Wednesday, October 13, 2010

One Tin Soldier

Listen, children, to a story
That was written long ago,
About a kingdom on a mountain
And the forum folk below.

On the mountain was a treasure
Buried deep beneath a stone,
And the forum people swore
They'd have it for their very own.

So the people of the forum
Sent a message up the hill,
Asking for the buried treasure,
Tons of gold for which they'd kill.

Came an answer from Another,
"With our brothers we will share
All the secrets of our mountain,
All the riches buried there."

Trail Guide (02/11/00; 09:49:21MDT - Msg ID:24996)
The Gold Trails
Thank you Aristotle!
A fine work that's worth a long study, my friend.

Many writers today offer nothing less than a philippic discourse about the flaws in today's fiat systems. Always looking backwards, they are lost to grasp how what was considered "hard money policies then",,, "eventually failed then". Truly, a hard financial structure trying to blend with a soft, flexible "human nature". In a larger degree, how much more could it not work in today's modern world. Once implemented today, these same policies would again "crash and burn" in response to the demands from "real people" living a "real life".

Aristotle, your five part series is trenchantly written and offers readers a glimpse into a future that must be. Will be!

My thoughts on a deep subject:

If the modern banking system has mislead us at all, it mislead by supporting a view that our wealth, our things, were not money. They implied that "paper settlement money" was our real wealth and only it could be as such. Truly, as we walk and breathe, humans' things have always existed as both money and wealth. Side by side by side they walked with us in our financial life, in both modern and past context. Yet, in our modern "Western World" of thought, the largest portion of one's personal asset holdings now reside in the form of "paper money". Worse, the majority in its "contract derivatives" forms. Gold included.

No longer do we hold our greatest portions in real forms that transcends the peaks and valleys of fiat money value ,,,, a variable fiat money system that our "changeable nature" demands. No, we opt to ignore the true purpose of this paper money system and cast the entirety of our resources into it. Never stopping to understand that this money is but an "economic need" "to process a trade". Not an "economic product" and therefore wealth itself.

Throughout recent time, fiat money has responded well to human nature, flowing like a river as it expands and contracts to our wants and desires to buy and sell things. From drought to flood it is the channel of our trading system, as it moved the "end product water" that flows within its wide banks.

Today we use the remains of this dying "dollar settlement system". It continues a natural death, as society struggles to use a currency that can no longer represent our financial structure. A changing structure in a world that marches on. The dollar's debt load has aged it and brought it to the end of its time line.


Another Sidebar:

Date: Sat Apr 25 1998 22:55

"The United States Government does not hold any reserves against its currency". Truly, this can only be the case of the world reserve money. Indeed, all other currencies have reserves of US$ to back them, yet only the dollar has nothing!

When the US government does not take in enough taxes to meet expenses, it sells treasury debt to make up the difference. When no one bids for this debt at an "acceptable" interest rate, the Federal Reserve bank buys the debt, outright! It gives printed cash to Washington and then, "holds the new treasury debt ( bond ) as backing for the issued cash!

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 its citizens to pay future real production ( taxes ) as a "backing" for its newly printed currency! As this process has been going on for decades, it has built up a debt of "real production payments" that its 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!


At present, I, like you, must view the world thru dollar. The "world reserve trading currency" it remains! All persons hold dollars, be they as the "proxy" currencies of other countries, or other assets worldwide, all things find value thru the "debt securities" of American citizens! It is the ability of the factory worker in Detroit, to pay the mortgage that does make your Pounds of value in world trade. It is the way of the IMF, Yes?

I think, your "American perspective" does not see or know or understand, how the dollar is "already much inflated" worldwide. Your Western thought is only of the "dollar price of things" at present. It is to say, "if prices do not rise, there be no currency inflation", and "see, the world competition for selling goods and services in dollars, this brings no price increase"! This results from the current world currency system that does force the "holding of dollar debt" as reserves. A new change in this system will release these reserves, for the spending and the buying! It is during this change that American persons will find a "new price inflation" from a "existing currency inflation". You see, it is as you say, "your chicken has roosted for some time, but only now you find he has come home"!


Only today, the end of this "time line" will find many holding their wealth in this same system, for a purpose it should never have been intended to perform. That being, to represent one's life long accumulation of real wealth as their money wealth things. Most will understand the impact of this well after the fact as we are indeed in transition to yet another paper system. One we must have, and will use. Just as everyone used the old one to their own private advantage, we will indeed grasp the next one. Just as you point out, Aristotle, fiat exists more so because it does "what societies economic function wants", not because it's a function of "what society is forced to do"! Still, some will bark against this in an effort to stop people from following human destiny. Fortunately, relative to our lifetimes the world evolves quickly, with or without our agreement.

In this period however, we will return back in time much further than many can see. This time gold will be pulled away from its strained attachment with "fiat contracts of currency" and again take its place as the ages old "wealth money holding" it always was. It will occupy its rightful place on the shelf with all our other "wealth things". And here it will, "for the first time in modern context" show its true value in relation to modern paper settlement money. A value no one today will believe!

Should one risk financial assets based on
this series (Aristotle's) alone? Never! On the contrary, no one should believe what he has written. Rather, we as a community should "study" his fine work and seek to understand its meaning. Once fully understood, I think most would then agree with its inevitable outcome. Indeed, a "free gold market" based only on physical holdings would impact the world economic system unlike anything seen before it. And yes, its impact on the relative value of gold will make that metal the monetary wealth investment for the next thousand years!

This my friends is why so many today, "Walk In The Footsteps Of Giants". They walk a trail that takes them further and further from derivatives of gold and the present currency it's (gold) priced in.

From Yesterday, through Today and onward into Tomorrow" ,,,,, we say buy Physical Gold for your future ,,,,,,, doing so will write your personal history in the palm of your hand!

"Soon, we will all hike the "Gold Trails" and see all there is to see ,,,,,,, over the mountains and through the valleys ,,,,,,, across rivers and plains ,,,, looking near and far as we stop along the way ,,,,,,, Truly, we will view the value of gold as modern mankind has never seen it before ,,,,, join in, it will be a journey in life, that's well worth taking.

thank you again Aristotle ,,, Trail Guide

This was written 12 days before the beginning of The Gold Trail.
18 months later he left, head hung low. 15 days after FOA rode off into the sunset Europe introduced its new medium of exchange. For the previous three years the euro had only been a unit of account. Then, only 39 days later, 54 days after FOA left, gold broke out of its two year, sub-$300 range and never looked back. Anyone who recognized the rich value of the treasure FOA was sharing at any time during his tenure is up almost 400% today. And as he might say if he were here right now, "you ain't seen nothing yet!"

What finally drove FOA away was similar to what drove ANOTHER away five months earlier. It was pretty well articulated in the following posts...

Trail Guide (7/8/01; 08:36:41MT - msg#: 57668)
I must go where "Ears do not bite"!

I don't believe it people, but I guess this was bound to happen!

I just spent several days writing a piece that explained our whole philosophy. This time in a clear positive manner that was easy to read. I had decided to stay on the GoldTrail page only and elevate our discussion into a real time dialog. Events are close enough to a conclusion to warrant this. After a ton of asking and asking I finally convinced Another to write with me in his true academic / professional voice. Great! No more editing for me.

So,,,, he gets today's forum from me and what does he read?

------ Journeyman (7/8/01; 06:40:37MT - msg#: 57667)Bet you never heard this story. Media control & Chomsky @ALL

------Chomsky's proof
By William Rivers Pitt The United States is unusual among the industrial democracies in the rigidity of the system of ideological control ---'indoctrination,' we might say--- exercised through the mass media. --Noam Chomsky -------------

-----------June 25, 2001
--In the early morning hours of Thursday, June 22, 2001, a man named Jared T. Bozydaj took to the streets of New Paltz, New York, with an Intrac Arms 7.62 semi-automatic assault rifle. He fired pointedly at police officers, wounding one officer named Jeffery Quiepo in the arm. The shooting went on for several hours before Bozydaj was disarmed and arrested.-----------------

--------Clearly this kind of control requires an extensive network of influence coordinated from some central "authority." If they cover-up (by failure to cover) this sort of thing, what about economic news such as the current major turbulence in Chile, Argentina and Brazil? Etc. ----------

-----Reminds me of ---another-- illustrious information guru. ---------------

---"Don't tell them ... then it will not exist ..." -Chief Nazi indoctrination "Information Officer" -----

OK,,,,,,and if that was not good enough, here is one more! Go on,, read the whole post? A few items below:

working-kirk (7/8/01; 05:49:57MT - msg#: 57664)

---Which bring me to the subject of Crack Whores.-------

-------If you are selling sex you can get a blow job between $10.00 to $15.00. A Fuck goes From $25.00 to $100.00. A blow job takes anyway from a minute to three, and sexual intercourse can take five minutes to 15.----------------


OK,,,,,,, good job men! Perfect timing! On subject and driving home the quality of this venue! I complained in two of my last three post about such discussion and most everyone here seemed to support a "freedom of speech" that included all of the above! Journeyman gets to associate Another with" indoctrination" and "Nazi" thought.

All right,,, good stuff J-man!

Well,,,,,, Michael,,,,,, Randy,,,,,,, All,,,,, For all my insisting to "him" that this venue was the correct place to build an understanding of our future world of gold,,,, I guess I was wrong? I got back a quick retort and firm instructions. Instruction I will follow till hell freezes over because I will not lose my connection to Another. He said simply "tell them right now our position and walk away, it's over"! And I can tell you when he says it's over,,,,, it is over!

So,,,,,,,,, MK, please understand that it's not old FOA walking away mad this time. The big guy said we are done. I'm back to discussing this in private with select people that want to hear it and debate it in private. I'll stay in touch with you and discuss as you may want? After all this work, I guess it's my turn to feel low now. What a bunch of garbage!

Good luck all, I did my best to plant the seeds of thought. Own the wealth of gold and they will grow for you!

You will now "watch this new gold market" without FOA or Another.

Your friend and hard worker,(smile).
Last post, Signed off!


USAGOLD (09/03/01; 17:21:29MT - msg#: 60749)
On "Floaters", and Part of a Private Note from FOA Printed with His Permission I received the following from FOA by private e-mail:


I cannot post now as that area of my system is already being reworked. In my earlier mail to you I mentioned several weeks, same thing goes for trail posts. As to your question concerning all the various Another posters floating around:

--- "Is this Another or just a good imitation" ?----

It's not him, just another floater trying his best.(smile) Another asked me to "walk away" from the old rough crowd at your main forum so people wouldn't associate their foolishness with us. If we decided to leave for good, you would not be reading me at the trail or getting this mail either. He would cut off all communications with the same permanence that was demonstrated at Kitco. Once gone it's over and he never goes back, that's his style. Besides, I can tell you (and those that know him already know this) that the last thing he would be doing is posting right now!

Have a nice labor day, this will be my last reply for a while. See you in a few weeks, my friend.

- - - - - - - -

MK: I hope this puts the speculation to rest. Anyone can go to our archives and cannibalize sentences from "Another (Thoughts!)" or "In the Footsteps of Giants" and make it look like a post from Another. If you want to read the real thing we invite you to go to the "Another (Thoughts!)" archives where you will find a wealth of information -- and it's authentic Another. . . .Those who are newcomers might find these enigmatic postings an eye-opener -- as have many before you. I do believe that when Another is ready to post again, he will do it here.

Also, what follows immediately below was contained in another private correspondence from FOA. Though a private communication to me, I felt it important enough to ask permission to post it here which he graciously granted. . . . .

- - - - - - - -

FOA: Looking back, Another was a true master of understanding people's thought processes. He knew that none of us, that's you, me or any of the rest of us raised inside a background of American financial understanding, would ever accept his position thrust; with him just spelling it out in the open. Especially when this whole financial / political transition has been taking place over more than a decade and a half. By the way, he started this some decades ago. So, he decided to ask readers and listeners to think for themselves; by presenting bits and pieces of the flaws in our "Western Thought" as others saw it and as it pertained to his world of gold and oil. Not wanting to prove anything, while asking us to prove everything for ourselves; as these long term events unfolded.

I understand that there are a large group of basic individuals that fully understand our line of what is happening and are buying gold. What I never envisioned was how many groups make up the gold trader crowd; all standing apart from the Physical Gold Advocates. Further, I never thought they would segregate into so many vocal tribes, each trying to advance their own minor position in the gold world and willing to step all over themselves and anyone else in the process. I find it all a real show / play to watch as it truly demonstrates the very human dynamic Western governments have use to distort modern gold thought. I now understand that Another did fully grasp just how distorted this chain of thought was and went around it all by waiting for events to completely destroy their concepts; instead of debating with a host of gold tribes.

In the end, physical gold will win out and prove to be the greatest wealth holding anyone has ever known. Unable to grasp that only a transition of political influence by old world players can break this modern American Western hold on gold, these tribes are vulnerable to the same government influence they long for. Their wealth will be portioned by those same Western governments as world political reality forces our American leaders to embrace a world "free market" in physical gold. While abrogating, thru taxes and windfall appropriations, all forms of paper gold ownership.

Today they chant; " we want our leaders to recognize gold again"! OH, it will all right and the impact such a recognition will have on these various paper gold plays will leave these gold tribes dancing around a midnight fire! (smile) If nothing else, the entertainment of watching them spew brime on each other will be quite an act to follow. If nothing else it will educate future investors as to where to look for reason. Indeed, the law of ages never changes as ones conduct in social interaction still identifies oratory as being worthy or no. People that relish rash interaction always find themselves surrounded by fools. Eventually broke fools! (smile)

USAGOLD (9/4/01; 10:52:32MT - msg#: 60775)
Interpreting FOA's Message. . . .

Gandalf, far be it for me to interpret (paraphrase) FOA line by line, but you ask a very important question by e-mail which I will try to answer here for all. I hope you don't mind, but I think the whole Table Round might gain traction by your good question and my attempt at an answer:

Your question had to do with "interpretation" of the message I posted last night. Here's my response.

MK: I think what he is saying basically is that there are many vested and competing interests in the paper gold market that Another was well aware of long ago and that he (FOA) did not factor into his own thinking until recently. Rather than take on all these competing interests in an endless rhetorical battle, Another has decided to allow events to do his talking for him. What he has put out for public consumption in the past is a guideline that will get the investor where he or she needs to be -- in the physical metal.

(I find this sentence particularly interesting as it shows Another's basic methodology: "Not wanting to prove anything,asking us to prove everything for ourselves; as these long term events unfolded." Those who have studied Western philosophy are very familiar with the Socratic method of leading the student to an understanding through a series of questions and challenges. The word "education" derives from the Latin "educare" -- "to lead out of" -- as in to lead out of ignorance. To lecture is one method of "leading out of" but for long lasting results educators have long known that the Socratic method -- if it can be employed -- is the most effective. One wonders if educators nowadays even think about such things. We hope that to be the case! Another apparently understands the methodology.)

The key paragraph starts with "In the end, physical gold will win out and prove to be the greatest wealth holding anyone has ever known." All these competing interests will feel the sting of the metal itself as an "old world" belief system manifests itself in the markets (perhaps the European financial establishment?). All will be forced by the implosion of the paper gold market (and the dollar as well) to understand the real meaning of gold-in- the-hand. All gold related paper will burn along with most other paper assets. This is my interpretation, Gandalf, of the message in its essence. Others may have a different interpretation but this is mine. We welcome further discussion and interpretation. MK

Just a little history from The Gold Trail.



Unknown said...

When we are talking about 'gold' is silver encompassed in all that talk as well. As in, when we say 'gold' does that really mean precious metals. I am asking because I have all my eggs in the silver basket.
Thanks in advance to whomever answers.

Texan said...

No. Read comments from several posts ago, there is a very long discussion about this exact topic.

FOFOA, please keep it up. Your thoughts are especially valuable as things are moving very fast now asBW2 starts to disintegrate.

costata said...


When FOFOA refers to gold, he means gold. Not silver or precious metals of any other kind. Only gold.

Likewise Another and FOA.


Thanks for the post.

Pete said...

Another great post FOFOA.

I'm with Texan, more more more! :)

Thanks again, Pete

Pete said...

@ Costata

As a fellow Australian I particularly like your comments.

What do you think will happen here with the USD's demise?

So many of our mainstream media fools are relishing the 'high Aussie dollar' as if it is some sort of achievement. Bah, even the NZD is going up faster than ours in the last few weeks. But that's not the point - they don't see the relative devaluation of the USD, only their naive observation of an appreciating AUD.

Our export sector is pretty screwed. But we can pile on more cheap debt and import cheap trinkets with our credit cards. Hooray.

JR said...

Hi David,

Here are some links to explore a few ideas FOFOA has expressed on silver, in no particular order:

Happy reading and best wishes, J.R.

costata said...

Thanks Pete,

"What do you think will happen here with the USD's demise?"

That's a long discussion which may be a bit too specific for this forum.

I also post comments and frequent a blog hosted by a Kiwi calling himself Steve Netwriter. It covers a lot of the same issues discussed at this blog from a Aus/NZ perspective without being parochial. Drop by sometime.

FWIW here is a link to a recent exchange there that was mainly about US$ failure + Freegold with some comments on how it could impact on Aus/NZ. (From #8 onwards.)

Martin Armstrong has written a few papers, where Australia was mentioned, that contain some plausible predictions for Australia IMHO.


dojufitz said...


i had a cap named after the blog....if anyone asks me what the hell is that? I'll tell them what its all about....

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

FOFOA: Half way through the article I thought It was your goodbye post too!

Phew, thank God it ain't!

By the reminding you about the post that you wanted to cover from the shoeshine boy.

Indenture said...

Gentlemen & Ladies...

In June FOFOA asked for our help so that we could save hamburgers from a terrible fate. Almost four months have passed since the first round of donations and now it is time to step up again and contribute anything you can so that we, the readers, will continue to have access to, what will undoubtedly be recognized in the future as one of the greatest voices on Gold in the history of mankind.

This is the kind of life changing information we happily pay for.

Please Support FOFOA

Dave Narby said...
This comment has been removed by the author.
Dave Narby said...


Some of us hold some silver, but few are 100% invested.

We have discussed the best time to convert our physical silver to gold and indicators (e.g. the gold/silver ratio (GSR)), as when the remonetization of gold is complete, silver will most likely be a weak sister to gold.

My feelings are that the GSR will reach absurdly low levels not seen in over 100 years (as the short squeeze in silver will likely precede gold), but I will be scaling out of my physical silver, exchanging for gold, as the GSR sinks, as eventually it will return to 1:60 (or higher).

However, *I am a speculator*, but if I was not, I would immediately exchange all my silver for gold, retaining only some token amount for possible use as barter in a SHTF scenario.

"Gold is money, and nothing else."
-JP Morgan

Mike said...
This comment has been removed by the author.
Paul I said...

Been thinking about the Truman article:

“The US Treasury holds 261.5m fine troy ounces of gold. The government has been sitting on it since the Great Depression, receiving no return. At the current market price of $1,300 per ounce, the US gold stock is worth $340bn. The Treasury secretary, with the approval of the president, has the power to sell (and buy) gold on terms that the secretary considers most beneficial to the public interest. Revenues from sales must be used to reduce the national debt.”
Edwin Truman

Price suppression?

“Ted Truman is not a fringe figure or a minor intellectual; he is a giant in the field. He is not just close to the establishment. He is the establishment. An op-ed by Truman appearing one day after the IMF semi-annual meeting ended with no effective solutions on the currency wars is no coincidence. It is a metaphorical Message to Garcia, to the gold insurgents, from the President and the powers that be. It is price suppression without having to engage in actual sales. It is a warning to gold bugs that they may get crushed. It is meant to induce fear into those newly interested in gold that it’s a rough game with no holds barred. It is a show of bravado by the fiat money crowd. But it is also a sign of desperation; the last gasp of the ancien régime of fiat money. If a smart guy like Ted Truman is reduced to the old canard about gold being good only for hanging around your neck, then what else is there to say? The intellectual opponents of gold are now as exhausted as the mines.”

Jim Rickards

But is it a crude attempt at price suppression, or is capitulation?

“With all this in the background, we now feel a disruption in the force (old line from star Wars movie). The recent BIS meeting may have set the stage for an eventual monumental change in the way gold is traded, owned and valued. The very fact that a major portion of the US gold stock has been changed in status in a way that would allow it's movement (ownership); means that the US has now entertained the same position as England is doing regarding gold and the EMU with Europe. We (the US) are preparing for the destruction of the dollar's gold world. In this, some players will have to be saved (with real gold) if the dollar is to have any existence at all in the new Euro reserve function.”


If the US finally feels checkmate breathing down it’s neck (and surely it MUST), what would they do? Same thing UK did, buy the best end game position they could, with the only chess piece they have left, gold.

Ivo Cerckel said...

"Looking back, Another was a true master of understanding people's thought processes."

Modern philosophers, especially since René Descartes (A.D. 1596 - A.D. 1650) and Immanuel Kant (A.D. 1724- A.D. 1804), divorce thought from reality and start like Descartes from Consciousness, from the fact that man has innate ideas in his mind.
This is not the starting-point of [Another] and others who study philosophy as the perennial philosophy. They start from Being, not from Consciousness, and for them it is reality which imposes its structures on the mind, not like Kant, the mind imposing its structures on reality.

Catholic Archbishop Léonard of Brussels was severely being criticised yesterday, Thursday, for arguing that the aids-epidemy is an "immanent justice" for immoral conduct.

Léonard oogst zware kritiek
vrijdag 15 oktober 2010
Auteur: Veerle Beel en Bart Dobbelaere
De aarstbisschop ziet in de aids-epidemie een 'immanente gerechtigheid' voor een te losse levenswandel.

His Eminency, the Cardinal, thereby explicitly rejects "social justice".
The KATHOLIEKE Universiteit Leuven, KU Leuven, nevertheless continues to advocate social justice.
(Social Justice as viewed by Leuven – first exploration
Posted by Ivo Cerckel on May 25th, 2009

But then, again, KU Leuven wants to remove the golden K from its name.

Catholic university drops the C word
07 October 2010 De Standaard Brussels
"Change of course for K.U.Leuven, " headlines De Standaard. The Brussels daily reports that the Katholieke Universiteit Leuven, one of Europe’s oldest universities, is planning to drop the "Katholieke" (Catholic) from its name

Before Descartes (1596-1650), we could say that reality is there
and then man comes along and gets to know it.
Since Descartes, human thought is the first reality.
(Joseph M. de Torre, “Christian Philosophy”, Manila, Sinag-Tala, 1980, 3rd ed., p.131)

U.S. is currency war's "tomb maker": China economist
BEIJING | Thu Oct 14, 2010 2:16am EDT

Dave Narby said...

High 5 said...

"Silver will always be part of "gold money". But, is far too small a market for large, modern economies. Silver will do far better than any paper asset, only it will serve better as a "personal holding" than as a major money. If it is of your way to balance wealth, then silver will show value."

"Metals have not shown their true worth for many years as the world has done very well. This is very good. But, all things do change! As it is our time and place to live this change, our thoughts must view the future as it must be. Who can know the minds of men and countries as paper burns?"

Words of ANOTHER

High 5 said...

"We will no doubt see a mass run of CBs into gold at ANY price! This I know! As for now, each person must protect worth, as the nation/state is locked from change."

"Know this, my knowledge of gold is for the simple ones, of small thought, such as I. Resist the traders mind, hold your wealth close. There are those that will take your worth at the very time you need it most. Most will not see the time or place, few are allowed!"

Words of ANOTHER

High 5 said...

Consider, can they all buy silver?

The most important thing to observe is that Mr. Buffett did NOT use any form of paper to represent his silver. No options on silver, no futures, no options on silver futures, no silver mining stocks, no leased silver deals from mining stocks and no MARGIN! Most of the large buyers of metals are buying the physical, outright. Mr. Buffett had Berkshire

Hathaway purchase silver as part of it's long term "economic investment outlook". Not to be confused with a leveraged, quick profits bet. Understand, that Berkshire plays within the "world paper economy parameters", they are not looking for a currency replacement. What is not seen, are the personal holdings of Mr. Buffett, Mr. Soros and countless other "world wealthy". In those accounts you will indeed find silver, but also, much more gold!

Note, that he was buying thru much of last year. So were a number of others. The one common thought from them all is that, "the real wealth will be held in PHYSICAL form"!

"you may also follow in the footsteps of giants"

All words of ANOTHER

Anyone new to FOFOA should read all ANOTHER and FRIEND OF ANOTHER posts.

costata said...


"In June FOFOA asked for our help so that we could save hamburgers from a terrible fate. Almost four months have passed since the first round of donations and now it is time to step up again and contribute..."

Count me in.

Devils Avocado said...

Hi guys!

Didnt Another mention something about watching out for governments selling gold?


Unknown said...

@Museice & costata --- Hear hear! I've been "meaning" to contribute again but needed a little nudge. Let's all hit the tip jar and keep FOFOA leading our charge into battle. I did!

@bailingout -- your comment pulled my mind to readings during Sunday service. It makes me want to put themes together in a series: one of "the words of Another", one of "the words of FOA", one of "the words of FOFOA" -- I think that type of study could prove deeply revealing.

P.S. the word identification thing is WAY TOO HARD!

Mike said...

KD on Gold Bugs again

i guess he doesn't know the difference between paper markets and physical markets, he says gold is paper based on his charts. i think most people think the price of gold is whatever the paper markets say it is.

he is right on the taxes part just not those citizens that physically hold it.

i guess wealth is how much paper you own and what it says on the statement.

Wendy said...

Welcome back Ivo, it's very nice to see you again (figurativly speaking)

I must say, although I'm certainly not, nor will I ever be the scholar that you are, I agree with Descartes's theory: Our thoughts create our reality. Further I would say that our thoughts are created by our perception and thus reality is really simply: perception.

Ivo Cerckel said...

Dear Wendy,

Thank you for welcoming me back.

You would say that our thoughts are created by our perception and thus reality is really simply: perception.

The principle of causality says that nothing can be the cause of itself.
The principle of causality is subsequent to the principle of non-contradiction (PNC) which says that is impossible to be and not to be at the same time and in the same respect.
Like the PNC, the principle of causality is known from, or arises from, experience.

You are confusing cause and effect.

Your perceptions perceive reality,
your perceptions don’t create reality (but .. perceive it).

Best regards,

Motley Fool said...

It should be noted that a 100% gold standard will fail. It can't work with "response to the demands from "real people" living a "real life"."

The free flow of gold implies more than just being able to carry and exchange physical specimens.

Just a foolish thought.

Desperado said...


That Denninger piece is a zinger. His ego seems to be as whacked out an ivy league economist's. First we have his tax argument:

"But they sure as hell will tax the bejeezus out of it, and indeed, likely will tax the hell out of all capital gains, no matter what instrument you use." and You will not be able to sell your gold within the tax law without paying a punitive tax sufficient to trash your wealth.

So Denninger's argument is "even if you win, they will tax it". Strange how he doesn't apply this to any of his Denninger-sanctified investments.

Then he says that barter will be illegal and only performed by outlaws.

You will be able to barter with someone who also will evade tax, but that person must be willing to break the law too on a forward basis, since he can't exchange the gold into the market without paying the taxes either. and If you choose to go underground you will retain your investment, but you will also be acting in a criminal fashion, and will only be able to trade in this fashion with other like-minded criminals. While there will certainly be some people who will be willing to do this, such a choice comes with material amounts of risk, and also forecloses you from being able to transact with everyone in the economy.

Basically Denninger is saying to keep your faith with the US government or else. He is saying that you are a federal slave and that if you wander off of the plantation then master (the IRS) is going to come get you with his dogs and his whips.

I choose not to live my life as a slave like Denninger, that is why I expatriated and that is why I read Fofoa. What scares me is that Denninger will probably turn into gold sniffing Nazi attack dog.

Anonymous said...

Hi to FOFOA and to all you. My request goes to FOFOA. Could you please elaborate on your views about the future jobs that will become important/succesfull after the Freegold concept becomes the modus operandi of the international financial system.

High 5 said...

Why the U.S. Has Launched a New Financial World War -- and How the Rest of the World Will Fight Back

miked said...

>>The principle of causality is subsequent to the principle of non-contradiction (PNC) which says that is impossible to be and not to be at the same time and in the same respect.

I think whoever came up with that one had never heard of quantum mechanics Ivo ;)))

Ivo Cerckel said...

Miked says that whoever came up with
"The principle of causality is subsequent to the principle of non-contradiction (PNC) which says that is impossible to be and not to be at the same time and in the same respect "
never heard of quantum mechanics

This theory of general relativity is incompatible with quantum mechanics and especially with Werner Heisenberg’s uncertainty principle which says that
it is not possible to be exactly sure of both the position and the velocity of a particle;
the more accurately one is known, the less accurately the other can be known.
Einstein’s theory of general relativity concerns gravity and objects on large scales, quantum theory concern the electromagnetic force and the strong and weak nuclear forces on microscopic scales.
In the PRESENT STATE OF SCIENCE, the incompatibility between quantum theory and Einstein’s theory of general relativity, the issue of quantum gravity, remains.

I wonder whether Miked, like Wendy and Descartes, does not confuse being with knowing.

We may not know how general relativity and quantum mechanics are compatible.
But they are.
Proof: scientists are trying to solve the "mystery" of their compatibility.

Is paper money compatible with "our" society?
Well, "our" society hasn’t yet collapsed :-)

k said...

Exactly Desperado. The truth is that Denninger is tantamount to a charlatan in a suit. He is a self professed market expert with zero real knowledge of investing or trading, he himself is a software programmer. He has been wrong most of the time, I stopped checking his shill like website (he is behind most screenames of posters and has been proven so) when he kept shorting bonds over 1 year ago and kept saying the market was wrong and not him. He suffered massive losses but just stopped talking about it as if it would go away. He clearly is not trading with real moeny or he would have lost even his keyboard. And currently having missed this slight run up in gold he is upset by the uselessness of his forecasts and his website (read: his life).

In short he is a joke and a bad one, and could be described as a predictable contrarian indicator. This time saying gold is overpriced is a sure bet gold prices will double from here and shortly...

Im writing this because Denninger is dangerous, very dangerous. The unsuspecting crowd will be enthralled by his eager website design craftmanship and catchy articles and plow into his latest money destroying trades. Beware, you have been forewarned.

Ivo Cerckel said...

Contrary to what many authors (1) ague,
the principle of non-contradiction (PNC) is a law of thought and not a law of reality.

Reality is not submitted to the Principle.
Only thought is submitted to the Principle. (2)


See for example Ayn Rand who says that contradictions cannot exist.

Ivo: Yes, they cannot exist in thought, but they can exist in reality.

In reality, we have the contradiction of "paper" and "money" or "paper" as "money".
This blog will solve the mystery.

As Victor Hugo said
"All the forces in the world are not so powerful as an idea whose time has come."
"Il n'est rien au monde d'aussi puissant qu'une idée dont l'heure est venue."

To which Margaret Mead adds;
"Never doubt that a small group of thoughtful, committed citizens can change the world. Indeed, it is the only thing that ever has."

It is up to this blog to demonstrate the "monetary" contradiction in people’s thought …

… in memory of Vincent H. Miller,
founder and President of
Libertarian International, LI,
now the International Society for Individual Liberty, ISIL.

Fernand Van Steenberghen, (F-X De Guibert, éd.), "Philosophie fondamentale", Longueuil, Québec, Editions du Préambule, 1989, p. 296 note :
Contrairement à ce qu’affirment beaucoup d’auteurs, ces principes [PNC, law of identity and law of excluded middle] sont
des lois logiques ou des lois de pensée comme telle
ET NON des lois de l’ordre réel.)

Edwardo said...

For me, what makes Denninger's anti-gold diatribe absolutely asinine...

"you will also be acting in a criminal fashion, and will only be able to trade in this fashion with other like-minded criminals."

and strangely, an out and out howler to boot, is the fact that this is the very same person who has spent the last several years documenting in detail how U.S. capital markets are financial abatoirs run by a den of thieves, or, more to the point, criminals.

Bravo, Karl.

FOFOA said...

Re: Denninger

Please reread my three-part comment:
October 11, 2010 7:30 PM

In it I said, "...including a lot of deflationist and silverbug names you would recognize but I'm not going to list." Karl Denninger is one of those. He is "easy money camp."

He is actually in Bill Still's YouTube version of The Secret of Oz. They were talking about it in the thread under Karl's post...

These guys all hate gold, going back hundreds of years. They also hate the Fed which is the apparent overlap that confuses some of our peers. But they are NOT in our camp. The silver movement in the late 1800's was the easy money camp. Same people as the Greenbackers.

By the way, Gary North is still going strong:


golden tube said...

Yes Gary is.........

"......If we were to abolish the Federal Reserve System, and if the government would then transfer to American voters all of the gold presently said to be in the vaults of the Federal Reserve Bank of New York and Fort Knox, we would see the restoration of liberty. I can think of no other pair of laws that would transfer more authority to the voters the abolition of the Federal Reserve system and transfer of the gold in the form of tenth-ounce coins back to the voters. This is why this essay is hypothetical.

Who are the opponents of such a procedure? First, the Congress of the United States. Second, all the bureaucrats who work for the Federal government. Third, all of the decision-makers of the Federal Reserve System. Fourth, the vast majority of all commercial bankers. Fifth, the entire academic economics profession. This is why we are unlikely to see this pair of laws passed in our generation...."

miked said...

>>the principle of non-contradiction (PNC) is a law of thought and not a law of reality.

>>>>The principle of causality is subsequent to the principle of non-contradiction (PNC) which says that is impossible to be and not to be at the same time and in the same respect.

Most women would disagree with that Ivo. The women I know will not let a man win an argument and usually argue from both sides at the same time ;)))

Just kidding. Thanks for the references.

Desperado said...

G'day Fofoa,

Gary North's piece is simply sublime. How brilliant to bypass the entire federal and state government and get the gold directly to the people. Of course it would be suicide for the ruling elite. It would symbolically be the repudiation of a century of Progressive "achievements" and would drive a golden spike right through the heart of FDR's legacy and the "Democratic" party.

My question to you Fofoa, is in light of your admiration for the Euro, would you prefer to have the gold used as reserves to back a new Euro-style Dollar (which would support the ruling elite), or would you rather see it given directly to the people in order to bypass their power, kick start freegold, and to starve the elite of legitimacy? IMO, this decision closely parallels what I have been saying about the Euro and the EU.

FOFOA said...

Hello Desperado,

"My question to you Fofoa, is in light of your admiration for the Euro, would you [A] prefer to have the gold used as reserves to back a new Euro-style Dollar (which would support the ruling elite), or [B] would you rather see it given directly to the people"

A! Any day of the week. And the ruling elite part is your blind spot to reality. I'm not denying the existence of a ruling elite, only your vision.

I like you a lot, Desperado, but I cannot argue with someone who is blind to the obvious because of years accumulating false assumptions and poor information.

How about if they securitize all the national parks at $422.00/acre and give shares away evenly to the debtors and the savers? The savers will still end up owning them all. And the debtors will get their final welfare check as they sell their shares to the savers while the government finally becomes really broke. I suppose you'd like that. But what, exactly, would it solve?

If you cannot see that a two-way market (between the debtors and savers) for gold (that's buy and sell - "two way") is infinitely better than a mass give-away, then I really don't know what to say. You are what FOA and Aristotle would call a "Hard Money Socialist."

Getting the gold back into circulation is done through a free market price, not through a suppressed price give-away.

Gary North "realizes" this, even if he doesn't realize it: "If the price of gold rises, it pays someone to own gold. So, people begin to buy gold. Gold-using producers start buying."

But debtors don't hold gold. Only savers accumulate. Producers! As he says. Gold is for saving, fiat is for spending. The debtors will immediately sell their gold claims to the savers.

In my mind, it would be infinitely better for the USG to acknowledge Freegold, declare a starting price of, say, $10,000/ounce, and then open the vaults and let the price float. They buy and sell at the market price through the banks, starting at $10K.

The price would soon stabilize, much higher than $10K of course, but the two-way market would be in effect. The gold would not be gone. The currency would be stable once again.

You give it all away to the debtors at $42/ounce and let them sell it to the savers for their final $1,350 welfare check, where does that leave you?

Half the population wants easy money. The other half wants to save what they earn in gold. Can't you see this? It is not about "the elites." They are all mostly in the easy money camp. If they give the gold away at $42/oz the elites will buy it right back from the poor and then lock down the price for a new gold standard. Buy themselves another 67 years in power perhaps. Is this what you want?

Gary wants to divvy up the gold and then inflict Freegold. If you cannot see the disaster that this is, I don't know what to say to you. All to take power away from the central banks? This is the mistake. It is not their fault. As Greyfox said, “We have met the enemy and it is us.” We are at fault, for saving in promises. We give THEM power.

And Gary's proposal would do more harm than good to the overall modern economy. And it's not gonna happen anyway. It's a dream. A fantasy. A picket sign.

Would Gary's solution be okay with me? Sure! But it wouldn't last. And it won't happen, so it's purely academic, which he acknowledges. But Freegold is not!

And furthermore, all the power Gary wants to take away from the bureaucrats will be taken away ANYWAY when the dollar loses its global reserve privilege, and that privilege's sister, the paper gold market. Gone. Done. That's all it takes. Think it through, Desperado.


Desperado said...

Sehr Geehrter Herr Fofoa,

What I want is what the founders of the US tried to achieve: A strictly constitutionally limited federal government and a system of checks and balances that perpetuates this. So when you say: "years accumulating false assumptions and poor information" I consider this a critique on "the assumptions and poor information" from people like Franklin, Jefferson and Washington. The elites have stolen our constitutionally limited government and turned it into a monster they use to control and wreak anguish on the people.

Your example: "How about if they securitize all the national parks at $422.00/acre and give shares away evenly to the debtors and the savers?" strikes to core of this. The National Parks are clearly in violation of the constitution. Even worse are the national forests and all the federally owned BLM land. The federal government has absolutely no business owning this land, so the argument over how debtors and savers would use it is moot. Let the citizens decide what to do with it through their state and county governments.

With this statement: "In my mind, it would be infinitely better for the USG to acknowledge Freegold, declare a starting price of, say, $10,000/ounce, and then open the vaults and let the price float." I see our main difference. You think the Federal government is salvageable. I don't. I think the founders would be on my side.

As Thomas Paine said: "If there must be trouble, let it be in my day, that my child may have peace. ". Yes, handing the gold out would be a great shock to the economy and likely cause a collapse in gold prices and perhaps even anarchy. But it would in essence guarantee the complete overhaul if not overthrow of the federal government for many reasons, and for a period at least, they would lose control of "money" and the privilege seigniorage. Given the choice between guaranteed collapse of the federal government now and possible collapse later if the elites blow it and don't go Chavez, I'll take the former.

As you said, it will never happen anyway. But I find it an interesting and useful exercise anyway.

Mit Freudlichen Grüssen,


miked said...

FOFOA, why do you think the government should set the price at 10,000$? Surely the current market price is fine? If such a demand for gold really exists the market would adjust anyway?

As the US government only owns 5% of the world's gold I am not sure what a government sponsored gold window would achieve other than a more liquid market for physical gold in terms of US dollars?

To cause Freegold to come about they would also have to make paper gold illegal simultaneously, crash the paper market and wipe out wall st. I doubt very much they will want to pursue this course of action.

Unknown said...


POG is arbitrary. even at 10k per oz everything will function just fine. As opposed to oil that, if price increases faster than people's incomes, will slow down the economy. Thats why gold is not a commodity.

Opening up a physical window with a starting price of 10k per ounce does not mean that "the government would set the price at 10,000$". The opening bid is 10k, afterwards the price will go where it will go...

The above is actually the nuclear option that BIS has and that FOFOA writes about. It will probably happen after the situation has become untenable and the $ collapse is out of control. After all, the BIS does not want to be viewed as a $ destroyer.

FOFOA said...

Thank you Alek.


"I doubt very much they will want to pursue this course of action."

Ha! Obviously they will not. It is as much of a fantasy as Gary North's idea. But to "crash the paper market" as you say, opening a physical-only gold market with opening bid/offer at $10K would do that just fine. The current market price would not be fine for this. It is a paper gold price. They could even freeze the paper gold market at $10K and settle everyone out with fiat. That way they wouldn't make people too angry. If you had a share of GLD you get $10K in fiat. Of course the physical market is already up up and away, to $56K or something like that.

So what do you get as a GLD holder? You had an ounce of paper gold, now you can buy two 1/10th ounce pieces if you want. All in all a pretty good deal for paper gold. But then again, this is a fantasy. It is the very best possible choice the US could make, to front run euro Freegold. The dollar would be devalued and hyperinflation would likely be avoided. Many discontinuities that will certainly occur in a chaotic transition like Jim Rickards talks about, could be avoided under this scenario. But alas, it is only a fantasy.

You say, " I am not sure what a government sponsored gold window would achieve".

This is a two way gold market, buy and sell, not one way like the old US Treasury gold window of 1971 and earlier. What keeps it stable is the physical-only price. Having official gold available at the banks at a floating price would also help avoid hyperinflation as the dollar loses its reserve function. But gold could actually be bought anywhere, or sold anywhere, at the same price as it could be bought and sold at the official sources tapped into Fort Knox.


Wendy said...


That old sappy song is one of my all time favorites. Whenever I catch a song playing in my head it’s most often One Tin Soldier. “do it in the name of heaven, you can justify it in the end” kinda like bankster doing the work of god!!


FOFOA said...

Ah, Desperado,

I don't think the Federal government is salvageable. I think it is certainly not at its present size. But beyond that, I'm not quite sure how it will end up. A lot smaller I imagine.

The difference between our perspectives is that you are an activist and a dreamer, I am an observer and a realist. But the really interesting thing is that the high probability reality I am observing in its approach is actually much better for advancing your dream than your own implausible preferred actions. This is the part you cannot see.

Desperado, you say, "The elites have stolen our constitutionally limited government and turned it into a monster..." As opposed to the more perfect union created by Franklin, Jefferson and Washington. But the facts are that political power corrupts anyone, even the founding fathers. I submit this from Richard Maybury:

"Weren’t the American founders exceptions to “power corrupts?” No. As revolutionaries and founders, they were brilliant. But once their new regime was in operation, they launched a government-owned central bank, a bond scam, the unconstitutional Louisiana Purchase, and a default on debts to France followed by an unconstitutional war with France. This leads to a question that is rarely asked: if the founders couldn’t be trusted with power, who can?"

You said, "Yes, handing the gold out would be a great shock to the economy and likely cause a collapse in gold prices and perhaps even anarchy."

That is not why I think it is a bad idea. Not at all. The point of Gary's scenario, minting 1/10th ounce coins and then handing them out, is to get gold back into circulation again. He wants new gold money. But the point of Freegold is to finally free gold of its link to the debtors' folly. Circulating small gold coins as the currency always ends in tears for the savers. The debtors will always borrow and expand the currency, even if it is gold. But in Freegold, the gold floats against the debtors' folly. And it is the LACK OF A FLOATING MONETARY RESERVE in all other systems that gives your elites the power to grow beyond reason.

It is not fiat. It is not the printing press. It is not the Fed. It is the SYSTEMIC LACK of a floating alternative for the producers to store their savings that automatically funnels that power back to your power elite. It is what allows an expanding currency to expand its value in favor of the elites. Without it, the expanding currency would just dilute its own value, keeping the power of the printing press in check.

This was Aristotle's big epiphany back in 2000. (You can read all about it in the link in the above post) This is when it finally clicked for him, what FOA was saying. It is so extraordinary and seemingly counterintuitive that very few will ever understand it until it actually unfolds in front of their eyes. And it is, that we actually NEED fiat currency in order to free us from this burden, this never-ending struggle between the debtors and the savers. We NEED fiat currency to truly set gold free. Gold money just doesn't do it. It has been tried several times and it always ends badly because of the reality of human nature.

Gary's system might be the perfect system in a perfect world. But as Aristotle said, Freegold is the perfect system for our real world, our imperfect, real world. Freegold is what will keep the power elite in check, not gold money.


Edwardo said...


Do you believe that Ft. Knox holds gold in anything like the quantity that is claimed?

ShamefulPath said...


I've been reading your blog for a while and I like it, but I have a problem with Freegold I would like you to explain to me. I understand how Freegold is like Valhalla to savers, that makes sense to me. But it should be Hell for debtors.

Now I know you will counter that they can have the all the fiat they want. This is true, but who would lend it to them? Why would most savers take their gold and then buy fiat to loan to a debtor? I can see under some very specific circumstances, but the interest would have to be high to ward off potential loses of fiat value. Or the lender would be required to repay in gold, which brings us close to a gold system rather then Freegold.

Now of course the debtor can get money from the Central Bank through direct printing, but such a use would devastate the currency and bring unending hyper inflation to that particular fiat.

Now most savers are quite happy with keeping what they have, and under Freegold I expect gold to appreciate as fiat is debased, so they will even show a fiat measured gain. Why would savers invest when such a danger exists as to the return of their capital?

It seems to me the only reason the fiat system works for the debtors is they can steal value at every turn. Under Freegold they could no longer steal value so the system becomes mostly worthless to them.

FOFOA said...

Hello ShamefulPath,

Private banks lend to debtors for interest by expanding their balance sheets which creates new credit money (private bank liabilities). Reasonable loans tend to expand the economy and are not necessarily price-inflationary. The addition of the savers' savings into this process lowers the private banks' lending standards which ultimately implodes the system and the savers ultimately lose their savings.

In addition to this private bank inflation, the collective will tends to inflate the currency base (reserves) which is price-inflationary.

If your point is that Freegold will be Hell to sub-prime debtors with their hearts set on living in a McMansion with a 26 foot Donzi in the driveway, I'll agree with you.


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

Just one thing about Freegold confuses me FOFOA.

What will give gold its value in a Freegold world? In the old world gold got its value from the fact that it was money, legitimised by law, and that gold represented the assets in the economy it could be used to buy.

Under Freegold there would be no such law mandating it as money, or do you envisage some internationally observed mandate that gold be used as the international clearing mechanism, and nothing else?

After all without a law investors can use any kind of asset to store their wealth. Some people might think of dollars in terms of pork bellies and others in terms of Rhodium, and others just in terms of hours they work. What legal framework would be needed to make gold the default - and hence give it legitimacy to represent all assets in the economy?

ShamefulPath said...


Exactly, Freegold will be hell on many debtors. I understand the swing from easy to hard money as you have described, however can we really assume that the debtors will just go gently into that good night? As you have noted a lot of big players themselves are debtors, they take advantage of the soft aspects of fat. Why would it be in there interest for Freegold to exist?

Is there not an instance where the powerful debtors and the unwashed masses of debtors unit against Freegold? That they will either tax it or force a "More equitable redistribution of gold"?

Freegold seems that it would set savers free from the will of the debtors, and it seems against human nature and history that the debtors accept that willingly for any length of time. You point out the desire for the debtors to have easy money.

I also get what you mean about price inflation and productivity. I expect that some savers would use their golf to invest/gamble with productivity increasing loans, but less then then now. Because many would be happy with their gold appreciating via inflation in their home currency. And it will either appreciate a lot or a little depending on bank loans. As there is no latent productivity to steal from the savers increases in the money supply that does not boost productivity will be highly inflationary.

I appreciate you answer, but I'm still not understanding why debtors willing allow this system. I get that they might be forced to, but is Freegold just another battle in the eternal struggle between savers and speculators? If this is the last fight what is it that will forever defeat the debtors? The phase transition to Freegold will make gold holders wealthy, and human nature dictates that envy, particularly from the debtors that they would try something.

Having said all this I'm basically holding all the vast majority of my wealth in gold, meager as it is.

Michael H said...

@ ShamefulPath,

In previous posts, FOFOA has described a future system based on equity instead of debt. I hadn't been able to wrap my head around it then, but the objections you raise help me to see what he meant.

Savers would be less keen on making loans for the reasons you cite. But, since gold is static (it doesn't pay a dividend! you can't eat it!), people will be looking for opportunities to use their saved wealth to produce even more wealth.

So perhaps instead of making loans, they will invest equity in new ventures and businesses.

Consumptive loans will be highly curtailed, as FOFOA says. Likely we'll be back to loan-sharking and predatory loans aimed at taking the collateral after the loan goes bust. But savers will still be motivated to put their wealth to work in productive uses.

ShamefulPath said...

Oh I understand people putting gold to use for equity, but that would take time. I daresay many will be happy to sit on gold for a while after the massive revaluation upward. That however does not deal with the problem of debtors and human nature. The masses will cry out for free goodies and cheap money. But if the gov provides that they will destroy their currency as the savers will be spared. Oh and gold will still increase, as it will still increase in fiat denominated terms unless all money printing in a nation is flat. So the rate of return would need to be high enough to beat currency and future inflation expectations, risky when currencies will die during the phase transition. I would expect to see a Volker like rate of interest. Or equity holdings, and equity will be seen as meh as I expect them not to do great in the currency fire, so still a risk there.

The debtors have had the same goal for all of history. Now Freegold basically cuts them off at the knees, forever. Its this finality that strikes me as odd. If it was for a generation or two then back on the cycle that makes more sense. Can Freegold change the nature of man?

I'm all for Freegold and equity vs debt. It seems to good to be true which is why I have these questions. Debtors big and small will hate this system with every fiber of their being, and will try to eat away at it like rust.

I will also point out that Freegold will basically destroy the financial sector. Why invest in speculative and insane debt instruments when there is Freegold? And I think we have seen that this sector wields an absurd amount of political power.

Freegold would have a legion of powerful enemies, and a mass behind them. Why would the gov welcome Freegold and not tax it when these powerful voices will whisper in their ear "Tax gold, take it from them". After all the gov would like that value, and the debtors would like to see the savers route to safety cut off.

miked said...

Hello Shameful

Why would debtors hate this system? Their debts would be denominated in fiat and hence it would be possible for governments to inflate them away if they so wished. However, doing so would be undesirable because it would weaken the currency vs gold and would encourage investors to sell their currency. This is a feedback loop forcing some discipline on the government, but still allowing a degree of flexibility.

In the same vein savers will be cautious to lend for fear of having their loan eaten up in inflation, but this is a good thing. Only prudent loans will be made where expectation of repayment is realistic, and the madness we have seen the last 20 years could only ever repeat on a much smaller scale because following irresponsible printing inflation would quickly become endemic. Interest rates would rise and cut off borrowing and equilibrium would be restored. Targeting of capital should be comparatively efficient as bubbles would correct more quickly.

ShamefulPath said...


The debtors would not be able to have their debts inflated away. I will explain.

The debt will vanish in the phase transition. But what about after. Now assuming they get loans, which is doubtful because of the currency weakness. So loans would have to come from state organs which will destroy the currency, or savers would have to put their necks on the line which is unlikely. High inflation is likely with printing because of the physical gold trade and right after fiat collapse, people will be watchful for this for at least a generation. Germany is still watchful about money printing and Wiemar was a long time ago. There is no real flexibility, with all value being held in gold and currency for transactions it will be gotten ride of as fast as humanly possible particularly if there is printing. It is important to not that here in the US there is still a widely held belief there is backing to the currency and then many currencies worldwide are backed by dollars. Now imagine a world where everyone knows that the fiat is worthless and needs to be spent as fast as possible, either into savings or assets/services. In such a world would the govs be able to get away with printing since there is no value in the currency to steal, only an idea of value of transactional value. We are still in the mental case where people will hold fiat where in Freegold it seems that everyone would know that fiat is insane to hold, stripping the fiat of the ability to steal value from the holder.

So yes only prudent loans and you think debtors will approve of this? If they were so responsible then we would not be in this mess. The debtors basically want to live beyond their means and get free stuff. This cannot happen in Freegold. Either the loans are hard to get and the currency is stable (very high interest) or easy to get and massive inflation. This is hell for debtors, and I cannot fathom why they would willingly live in hell after living in debtor heaven. Remember the debtors like paying back in reduced value, however such a reduction of value in a purely faith based currency will lead to hyper inflation which most everyone will hate, save the gold holders who will simply laugh. Freegold is amazing for savers but I cannot understand how it's good for debtors. If they could get easy moeny and inflate it gently sure, but the gold market would watch currencies like a hawk and punish them viciously for printing. Remember it's gold bidding for the currency, and if it's being inflated wildly what is to cause gold to bid for the rapidly diminishing currency? After all would you bid your gold for Zimbabwe dollars in 07?

I might not fully understand freegold which is why I'm posting. The understanding I have puts a straight jacket on govs and debtors. Which honestly I love, but I don't see how it realistically holds for the long term. The debtors would have a choice, onerous interest terms or hyper inflation for debt.

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

Hi again Shameful

You are assuming that the debtors have a chance of getting free money again and that somehow soft money can continue. After a hyper-inflationary collapse wouldn't you think the chance of anybody getting a free ride would be pretty remote? After seeing their savings evaporate savers will be on high alert for the foreseeable future. Nobody is going to be giving loans out which can't be paid back for at least a generation. Even if by some miracle soft money were somehow recreated after a collapse savers will keep their money in hard assets and won't loan it to the banks again. Once bitten, twice shy. A second soft currency would be toothless and this is why hard money has always followed soft money in the past.

The only alternative to Freegold is a gold standard. And that makes Freegold the easy option for borrowers.

ShamefulPath said...

free/easy money will not be around immediately following a hyper inflation. FOFOA goes into this and I agree about his cycle theory. My issue is the finality. With powerful allies and coalitions they would seek to destroy Freegold as soon as possible. With modern propaganda techniques it is far easier to change public opinion then before.

I fail to see how Freegold is easier on borrowers then a gold standard. There are two choices, onerous loan terms or hyper inflation. I neither case gold holders would be totally safe, and the debtors at a disadvantage, at least compared to the last 100 years. My problem is not the short term, I understand that. But I cannot see how debtors will be forever reformed. After all but the most deranged debtors do not seek hyper inflation.

Now maybe the change would not happen again till after my lifetime and I'm a young man. Hell perhaps the debtors would even push for a gold standard to try to transition back to the easy money system. I like trying to see trends into the future, and like it or not human nature never changes.

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

You can't stop a drug addict from seeking out and taking a drug but you can restrict the supply. Even the drug addict would have to agree limited supply is better for his health :)

In the final analysis, a debt which does not get repaid causes a mis-allocation of resources so it should be avoided. If onerous terms of repayment are to repay all the money you borrowed plus a small amount of real interest then pray tell why should savers ever part with their money?

In reality a good loan is one used for productive means and a bad one is one used for a depreciating asset or still worse, for frivolous consumption. I think the borrowers you are thinking of belong in the latter categories. If, even after the lessons of a monetary collapse they are in the majority then Houston will have a problem :)

Texan said...


You are right. There won't be a lot of lending going on. So what. Everything will reprice to a level where taking on massive debt isn't needed to buy it. Think what happens to home prices if there was no debt.

Governments that are prudent in their expansion of the fiat will have a functioning society where fiat can be exchanged for a few beers and a meal. Governments that aren't prudent, won't last long.

No one can stop it. Everyone here berated Denninger, but I think he is right on about many things. He gets the logical end game for the deficit, he just thinks it's reversible. Most on this blog do not.

The "elite" will have no choice but to buy gold. If everyone even so much as thinks that others will start parking savings in gold, there will be a massive "bank run" on fiat, into gold. The classic prisoner's dilemma.

This is why everything, and I mean everything, hinges on whether the US can maintain "faith" in it's status as reserve currency. That's why QE2 has apparently split the Fed. Why South Korea is reported to be OPENLY mulling adding gold to their reserves. Why the ECB also looks split. Why China's mouthpiece paper is warning the US not to get too wild with this money printing thing. Why the Brazil finance minister is openly discussing currency wars. Why OPEC just warned they will hike oil to $100 if the dollar devalues. Why France talks about the bancor as a new reserve currency.

All this , and so much more, within the past MONTH. It's
all happening right now. No one wants the system to
change. They are happy. But they don't want to get wiped out either if the Fed tells them "so sorry about that inflation thing, too bad for you." So they are all starting to eye the
barn door. If the Fed goes nuclear, we could see a stampede.

ShamefulPath said...


I have no doubt that gold will be a major factor after the coming collapse of fiat. The world is getting unglued because everyone realizes we are nearing the absolute endgame of the ponzi. America is sick to the point it cannot recover without wiping out it's debt and restarting at a much lower level. Europe is in much the similar position, a broad generalization but they will be harmed at least on the personal citizen level. Perhaps the Euro can shield them a little, but the failure of the welfare state will still rock them to the core. Asia will have a rough ride because their customer will disappear overnight.

So I see a world where gold could rise like a phoenix as a store of value in the world of fiat. I just cannot fathom a world where the coalition of debtors can be chained for a long length of time. Debtors usually including the government, mega corps, some ultra rich, as well as the spendthrift masses. That is a mighty group in both power and influence. Bringing the world to it's knees and destroying the system will not stop them forever. They are like rust, rust just keeps coming.

As to the "elite" I totally agree that we follow in the footsteps of giants. Naturally old world wealth and smart money doesn't hold on to it for generations though wars, famines, plagues, government changes without being smart. So I totally believe that very smart, very powerful people have taken up a position in gold or held it from their family hoard and eagerly await a gold revolution. It would not surprise me if some of them are helping stoke the fires of this coming chaos for their own gain. After all they will be made even more wealthy and power and can expand their personal and family fortunes. But ultimately these type of people are quite adaptable and I could see some of them them siding with the debtors after they have gained the advantage of the gold revaluation. It will be a simply calculus about what is in their best interest in the long term and such a decision would not be taken lightly for any of them.

I'm not in any way against the idea of Freegold and I have a lot of respect for FOFOA's writing and insight. I simply fail to see some of the things he puts out there like everyone accepting the system to the point of not trying to change it though state action. Hell I love the idea of Freegold, and being able to save my money outside the inflation and capital gains tax of government.

costata said...

Hi ShamefulPath,

I have enjoyed reading your exhanges with miked, Michael H, FOFOA et al. Could we approach you question from a different angle? Who are these debtors who will want to return to a debt-based monetary and financial system?

Who can we include in a list of those who would oppose a return to a debt-based system?

In the "opposed list" I would include: India, China, Russia, most of SE Asia, the Middle East oil producing countries, many countries in South and Latin America and the EU countries with large gold reserves (France, Germany, Italy etc).

After the hyper-inflation has burned its way through the USA I suspect you could add their name to the list. After defaulting yet again the US$ will never be the world's sole reserve currency again. The best the USA can hope for after the debts are defaulted is to have a sound currency. Freegold will give them a shot at this due to their huge gold reserves.

FOFOA said...

Thank you Costata! Excellent response. I had just written this when your comment popped up.

Hello ShamefulPath,

You seem to be under the impression that lent money must come from the savers' savings. This is not how it works in a purely symbolic fiat currency system like we have now... and like we'll have in Freegold. Credit money is borrowed into existence from the banks. This is what banks do. They expand their balance sheets to satisfy the debtors and for that risk they earn interest. They take the debtor's promise onto their ass(ets) and create liabilities that can be spent like base money created by the government.

This system will continue in Freegold with the exception of the securitization process. The securitization process allows the banks to offload their assets (risks) to savers relieving them of the need for future prudence. Securitization, or structured finance, was born in the 1970's, expanded beyond mortgages in the 80's, institutionalized for sub-prime debtors in the 90's and blew up in the 2000's. Outside the US, this process was more than a decade behind, only emerging in Europe in the 80's.

So private debtors will only be set back 15 to 30 years at most, not centuries like you imply.

Governments, "the other debtors," have three different ways to get their money. They can borrow by issuing bonds, they can print expanding the monetary base, and they can tax the economy. In Freegold the raw printing will be curtailed because they will find it in their best interest to do so. As for the borrowing, the US will still borrow the same way the rest of the world has had to do it for the last century. Only the US exorbitant privilege will be gone. And as for the taxes, they will ultimately increase as the economy is revived through Freegold. Gold will not be taxed, mind you, because it will be the base capital upon which orders-greater taxable trade is built.

You must understand that savers don't save everything they earn. They spend most all of it. More than 90%. The countries with the highest savings rates are usually around 10%. This is part of the reason that fractional reserves can work, except in times of great economic growth where savings overtake monetary reserves and create monetary deflation. And this is exactly why it is better to have the link severed between savings and money.


FOFOA said...

The term FREEgold seems to be hopelessly confusing a great many of you, especially the ones suffering a myopic obsession with the "elite." So I would like to suggest a new name for this system, which is not really a system at all. It is more like the lack of a system: the dollar reserve system and the paper gold system. Without them, Freegold is what we have, along with whatever "system" develops. It is not something the debtors or the elite can fight. It's just a shift in the perception of savers. Can't change that.

So here's the new name I propose: CrackWhoreGold. Maybe this way all you NWO-types will stop associating it with whatever utopian concept you think TPTB will never let you experience. CrackWhoreGold works very well actually:

1. Always available at the right price.
2. Will go with any guy (or gal) regardless of nationality (subject to 1 above).
3. Gets high whenever possible and tries to stay high.
4. Has a pimp called Uncle Sam who wants her down on "the Street".
5. Milks big spenders for everything she can get but ultimately prefers the company of rich patrons.

So from now on, when you "elite-ophobics" come at me with something like ShamefulPath did here: "Freegold is like Valhalla to savers...", I'm going to insist that you call it CrackWhoreGold instead: "CrackWhoreGold is like Valhalla to savers." Maybe it'll make you think things through a little.


ShamefulPath said...


Can we make such broad generalizations? I ask because virtually all governments are debtors, and have been for most of human history. This is particularly acute in democratic systems. After all politicians are elected by making promises and being Santa Claus. After all they may loot the future since they will not be in office to take the heat.

We really have smaller groups that we can identify as debtors vs. savers.

ShamefulPath said...


How does fiat gain value? Now it seems to me we are looking at a supply/demand function. After the savings value is removed from fiat that will vastly decrease the demand. So unless the supply is limited the reduction of demand will reduce the value. In a system of reduced demand and ever increasing supply gold would buy an ever increasing amount of gold right?

Now as to securitzation, without this fait loses another weapon. Now in a world without securizization fiat loses the ability to be stored there as an investment and reduce cost inflation of goods/services.

Assuming hte private banks can keep making money and still have the backing of hte CB, it would lead to what we have now of the ability and indeed race to create new funds to buy assets.

Taken otgether it seems to me to be a solid ever increasing supply and realativly static demand for holding fiat. As fiat would be transcational not a value holder. I'm struggling with seeing curancy stability with this.

Now instead of an attack for elite phobia, can you explain why powerful people would not conspire for personal gain? After all in your articles you point the the house of Saud conspiring with CBs to keep the $ price of gold and oil down. You write about the BIS conspiring to end the dollar reserve system and the Soviet Union. Indeed is not CrackWhoreGold going ot be brought about by hte machinations of the BIS and other giants? So are these the one people who have conspired?

Also can you please explain more clearly why gold as capital would not be taxed? I know a little about the tax system in the US and worldwide and many nations tax capital. Why would gold as capital be different? I know you wrote about taxing what they do with capital, but what is special about not taxing every step as government loves to do.

Pete said...


I know this isn't the answer you want, but I do definitely suggest reading through all of FOFOA's articles and the comments/responses posted on each one. It will take you a while but I am sure that your questions will be answered. Even questions you haven't thought to ask yet will probably be answered.

Edwardo said...

FOFOA wrote:

"Governments, "the other debtors," have three different ways to get their money. They can borrow by issuing bonds, they can print expanding the monetary base, and they can tax the economy."

It seems to me there is one other way and that is confiscation, as in mandating that savings in retirement plans be deployed into government debt instruments.

Anonymous said...

Hi all!

Harvey says Germany BUYS its gold on the free market in order to mint its coins, which they mint in high numbers and every year since 2002. There are five mints in Germany so far I know.
Prior to 2002 and EMU/Maastricht we even had VAT for gold. I know no other country in Europe except Austria with so many gold dealers (hundreds?) as Germany. As is well known, Germany has only about 5% of its gold within its borders. Is this its way to prepare for Freegold? Prior to 2002 there has been no minting of gold after the WWII. Does anyone know more on this subject?

costata said...


You asked:
"Can we make such broad generalizations?

IMO Yes. Look at what the countries listed are doing and in many cases have been doing for some time. A few examples:

India - the population, with savings, saves in gold and has done so for thousands of years.

China - has ramped up its gold production to take the No. 1 spot. They actively encourage their citizens to buy gold and silver.

Russia has been building its gold reserves at a rapid pace and continues to do so every month.

The Eurosystem Central Banks mark their gold reserves to market every quarter. No other Western country CB does this. Ask yourself: Why?

Re: Debt

I think you have a blind spot on this subject. Regardless of whether politicians love debt, or anyone else for that matter, there is an exponential function at the core of the current system.

It is simply a fact of mathematics that at some point the debts become unpayable when growth is exponential. It is just a matter of time.

It is axiomatic that debts which cannot be repaid won't be repaid. Do you truly believe that people will readily accept a return to a debt-based store of value (savings) system after a massive global default?

If you don't understand exponential functions this series of videos by Dr Albert Bartlett will explain them in a clear and easily understood way.

Link to vid 1 of 8:

costata said...


Pierre Lassonde talking with Eric King over at King World News.

“While traveling last week I was speaking with an individual from a top bullion bank from Europe. He said his trading desk has seen their Chinese business go up to record levels in the last two weeks. The most interesting aspect to me is the fact that the Chinese central bank is diversifying their reserves away from the dollar, and they are literally buying all of the local gold production inside China.”

“Because of this the Chinese jewelers are not getting any gold, so they are having to purchase all of their gold on the open market. Internal Chinese citizen demand is already 350 tons per year, and growing by about 15% per year relentlessly.”

“Chinese demand is already at high levels, so another 15% added to existing demand raises their citizen’s appetite for gold to over 400 tons next year. If the Chinese central bank continues to consume internal production at the rate they are, it would be difficult for the gold market to experience a major correction. The Chinese central bank would have to back off purchases of internal production for 3 months or 6 months to get a major reaction in the gold market.”

miked said...

That's one ounce for every 118 people per year Costata. 350 tonnes sounds lot but there is room for growth for sure, especially in a panic.

Michael H said...

@ ShamefulPath,

You wrote:

"How does fiat gain value? Now it seems to me we are looking at a supply/demand function. After the savings value is removed from fiat that will vastly decrease the demand."

Besides the 'store of value' demand for a currency, which, as you note, will soon disappear, there is the 'usage demand', as A / FOA / FOFOA have written.

Currently, the dollar enjoys a very high usage demand thanks to the fact that oil is settled in dollars.

From what I can tell, the future of currencies will be a new 'currency war' for usage demand. The currency that gives the most usage benefits will be used for international settlements, and thus will enjoy greater demand and will thus give the issuing government the most seigniorage benefits.

I think this is where FOFOA gets the direction for 'gold will not be taxed', since a government taxing gold will impede usage of their issued currency.

(As an aside, I noticed that FOA stated that gold would have capital gains tax applied to it, so maybe the issue isn't fully settled?)

If no currency gives sufficient benefits to be used as an international clearing mechanism, then the default clearing function will return to gold, and no government will get the benefit of seignorage. It seems that this 'pure gold settlement' outcome is what the new Euro architecture was trying to prevent.

costata said...


Agreed, there is plenty of room for growth.

I put up that quote for other reasons. I have maintained for a long time that China has much larger gold reserves than their official 1054 m/t. I am also on record arguing that there is no "China put" underpinning the gold market. IMO China already has all of the gold reserves they want/need.

China is mining over 350 m/t of gold pa. If Pierre Lassonde is right then China's inground reserves are becoming aboveground reserves at the rate of 350+ m/t pa.

Also bear in mind that they are mining gold at cut-off grades that reflect current prices not Freegold prices. Note too that their mining laws have a provision built-in to convert miners in China to contract or toll operations. In other words China's government is "immunised" from Freegold pricing on their local gold deposits. They can add to their gold reserves as long as they have inground gold.

Meanwhile their citizens are competing for gold in the open market though it is important to remember that most of their purchases are re-sold and exported in the form of jewellery.

Since jewellery sales have been declining (on WGC figures), in effect, Lassonde is saying that the "15% added to existing demand" IS purely investment demand.

Therefore his 15% estimate may grossly under-estimate the rate of investment demand increases. If, say, jewellery takes 250 m/t of the current consumption of 350 m/t then, on Lassonde's figures, investment demand in China is increasing at 50% pa not 15% without unsettling the gold market to date.

Since FOFOA knows most of this already merely posting that quote conveys more meaning than the words might suggest. Sometimes I forget to break it down.

costata said...

What is Karl Denninger saying here?

Sounds a lot like A/FOA and FOFOA to this simpleton.

"In both cases the economy failed to truly recover as the excess debt remained as a millstone around the neck of the economic and monetary system and since that excess credit is ten times or more the currency base there is no ability to "inflate it away" without causing an instantaneous collapse of the currency."

"...Were he (Ed: Ben Bernanke) to face me in a debate of 30 minutes or longer I could, in fact, force him to admit it or sulk away and concede by silence, using nothing more than publicly available data and a basic charting program such as Excel. That debate will never happen and you will never see Congress do it (even though some of them know it too) because the day it happens confidence disappears and unless that realization comes with a concise and cogent plan to address the problem all markets tied to the United States instantaneously collapse."

Someone foresaw this and conceived a plan. Separate the store of value role from fiat currency and allow a free market in hard assets. Gold naturally being the hardest of hard assets would have primacy. Freegold.

Allow fiat currency to float against gold and be used as the medium of exchange. With a single mandate of stability the ECB Eurosystem Central Banks launched the Euro.

Euro + Freegold = New system to replace the $IMFS. As Another said"

The politics of the ECB? It is as a "side show"? We watch this new market, yes?

CrackWhoreGold said...

Hey Costada,

Denninger seems to be just on the threshold of CrackWhoreGold, but he just can't seem to make it through the gates and into Oz.

The real joke is that the title is "So You Want Me To INVEST?" while Denninger claims that instead of gold we should buy derivatives and options to hedge against collapse. The man is a dolt.

However, as far as Euro + CrackWhoreGold being the replacement to the $IMFS goes, I would probably side with Denninger. The Euro is as much of a dead man walking as the $IMFS, just look at the rioting in France. What do you think they are rioting about, the Fed? Or the perhaps are they sick of the EU-elite?

costata said...


"The Euro is as much of a dead man walking as the $IMFS, just look at the rioting in France. What do you think they are rioting about, the Fed?"

No, they are rioting about the retirement age for a part pension being raised by two years to 62 and full pension by two years to 67. The government pension system was introduced by Otto Von Bismark with a retirement age of 60 when the average life expectancy was 45.

Do the math.

In relation to the "dead man walking" Euro, the AUS$ was dead at what exchange rate in the last 40 years? US$ 1.43, 1.00, 0.48, 0.98, 0.86, 0.72 etc. With all due respect, you do not appear to understand the implications of floating exchange rates. Reading Robert Mundell's writing on this subject could be beneficial.

Anonymous said...

Sorry, Costata,
your last post does't show you know much about Europe.
Desperado has tried to explain the situation in the EU, but you didn't get.
Except for vandals in France, everyone here is fed up with the lies and the corruption we have. It's not so much about pensions. In Germany we have for weeks demonstrations (S 21 to google) and its really not only about a railway station.
You have no idea about the European policy imposed upon US and you don't have to as you don't live in Europe. Keep staying busy with freegold (religion?) and let BismarCk rip. He was a great man and his reforms were not socialist.
Thank you

costata said...

Hi Fauvi,

I'm not suggesting that I personally have any expert knowledge of Europe but Australia has a hugely diverse collection of migrants and a jet airplane or two.

I have no connections in France or Switzerland that can give me any on-the-ground feedback.

For Europe I have to make do with feedback from the relatives, friends and contacts I have in Ireland, England, Poland, Latvia, Spain, Greece, Italy and Germany. I also admit that sometimes being "a local" could also influence their perspective. Australians are often woefully ignorant and parochial in their perceptions of Australia.

So in relation to the recent protests in France all I can go on is what I read. The reports I have seen say that the protests are about a plan by Sarkozy to lift the retirement age for pensions.

If that is not what the protests are about by all means tell me what they are about.

Does your observation invalidate my comment about floating exchange rates?

If the Euro floats it can be any "price" expressed in any other currency. How do you "kill" a currency that floats? I put forward the AUS$ as a case in point because it has experienced wild gyrations over the years and it survived them.

Are you expecting the EMU to break up and the return of national currencies in Europe?

I realise that Desperado despises the current EU regime. I'm not attempting to defend it but it is what it is. The PTB wangled the EU government into existence through treaties when the referendum process failed. It is a fact.

FWIW I think Bismark was a brilliant strategist but I don't think he was a social welfare pioneer or a socialist.

You said:
"Keep staying busy with freegold (religion?)"

This accusation is truly ironic when you consider that I came up with that term (CrackWhoreGold) and the description. I suggested FOFOA use it to counter these quasi-religious and social engineering interpretations of Freegold. I hoped it might help some people approach Freegold with a more prosaic mindset.

Even more ironic is that you should use the "religion" label in a comment about a comment I made to someone calling themselves CrackWhoreGold.

Thanks for the laugh.

costata said...
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costata said...
This comment has been removed by the author.
Anonymous said...


maybe I was a bit harsh with you. Excuse me, it wasn't my intention.

Of course you can't have a precise view of the situation in Europe. Fact is that we are ruled from people we didn't elect. Fact is that these people are corrupt and misuse their power they thave highjacked. I cannot actually understand how an intelectual like you aree one can believe what MSM writa about the riots in France. And yes, there not only unions (which I don't like either, there are also unfortunate youngsters gone wild. I've spent plenty of vacations in France, have friends there and I find life in France just as hart as somewhere else in Europe. Pleople are quite poor in Europe and stupid. They have been lied to for decades. And looted. When your scum of a govmt take you 40% of your income ppromising you SS and medicalcare how do you call that? You all seem to have a very good opinion about Germany. Wrong. We drive BMWs to the discounter (Aldi). But we save. We save water and electricity and every year we pay more and more. The natural gas and the heating oil are becoming too expensive for the middle class when you have even one child. How can you save when your money is taken away from you? I need no darn medical care but I have to see how ineffective medical care is professed in hospitals on 80 - 90 years old who cannot say anything. People are indoctrinated and EXPECT returns for that had been take away from them. How can I trust these governments that they have a sound monetary idea? Germany is socialist. We now have laws modified like they had had in the DDR!!! Who knows that

Anonymous said...

Der Spiegel won't write that. I don't expect any retirement, pension. We have been fortunate enough to be able to save and disconect from the paper money but that doesn't mean that I am not AFRAID!!! Germany might be the black swan, you know. Why? Because we are not a "real country". After WWII Germany has not signed any peace traty with any victors. International laws say the we are some kind of outlaws and we live in German Reich! After the reunification we should have voted for a constitution which we didn't. The Grundgesetz was a temporary kind of constitution. Do you now the generral attorneys have to ask the min. of justice if they want to prosecute a politician? Have you heard the DB Ackermann had had his birthday in Kanzleramt sponsored?
Just look in voltairenet who exactly Sarkozy and Merkel are. How do you trust these people. These are nicht TPTB, They are the powers that ARE!
These protest you see are a consequence of failed policy: bad education, rampant unemployment (in G. there is the so called Hartz law: people have to work for one Euro/hour if they couldn't find work when unemployment allocation ended - after one year or 15 - 24 months for the older. There are no jobs for the older! Almost nobody works at that age. They have destroyed about 10 mil. jobs in Germany since 1990. That's why people protest. You may want to know why they don't protest in G. Well, there is less solidarity and we have our discounters. And we know nothing about MONEY. NOTHING! They smell the rat but can't identify it. Even our blogs are not indeep analysis but revolt is in the air. Nationalism is spreading everywhere.

Anonymous said...

How do you change that? HOW? WHEN? When everything is already lost?
Yes, I want a breakup of the euro. Why should not ALL currency float freely against gold? Because G has no gold? Because G. want to "integrate" itself within the EU so that its big corporations explot the rest of the EU? We are the European China, we disrupt the rest of the continent that's why we gave them eventually money, OUR taxes, money I cannot SAVE myself as I WANT! And btw even our stupd MSM is censored like in most western EU including France, Italy,Spain (I speak or read these languages).
Me too I look for a solution and I would love that bitch of freegold, the economic arguements when considering debt are overwhelming but I am anguished because we are ruled by SOCIOPATHS! And as long as nobody can explain to me why they would accept the bitch and what further plans may be with that, well it's still "religion"! The giants may have and already have their tons in private vaults and they don't need me and you to spread the gold. They have their competition among themselves. What they need is a dumbed down population, even less useless eaters like in feudalism. And we are already there. The gap between knowledgeable and wittless grows day by day. Huxley, H.G. Wells and Orwell have warned us. Were they conspiracists too? In case you want to translate German texts I'd give you serious links to read especially about G.

costata said...

Hi Fauvi,

Thanks for explaining how you see the situation in Europe, and Germany in particular, in such detail.

You might be surprised to know that many of the societal trends, abuses and government theft programs which you describe are practiced in Australia too.

These are offset by some attributes that Australia possesses which could be categorised under the heading "pure dumb luck". These include no land borders, a small population for the size of the country and massive natural resources that can be extracted "free of charge" from the Earth. ("Free" resources under an economic doctrine that refuses to price environmental impacts and depletion.)

IMHO it would be naive of anyone to thinks that Australia is coping better with this episode in history due to a superior system, wise politicians, good government or a better ethical/moral code of behaviour.

As FOA observed, if you don't like the present system you are going to hate the next one. However my reading and research tells me that the failure of the $IMFS is inevitable.

The only credible alternative I have found is the Euro Freegold model that A/FOA and FOFOA have explained so exhaustively. In my estimation this model may give many countries, who have been dominated by the Anglo-American empire, an opportunity to chart a new course without US$ hegemony.

In the meantime I think that surviving the transition has to be the No. 1 priority and I also think owning some physical gold is a key part of a survival strategy.


dojufitz said...

Robert Fisk on the demise of the USA dollar

sorry if this had already been posted.

Anonymous said...

"Once the dollar begins it's decline through price inflation, it's use as a reserve and more importantly it's use to establish a gold market will stop. This will cause an unexpected delayed positive impact on gold values as gold's paper marketplace goes through tremendous convulsions. We may see dollar price inflation in all things, yet gold values fall as contracts fail from constricted supply."

"Further, they continue to use the various dollar gold derivatives even as their paper supply mushrooms. A process that forces the contract gold price down. Yet, all the while they are proclaiming that they are "in the gold market" and bemoaning how the manipulation of the metal is giving them loses."
Is this what happens today?

Anonymous said...

"A failing currency system would find governments and bankers selling into a virtual "black hole" of demand. "

Do we have a "black hole" of demand "?

I guess we have. And yet the market/dealers have plenty of metal.
How that? How long? The OI are not shrinking massively. Why?

CrackWhoreGold said...

Hey Fauvi,

Thanks for an excellent set of comments about Germany and the political situation there. I completely concur.

@Costada, as Fauvi says, the reason these guys in France and Greece are protesting is only partly rising retirement ages. BTW, the western press is typically lying once again. They all say that the lazy french are striking because the government wants to raise the retirement age from 60-62. This is a lie. They want to raise the full retirement age from 65 to 67, and the minimum retirement age from 60-62. I know that a lot of recently unemployed boomers in the USA are taking early retirement at 60 for lack of other options. I don't here the MSM carrying on about that.

But this isn't even the real point. They are far more upset that the elites are planning on loading "austerity" onto the shoulders of the working class, while they plan to continue to jet around the world to their various G20, GATT, AGW, Davos and whatever meetings in a constant unseen plot to milk more tax money from the government and rents from the middle class.

What the strikers (currently mostly restricted to France and Greece) are saying is "So Nicht!". It is not going to happen this way. They are saying that if the EU-elite are planning stealing the pensions they were promised then there is going to be a fight.

The situation is really that the sheeple were willing to accept an elite that suppressed democracy and made all the decisions as long as things continually got better or at least didn't get worse. Now they see that after putting up with all the elite's bullshit that the elite want to saddle them with the full brunt of "austerity". So Nicht!

The situation is really very similar to the healthcare debacle in the US. Flyover country has had enough. Even if the elite manage to keep enough RINO's and Democrats in power to prevent any meaningful change, the game is far from over.

This is the political dimension that is going to shape both the timing and ways and means that freegold will be adapted, if we are even so lucky.

One final point, I took on the handle "CrackWhoreGold" because I was getting frustrated with Fofoa trying to restrict the scope of comments on his blog. What would Another and FOA think of a friend of theirs who tried to belittle and even humiliate concerned bloggers because they had differing views about the EU-elite by forcing them to grovel around and use the term "CrackWhoreGold"?

Best Regards,


costata said...

Hi Desperado and Fauvi,

I understand that there are deeper issues than the ones presented in the press. Ireland, Latvia and Iceland are case studies for a more widespread problem.

The bankers who have transferred their debts to sovereigns now demand the application of the IMF's mathematically impossible "solution". In effect they want all tax revenue to be applied to servicing debt. Meanwhile the IMF imposed austerity measures shrink the economy and the tax revenues.

On the other hand the citizens in many of these countries have been duped by politicians into believing that their mathematically impossible promises of pensions and social welfare programs can be delivered.

It's a real mess.

At some point I hope there will be a compromise and some restructuring of unpayable debt will be accepted. Likewise on the welfare and pension programs. However, "hope is not a strategy" so I'm not counting on good sense to prevail in time to avoid a disaster.

SatyaPranava said...


i know we sometimes get so caught up in the moment that we forget what happened yesterday. i think that might have happened re: your fisk posting. that was Oct 2009 news as we were melting up.


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