m.t. in 1999, 1,516 m.t. in Oct. 2004, 1040 m.t. today. Yet somehow even Greece not only managed to resist the hungry collective's desire for its gold, but actually increased its gold holdings over the last six years? Greece: July 14, 2004 107.5 m.t., today 112.4 m.t.

So the Swiss acted like England, and Greece like Germany? Is this part of the ECB difference?

FOFOA said...

Speech by Alan Greenspan, at the World Bank’s conference on Recent Trends in Reserves Management, Washington, D.C., on 29 April 1999...

"Arguably, immediately following the dollars float in 1973, U.S. Authorities did not intervene and left it to others to adjust their currencies to ours. We did not sense a need to hold what we perceived to be weaker currencies in reserve because presumably we could always purchase them in the market, when, and if, the need arose. We held significant reserves in only that medium we judged a “harder” currency that is gold.

"It has become a general principle that monetary authorities reserve only those currencies they believe are as strong or stronger than their own. Thus, central banks reserve balances except in special circumstance hold no weak currencies of which I am aware, other than standard transaction balances that are not viewed as stores of values.

"We in the United States built up modest reserve balances of DM and yen only when we perceived that the foreign exchange value of the dollar was no longer something to which we could be indifferent, as when, in the late 1970s, our international trade went into chronic deficit, inflation accelerated, and international confidence in the dollar ebbed.

"The choice of building reserves in a demonstrably harder currency is almost by definition not without costs in real resources. The budget cost of paying higher interest rates for the domestic borrowings employed to purchase lower yielding U.S. dollar assets, for example, is a transfer of real resources to the previous holders of the dollars. The real cost of capital because of risk is higher in a weaker currency country. Countries with weaker currencies apparently hold hard currency reserves because they perceive that the insurance value of those reserves at least equal they're cost in real resources. Reserves, like every other economic asset, have value but involve cost. Thus, the choice to build reserves, and in what quantities, is always a difficult cost-benefit tradeoff.

"In general, the willingness to hold foreign exchange reserves ought to depend largely on the perceived benefits of intervention [manipulation] in the foreign exchange markets. An evaluation along these lines would appear to require a successful model of exchange rate determination, and a clear understanding of the influence of sterilised intervention. Both of the above have proved to be a challenge for the economics profession.

"The two main policy tools available to monetary authorities to counter undesirable exchange rate movements are sterilised intervention operations in foreign exchange markets and monetary policy operations in domestic money markets."

raptor said...

from wikipedia :
The size of the world stock market was estimated at about $36.6 trillion US at the beginning of October 2008.
As of 2009, the size of the worldwide bond market (total debt outstanding) is an estimated $82.2 trillion [1], of which the size of the outstanding U.S. bond market debt was $31.2 trillion according to BIS (or alternatively $34.3 trillion according to SIFMA).

Total gold ever mined ~ 5T$ :

so if only 5% of the money from stock/bond market move to gold... price double.. but no sane bank or person will part with 100% of its gold to give it to the these 5T$-wannabe-owners .... what those 5T will fight for is the yearly production of ~2500 tonnes (~60B! today prices)... let say out of my hat 16 times bigger 500 B with the paper gold...

5T/500B = 10 times bigger

1200 * 10 = 12 000 per oz

happy waiting...:)

raptor said...

wow interesting point, havent thought about that, but is true the last time 1980 only 10% of world population was into gld...

Listen from the middle..

costata said...


IMHO you should also factor in the Dollar Bloc countries who sold off most of their gold reserves (presumably at the behest of the USA).

This list includes major gold producers such as Canada and Australia. If A/FOA's prediction proves to be correct then Govt will grab a big chunk of this mine supply in the process of rebuilding their reserves.

Therefore 2500 m/t might be way too optimistic for annual supply that can actually come to market.

Under this scenario buyers of gold will need to look to existing aboveground supply. I suggest it will be the Giants and the Central Banks with large gold reserves, such as the Euro system banks, that people will be obliged to deal with.

Alternatively if you are feeling generous people may be able to obtain a lower price from the raptor.

costata said...


Check this out. EU bailout or US bailout of the US and EU Banks?

"The Greek Bailout's Two Secret Exit Clauses: Why Europe Is Now Cheering For Its Own Demise"

FWIW I think Tyler Durden's analysis of this is right on the money.

I wonder if the play by the BIS/ECB is to force the politicians in the EU member States to reign in their banksters?

eg. Chancellor Merkel has fired the first shot over naked shorts. With an EU wide set of policies to follow.

Are debt writedowns coming?

Desperado said...

@FOFOA, the breadth of your research into this gold conundrum amazes me and inspires me...

If I understand the point you are making, it is that the SNB and the Federal Government were reckless in their rush to sell off their gold, and that the ECB were wiser, and that Greece was wiser still.

As I recall, there were 2 national referendums on this SNB gold. The first was whether to sell it, and the second was where to spend the proceeds. I cannot remember how I voted on these referendums, but I can tell you that I am 100% consistent in voting for small government and low taxes. At the time I think I believed the propaganda that we were in a new electronic age of the internet, and the gold was a barbaric relic.

Swiss National Bank Sales—Lessons and Experiences

...Overall, the gold sales proceeds amounted to CHF21.1 billion, or CHF16.241 per
kilogram. Expressed in US dollars, the average selling price was $351.40 per ounce, which
was $17.20 higher than the average London fixing price between May 2000 and March 2005
...Last week, the SNB’s General Assembly approved the 2004 accounts of the SNB, thereby
formalizing the disbursement of the CHF21.1 billion proceeds of the 1,300 tons of gold. Onethird
of that amount will go to the federal government and two-thirds to the 26 cantons.
Beginning on May 12, the SNB will disburse the money in ten weekly tranches. The
disbursements will have no impact on the Swiss yield curve or the exchange rate, as the
necessary portfolio adjustments were made in the run-up to the pay out. With the final
tranche on July 14, the disbursement of the proceeds from the gold sales will have been
completed, representing the largest financial transaction in the history of the Swiss National

I can tell you that the Swiss are very insular and easily manipulated by the press, and that the left and particularly females often vote on referendums for soft emotional causes like letting in hundreds of thousands of asylum seekers or recently increasing VAT tax to 8% in order to fund the exploding disability payments to freeloaders.

So yes, the Swiss were more stupid than the ECB (although if you look at the "Gold Holdings in Percent of Annual Imports as of 1998" you can see how Switzerland did have "excessive" gold reserves when compared to other countries).

But the main point about the EU has nothing to do gold, and it is that it is as sinister as the US federal government and it seeks grab more sovereignty and to make the non-elite into indentured servants.

Martijn said...

So the Swiss acted like England, and Greece like Germany? Is this part of the ECB difference?

Very interesting research FOFOA!

Martijn said...

@FOFOA, the breadth of your research into this gold conundrum amazes me and inspires me...

I second that!

FOFOA said...

Hello Desperado,

Perhaps the "indentured servants" of tomorrow will be those who live in countries without sufficient reserve assets to attract essential trade, not those without their own devaluable national currencies. A shared currency is truly only a standard. It exists on the monetary plane, not the physical one. The exorbitant privilege of printing a reserve currency has only applied to the US since WWII, no one else.

Perhaps some, like ANOTHER, knew as far back as 1997 or earlier that it was irresponsible to part with gold reserve assets prior to Freegold, especially for the frivolous act of socialist profligacy.

Once the $IMFS is gone and Freegold is here, NET trade imbalances will all have to be settled on the physical plane, not the monetary plane. This is the result of the full demonetization of gold, returning gold to the physical plane where it belongs. When money was only gold (or only gold and silver coin), the monetary plane consisted only of physical items, so imbalances could be settled there just the same as physical.

The key here is NET trade imbalance. Transactional currency, whatever it is -- seashells or Bernanke keyboard digits -- facilitates the trade of all other goods. But in countries like Greece, less goods flow out than in, so we need a non-economic physical good to NET it all out. Gold is it.

This applies on all scales. The individual running a surplus at home needs access to gold as much as the nation running a deficit needs gold reserves. But that doesn't mean that every jug of milk entering Greece is paid for in gold. And it certainly doesn't mean Greece's past debts will be paid with its revalued gold.

Those past debts were mistakes, not only for Greece, but also for the lenders that bought Greek debt. They were bad investments. They will never be paid back in real terms, if at all, and the ECB knows this. Which may explain the nominal ECB bail out of the banks.

When Freegold comes, the denominators (numeraires) of all global debt contracts will be drastically devalued. According to Another, only the Saudi's will have the leverage to collect on past mistakes in real terms, because they hold the one trade good that everyone needs to keep flowing.

And even with the denominators reduced, I imagine that a good deal of the debt will be defaulted anyway. Or netted out on the national scale.

I imagine that Greece will not have to part with more than, at most, half of its gold for its past transgressions. Gold will need to reach such a price. Obviously this does not mean ALL of Greece's past transgressions, or else gold would go to $250K/ounce (which, of course, is very possible). So some creditor nations, who have transgressed themselves, will take a big haircut on Greek debt or be outcasts of the new international trade system.

Beyond this, Greece will exist within a new meritocracy, with 56+ tonnes of gold in reserves remaining. It will not be able to fund reckless profligacy through $IMFS debt anymore (See: Goldman Sachs) because the debt markets will be dead. It is called the hard slap of reality.

So it's not that Greek Govt union workers will get to keep their jobs, their pay or their pensions, but instead, it is that they won't starve to death. As Dan Amerman says "some Europeans will be forced (kicking and screaming) into a state of 'Accidental Virtue'!"


dojufitz said...


I don't know if you have answered this before but i'm wondering what happens to Silver when Freegold arrives?

FOFOA said...


Here are some thoughts over at Hope they help.

Martijn said...


A/FOA did not really believe in silver. Central banks are also not holding any.

The only thing is that silver is in relatively tight supply as it is an industrial commodity and is not hoarded in the amounts gold is.

Martijn said...


The Swiss headquarter the BIS, and they are in it too.

Don't you think they sold their gold in coordination with the ECB?

As you say about silver a metal has more value if it's more widely distributed.

I guess that is what the Swiss acknowledged as well.

And the remaining 1000 tonnes is still quite a lot for their 7mio inhabitants as it leaves them at over 10 times the per capita rate of Greece.

Desperado said...

Grüss FOFOA,

I wish that everyone with a little gold could become their own CB and issue their own currency! But seriously, I often think the world would be far better place if it was made up of 1,000,000 Lichtensteins.

In this Marc Faber interview from yesterday, Faber says that this recent $1T ECB QE and the rise of the dollar has set the stage for a Fed QE2 of about $5T in the fall that will again give markets a boost and kick the can down the road one more time. This is what Larry Summers is pushing too. Switzerland, Norway, Canada and most of the rest of the world will be forced to debase their currencies in a race to the bottom with the Fed and the ECB. This clearly shows how insidious the US Dollar monopoly on reserve currency is. I think BRIC's are going to be forced to put their foot down and end this Reserve currency monopoly, and it will be this year.

In a similar kind of vein I found this inteview of a Mexican Businessman Hugo Salinas-Price on the Nature of Money and Why Silver Should Be Legal Mexican Currency interesting when he discusses the gold standard:

"Are free-market economics having an impact in Mexico?

Hugo Salinas-Price: Yes, but the impact has not been favorable. Because "free market economics" was thought up when gold was the only money that existed. Economists of that time could not imagine a world without true money such as we have today!

It turned out that a free-market without the gold standard caused the de-industrialization of the US, Britain and Europe – and Mexico, too.

Deindustrialization causes unemployment, of course. Since the deindustrialization occurred while we were trying out "free market economics", the deindustrialization has been blamed on "Free Market Economics", when the real cause was going off the Gold Standard. Very, very few anywhere, see the relationship. I have written briefly about this, in my article, "Gold the Protector and Creator of Jobs."

You see, if we had the gold standard, Americans and Mexicans could simply not buy from countries that did not buy from the US and Mexico in return; that being the case, if the gold standard were reinstated jobs would sprout like mushrooms in a matter of months. Protectionism is only a Band-Aid."

FOFOA said...


I said, "Perhaps the 'indentured servants' of tomorrow will be those who live in countries without sufficient reserve assets." I didn't even suggest that would be the Swiss. ;)


Transactional currencies can be anything, and they can be as local or as small as you want. But whatever the locality, whatever the size, net trade imbalances with the outside world will still have to be settled on the physical plane. Work this out all the way and you will find Freegold.

By the way, the US exorbitant privilege started in 1922, from the beginning of the gold exchange standard. And it was handed to the US by international convention, not taken by force or deceit.

"In addition, the situation I am going to analyze was neither brought about nor specifically wanted by the United States. It was the outcome of an unbelievable collective mistake which, when people become aware of it, will be viewed by history as an object of astonishment and scandal."
- Jacques Rueff (The advisor who told Charles de Gaulle to cash out all dollar reserves for gold)


Martijn said...


I was talking about your remark that perhaps: So the Swiss acted like England, and Greece like Germany? Is this part of the ECB difference?

What I was trying to say is that the Swiss did perhaps act like England, but were much more in accordance with ECB vision then the English.

They were redistributing their gold to allow what remained to take on its real value a little faster, while England most likely had a completely different drive.

FOFOA said...

The US exorbitant privilege began at the International Monetary Conference of 1922 when for the first time international banks were allowed to accept not only physical gold, but also US dollars (paper gold) as reserves. But all US dollars held by foreign banks were put on deposit back in New York City banks. And there they were counted as local US deposits, the same as if you and I put our gold into the bank, in addition to being counted abroad.

These deposits were used as the basis for credit expansion in both the US and in the foreign countries claiming them as reserves. This process doubled the money supply paid out through the US balance-of-payments deficit for the last 88 years (except that money which France demanded in gold). US deficits never contracted the aggregate purchasing power of the US after 1922, the way deficit settlement is supposed to. It also exported US inflation outward. And it continues today.

The only solution to this problem is the explosive expansion of the gold base (volume x price). Volume can be expanded through mining, but not fast enough to suffice in a crisis. Therefore price will take the brunt of this reset. The price of gold will explode.

1971 was the first step toward Freegold. The final step is today.

ebikeguru said...

The Greeks are buying British gold!!!

Martijn said...


Did you read this speech by Vítor Constâncio?

You might just like it...

Anonymous said...

The EU is a DICTATURSHIP Martin and you are a stupid ass. Full stop.
Sory to be that rude, but you deserve it.

Martijn said...


I have very little to do with the any facts regarding the EU as I'm sure you are aware of.

SatyaPranava said...

i'm actually sorry to be asking a question that might inflame the tensions, fauvi. but why the need to be so harsh? there are many of us that believe that the EU is a dictatorship on here and some that find it relevant to freegold and some not.

but reading the above, i'm having a hard time understanding the need to call martijn an ass because of his position. Moreover, I'm kind of confused by what he said that set you off...can you explain the thougths behind the frustration/anger?



Unknown said...

Could muni defaults start the waterfall effect away from 2.8 trillion in muni bonds and into gold?? Of course as long as investors think they can protect their fixed income by buying CDSs, they may not make that shift... or at least delay it.

If Harrisburg does file for bankruptcy, it would do so under Chapter 9-which is employed by cities, but rarely. In one closely watched case, the city of Vallejo, Calif., has been in Chapter 9 since 2008.

About the Harrisburg situation, Jim Lebenthal, head of public affairs for the longtime municipal-bond underwriter, Lebenthal & Co., said that while filing for Chapter 9 would be a small matter in the scheme of things, it's "emblematic" of the larger economic struggles that cities face right now. "If it can happen in a state capital, my God, it can happen anywhere," said Lebenthal.

The overall problem is that the $2.8 trillion muni bond market, long considered one of the safest havens for investors, now faces a daunting level of debt, as cities from Los Angeles to New York struggle with an array of headaches, including less tax revenue and high labor costs.

According to remarks made by Harrisburg mayor Thompson in April, the city spends rought 70 percent of its annual budget on labor.

Cities can always raise taxes to fight a budget shortfall. But costly projects, fewer people in the workforce and more demand for city services can make budgets tough to square these days.

Financial firms underwrite bond offerings for cities and public-works projects, and the default rate on muni bonds has historically been quite low-less than 1 percent-compared to nearly 13 percent for corporate bonds, according to ratings agency figures.

In that sense, the Street encourages investors to go long municipalities.

But investors and the Street can also short munis through credit default swaps, or CDS policies that pay out if an entity defaults.

The Markit MCDX, an index that tracks the cost of insuring against default of a basket of 50 municipalities, is on a recent high of $173,000 for $10 million of protection on a five-year bond-a point last reached near the beginning of this year. A swap that would pay out if the state of Pennsylvania defaults cost $112,000 for the same $10 million amount.

Anonymous said...

have you read his last link?
How do you call someone who suggests likings for globalist propaganda?
Or how do you call the message of that piece of shit he links for FOFOA?
What has Freegold to do with that BS?
As he lives in Europe he should better know about the dangers we are in for now. I don't wish to live in the US of Europe!

"The Europe of Maastricht could only have been created in the absence of democracy."
Claude Cheysson, French Foreign Secretary 1981-1984. Quoted by Sir James Goldsmith, speaking to the Federation of small businesses, Newcastle, 27 June 1996. It's not recorded whether Cheysson was bothered by this or not.

"There is no danger of a single currency."
Ted Heath, British Conservative Prime Minister and noted Europhile. EEC membership information leaflet, 1975.

Sissons: "...the single currency, the United States of Europe: was that on your mind when you took Britain in?"

Heath: "Of course, Yes."
Ted Heath, British Conservative Prime Minister and noted europhile, and Peter Sissons, BBC journalist and presenter. Question Time with Peter Sissons, 1 November 1991.
And I can give you and Martim more like that.

@mortymer001 said...

The clever man tells, the wise man knows and only the time judges.

raptor said...

Another interesting fact :

Eurosystem has 5 times more forex reserves than USA !

raptor said...

Btw.. if you think about it the creation of the Euro may be prolonged the live of the $ as reserve currency... cause it was able to offload big chunk of the debt which was created in Euro instead of $.

What do you think... if not the Euro probably the 2008 crisis would have been 2004-2005 , may be ?!

And Euro as a currency was able to support much larger debt, compared to all the prev. currencies in Europe combined.

SatyaPranava said...

fauvi, i'm not sure i'd need to call them anything. I'd maybe think them confused, but realize it may be me who's confused. I think you and I are on the same page on this in some regards, and yet, I come here to hear a different perspective.

The reason I posted the NYT article is because the evidence that I have seen suggests that the EU was a very old creation, whose implementation is taking generations and centuries to fully implement. this strategy no doubt makes it more difficult for people who catch on to do much about it. it's brilliant, actually.

but it also makes me question the timescale for freegold, assuming it happens at all. but assuming it does, like A/FOA found (assuming they're still alive) the time table is a bit longer than they expected. this could be because they're wrong, or could be because historical globalization is a much slower process than the process whose future they saw.

I also posted that article (and sadly, i haven't read it in over 10 years now) because when I remember reading it, I remember thinking several things. first, the level of discourse in the NYT during WWI was a lot higher than that rag today. two, that this was a huge disclosure by someone in the know. three, he was allowed to disclose it. and just as importnantly, that Butler seems to be leveling a threat against anyone (with clout) who potentially contemplated attempting to derail this process.

sadly, I haven't heard anyone else here comment on it, and I am curious to hear other perspectives and viewpoints.

but, just because I believe something different, or even if I were to believe that martijn is tragically wrong (or anyone else), and even spewing mindless propaganda and drivel, i can't think making it personal would ally anyone to my cause? in fact, quite the opposite.


Martijn said...


I think you misunderstood me. I simply linked an article that I thought somewhat relevant to FOFOA's vision (and that of other readers) on Europe.

If you choose to see that as propaganda or anything feel free to do so, but that was not my intention.

Martijn said...


I think the USA has less need to hold forex reserves as they have been able to print the 'strongest currency' in unlimited supply for the past decades. They have had relative little need to defend their currency by intervention, so they generally chose to receive products instead of currencies for their dollars.

costata said...


Re: Muni defaults

I think there are so many potential triggers out there that it is hard to choose.

IMHO Muni defaults would be met with QE BUT they could also draw people's attention back to the USA's problems and start the next leg down in the US$.

Will it be the final act? I, for one, doubt it because I don't think the opposing forces have run out of tricks yet.

On the other hand, as the whole system becomes increasingly fragile the odds of a sudden failure shorten.

For me the BIG recent story is that EU citizens are seeking gold in volume. IMHO we shouldn't underestimate the importance of this. It was an important step when Chinese citizens started to buy gold, legally :), but EU citizens piling in is a quantum leap forward.

Regardless of any economic problems in the EU, think of the buying power in these countries compared to China and India. IMHO this is part of the Euro Freegold sponsor's plan - widespread gold ownership in the wealthy EU member states to ease the pain when the $IMFS "paper burns".

The clues are found in the initiatives taken by the ECB/EU over the past decade to make gold attractive to EU citizens eg. favourable tax treatment, wider distribution and more sales outlets, the ECB publicising it's MTM policy for gold reserves and the big one withdrawing their support for the gold price suppression program thus PERMITTING the price of gold to RISE.

Anonymous said...

we are producing a bit of a noise now. Regardless.
"the EU was a very old creation, whose implementation is taking generations and centuries to fully implement. this strategy no doubt makes it more difficult for people who catch on to do much about it. it's brilliant"

Yes, it's a brilliant conspiracy against humanity - like many others.
If freegold were to be a further result of globalization, thanks, better it fails.I have no idea in which timeframe and for whose advantage people here wish for freegold.There will always be rich and poor, therefore freegold will never be a solution for the whole world. We might be some kind of a winner the moment it surfaces but for how long? What about the time frame before it happens? How survive the next? What about our children and their children? The globalization has not been achieved to make the masses rich. The same with freegold. There has never existed a perfect monetary system.Every generation had its own crisis and wars - and we know for whom war pays. The same with freegold.What do people here think about Bill Still and The Swarm? His solution for the monetary system is also idealistic IMHO. However, I believe we all can survive this crisis better when others will lose almost everything, but the society we will be living in during and eventually, if globalization continues this path, will not be a better world to live in. Scorched earth all around after game over will not be nice and that we will have regardless if freegold emerges or not, regardless how rich you will be.there is no place to hide away from the coming events. The misery to come will be so great that only people used to destroying life will feel comfortable in such an ambiance.

Anonymous said...


a few quotes from that NYT - Butler - article:
"moral leadership"
"influence of liberal and enlightened political institutions"
"true internationalism is not the enemy of nationalistic principle"
"...get men free to develop..."
"Our central government is of limited and defined powers."

Smoke and screens, flawed ideology, demagogy, call it what you want, but we've seen the results:
Dirty wars
and all symptoms related to. The real history is not available for the masses, through centuries we've been manipulated like animal herds and were never able to come to a decision by ourselves.
BTW N. Ferguson cannot believe the Europe might become USoE and I hope he's right. Afterall this crisis produced more nationalism then ever and I expect it to get bigger.Unfortunately not a sound nationalism. The way "they" have chosen to make us accept this new European or international order might turn against them. Hope for it!

miked said...

A question for anyone here who believes that western central banks want a low gold price. I guess that is everybody here?

Wouldn't the easiest way to mess up the physical gold market be to apply VAT to gold sales and imports? Thoughts on why they have not done that?

SatyaPranava said...

fauvi, and others, i will continue this conversation in the new thread.

raptor said...

Fauvi, the thing is that world government is inevitable ... if does not happen in this generation it will happen in the next.. or the next.. no matter sooner or later there will be world government and world central bank.. that is how we decided to organize as a species, from the day countries were created..

the question how we can have more local power and self determination and I think one of the ways if there is some way for the ppl to vote every day with their money i.e. freegold or similar system in which the gov. does not have full control in the money system.
Of course it is also a matter of politics.. so ppl can counteract bureaucracy and monopoly in a meaningful way.

The thing I'm amazed is that politicians and ppl in general have such a short memory ... and can't learn from examples just 20 y ago that socialism/communism and 2y ago wild-unruly-capitalism does not work ... or work well for decade-or-two.

But may be this is part of our gene pool, we have to learn it the hard way every generation.

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