Friday, October 21, 2011

Tweet this!


FOFOA is now on Twitter!

http://twitter.com/#!/FOFOA999

Still trying to figure out where I type to twit, but I'm sure I'll learn. ;)



Sincerely,
FOFOA

397 comments:

«Oldest   ‹Older   201 – 397 of 397
Anonymous said...

Ozzy, where are you living, I mean which country?
You know what, M. T. also said “I want my money back”. ;) Me too. As long as the socialist government is confiscating 1/3 (best case) from my income I have no problems when people ask, expect their entitlements. That’s socialism we have and we have to cope with.
Nobody asked me if I want to pay in the ponzi rents (19%). Nobody is interested about my opinion regarding criminal health care (15%). VAT 19%!!!And it goes on and on so that in my opinion it’s not people harming the system but the other way round.
So now I count every darn day the system agonizes and hope for a BIG funeral!

JMan1959 said...

"Gold for Oil," coming soon, to a theater near you? Looks like Greece(and maybe even Italy) may be willing to exit the Euro after all, in spite of all the headaches it will cause. Just goes to show that in politics, anything can happen. People don't always choose wisely, economically, or for the greater good. Socialists are like three year olds--it's always difficult to give them a haircut. I can't wait to see how they fare under a devalued Drachma, they are hosed either way. It's like the quote from the young chess master in "Searching for Bobby Fischer":
"You have already lost, you just don't see it yet."

JR said...

Hey Joel,

Since its slow, here's some neat off-topic history: Did you know that the bathtub was introduced into the United States circa 1842; and that surprisingly popular American sentiment was largely resistant to this new development in personal grooming until President Millard Fillmore had a bathtub installed in the White House in 1850, making the invention more broadly acceptable?

Silly Americans I say, so easily led about by others, don't you think?

Cheers, J.R.

JMan1959 said...

JR,

Is that a cryptic analogy? So unlike you, if so, lol...

JR said...

As deliciously illustrated in the Bathtub Hoax by the skeptically cynical free-thinker HL Mencken, don't believe everything you read.

Indeed, others have noted, "It is easy to laugh and lose sight of the motive behind “A Neglected Anniversary.” Mencken wished to demonstrate the dramatic inaccuracies of many newspaper accounts, which are too often swallowed whole by uncritical readers."

Indeed, in today's world Mencken's prescient message is perhaps more profound:

Just before his famous confrontation with Tucker Carlson on CNN ’s Crossfire two years ago, Jon Stewart was introduced as “the most trusted name in fake news.” No argument there. Stewart, as everyone knows, is the host of The Daily Show, a satirical news program that has been running since 1996 and has spun off the equally funny and successful Colbert Report. Together these shows are broadcast (back to back) more than twenty-three times a week, “from Comedy Central’s World News Headquarters in New York,” thus transforming a modest side-street studio on Manhattan’s West Side into the undisputed locus of fake news.

The trope itself sounds so modern, so hip, so Gawkerish when attached to the likes of Stewart or Stephen Colbert, or dropped from the lips of the ex-Saturday Night Live “Weekend Update” anchor Tina Fey, who declared as she departed SNL, “I’m out of the fake news business.” For the rest of us, we’re knee deep in the fake stuff and sinking fast. It comes at us from every quarter of the media—old and new—not just as satire but disguised as the real thing, secretly paid for by folks who want to remain in the shadows. And though much of it is clever, it’s not all funny.

Fake news arrives on doorsteps around the world every day, paid for by You, Time magazine Person of the Year, a.k.a. Joe and Jane Citizen, in one way or another. Take for instance, the U.S. government’s 2005 initiative to plant “positive news” in Iraqi newspapers, part of a $300 million U.S. effort to sway public opinion about the war. And remember Armstrong Williams, the conservative columnist who was hired on the down low to act as a $240,000 sock puppet for the president’s No Child Left Behind program?...

JR said...

"...Many people believed that his confession, and not the original article, was the hoax. Mencken felt impelled to pen a second follow-up appeal, titled “Hymn to the Truth.” Writing in the Chicago Tribune of July 25, 1926, he commented, “The Herald printed my article [“Melancholy Reflections”] on page 7 of its editorial section . . . with a two column cartoon labeled satirically, ‘The American public will swallow anything.’ And then on June 13, three weeks later, in the same editorial section but promoted to page 1, this same Herald reprinted my 10 year old fake—soberly and as a piece of news!”

Mencken’s history of the American bathtub had been so graceful and charmingly constructed that people simply wished to believe it.
Since then, curious researchers have thoroughly discredited Mencken’s bathtub “facts.” Biographies of Mencken feature the hoax he had played so well that even he could not debunk it. (All the bathtub pieces and more are compiled in The Bathtub Hoax and Other Blasts and Bravos, edited by Robert McHugh.) Yet references to Fillmore’s first bathtub still can be found. That piece of fiction has even made it into the Age of the Internet. The Internet Public Library’s page on Fillmore, part of its series on presidents, lists under “Points of Interest” the following: “The White House’s first library, bathtub and kitchen stove were installed by the Fillmores.” (See http://www.ipl.org/ref/POTUS/mfillmore.html.)"

JMan1959 said...

JR,

I too, believe the Euro will survive, solely because of the genius of it's CB architecture. I am just not convinced the masses of rioting socialists are going to be willing to take their prescribed medicine. Fixes (bandaids) are not so easy without a Nation-state printing machine.

nycerroll said...

It would be funny if it weren't so sad:

http://worldcomplex.blogspot.com/2011/11/canadian-mint-launches-new-gold-etr.html

DP said...

Thank you, JR, for introducing a welcome and refreshing breath of Moldbuggery to the light entertainment section during this quiet comments season ahead of Cannes.

Sincerely,

DP

Indenture said...

nycerroll: I've been to some interesting scientific web sites but http://worldcomplex.blogspot.com/ hurts my brain. If anyone wants a neuron scramble read some Worldcomplex.

Try reading 'Inference of dynamics for complex systems, part 1 2 & 3'

Or... Go to the garage, get a ball-peen hammer, place genitals on work bench...

Crack said...

@Indenture

Cld be wors - try readin a lil Ash befor litesout

Wher he at anyways...

Anonymous said...

I just loved it, “JR”!!! The best laugh I had today. God, I am so curious how this
“Mencken is überall” develops.

Indentured said...

.

Indentured said...

This is a test of the FOFOA Broadcasting System.
This is only a test.

Edwardo said...

http://www.zerohedge.com/contributed/foreign-central-banks-have-left-building

The worm may be turning in some interesting ways. Today, for example,
the dollar spiked up, but gold did not, conversely, collapse.

M said...

@ Costata

"Gold Miner Stocks

Heads up! From our old friend Bron Suchecki of the Perth Mint."

Im not buying it. In a world with this much money sloshing around, there is no technical reason for the shares to be lagging. Sure there has been allot of shares issued but there has been allot of shares issued in other industries too. Just look at the internet stock bubble 2.0.

Gold stocks never took off in the 70's bull market until the end.

M said...

Royal Canadian Mint to sell gold for $20

Of course, $20 will only buy a speck of bullion about the size of a grain of sand, as gold costs more than $1,700 an ounce. And the buyer won't actually receive gold, he or she will only receive an Exchange Trade Receipt that provides evidence of ownership of gold held in the Mint in Ottawa.

But the Mint says in a statement investors "will be entitled to redeem their ETRs for physical gold products in the form of 99.99 per cent pure gold bars or coins."

mr pinnion said...

Now thats what i call gold speculation.

Regards
Ozzy

costata said...

Hi M,

I wrote a response to your comment about Bron's post which blogger ate.

I'm too depressed to recreate it tonight. Perhaps tomorrow.

Cheers

mortymer said...

With "no comment" note:

http://www.bbc.co.uk/news/business-15549896

Enjoy!

mortymer said...

Tanzania upsets African Barrick Gold investors

http://www.telegraph.co.uk/finance/newsbysector/industry/mining/8838485/Tanzania-upsets-African-Barrick-Gold-investors.html

mortymer said...

Not yet in KWN Broadcast folder but already accessible via their "KWN Special":

http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2011/11/1_Fleckenstein_-_One_or_Two_Year_End_Game_for_Money_Printing.html

Ps: yes, their page needs improvement (e.g., searching in archives, filtering, etc), emailed with them gave hints, nothing changed, grrr.

mortymer said...

...and since I have not put any music for long time:
http://www.youtube.com/watch?v=w8fI7JWzn9c

With a very short reminder:

"PRESS RELEASE
1 November 2011 - Change of presidency of the European Central Bank

Today, Mr Mario Draghi, former Governor of the Banca d’Italia, has taken up his duties as President of the European Central Bank (ECB).

He was appointed on 23 June 2011 by the European Council for a term of office of eight years.

He succeeds Mr Jean-Claude Trichet, who was President of the ECB from 1 November 2003 to 31 October 2011."

http://www.ecb.int/press/pr/date/2011/html/pr111101.en.html

Piripi said...

Here's an interesting sign of the times:

Those who have has their perspective adjusted by the Thoughts of A/FOA/FOFOA for the most part tend to become "physical gold advocates" (PGAs). They understand that physical gold is the lowest common denominator and the bedrock of an honest monetary system, and as such can have no fixed value.

Far and away the larger part of the "gold community" however are "hard money socialists" (HMSs) who realize the need for gold's influence over the larger monetary system, but continue to denominate gold in currency. As such they see gold also as a speculative vehicle with which to hopefully capture some profits in currency via the trading of options, futures, mining shares, silver and other derivatives of gold.

Well, it seems some of the HMSs are re-evaluating at least part of their approach, contemplating bringing their actions, if not their understanding, more into line with those of the PGA.

This post by The Turd is well worth a read, all the way through IMO.

Unknown said...

is greek referendum some kind of a joke
http://newsongold.blogspot.com/

mortymer said...

Blondie, neither one of those A/FOA/FOFOA adjusted anyone´s perspective IMO. Those who seek information find what suits them, their level of understanding...

We are floating here, there are waves up and down, fear and greed. Some want anchor, (which has been tried and is considered dangerous and un-effective) more experienced just a good reliable compass. The IMFs drunken captains holding the wheel try to steer in uncharged waters almost tripping the boat while more and more see the benefit of a golden rose.

Speaking of MF_Global, there is an interesting perspective to look at the event as an institutional bank run due to asset/liability maturity mismatch:

http://www.zerohedge.com/contributed/greco-franco-bank-run-has-skipped-pond-landed-nychicago-and-nobody-noticed-exactly-i-pre

sean said...

Turd Furgeson is one of the few commentators out there with a holistic view of gold and silver, able to present technical analysis in the context of global politics and market manipulation. The email he quotes on MF Global is pretty interesting and scarily believable. Although it has no bearing on what she writes in her email, from the look of her website, boy is the woman who wrote it... er, how would they put it in the States?... freakin wacko! (No offense to rabid Christian fundamentalists).

mortymer said...

This week on program:

G20
November 3 - 4 2011: Summit of the G20 in Cannes
http://www.g20-g8.com/g8-g20/g20/english/priorities-for-france/calendar/calendar-of-the-french-presidency-of-the-g20.78.html

Russia-China-Brazil
Medvedev to meet Chinese, Brazilian counterparts at G20 summit in Cannes
http://en.rian.ru/russia/20111101/168311873.html

OPEC
http://www.opec.org/opec_web/en/press_room/2142.htm

SCO
http://www.washingtonpost.com/world/asia-pacific/china-to-discuss-financial-crisis-with-russia-central-asian-nations/2011/11/01/gIQApiFqbM_story.html

Russia-China
http://en.rian.ru/russia/20111101/168311873.html

ASEAN
http://article.wn.com/view/WNATE888EAACB84801767779111DFC6E0738/

FED
"...And then the Fed meeting on Wednesday… This meeting will be no great shakes regarding any new direction for the Fed Heads… However, after the meeting, Fed Chairman, Big Ben Bernanke, will hold a press conference…"
http://dailyreckoning.com/euro-gets-caught-in-yen-dollar-crosses/?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+dailyreckoning+%28The+Daily+Reckoning%29

Ashvin said...
This comment has been removed by the author.
Ash said...

Can I help you, Crack? If not, then please leave me alone. I'm having a bad week... invested my life savings in Greek 1-year notes!

Jus playin', of course. Speaking of complex word games, for anyone interested:

The Collapse of the Tower of Financial Babel

Edwardo said...

Neither Reggie Middleton's assessment, nor the TF testimony made by some anonymous, putative financial services professional are mutually exclusive. And while it may not be true that Goldman planted Corzine as a Trojan Horse, it is eminently believable.

Piripi said...

mortymer said:

"Those who seek information find what suits them, their level of understanding..."

And how does their level of understanding change then, if new information is not a factor?

I would call a "level of understanding" a perspective, and suggest that the ability to entertain a differing perspective without accepting it is the attribute which allows one to then shift their perspective to another position, often differing from either of the originals, should the newly entertained perspective be found to contain something of value.

A/FOA/FOFOA have certainly done that for me. My current perspective is not the same as any of them, yet is much changed in many respects due to my entertaining of theirs.

The information yields the perspective, but without the capacity to entertain this, it remains simply sterile information.

The ability to shift between perspectives is more valuable than any single perspective.


The point of my placing the link was that one of the more high-profile and heavily followed PM traders is considering out loud giving up trading and moving that capital into physical, because of growing counter-party risk concerns. Turd may have an appreciation of the need for gold, but he is also a died in the wool trader.

I would imagine he finds himself under more than a little stress having so many inexperienced traders absorbing his strategy on a day-to-day basis.

I have read only a few of his posts, and it struck me every time that his integrity is second to none. While I don't entirely share his perspectives, I do greatly respect the way he operates.

******

Your anchor and compass analogy is an excellent one.

Past systems have used gold as an anchor, which made them unable to accommodate the change in sea level.

Freegold uses gold as a compass instead, allowing relativity/objectivity between all users while at the same the complete freedom to navigate wherever they wish.

Indenture said...

mortymer: "neither one of those A/FOA/FOFOA adjusted anyone´s perspective IMO. Those who seek information find what suits them, their level of understanding..."

I humbly disagree. Was my perspective changed when I realized the difference between paper gold and physical gold? Because before that mental shift I had never heard of an unencumbered asset. Gold for Oil also sounds like a perspective and not a "level of understanding". (and mortymer I have deep respect for you so this is just me trying to learn more)

Motley Fool said...

I am in agreement. The whole purpose of this blog is to give Another perspective.

costata said...

Something To Monitor Very Closely

Hi All,

I think that we should all be on the lookout for any information that supports or contradicts this claim by Stewart Thomson (my emphasis):

The public is beginning to borrow money to buy bonds, to enhance their returns.

Presumably a decision to leverage an investment in bonds is informed by this "logic" (ST writes):

.....the public has "perceived needs", not patience.

Personally I find this plausible, at least in principle. Savers/Investors who are desperate for yield could be seduced by the notion of magnified returns, through leverage, from a “safe” bond investment.

However, the question in my mind is: With bond yields so low how could the public borrow at low enough rates to make the leverage enhance their returns?

If this claim is true then it could mark the beginning of the end for the bond market bubble. So any links to relevant articles, reports or analysis would be most appreciated.

DP said...

I think its kinda like an onion, stripping down through layer after layer. You can't even see the inner layers until you've exposed the ones covering them first. When you go back to older posts/comments, after working off some more layers, suddenly you can see what was there all along. You just weren't in a position you were ready last time around.

Clearly, when I say 'you', I really mean 'I'.

mortymer said...

Blondie, I was more trying to suggest that we deal here with paradigm shift and that is something one has to do on his/hers own - to learn anew. To me it was the illogical happenings and that the present system could not be well explained in extremes and special cases.
Most I got from opinions of others; A/FOA/FOFOA&others were just a base platform/a benchmark for the learning of what little I know, to run against it different thoughts and see if it makes sense and slowly getting forward crossing the river slowly touching stones with a feet" as the Chinese proverb says. You seem to suggest that actually it was stumbling on Aristotele´s thought in combination with the depth of A/FOA/FOFOA´s perspectives which gave You the impulses to build your own one.
It does not matter as far as each of us tries hard to think on our own and we politely exchange opinions.

You have a good point in Turd´s change in the strategy but is it a consequence of a calm decision or a present disappointment? Old habits die hard. Let us see.

-
The growing counter-party risk seems to be in the center of attention in BIS, see latest:
http://anotherfreegoldblog.blogspot.com/2011/11/bis-capital-treatment-for-bilateral.html

-
There is another interesting meeting happening(s):

"...Papandreou will join a group at about 8:30 p.m. comprising Sarkozy, Merkel, International Monetary Fund Managing Director Christine Lagarde, as well as European Union authorities, according to a statement from Sarkozy’s office. They will have met at about 5:30 p.m. without Papandreou..."

"...The leaders of Brazil, Russia, India, China and South Africa -- the so-called BRICS -- may also meet in Cannes today, Sergei Prikhodko, Russian President Dmitry Medvedev’s foreign policy aide, said yesterday. ..."

"...While Sarkozy’s office said ECB President Mario Draghi would be in Cannes after taking office yesterday, his spokesperson said today he won’t be because of the need to chair tomorrow’s meeting of the central bank’s governing council..."

http://www.businessweek.com/news/2011-11-02/eu-leaders-set-to-push-greece-on-bailout-in-emergency-g-20-talks.html

Edwardo said...

Costata, I am sure if you e-mail Stewart Thomson he will give you some information regarding his claim. My guess is that some number of his client base is engaged in this activity, but, perhaps, he has contacts in the investment world that are reporting the "borrowing to buy bonds" behavior.

Max De Niro said...

Just read through a load of Stewart Thomson articles on the Safe Haven site... Wow, he's good!

"It's very important to stay focused on gold bullion, alone, as your sole lighthouse in the crisis storm waters. I own silver, wheat, corn, uranium, oil/gas, and gold stock, but these items are all "reflation plays". Gold is not a reflation play, or a "safe haven". In the final analysis, gold, alone, is the ultimate asset."

......


"Most in the gold community are in a state of emotional despair, and the reason is a massive over-allocation of financial resources to gold-related items, and under-allocation to gold bullion when it goes on sale, as it is now. Those who believe that deflation is gold-negative need to ask themselves if a closed down financial system is gold-negative. Understand the difference between the reflation trade, and the "risk to the financial system" trade. The latter involves gold bullion, alone, and the question is, are you onside?"

Spot on.

Max De Niro said...

The above quotes are from here

costata said...

Edwardo,

Thanks for the suggestion.


Max De Niro,

Thanks for the link. I missed that particular post from Stewart Thomson.

That bond vs gold ratio chart he linked is stunning. ST comments:

A decline from 40 to 9 is the ratio story of the bond against gold. I'm not sure how a 75% decline in price against gold makes bonds a "competitor" in this financial crisis, but if that's what the bond bugs want to believe, that's fine with me.

http://www.gracelandupdates.com/images/stories/SON11/2011oct4bond1.png

costata said...

This post from Mish Shedlock is actually amusing if you approach it with the mindset that the politics are a sideshow.

http://globaleconomicanalysis.blogspot.com/2011/11/in-praise-of-papandreous-referendum.html

You will have to ignore the factual errors and Shedlock's usual tendency to see what he wants to see. Look at the EU politicians squirm as they (and their backers) try to avoid confronting reality.

FWIW I suspect that Daniel Hannan gets closest to defining Papandreous' motive for calling the referendum in this excerpt which Mish presented:

He had evidently had enough of the antics of the opposition party, New Democracy, which kept insisting that Greece remain in the euro, while opposing all the austerity measures necessary to that end – an outrageous stance given that New Democracy ran up the deficit in the first place.

Papandreou hoped to force his opponents off the fence: in favour of the spending cuts or against euro membership. Perhaps he also hoped to put pressure on the EU to offer more generous terms.


Time will tell if Hannan is right.

Edwardo said...

Given that the referendum is almost certainly going to yield a no vote, why would the EU wait for the vote and not just send Greece packing before the vote.

JMan1959 said...

I think his move might be politically shrewd. If they vote against it and they end up defaulting, he can say I told you so. If they vote for it, he can turn sentiment against the protestors by defining them as minority whiners.

Edwardo said...

In the meantime, as per an earlier post made by Blondie:

http://brucekrasting.blogspot.com/2011/11/on-mf.html

Wendy said...

Insanity = borrowing money to buy bonds.......OMFG
Thank you for that tidbit Costata.

Kinda like "reality TV" ... too stupid to be reality ;)

M said...

@ Costata

Mr. Fekete wrote a piece on bond market speculators a while ago. I think it got passed around here but I will post it again.

http://www.safehaven.com/article/19693/there-is-no-business-like-bond-business

costata said...

Hi Wendy,

Cheers


Hi M,

I'm familiar with Fekete's writings on bond trading. I understand how the primary dealers can front run the Fed and profit from declining interest rates.

The signal point about Thomson's claim is that he appears to be saying that Joe Public is beginning to use leverage to buy bonds.

mortymer said...

Indenture, thank you, I hope I will never stop learning.

There is difference between being dropped on the top of the mountain and climbing it oneself.

Max De Niro said...

Costata,

I think that 'priced in gold' charts are the most revealing of all. It is the correct perspective, after all.

Piripi said...

@ Max,

Actually, it's not quite the correct perspective... the correct perspective would be priced in unencumbered physical gold, but we don't have price discovery on that at this time.

******

@ Mortymer,

"There is difference between being dropped on the top of the mountain and climbing it oneself. "

Damn straight.
I am discussing that very thing regarding Freegold on another forum currently.

"It does not matter as far as each of us tries hard to think on our own and we politely exchange opinions."

Agreed.

"...Turd´s change in the strategy... a consequence of a calm decision or a present disappointment? Old habits die hard. Let us see."

I wondered the same thing. May turn out to be just another case of "you don't own your stuff; your stuff owns you"? ;)

Max De Niro said...

Yes indeed, Blondie, thanks for that important clarification.

Motley Fool said...

There is also a qualitative difference between marking a route, climbing a marked route, or discovering different side-trails or routes.

Our kind host has shown us many different paths, beyond the one that Another laid out.

A few more likely exist.

@blondie, yep unencumbered would be the correct perspective, sadly it's not available.

TF

mortymer said...

http://news.yahoo.com/obama-arrives-france-attend-economic-summit-070213213.html

"...Carney rejected the idea that that left Obama heading to the summit in France in a position of weakness, especially compared to China..."

"The United States is still the largest economy in the world. It is still the most powerful nation in terms of its alliances and its influence around the world. And that influence comes in a variety of ways, including the wealth of experience that we have," Carney said. "But the focus here is not on whether or not the Chinese involve themselves financially. I mean, that really is a sideshow to the focus here..."

[Mrt: If only Carney knew how prophetic he is... so lets Funk play for him.]

http://www.youtube.com/watch?v=Ru9e596Zr8Q&feature=related

mortymer said...

Viet nam:
"New gold market management mechanism to close doors to many gold traders..."

"...Phi Dang Minh, former Deputy Director of the Foreign Currency Management Department under the State Bank, also said that cutting down the number of gold traders and producers is a reasonable decision, because gold, by the nature, is a kind of money..."

"...Not only trying to cut down the number of bullion gold traders and producers, the State Bank also plans to impose high tax on gold production and trading. The Ministry of Finance will join forces with the State Bank to set up import and export tax policies, VAT, luxury and corporate income tax policies. The central bank is also considering applying the taxes which aim to reduce the attractiveness of the bullion gold trading and speculation...."

http://vietnambusiness.asia/new-gold-market-management-mechanism-to-close-doors-to-many-gold-traders/

mortymer said...

ASEAN
http://vietnambusiness.asia/18th-asean-summit-ends-in-great-success/

G-20
http://en.wikipedia.org/wiki/2011_G-20_Cannes_summit

mortymer said...

Cannes live:

http://www.g20-g8.com/g8-g20/g20/english/home.9.html
&
http://www.g20-g8.com/g8-g20/g20/english/photos-and-videos/videos/videos.94.html

mortymer said...

...other story:
http://www.latimes.com/business/la-fi-goldline-charges-20111103,0,1254415.story

Max De Niro said...

The flip side of the argument for no taxes on gold, post freegold, is that every country puts heavy taxes on it, with rogue countries feeling the wrath of the big boys, similar to way it happens now.

I think it is possible to mix totalitarianism with freegold.

Anonymous said...

I think it is possible to mix totalitarianism with freegold.

Yes its possible. Who would be the rogue state in freegold? Who would loose the most? Who would gain the least? Any country starting the taxation will see a outflow of gold which can only be reversed if they can become a superproducer. They may well become a superproducer, but why loose gold by trying to be greedy?

Max De Niro said...

d2thdr,

I would envisage the rogue country being the one that DOESN'T tax gold.

As soon as they did this, there would be a 'humanitarian crisis' and would be invaded by NATO.

Taxing freegold would be the default move, initiated by the G20.

Max De Niro said...

Governments have shown us, throughout the centuries, that they are willing to engage in heinous acts in order to keep the control that they covet so preciously.

I understand all the logical arguments, but people are not logical, especially the sociopathic egomaniacs that bludgeon their way into positions of international power.

In my mind, the freedom route and the totalitarian route (both under a freegold system) carry equal probability of eventuation.

mortymer said...

Australia, France… Wherever You Are, Demand For Physical Gold And Silver Is Soaring
November 03 2011; Posted By Stephen Ward

http://www.perthmintbullion.com/blog/blog/11-11-03/Australia_France%E2%80%A6_Wherever_You_Are_Demand_For_Physical_Gold_And_Silver_Is_Soaring.aspx

[Mrt: there is an interesting info under the article...]

---
* "Moseremous says:
Perhaps if you melted down your idiotic 1 tonne coin, then you could supply 1 oz gold bars to the public"
* Stephen Ward says:
Thanks for expressing your view on our blog.
The one tonne coin, which is made from gold leased from banks, does not affect the amount of gold available to manufacture our products.
---

[Mrt: Leased? This is a Big thumb down.]

Michael H said...

mrt:

Regarding the 1 ton coin, see Bron's blog, where he states:

"Lots of funny ones like "where can I order it", a few calling it obscene waste of money (to be fair, you can't expect average person to understand the concept of pooled physical backing unallocated)"

http://goldchat.blogspot.com/2011/10/what-1-tonne-coin-tells-us-about-gold.html

From this context it seems to me that the 1 ton coin is owned by pool-unallocated accounts at the mint.

mortymer said...

PRESS RELEASE
3 November 2011 - Monetary policy decisions

At today’s meeting the Governing Council of the ECB took the following monetary policy decisions:

The interest rate on the main refinancing operations of the Eurosystem will be decreased by 25 basis points to 1.25%, starting from the operation to be settled on 9 November 2011.

The interest rate on the marginal lending facility will be decreased by 25 basis points to 2.00%, with effect from 9 November 2011.

The interest rate on the deposit facility will be decreased by 25 basis points to 0.50%, with effect from 9 November 2011.

The President of the ECB will comment on the considerations underlying these decisions at a press conference starting at 2.30 p.m. CET today.
European Central Bank

http://www.ecb.int/press/pr/date/2011/html/pr111103.en.html

JR said...

Here are some big ideas to chew on - its all gonna be about the flow of gold in Freegold. Basically, if gold gets taxed, gold won't flow as it otherwise would, because the tax is an artificial restriction on gold's purchasing power, no? Consider the import of this idea from FOFOA's above post:

Once Upon a Time:
"The lesson from the monetary changes made in the post-war 20s is that if you want the debtors to ever be able to repay their debts in real terms, you do not sterilize the vital spur and brake function of gold by locking its purchasing power. It is the price mechanism—price changes in goods and services—that transmits the arbitrage signal that causes gold to physically flow to where it has the greatest purchasing power....

But gold can reverse this flow in an instant on the BOP at a high enough price. And once it does, it will begin to exert the brake and spur forces on the two countries until the flow of actual goods and services finally corrects and reverses. Once that flow corrects, the gold flow (which is opposite the flow of goods and services) will reverse and subsequently the brake and spur forces will also reverse."


The gold has got to flow, and taxes are an "artificial barrier" to the free flow of gold. The "brake and spur" forces are impaired by taxes on gold, because the taxes impact gold's free flow.


Confiscation Anatomy – Part 2:
"Fact: There is plenty of gold at the right price. At the right price, there is no shortage of gold. At the right price, there is no profitable risk/reward calculation under which any major global entity would decide to steal someone else’s gold, especially its own populace. The risk would be much greater than the potential reward.

And if that “right price” is a FREE price, a FLOATING price, then there will NEVER be a shortage of gold to keep the gears of global trade lubricated. And as long as they are lubricated the USG will have international trade that can be taxed."


...

"For example, if the US tried to keep the price of gold down, all the gold inside the US would flow out of the zone (purchased with higher offers). And if the US tried to prevent this outflow of gold, its currency would be ostracized on the global exchange. This would make it extremely difficult to trade for ANY real goods, including oil.

So the US will have the incentive to encourage a vibrant physical gold market within its zone with little or no restraints (like a VAT or sales tax) to increase the credibility of its printed fiat currency on the global FOREX exchange. If you add a VAT to gold it simply raises the price of gold in your zone relative to other zones without a tax, which lowers the value of your currency on the global exchange."


...

"And I do realize that there is a whole ‘nother angle to this confiscation issue: confiscation through taxation. Not gonna happen. Not the way you think anyway. The phase transition/lightning (Freegold) revaluation cannot be taxed efficiently. And if it can’t happen efficiently, ain’t gonna happen. The risk/reward calculation facing any taxing authority will be as clear as this blog. 95% of the global private physical gold stock has no recorded cost basis on which to collect a “flash revaluation” capital gains tax. It is impossible. Only paper gold has such a widespread cost basis. And you can’t really collect taxes on a capital loss, now can you? "

JR said...

Max,

Its not a choice to not tax gold or not. Its a choice to take action that enables your currency to maintain viability, thereby maintaining the viability of the currency issuer to retain the currency power (seigniorgage).

If the currency doesn't get real goods aboard, the currency issuer not is a real god spot, is it?

mortymer said...

MH: thanks, I read that one, I was silly, did not got that first time. Hmmmh. Well.. ... :o)

Return to Resistance said...

Watching ECB Press Conference:

Reporter: (Paraphrasing here) Do you believe the ECB needs to stand ready as the lender of last resort to fight the Euro zone crisis?

Draghi: Let me answer your question with a question. What makes you think that being the lender of last resort is the solution to the Euro Zone crisis?

Clyde Frog said...

Did he happen to say what IS the solution, Return to Resistance?

Clyde Frog said...

I have had enough of wetting my bed at night worrying about this.

Return to Resistance said...

The reporter never pressed Draghi for an answer. I would say his answer was met with confused silence.

Return to Resistance said...

Last question of the press conference: (Again paraphrasing)...

Reporter: Given the problems in Italy do you believe that the ECB will be forced to buy Italian bonds for a long time?

Draghi: We're not forced to do anything. We are independent and makes our decisions accordingly.

Seems to be saying all the right things but we'll see if his actions match his words. I'm surprisd by the rate cut today.

Max De Niro said...

Thanks, as usual, for those prompts JR.

I understand that it would be against the self-interest of a government to do these things.

However, governments do many seemingly ridiculous things that would appear to be against their self-interest.

Their only real interest is in getting re-elected. If a suddenly broke populous decide that they want a share of all this revalued gold, then politicians will do it.

I could reel of a long list of things that politicians do which is significantly against the interest of the country that they purportedly represent, but which actually only serves to enhance their own careers (in their minds), but I'm pretty sure everyone here is well aware of such things.

I know that countries that have been consuming too much and not producing must rebalance, but this does not happen overnight. There could be decades of hardship whilst countries re-skill and re-invest. These times will be ripe for social unrest, demagogues, witch hunts and ultimately war.

This debacle in Greece, with a referendum, then no referendum, resignations, then no resignations, austerity, then leavign the euro just shows that best laid plans sometimes are all for naught. When people get angry and crazy and broke, shit happens.

dumnonia-watchman said...

Re Draghi.... an analyst on TV (I know, I know) just said ' Draghi is already sounding a lot like Bernanke and Mervyn King...more attuned to what markets need'.

We've just had Corzine stitch up MFGlobal (getting them deeply into EuroGov Bonds...watch Goldman snap up the remains soon).

I wouldn't trust Draghi as far as I can throw him, he's ex-Goldman. I will watch his words/actions very carefully over the coming months, and look for signs of internal disagreements.

The $IMFS has got their man at the top of the ECB.

JR said...

If Freegold is a sustainable equilibrium, think about taxes on that same timeframe.

I agree with your sentiments, such as this:

I could reel of a long list of things that politicians do which is significantly against the interest of the country that they purportedly represent, but which actually only serves to enhance their own careers (in their minds), but I'm pretty sure everyone here is well aware of such things.

Perhaps were we disagree is the degree (or length of time) to which the ends of these policies would be distorted or held from sight.

Max De Niro said...

I understand and appreciate your point JR.

I still stand by my argument that in the short run, at least, politicians are very likely to make bad decisions.

Politicians don't need a long span of time to cause misery and loss to those who are prescient and responsible enough to prepare and to rest of the population who may be cajoled and manipulated into further economic misery or war at worst, even if in the long run taxes are forced off the physical.

It's no comfort to know that political idiocy won't last long if they take what you have in a matter of days. You certainly won't be getting it back once sanity returns.

I would say that the most susceptible countries to this are the more socialist, entitled and the most indebted (perhaps that's a bit of a tautology), and I live in one of those countries, so I am preparing myself for the worst.

JR said...

Hi Max,

I'm with you. So lets work thru a rough "real world" counter-factual. We are talking post revaluation? How do you tax gold post freegold revaluation? The paper basis is 0.
You tax the physical transaction, like a VAT? Got agorism/black market barter? Then what, do you jackboot peoples houses?

More to the point, the G doesn't need taxes paid in its own currency, the G needs gold. And not for itself, but to flow to support the trade of real goods. If need be, will they print money to buy gold? Will they devalue their currency relative to gold to (ultimately) balance their trade flows, because its from the trade flow, the real goods, that the take their skim. The need for taxes is not to get your own issued paper, its to get your skim of the real goods this paper gets you. So make sure that paper gets some real goods, or your taxes are just paper, no?

Euro Gold

"Here are a few simple principles that will save you the hassle and embarrassment of constantly being surprised by the actions of politicians and central bankers. They will never sacrifice the system to preserve the value of the currency. But they will always sacrifice the currency to save the system. "

What do you think?

Max De Niro said...

JR,

It is not so much the technical aspects of trade flows etc that I am taking into consideration, but the the social aspects of a system in meltdown.

Yes, I am talking post-freegold, in a country where most of the population is now bankrupt, broke, unskilled, unprepared to compete in a production-based world. A population characterised by despair, revenge, envy and misery.

These people will be baying for blood.

G doesn't need to do any jackbooting, the people will do it for them. We are already seeing this kind of behaviour now. There is a culture of hatred of wealth developing. People talk their own pay down and talk in derogatory tones of those publicly making big bucks, whether they deserve it or not.

Without wanting to sound overly dramatic, I could see citizen spies outing those with gold, and shopping them to a G who will be only too happy to take their physical for the good of the collective. Why should some be wealthy, when most are so poor?

I don't think that it will be a stomping boot, coming vertically from above, but a roundhouse, delivered horizontally from unthinking, envious, desperate and manipulated masses.

Normal people couldn't give a crap about international trade and gold flows, they just want what others have and politicians will be only too happy to accomodate, manipulate and harness that envy - it's what they do best.

DP said...

I enjoyed reading 1984 too, also The Grapes of Wrath.

holdinmyown said...

JR said:

" How do you tax gold post freegold revaluation? The paper basis is 0."

In 1972 Canada introduced a capital gains tax for the first time in its history. How did they arrive at a base cost price for all assets? They simply declared that the actual cost basis (ACB) would be the last listed price on Valuation Day (V day). If no market listed price was available for a particular asset then the onus was on the taxpayer to "prove" his estimated valuation which could be challenged by Revenue Canada if they thought necessary. Using this as an example, what is to stop G from arbitrarily imposing an ACB for gold post freegold? The non-gold-owning citizens may in fact demand it so as to not confer a perceived windfall on their gold-owning citizens arguing that the pain of monetary re-set should be shared by all.

I agree with MDN that there is always a way for governments to get what they want and what they want is not always to the benefit of the country. But you can damn well be certain that it is to the benefit of the politician (even if only until the next election).

holdinmyown said...
This comment has been removed by the author.
holdinmyown said...
This comment has been removed by the author.
Max De Niro said...

I just want to make it clear that I think there is just as good a chance for freedom as for totalitarianism, as the future is inherently unknowable and peoples' propensity for idiocy and evil is unfortunately slightly less unknowable.

I just think that it is worth considering the potential pit falls of making oneself a target and perhaps thinking about how one might mitigate this unfortunate circumstance - it's gotta be worth a few moments of consideration, no?

JR said...

Here's a quick thoguht:

"I could see citizen spies outing those with gold"

Why would anyone's gold be in view? Its not being valued properly by the currency issuer, so its not flowing, what is there to tax? One may own wealth in the same sense one one's wealth today, but just like gold's role today, in such a dystopia is not one of recognized, liquid wealth.

Michael H said...

I'm catching up on some comments. Look at this 2-part comment from costata:

http://fofoa.blogspot.com/2011/08/forum-1800.html?showComment=1313110888731#c3689325576676635121

"I invite you to consider the possibility that the BBs might ramp the paper price of gold up to a level which gives them the opportunity to profit from a dump like they did with silver recently. ...
With a big hat tip to Warren and his astute colleagues ... I suggest that you keep an eye on the 144 DMA for a clue on the bottom of a dump if the BBs can pull off the pump without losing control."


Now look at this chart from scretapefiles:

http://1.bp.blogspot.com/-_rDLi2gI5Xs/TqyKbew199I/AAAAAAAAAiA/3pflFDqWezs/s1600/sc.png

Take a bow, costata.

JR said...

holdingmyown,

Yes, that's my point. Its really hard to tax the revaluation.

And gold is small in size relative to price, fungible, transportable, easily hidden, etc. They go for the low hanging fruit guys.

Max De Niro said...

That's a very good point JR.

It's easy to forget that we live in this little internet bubble where gold rules all, when it's not on the radar of most others.

At some point it will become very public that the new system is based on massively revalued gold, however, whether that is the day after 'the crash', or a year later.

To add injury to insult, many of these newly destitute people will have sold their gold to cash4gold at what will become horribly evident as a small percentage of its true value, cutting off their only lifeline.

This brings up the question of what do people see as the timeline for events between the end of the $IMFS and freegold?

JR said...

Date: Sat Apr 04 1998 23:20
ANOTHER (THOUGHTS!) ID#60253:

REPLY,

Date: Thu Mar 26 1998 00:26
Myrmidon ( @ Another ) ID#345268:
" the US will confiscate gold coins and bullion some day? "

Sir,
I think, that gold will be viewed as money by the USA government. It's new, much higher price will offer a "way out" from many economic sins. In that day, persons will not try to "buy" gold, as it will already be used "as currency". To ask, "how can one afford $30,000 gold" would sound as today as "how can anyone afford $30,000 in savings account"? One does earn money, not afford it, yes?

Thank you

===========================

Date: Sun Apr 19 1998 15:09
ANOTHER (THOUGHTS!) ID#60253:

REPLY:

Date: Sun Apr 19 1998 03:38
Drifter ( ANOTHER'S Thoughts ) ID#270447

Date: Sun Apr 19 1998 14:18
OLD GOLD ( ) ID#238295:
There will be ample time for holders of gold bullion and gold shares to sell their holdings for huge profits. Drifter was right on target here. Let's worry about getting POG to $350 this year. We have a long way to go on the upside before confiscation and/or taxation becomes a realistic concern.

Mr. Drifter and Mr. Old Gold,
If you search the "thoughts" posts provided by Mr. Sharfin, many of your conclusions are addressed. Many do feel that if "the gold mines were safe in the past", "they will be safe in the future". I submit this persons thinking for your consideration:

"The Western public has always thought of gold as money. Even after the 70s and 80s, most private investors held a small side thought, that gold was still, somehow dollar money. It was only during the late 80s and 90s that people started to completely lose the connection of paper spending money and gold. Clearly, all evidence shows that prior to the 90s and particularly prior to the 50s, the push was to change the publics thinking away from gold money, to paper currency as money. In this political climate, gold mine investments were the correct move, as the business of gold was encouraged over the usage of gold as money! That is why the metal was called in and the mines were untouched.

However, today, the change will be counter to the prevailing public opinion, that gold "is not money". The world debt system and currency exchange, as we have know it will implode and leave little room for political maneuvering. The governments will revalue gold and "demand" that the public carry it and use it! It will be the source of all gold, the mines, that will be controlled! That's Controlled, with a capitol "C", not confiscated!"

JR said...

FOA highlighted this:

Solomon Weaver (03/14/00; 21:11:52MDT - Msg ID:26846)--

I remember a comment by Another which stated that dollars (cash) was a "derivative"....at first I was confused.. but over time...I started to understand.

Money "derives" its value from what it can move.

Anyone, with half a sense for history and culture, who sits down and ponders the most recent few hundred years of mankind's developments, comes to the dizzying realization that we have developed a massively new epoch in the total history of our species...in the last 300 years we have truly tasted the fruits from the tree of knowledge..and on some levels have indigestion.

The primary common denominator to our survival is knowledge (and its partner, wisdom).

Until about 120 years ago, oil was not very valuable...but the more we discovered how to "burn" it and how to "form" it (chemicals, plastics), the more valuable it became.

Like others here at the forum, I think that gold and silver are due for a return to hard asset category, and given their lackluster performance in the last 15 years, in a time with immense economic progress, can only enjoy a solid recovery (both in price and popularity).

On the other hand, I think we all have to consider that (all paradigms aside) humanity has entered into a world where the physical survival of 50% of our population requires the continuing functioning of a very complex set of physical and economic flows. These folks live in a derivative world. Milk is in cartons. Heat comes in over wires. Wheat arrives baked.

We see the rumblings of reemergence hard-liners in China and Russia and the "idea" of future wars is discussed....The problem with this is that with so much of our ability to create wealth tied to knowledge (techknowledge), invasion of the rich no longer generate the spoils they did before. I think that if we are honest, we will recognize that the extended use of emergency executive orders by the President would accomplish the same thing as having America invaded.

Would any President really want to be the one to do this? When Roosevelt called the bank holiday in the 30's and confiscated gold, does anyone think he wanted this???? He was a decisive man, stepping into a new office where he realized we needed some real bitter medicine. Gold was targeted because it was the "accepted" place for people of all nations to "park their wealth" in pockets "outside of the formal banking system". Back then, there was no highspeed digital money,and a large portion of money was cash....today, when you move money it goes from "your bank" to "counterparties bank". It is almost a pure derivative money. Even if gold were to rise in value such that it could be valued close to the same as today's fiat pool, most of us would die quickly if the digital fiat system did not work.

We look at the divergent paths of gold metal vs. gold paper. When gold paper becomes worthless, gold metal will have value because it holds inherent credibility. But given its very scarcity, that gold metal will need "another currency" to move its value into in order to transact purchases. In a dollar crisis in a digital world, there is really nothing to gain by "confiscating gold"....the primary concern should be to keep the "remnant of the dollar economy" stabile enough that "gold will flow back into it". Perhaps I am naive to believe that our leaders will understand this...if they don't then they are not only fools they are derivatives of fools. I like to hope that this might be one of the reasons why the very intellectually astute monetary mind of Mr. Greenspan decided to stay in power...I think he may be one of the few who understand the problems of foolishness (particularly when viewed in the magic mirror made of gold).

JR said...

6/14/98 ANOTHER (THOUGHTS!)

REPLIES:

From PH in LA:asks... Would limits be likely for US citizens? Would limits take the form of heavy taxation?and ... Or is he alluding to US government confiscation of gold (and silver?)? Or is this where currency controls would take effect? Restrictions (taxes) on dollars returning to the US from sale of Euros. Surely there will exist a market on which Euros can be exchanged for dollars for use in international trade, etc.?

Sincerely, PH in LA

ANOTHER: Sir, You ask, What do you mean by "everyone trying to spend their overseas dollars"? It is a very large question, yes? A simple answer would be: What else can a person of small wealth do with a currency but "spend it"! Outside your country, small persons, large traders and Central Banks hold the dollar, not for spending, but for the "reserves" and "store of value". It is held in much more quantity than exists inside your borders. Many of these persons think and know, that in last resort, the dollar, it can buy "oil" or "Gold" anywhere in world. In the real world, this is the "real backing" behind the dollar held in many lands! Today, the same "system" that makes this dollar "strong in gold and oil" does destroy the native currencies of many peoples! You may list for me, as perhaps the Canada, Mexico, Japan, Africas, all of Asia, come to mind! I ask you now, what gain these countries to maintain a "system" of "currency reserves", that breaks the local savings and economies? In a world that finds many nations "hungry" for a "reserve currency system" that correctly values "gold and oil" for the benifit of "local currencies", this Euro will change many thoughts.

In time, as the dollar does lose it's backing of oil and gold, thru a much higher price of these items, many "foreign dollars" will find "no other worth" but for "the spending of them for goods". The US economy cannot stand for these many digital units to "come home", as much will be the inflation should this result! I think, in this time, the great minds of your treasury will find many ways to "change the rules"! PH in LA, you have offered "some food for the thought" and "consideration" for them in your post. We watch this as it does progress, yes?

You ask, "Surely there will exist a market on which Euros can be exchanged for dollars for use in international trade, etc."? I find, the politics of gold will mature much differently than many feel. The transition from dollar reserve currency will bring a tremendous economic change for the country that issues this currency and it's world debt. In that time, the government will "encourage" citizens to hold an asset for personal "well-being" and "support", Gold! As the alternative will be the Euro, and this will be frowned upon. The gold will be seen as "American" and "walk tall with American Gold" and "carry your own weight, carry gold for the future of yourself and country"!

Remember, gold has a history many times your nations age. The last twenty years of transition do not represent the future of this world class money. I agree with what may be a common thought for local political gain, "follow in the footsteps of giants, and carry your future in both hands, carry gold"!


Thank you

JR said...

FOA (10/20/00; 14:00:07MD - usagold.com msg#43)
A Fireside Chat

...

I submit that many smart hard money thinkers like Traveler and Thai Gold (and many others) are walking forward but looking backward. I (myself) have tried this before but usually run into something I didn't see in front of me (smile). That something today, for modern hard money followers is in the form of an internationally induced transition away from the US dollar as a reserve currency. Such a policy evolution has the effects of driving the lead currency's creator into printing press mode as an only option to maintaining the viability of our economic and financial structures.

Yes, it eventually breaks everything! But this is nothing new for us gold history buffs and it's what has happen in countless modern national fiats around the world today. Nations that don't have a reserve currency to play with. We will do like their citizens do, continue to use dollars but carry in our pockets whatever new reserve is in fashion, as a backup! Be it gold or Euros or both. In addition, our entire financial structure (like in these other nations) will change to operating in an inflation economy. Money will be lost, big time and made big time, but things will still be financed, brought and sold. Houses will double, triple then double again in price, even as financing rates approach 35%, 40% or whatever. We will also follow the (then) prevailing world policy concerning physical gold, solely because it will make economic sense to our officials.

As such; like today, everyone uses dollar reserves because it keeps us within accepted international policy. Across the currency warfare valley our "gold trail" is coming to, we will also use gold as a free reserve medium. Mostly because it's what the leading reserve policy of that time will dictate and that will keep us on good trading terms.

No, we will not confiscate gold again. Perhaps if it is designated as US legal tender and caught up in some kind of currency change, that will pose a risk! But that's just following the same fiat rollovers so many other countries now must employ and will have little impact on most gold owners. Besides, PGA's know how to avoid such a trap through physical gold ownership diversity! US Eagles held along with a diverse group of new and old coins fit my pocket just fine. I don't worry about the premium on any ounces I buy today. In the future, the total price we now pay will probably be the premium anyway (huge smile from ear to ear!)

Again, as international trends follow the use of physical gold into the free trading asset realm, no longer as an official money, then it's value and ownership will soar the world over. To date this is the future before us as the dollar fails it's function.

Truly, a relationship with an honest international physical gold dealer will no doubt place oneself at the center of this exciting new financial evolution. (I'm trying to think of a dealer that would fit that description? I know I just saw one on this page. Somewhere?) (smile)

Motley Fool said...

Max

Don't forget that gold is going to go into hiding. Do you think it will come out of hiding if governments tax it? How will gold remaining in hiding affect a currency zone?

Also do you think the eurozone architecture is set up to tax it, or are they first to be invaded?

What is required for totalitarianism? Control of the populace by force obviously, but also control of the economy if only to benefit those who exercise the force.

With gold in hiding due to a proposed tax, and official stockpiles dwindling to pay for oil, 'peacekeepers', how long do you think this is sustainable?

I don't see your even odds.

As to Draghi. I read a speech by Trichet that strongly endorsed him. They have been working together at the ECB for 14 years now if I recall.

TF

Max De Niro said...

MF,

The totalitarianism that I foresee could possibly happen would be one whereby the people demand to be 'taken care of'. One where they are so destitute that they willingly give up their freedoms in order to ensure that every last scrap of wealth can be squeezed out so that they can house themselves, take care of the elderly, get medical care etc.

I've heard so many people advocate that humankind will stand up in the face of governments, that all they want is freedom. Well, when I look at history, I see a humankind that on average prefer to be slaves in order to get some security and certainty.

I see the control coming from the people themselves. Possibly.

Of course, it could easily go the other way and freedom could easily reign. That seems to be the prevailing view here. I don't see many contemplating the darker route. I thought I might just bring it up to see what peoples' thoughts were.

From JR's quoted material:
"Truly, a relationship with an honest international physical gold dealer will no doubt place oneself at the center of this exciting new financial evolution. (I'm trying to think of a dealer that would fit that description? I know I just saw one on this page. Somewhere?) (smile)"

This is interesting. How do people envisage the mechanics of the gold dealership market actually working?

That would be quite a good business to be in. How would current dealers fare through the transition? What might they need to do to come out the other side and be able to dominate a freegold gold dealership market, if there was one?

costata said...

Michael H,

Thank you. I don't know if you continued following that thread but I backed away somewhat from the comment you provided the link to.

I was disturbed by the fact that my comment could be seen as investment or trading advice by some readers.

Hence this later comment:

http://fofoa.blogspot.com/2011/08/forum-1800.html?showComment=1313202510910#c3586069118835450974

Cheers

JR said...

Yeah max,

Who might be "an honest international physical gold dealer?" Not just any gold dealer, nor just any international gold dealer, as a relationship with this 'honest international physical gold dealer" will no doubt place oneself at the center of this exciting new financial evolution. Hmmm..., this "honest international physical gold dealer" must be sorta tied up in this financial evolution, no?

5/3/98 Friend of ANOTHER

Gold is valued by the number of outstanding claims against it. Kind of like a house for sale with ten bidders. Each bidder thinks the house is in the bag because they have a valid bid ticket. Each one thinks he can have the house at any time, even though nine others want it to, because all I have to do is bid a little higher and take it! Insane, but that's what is going on! Somehow, the BIS and the major private gold holders know the total claims, as does Another. The Euro group is going to force those claims into real bids instead of just claims!


===============================

Q: ** Is Europe (led behind the scenes by the BIS) an opponent to the United States?**

A: Sir, Yes, but not in the ways of war, as it is in the feelings of "pride" and "we go our own way". The downfall of the Russia, did allow for the Euro and all that it will build. They now see the debt of the US$, as a reserve money, can be escaped! As even the US citizen will leave its own workers to die as products are purchased "overseas", how much easier will the world also flee the dollar! Opponents? No, I would say they are learners of the "American Way" as they embrace the "American Idea" of a "free world market economy".

...

Q: ***Your associate says that BIS helped China increase its gold holdings. Please tell me what the source of that information is, or is it simply a speculation on his part. ***

A: The BIS is the gold broker for all interbank sales/purchases. Bullion Banks are for sales to other entities. I think, at first, China was leverage against the oil producers. Then Arabia was allowed into BIS for Euro.

Q: **One other item you might clarify for me is "Who is really behind BIS?**

A: Perhaps, "who control them"?

Q: **The Swiss?

A: Yes.

Q: **The eurocentral banks?

A: Yes.

Q: **Who does BIS really represent?

A: "old world, gold economy, as viewed thru modern eyes" or " way to move from US$ without war".


===============================

Hair of the Dog?
As regular FOFOA readers know, I believe the BIS (the Bank for International Settlements) is prepared to manage the clearing of international trade after the inevitable collapse of the dollar. And the preferred clearing mechanism at the BIS? Gold, of course, at a much higher value than today. A "physical-only" value!

JR said...

On the "honest" part of "honest international physical gold dealer":

Go Go South Korea:
"The news reports said the BoK "entrusted all of its gold holding to the Bank of England for possible use in gold lending and other related transactions in future." That sounds like an "interbank IOU for gold" doesn't it? Perhaps it's even in a BIS sight account!

Now, what if CB hold one ounce of gold, and sell it twenty times, that one ounce is now worth $6,000, no? The difference between you and CB? The persons that hold "interbank" IOU for gold, value it at the multiple of leases/sales made against reserves. This leverage, it is held for performance on bank part. The BIS, it force performance, on any economy! You ask Korea about gold, yes?

Aww gee, do you think maybe there's a difference between you and the CBs when it comes to gold? Could it be? I wonder why the CBs call their gold "monetary" gold while your gold is commodity gold or non-monetized gold.

Physical gold is different than modern currency. At the CB level, it rarely gets moved. This was a big reason for the creation of the BIS in the first place. If you think about the purpose of the BIS as a clearing system or gold broker for interbank sales, it makes perfect sense that most of the gold deposited with the BIS would be sight or unallocated.

The purpose is so that CBs can transfer gold around the world without having to physically ship it. Avoiding the cost and risk of physically shipping a heavy metal is an important service provided by the BIS. And it does this mostly in unallocated form. When the BIS physically moves gold, the risk is shared, i.e. the risk is on the BIS.


The BIS is owned by its customers, the CBs. They set it up and subscribed to it (bought in) so it could provide services like this. The BIS's own gold is still owned by the CBs because they own a proportional share of the BIS.

Say you want to give me a hundred dollars. You go into your bank and deposit a hundred dollar bill. Then you fund your Paypal account and send me $100. Then I send that $100 from my Paypal to my bank and I can walk in and take out that $100 bill. You’ve just sent me a $100 bill but no one actually physically shipped it across the ocean. It was an unallocated deposit in one location and an unallocated withdrawal in another. This is what the BIS does with gold.

Out of practical necessity, privacy and security, most BIS gold activities are with unallocated gold. The main difference between the BIS and private bullion banks being that BIS sight accounts are fully reserved.
Being "reserves" is the very definition of CB gold."

costata said...

Greek PM scraps referendum on Greek debt plan

Greece's prime minister abandoned his explosive plan to put a European rescue deal to popular vote and opened emergency talks Thursday with his opponents, demanding their support in parliament to pass the hard-fought agreement into law.... (link)

Daniel Hannan take a bow!

He (Papandreou) had evidently had enough of the antics of the opposition party, New Democracy, which kept insisting that Greece remain in the euro, while opposing all the austerity measures necessary to that end – an outrageous stance given that New Democracy ran up the deficit in the first place.

Papandreou hoped to force his opponents off the fence: in favour of the spending cuts or against euro membership. Perhaps he also hoped to put pressure on the EU to offer more generous terms.

holdinmyown said...

Thanks again JR. Your research skills are truly amazing. I especially liked this line:

"Perhaps I am naive to believe that our leaders will understand this...if they don't then they are not only fools they are derivatives of fools."

Ultimately it is we who are the fools.

Wendy said...

JR??

Another said "The downfall of the Russia, did allow for the Euro and all that it will build"

All I come up with is the obvious threat of Russia to world peace, and I suppose if we were all involved in WWIII perhaps the Euro idea would become redundant for the forseeable future?

Do you think this is correct or do you perhaps have other ideas about Another's remarks?

M said...

@ Gary

You are right. I was always suspect of this neo Keynesian Draghi.I cant believe the Germans gave this guy the job.

Not 3 days in and he cuts interest rates. Unbelievable. He cut them because he is a keynesian, nothing more.

It is sickening.

M said...

Time to give up on the Euro ?

I think so...

The European Central Bank cut interest rates by a quarter point to 1.25 percent in a surprise move on Thursday and President Mario Draghi said the eurozone could subside into a “mild recession” in the latter part of 2011.

It doesn't get more keynesian then this. Maybe tomorrow he will announce a 35% tax on gold sales.

Motley Fool said...

M

Then again Trichet cut rates before any other central bank before the crisis in 2007+. Perhaps this is a forewarning, again.

TF

Wendy said...

M,

The politics in Europe is a side-show, the Euro is not going away. The situation is not that of the Asian crisis or that of latin america or countless others.

I have noticed others attempting to explain this to you, but so far you have not agreed... c'est la vie. Your personel grievence doesn't change the outcome.

Wendy said...

Oh and Btw, I'm not big on the group thinky thingy, so I made up my remarks all my myself in my own head..... just in case you were wondering

Chris Foster said...

Greece - Watch this movie before making up your mind about the Greek people.

It's called the 'Seven black years': http://goo.gl/ktkjw and is presented on the Adam Curtis blog.

Adam curtis produced the excellent documentary "The century of the self'

costata said...

Interest Rates

IMHO any CB/Treasury with any room to move on interest rates will be slashing them by the first quarter of 2012.

Take a look at the container freight numbers since September, some of the freight indexes and the latest DOW Transports. The August food stamp recipient numbers out of the States exceeded $45 million (from memory) around 8 per cent higher year on year according to one report I read.

Have a peak at China and some of the key stats coming out of Australia. The RBA cut by a quarter per cent this week to 4.5 per cent. Again this is just my opinion but I think there will be plenty more to come from the RBA.

What are the options for those countries (as in Nation States) who issue their own currencies and who are already at the zero bound?

Free inkjet cartridge for the first correct answer.

Max De Niro said...

By the way people, since FOFOA got twitterified, it dragged me into the 140 character world.

There is a good use for it - many of the TV presenters have twitter feeds and some of them engage in chat.

They sometimes say who is coming on and are open to ideas about what to ask them.

It might be a way to get freegold type ideas being discussed.

I think that one that could start discussion in the right direction is the mark 2 marktet structure of ECB gold reserves.

I have tweeted Lauren Lyster, who will be interviewing Jim Rickards and suggested such a question.

Stacy Herbert is also interviewing Rickards on RT, so I asked the same thing to her.

Perhaps it might be an idea for people here to ask Lyster, I think her program is more mainstream and less ridiculous than the Keiser Rerport, to ask Rickards the same question.

I find that this topic is roundly ignored by all gold analysts and commentators.

Let's try and force into the public conciousness.

My tweet to Lyster:
I see you've got Rickards. Ask him abt mark 2 market structure of ECB gold reserves. Automatic recapitalisation as bonds die.

Max De Niro said...

I added an extra tweet to Lyster:
Fed holds its gold as certificates (not physical), valued at $42. These don't recapitalise their balance sheet as gold rises

Clyde Frog said...

I have been reading a few more articles, and the many interesting comments on them, since I last commented. Things are starting to make more sense to me. But I am hoping I can rely on some of you cool dudes here to once again help me find and understand the answers to these silly questions I am about to present, which have been troubling me.

A "mild recession" - what is the effect of one of those?

Is it reduced demand for products and services, resulting in reduced price pressures - a strengthening in the relative value of money?

Does the ECB have a single mandate - "ze price stabilitee"?

Do they target a 2%/annum general price increase for consumer goods and services, nothing more (nothing less)?

If you have statistical evidence that the economy you are monitoring will exhibit weakness in the coming months and you have this single mandate, which dictates that you must strive to achieve stable (but mildly rising) consumer prices ... do you sit on your hands and allow your currency to strengthen against consumer goods and services?

Would it be good for the economy even if you did decide to eschew your single mandate and allow that to happen? Isn't a strengthening currency good for everybody?

Does it make you a rampant Keynesian idiot if you followed the clear path that is before you, as dictated by your single mandate and the relevant data currently at your disposal?

Thank you once again to everyone for humouring this silly newbie to date. I hope I am not stretching your hospitality too far now!

Motley Fool said...

Hi Clyde

Let's see. My views are...

Ignore the 'mild recession' politspeak.

Perhaps. Viewing either currency or goods in a vacuum is silly.

Yes.

Yes.

No.

No. No.

and No.

Peace

TF

Clyde Frog said...

Thank you, Motley Fool, for clearing those matters up for me. I see now that I return to reply to your reply, that my comment is missing here. I guess you must have received it by email or something. I'm a bit confused where it must have gone to be honest. Perhaps Google didn't like it very much. Anyway, thank you again for your help!

M said...

@ Wendy

Euro zone inflation is at 3%.

This has nothing to do with the inflation/deflation debate.

dumnonia-watchman said...

FOFOA quite rightly ties in the political aspect that will cause hyperinflation.

I think we should all feel vaguely depressed that Draghi is at the helm of the ECB now. Most of Europe wants the ECB to QE.

He has all the makings of an $IMFS stooge.

What better way to destroy the one viable alternative to the dollar than from within.

And if the ECB does go heavily into QE, the Eurozone will be at exactly the same risk of hyperinflation as the US/UK et al.

Jeez, the banksters have us by the balls, we are doomed.

Max De Niro said...

Gary,

What better way to destroy the bond markets, and hence the $IMFS, than through massive QE?

I hope he gets printing, and quick. Get this freakshow system over and done with.

Crack said...

Seem like Clyde alredy no better than sum others how the euro gonna work

Michael H said...

costata,

Yes, I saw that comment later on. Based on the usual conversation around here one would think that it is not necessary to include 'this is not trading advice' caveats, but one never knows who is reading along.

Something else of interest posted at Naked Capitalism today:

http://scienceblog.com/48700/mathematically-detecting-financial-bubbles-before-they-burst/

"Mathematically detecting financial bubbles before they burst"

"Using sophisticated mathematical methods, Protter and his co-authors answer the question of whether the price increase of a particular asset represents a bubble in real time. “[In this paper] we show that by using tick data and some statistical techniques, one is able to tell with a large degree of certainty, whether or not a given financial asset (or group of assets) is undergoing bubble pricing,” says Protter."

"The authors have also used the model to test more recent price increases to detect bubbles. “We have found, for example, that the IPO [initial public offering] of LinkedIn underwent bubble pricing at its debut, and that the recent rise in gold prices was not a bubble, according to our models,” Protter says."

JMan1959 said...

Costata,
My response to your question, Jeopardy style:

I will take "printing money" for two hundred, Alex.

A question for the troops:
Many of the anti-inflation economists hang their hats on the fact that they believe there can be no inflation without rising wages first. Can someone shed light on why they believe this? Seems to me that if velocity ever kicks in, driving up prices, wage increases would follow, not lead.

JR said...

Hi Wendy,

Here is FOFOA from Hair of the Dog? quoting Mr. Jonston, because it is "darn intriguing":

"And just because I find it so darn intriguing, I present this excerpt from a letter written by a retired financial analyst in his eighties, Mr. Johnston of Houston, Texas to his sons and posted on the
Gold-Eagle.com website back in 1997...

"The BIS, the Central Bank's central bank, was formed in 1930 to handle the collection of German war debt following World War I. Its members are the central banks of the industrial world, such as the Bank of England, the German Bundesbank, the Federal Reserve Bank, the Bank of Japan, and so on. It is almost certainly the most powerful financial institution in the world. Never once in its long history has it ever had to ask for help from any government.

A definite coolness exists between the BIS and the United States. This goes back to the Bretton Woods Conference in 1944, held to set up the machinery for resuming world business after World War II. Even though this conference established the gold-backed U.S. dollar as the only reserve currency, the U.S. did everything it could to torpedo the BIS and give sole power to the American sponsored International Monetary Fund. The war was not over in 1944, but the combatants still got together and defeated this U.S. grab. In the final showdown, the Europeans and Japan never completely trusted the U.S.

As the years went by, the BIS suspicions were justified. The U.S. began to abuse its reserve currency role by simply printing dollars. American companies began to buy control of businesses all over the world. In 1971, President Nixon took the dollar off the gold standard, and introduced the novel idea of floating currencies. Meanwhile, the U.S. national debt began to increase each year, until it now stands at about $5.5 Trillion, an astronomic amount that can ever, ever be repaid. It was clear that the U.S. was out of control.

Along about 1972, I began to spend a great deal of time and effort in studying the BIS and its agenda. The first thing I found was that although the U.S. had turned its back on gold, the BIS were aggressively buying it. By 1990, the BIS were by far the largest holder of gold, with more than one billion ounces. This amounts to an outright corner on gold.

The next thing I learned is that the BIS are extremely closemouthed. It keeps a low profile. Its favorite M/O is the sneak attack. They have their own word for this – "coup". Their ideal coup is one where the victim is taken by surprise, and does not even know what hit him. The BIS tries to leave no fingerprints. Thus their coups often become perfect crimes.

The third thing I learned was that the BIS had two ironclad objectives. Both were so bold that they would take your breath away:

1) To destroy the Soviet Union, as a threat to world peace.
2) To destroy the dollar as the worlds reserve currency.

We all know that the Soviet Union collapsed in 1989. This was done by the BIS without firing a shot. They simply loaned large sums of money to the Soviets, and then called the loans. Just a routine castration! A simple foreclosure. This is how they got the Russian gold.

The second goal, of bringing down the dollar as a reserve currency, has not yet been reached, but I believe it soon will be."


cont.

JR said...

cont.

So they cleared out Communism and then sought to build a new reserve currency to replace the dollar. As And Y emphasized earlier in these comments, the Euro/ECB/BIS folks want *PEACE,* hence these two big goals.

===========================

And from above:

"They simply loaned large sums of money to the Soviets, and then called the loans."

Hmmm, that M.O. sounds familiar.... oh I know:

FOA (08/13/01; 07:24:30MT - usagold.com msg#96)
Political Gold 2
...

As most of you will no doubt agree, almost all gold discussion still centers around "the dollar's war with gold". Truly, the evolution of this story will be how that war ended then and now the dollar's war with the Euro began! A very large part of that war strategy, employed by the ECB/BIS, was to let the dollar/IMF faction hang themselves by expanding and supporting the whole arena of this dollar paper gold market. Inflating the gold marketplace with so much "paper gold" that we would eventually have to bankrupt ourselves just to keep the dollar in the war game against the Euro.


GoldTrailFive

JR said...

Draghi announced a rate cut because:

The ECB has one plain and simple mandate, to act with regard to a target CPI that is statistically harmonized across different economies dealing with different economic factors. In other words, the job of the ECB is to maintain stability in the purchasing power of a common currency against the general price level in many different countries.

In light of the Greece stuff is sure seems they haven't re-linked the severed nation-state, yes? The its a currency operations for price stability? They are a coalition of interests severed from any one nation state with a single independent authority (the ECB) steering monetary policy down the middle of the road. Here's Randy Strauss linked earlier in these comments:

"site steward (10/25/01; 21:35:08MT - usagold.com msg#: 64207)
Deutsche chief doesn't recognize a good thing when he sees it...
http://www.gulf-daily-news.com/Articles.asp?Article=8334&Sn=BUSI

---------BRUSSELS, Belgium -- Deutsche Bank chief executive Rolf Breuer yesterday criticised European Union governments' lack of unity in economic policymaking saying this stood in stark contrast with a US commitment to economic recovery.

"What we observe in the United States ... is an admirable hand-in-glove policy between government and the central bank."------------

More like "hand-in-pocket" if you ask me...

This final excerpt to this article is what my subject line was in reference to:

------Europe has not matched US efforts to stimulate growth since the September 11 attacks, Breuer said, because "we have no common, defined, decided economic and financial policy in Europe".-------

More importantly, it does have a single independent authority steering monetary policy down the middle of the road so as to be neutrally suitable for a wide coalition of interests. (For elaboration, see my earlier post today.)

R."

Max De Niro said...

JR,

From your last post:

"The next thing I learned is that the BIS are extremely closemouthed. It keeps a low profile."

then:

"The third thing I learned was that the BIS had two ironclad objectives. Both were so bold that they would take your breath away:

1) To destroy the Soviet Union, as a threat to world peace.
2) To destroy the dollar as the worlds reserve currency."

This does not follow - how could a secretive organisation have such a bold agenda be found out by the investigations of an American financial analyst?

Does the BIS have a public AGM with these on the top of the agenda?

How could he possibly know this?

It sounds to me as though this guy guessed that these were on the agenda of the BIS, a guess generated through his own 'baggage' when looking at the world.

The other arguments then generated later on in the post are therefore simply based on conjecture and are a tale based on an educated guess at best.

Is there any concrete evidence that the BIS, one of the most secretive organisations in world, has these two objectives?

Max De Niro said...

Also, the Fed is a part of the BIS.

Does this mean the Fed is against itself?

Perhaps the other central bankers wait for Bernanke to get up to go for a piss and then whisper about him behind his back. Those amusing moments where everything goes quiet suddenly as he re-enters the room, eyes narrowed, looking suspicious would be a treat to behold.

It doesn't pass the smell test for me.

JR said...

We see the same words apparently, but beyond that we seem to differ. I'm not here to convince you, only you can allow that to occur. You will come to terms with things in your own time, or not all. With or without, the world moves on. And in the passage of time, things are revealed.

Crack said...

Dear diaree,

Spotted a trio a bog-trotters today. An a surpris pond-jumpa-outa, playin leapfrog over em

Max De Niro said...

Got it

dumnonia-watchman said...

http://www.scribd.com/doc/71606233/Art-Em-is-Capital-CurrencyCSCM-NOV2011-Final

Some thoughts on currency evolution from Artemis.

Their view: Bye bye dollar, hello SDRs.

Edwardo said...

The problem with the idea of the BIS having the destruction of the dollar as the world's reserve currency as an objective is that such an outcome was about as inevitable as anything can be said to be.

A sophisticated stance -we'll call it an objective- regarding the dollar would simply be to hasten the end of greenback's hegemony with the full knowledge that the aforesaid hegemony was doomed from the start.

JR said...

Ok,

Max says:

""The next thing I learned is that the BIS are extremely closemouthed. It keeps a low profile."

then:

"The third thing I learned was that the BIS had two ironclad objectives. Both were so bold that they would take your breath away:

1) To destroy the Soviet Union, as a threat to world peace.
2) To destroy the dollar as the worlds reserve currency."

This does not follow - how could a secretive organisation have such a bold agenda be found out by the investigations of an American financial analyst?
"

Then Max asks:

"How could he possibly know this?"

Who knows. Does it matter?

You are at an internet blog that is "A Tribute to the Thoughts of Another and his Friend." They are two anonymous people who posted information on a message board over a decade ago claiming a consortium of oil states had cornered the gold market, that the dollar was dying and the Euro was the ascendant new currency built on unprecedented relationship with gold (as a marked to mark secondary medium of exchange). They claiemd the euro would replace the dollar's transactional function as a new international monetary system built around gold as a reference point/store of value emerged as the dollar hyperinflated.

I have no idea who Another was, and I only wonder more and more how the heck he knew what he knew. But I don't judge him on what is essential ad hominem grounds, aka who is he and how could he know, but instead take his words at face value and let history and the passage of time grade his observations.

==========================

Is there any concrete evidence that the BIS, one of the most secretive organisations in world, has these two objectives?

If there was, would we expect it to be common knowledge? Would we even expect "concrete" evidence?

;) Did you like that one!

===============================

Did you know one of the main themes of this blog is exploring this idea:

FOA (08/13/01; 07:24:30MT - usagold.com msg#96)
Political Gold 2
...

As most of you will no doubt agree, almost all gold discussion still centers around "the dollar's war with gold". Truly, the evolution of this story will be how that war ended then and now the dollar's war with the Euro began! A very large part of that war strategy, employed by the ECB/BIS, was to let the dollar/IMF faction hang themselves by expanding and supporting the whole arena of this dollar paper gold market. Inflating the gold marketplace with so much "paper gold" that we would eventually have to bankrupt ourselves just to keep the dollar in the war game against the Euro.


cont.

JR said...

cont.

Max again:

"Also, the Fed is a part of the BIS.

Does this mean the Fed is against itself?

Perhaps the other central bankers wait for Bernanke to get up to go for a piss and then whisper about him behind his back. Those amusing moments where everything goes quiet suddenly as he re-enters the room, eyes narrowed, looking suspicious would be a treat to behold.

It doesn't pass the smell test for me."


=======================

Have you even be a part of a legislative process? Sat on a committee? Maybe worked with a panel? Perhaps participated in a group project? Maybe?

Shocker - organizations, despite the monolithic front they may prevent, are made up of individuals. Sometimes these are individuals representative of many other individuals. These individuals, apparently they don't always agree, sometimes they even fracture into different factions.

Have you experience this? People can be strange birds sometimes.

=================

Some FOFOA from afield

"Hello CG,

So you find the Fed sitting at the head of the BIS table somewhat contradictory to my hypothesis?

I would say that the G20 is a good analog to the BIS. When Obama shows up at G20 meetings on his 747 he gets the best seat in the room and big fanfare. But from his perspective, I'd say his attendence is a bit patronizing. Kind of like, "you other 19 countries like to think you have a say in the world? Okay, I'll play along."

Now remember, the Fed had its chair when ANOTHER answered these questions:


MK: One other item you might clarify for me is "Who is really behind BIS?

ANOTHER: Perhaps, "who control them"?

MK: The Swiss?

ANOTHER: Yes.

MK: The eurocentral banks?

ANOTHER: Yes.

MK: Who does BIS really represent?

ANOTHER: "old world, gold economy, as viewed thru modern eyes" or " way to move from US$ without war".


Do you think Obama is in on everything the G20 is up to? Do you think the US is in control of the G20? Do you think the G20 might have some anti-dollar plans up its sleeve, even as Obama sits in the best seat in the room?

The Fed views itself and the IMF as much more relevant than the BIS, just like Obama views himself as more relevant than the leaders of, say, Argentina, Australia, Brazil, Canada, China, France, Germany, India, Indonesia, Italy, Japan, Mexico, Russia, Saudi Arabia, South Africa, South Korea and Turkey... combined.


cont.

JR said...

Cont.

more from that FOFOA comment above:

"How do you think that makes the G20 (as a unit) view Obama? And how do you think the BIS views the Fed? As its fearless leader? Ha!


MK: One other item you might clarify for me is "Who is really behind BIS?

ANOTHER: Perhaps, "who control them"?

MK: The Swiss?

ANOTHER: Yes.

MK: The eurocentral banks?

ANOTHER: Yes.

MK: Who does BIS really represent?

ANOTHER: "old world, gold economy, as viewed thru modern eyes" or " way to move from US$ without war".


================================

FOFOA on credibility

"Which brings me to… what would be the point of NOT being an anonymous blogger? Would it be, as you say, so that "people feel more connected or more secure" in following me like a bunch of sheep? Or so they can "pigeon-hole" me making it easier to reject me without trying to understand my words and Thoughts?

I'm just guessing here, but perhaps being anonymous makes you actually consider the Thoughts and not follow/reject blindly. I must say, there is little that is more rewarding than watching the few, like Blondie and Costata to name just two, who are not blindly following me but are following the Trail on their own, actually THINKING things through… on their own!

Just look at what they write! They are not parroting the views of someone else. It is true, original thought! What a breath of fresh air that is, to read something that didn't originate, reproduce and flourish in a swamp teeming with lack of knowledge and misunderstanding. Original Thought, on the Trail that FOA marked with little piles of rocks, by anonymous online personas. Imagine that! Pretty un-sheep-like if you ask me!

So I guess the moral of the story is don't be a sheep! Don't take my word for it, think it through on your own! That's kind of the message on my blog. It is certainly the advice I give out privately to those that ask me for financial advice. Peace of mind can only come from understanding and making your own decisions, having your own Thoughts! And with that thought, I'll end with one of my favorite bits from FOA:..
"

cont.

JR said...

cont.

FOA wrote:

Of Credibility
A long time ago a gentleman told me; "go ahead, use your mind, speak for me as I give to you. Tell them our thoughts, it be good for all to know these things". With that comment, it all started. Even further back, long before we had these internet forums the logic and efforts behind this push was flowing..

Presently, I write almost entirely for myself. Another shares with me when and if as he sees fit. Often, to my consternation, and some embarrassment, his Thoughts do not arrive for copy when I say they will. Truly, this is as it should be.

I (we) expect none of you to consider anything said here as credible. Everything is given as I understand it. If you came with a notion that I am someone who sees the future; grab the children and run far away. For these Thoughts, and my ongoing commentary, are meant to impact exactly as the "gentleman" said they would. People hear them, and whether believed or not, the words leave a mark. A mental mark on the trail, if you will. And later, after the world turns, our little "stacks of rocks" will be easier to understand next time you are passing this way. In fact, your ability to find your own way will forever be enhanced for having seen this path in a different light.

Of Myself
I seek nothing and am paid nothing for this effort. CPM allows my discussion for their clients consideration and perhaps entertainment. It is not given as fact. To this end I offer this as Another has done; so these works are as free as the wind. My word is to remain, here only, until finished or as long as MK will accept me. That is all that binds my hand.

I have an old world kind of logic that requires me to stand upon or feel anything I invest my wealth in. And indeed, my wealth is partially what I know and speak. So to that end, I myself, some long time ago, have stood within the door of CPM's office! Just to look around. I spoke only to the woman at the front desk and was known to no one. By my word, this was my only contact with this fine company.


=================================

So make fun of me because I so quote other people, but when you read what they wrote, don't attack the messenger if you really want to consider what they have to say. Its not the messenger who is so important, but rather the message.

Max De Niro said...

JR,


When I wrote:
"The next thing I learned is that the BIS are extremely closemouthed. It keeps a low profile."

then:

"The third thing I learned was that the BIS had two ironclad objectives. Both were so bold that they would take your breath away:

1) To destroy the Soviet Union, as a threat to world peace.
2) To destroy the dollar as the worlds reserve currency."

This does not follow - how could a secretive organisation have such a bold agenda be found out by the investigations of an American financial analyst?"

I was questioning the message, as there was no evidence given.

All that is left is to question the messenger.



I am at a blog dedicated to anonymous people, but the Thoughts presented here are verified by real events and an eminently followable logical train of thought. I was simply commenting that I couldn't find it in that passage.
Perhaps I just lack the insight to make the connections that he had done.



As you say, in the passage of time, all things are revealed.

I have made my choices, so all is left is for me to wait and see.

Thank you for taking the time to spell out your point in characteristically encyclopedic fashion.

JR said...

More for Wendy,

For greater trade unification to occur without threat to peace?

5/5/98 ANOTHER (THOUGHTS!)
...


*** If so which countries are in which camp? Your associate seems to feel that Asia is split between the United States which has Japan as an ally, and Europe which has China as an ally ( a notion I found particularly intriguing). Where is Britain in this? Japan? And most importantly, the Gulf States, particularly Saudi Arabia? **

Sir, I feel he is correct in this thought. Europe does grasp for a relationship with Asia as the US did have with the Japan. It would build a mighty economy on a foundation of oil and gold as backing for new money. As China and Arabia was once a part of the Europe economy, in a small way. They may now return with no fear of Russia. Britain? A lost nation. Japan? This one is "of the American Economy" and is to live and die by it! They will seek your Alaska oil before loss of face with gold. A dead Yen be a dead Japan.

http://www.usagold.com/goldtrail/archives/another4.html

Wendy said...

Thanks for the reminder JR, interestingly I remember that letter well and it's probably why the phrase "threat to world peace" got stuck in my head. I found the content fascinating and believable.

I also recall those Thoughts of Another as well, and remember thinking that we're (canada) stuck with the US and Japan come hell or high water. BOC governor Mark Carney is a ex-Goldman guy. No surprise there eh?

M said...

@ Costata

"IMHO any CB/Treasury with any room to move on interest rates will be slashing them by the first quarter of 2012."

I didn't think they had any room with inflation at 3%....But other then a few riots, the UK seems to get by with inflation at 5.2%.

Negative real rates is not a small deal. Capital gets destroyed when rates are below inflation.

Chris Foster said...

Another + FOA = Ferdinand Lips

According to this writer:
http://en.wikipedia.org/wiki/User:Rd2c/Freegold


'After his death in 2005, Ferdinand Lips, co-founder and a managing director of Rothschild Bank AG in Zurich, was identified to be the author of the articles. Lips used the Pseudonym Another and FOA to masquerade his identity'

Piripi said...

@Chris Foster:

Ferdinand Lips was not Another!!!
Have you read his book? Could not be the same person; Lips was an HMS, through and through. Their perspectives are contradictory in a number of respects.

Knowing Another's identity or not makes no difference to the integrity of his Thoughts.
They are what they are.

******

Max said:

”...how could a secretive organisation have such a bold agenda be found out by the investigations of an American financial analyst?”

I don’t remember FOA claiming to be a financial analyst, but that aside, such a bold agenda could have easily been disclosed by an insider? One we know as Another?

******

Clyde,

Comments are regularly and mysteriously automatically spammed by Blogger for no discernible reason, but anyone subscribed to the comments gets it via email anyway. FOFOA unspams these from time to time when checking the spambox and they appear in the comments timestamped when originally posted... if this happens to one of your comments, email FOFOA to make him aware of it and he will be able to retrieve it sooner rather than later.

******

Edwardo said:

”The problem with the idea of the BIS having the destruction of the dollar as the world's reserve currency as an objective is that such an outcome was about as inevitable as anything can be said to be.

A sophisticated stance -we'll call it an objective- regarding the dollar would simply be to hasten the end of greenback's hegemony with the full knowledge that the aforesaid hegemony was doomed from the start. “


I would call a sophisticated stance to prepare an alternative system which both avoids repeating the negative aspects of the doomed incumbent and works in harmony with the predictable actions and aspirations of the market at large as that incumbent expires. Then exercise patience.

”Victorious warriors win first and then go to war, while defeated warriors go to war first and then seek to win.”
-Sun Tzu

Max De Niro said...

Blondie,

I wasn't referring to FOA, I was talking about Mr Jonston.

mr pinnion said...

http://www.zerohedge.com/news/cme-goes-margin-defcon-1-makes-maintenance-margin-equal-initial-everything

As important as their making out ,or another case of nothing ever happens?

Regards
Ozzy

costata said...

JMan1959,

You wrote:
Many of the anti-inflation economists hang their hats on the fact that they believe there can be no inflation without rising wages first.

One of the assumptions of the dominant school of economics (often called neo-classical) is that demands for increased wages causes "inflation" or a rise in the general price level. In other words it causes a "wage price spiral".

This is one of the reasons why so many CBs have a mandate to manage interest rates. And why they lift interest rates in response to inflation rates that are above the range they target.

Their theories about the optimum level of un-employment in an economy is inter-related to this theory. In effect they raise rates to increase unemployment (at worst) or job insecurity (at the very least) so that workers will hesitate to demand wage increases.

(There are so many flaws in this thinking and the policy responses it engenders that I hardly know where to begin to refute the idiocy of it all.)

In any case if you accept their assumption about wage demands causing inflation then rising wages must come first (demand pull inflation). If you then layer, on top of this, their erroneous notion that HI is merely inflation on steroids then it follows:

1. Rising wages under "full employment" conditions = price inflation.

2. Rapidly rising, across-the-board wage increase = a self-perpetuating spiral of high price inflation and ever increasing wages that has the potential to escalate to HI.

Capiche?

costata said...

I have been following the interesting conversation about the role and aims of the BIS in relation to the US dollar etc. I think it is also worth considering Another's statement that countries do not go to war for gold, they go to war for oil.

Europeans were in charge of the oil for food program. Extract from below:

"Notwithstanding Iraq's move as a convenient trial balloon.."

I assume he's referring to Saddam's demand to be paid in Euro for Iraq oil. This came into effect around November in the year before the invasion.

FOA (02/09/01; 14:24:03MT - usagold.com msg#59)
Current background

To bring us up to present:
To date, that purpose has been served largely because it succeeded in keeping dollar supporting oil prices down, extending our US economy,,,,, until EMU. As evidence to the process, notice how oil prices began their dollar rise only 6 months into post EMU. Clearly, there was no longer a need to support our dollar economy once the Euro was established. Indeed, just like a turning supertanker takes time, so too does the higher energy prices take time to work their will. Make no mistake, the world has seen the very last of cheap dollar oil.

The next dynamic of that process in the transition of oil settlement support into Euro denominations. Notwithstanding Iraq's move as a convenient trial balloon, the mass of this transition will not begin until the US has clearly embarked on a slowdown.

And that slowdown, energy induced as it is, will, this time, force the Fed to fight it with a super inflationary buyout of anything and everything that defaults. Right down to your shoe laces. This, my friends is the inflation dynamic unleashed once a currency is removed from reserve status.

Further; its no mistake of identification in understanding the ECB / BIS roll in all of this. That the ECB has started cashing in all it's interest on dollar reserves points to a new direction in currency warfare. Our own Randy@ The Tower has documented this for some time. In addition, their marking gold to market is a prerequisite to following the Fed's new inflation stance by scoring the dollar against the Euro gold price once the paper gold markets fail.


Expensive oil = Slowdown in the US economy because it is so reliant on cheap oil.

Note also that last sentence:
In addition, their marking gold to market is a prerequisite to following the Fed's new inflation stance by scoring the dollar against the Euro gold price once the paper gold markets fail.

When the paper gold markets fail we will still be able to obtain a price for gold – in Euro (unless the Euro is mismanaged). A high stakes game, no?

Cheers

ampmfix said...

@blondie

I understand what you say about the Thoughts:

"Knowing Another's identity or not makes no difference to the integrity of his Thoughts.
They are what they are"

But to me it is extremely important to know who Another was and study his life, among other things to find out how he arrived at all of his conclusions. I am sure many others think so.

Jesse McL said...

@ampmfix

"But to me it is extremely important to know who Another was and study his life, among other things to find out how he arrived at all of his conclusions. I am sure many others think so."

Perhaps many, perhaps a few, but certainly not all.

I don't know if he intended it that way or not, but by remaining anonymous he deftly ensures that his conclusions remain his own. For some subjects this is not so significant. But for the subject in question it is important because it means, with Another's Thoughts as a guide, you have the opportunity to claim your own conclusions as truly your own. And when it comes to reserving your own personal wealth, well, the buck stops with you. It does not rest on anyone else's identity or lack thereof.

Cheers.

JMan1959 said...

Thanks Costata,
As usual, a great explanation for a non economist. But surely these neo- classical economists have seen circumstances where inflation/hyperinflation takes off before wage increases. While I am sure they occurred, wage increases didn't lead/drive the Weimar or Zimbabwe scenarios, did they?

Wendy said...

"When future financial historians look back at the early 21st century, they may wonder why anybody ever thought it was a good idea to repackage subprime securities into triple A bonds. So, too, in relation to assumptions about the “risk-free” status of western sovereign debt"

http://www.ft.com/cms/s/0/88151ed6-0639-11e1-a079-00144feabdc0.html#axzz1cqshJjBa

JR said...

JMan1959,

Yeah, but they say those are isolated, unstable, third world, post soviet, war torn, etc. In a nutshell, the US is different - the US is no small potatoes, its the world economic powerhouse, the driver of growth, etc. These folks would suggest the FED could raise interest rates and defend the dollar ala Volcker. Its not different now, from their perspective.

JR said...

Hey Max,

Imagine you saw it more like: "FOFOA has been elucidating this idea, introduced by Another and FOA, that the BIS, via its Euro led faction, is moving from the Dollar International Monetary and Financial System,(the $IMFS), to a more stable system based on gold."

So then FOFOA quotes Mr. Jonston, because it is "darn intriguing," writing that a purpose of the BIS is "2) To destroy the dollar as the worlds reserve currency," and you go "well of course, who is this smart fellow who was also onto this trail?"

And when you read another purpose of the BIS is to "1) To destroy the Soviet Union, as a threat to world peace," you were like yeah, the Euro union wasn't gonna work without the Soviet influence removed, they needed to unify Germany...and yeah to remove the US v the Soviet dynamic...to allow for a greater trade union with Eastern Europe/Asia.

===========================

5/5/98 ANOTHER (THOUGHTS!)

...

** Is Europe (led behind the scenes by the BIS) an opponent to the United States?**

Sir, Yes, but not in the ways of war, as it is in the feelings of "pride" and "we go our own way". The downfall of the Russia, did allow for the Euro and all that it will build. They now see the debt of the US$, as a reserve money can be escaped! As even the US citizen will leave it's own workers to die as products are purchased "overseas", how much less will the world also flee the dollar! Opponents? No, I would say they are learners of the "American Way" as they embrace the "American Idea" of a "free world market economy".

...

***Your associate says that BIS helped China increase its gold holdings. Please tell me what the source of that information is, or is it simply a speculation on his part. ***

The BIS is the gold broker for all interbank sales/purchases. Bullion Banks are for sales to other entities. I think, at first, China was leverage against the oil producers. Then Arabia was allowed into BIS for Euro.

**One other item you might clarify for me is "Who is really behind BIS?**

Perhaps, "who control them"?

**The Swiss?

Yes.

**The eurocentral banks?

Yes.

**Who does BIS really represent?

"old world, gold economy, as viewed thru modern eyes" or " way to move from US$ without war".


==========================

FOA (08/13/01; 07:24:30MT - usagold.com msg#96)

...

As most of you will no doubt agree, almost all gold discussion still centers around "the dollar's war with gold". Truly, the evolution of this story will be how that war ended then and now the dollar's war with the Euro began! A very large part of that war strategy, employed by the ECB/BIS, was to let the dollar/IMF faction hang themselves by expanding and supporting the whole arena of this dollar paper gold market. Inflating the gold marketplace with so much "paper gold" that we would eventually have to bankrupt ourselves just to keep the dollar in the war game against the Euro.

Max De Niro said...

JR,

Yes, I can see your point. Perhaps I approached this new information expecting too much to be served on a plate.

By the way, Another's phraseology and syntax is decidely French. If you were to transliterate (as opposed to translate), you would come up with Another's syntax.

He also uses many more idiosyncratic phrases, less broadly French, but more personal, as I have heard used by Trichet.

Edwardo said...

Blondie wrote:

"I would call a sophisticated stance to prepare an alternative system which both avoids repeating the negative aspects of the doomed incumbent and works in harmony with the predictable actions and aspirations of the market at large as that incumbent expires. Then exercise patience."

-We agree and well said.

”Victorious warriors win first and then go to war, while defeated warriors go to war first and then seek to win.”

-Sun Tzu

-As for good old Sun Tzu, well, his script is much easier said than done. Nevertheless, his point (and yours) is well taken.

Wendy said...

Max,
Another was English

FOA is American

Wendy said...

BTW JR, do you remember who shot JR?
:)

Max De Niro said...

Wendy,

Another was anonymous, no one knows what nationality he was. He does, however, speak/write like a Frenchman.

A case in point from JR's last offerings:
"The downfall of the Russia, did allow for the Euro and all that it will build."
'the Russia' is not English syntax. This is French - la Russie.
"did allow" - this is a mistranslation of a past tense. French and English speakers use 'did' in a different way. For the French, it is solely a past tense, used by those who don't fully appreciate the nuances of past perfect, imperfect, pluperfect etc. For the English it can stress an affirmative too.

There are many other examples.

No native English speaker would write like this, unless of course, they were trying to appear French.

So maybe he was English but wanted to disguise this. That would seem a bit pointless to me, considering that he was anonymous. It would also add an obvious element of deception into his character, which would detract from his message, which is not the sense that I got from his writings.

Wendy said...

Max,

Another was not anonymous to FOA.

I've heard people guess, french, italian, arab ......

He was English

JR said...

Wendy,

Not really, but I did see bohemian Midge hopelessly hitting on a love struck Jimmy Stewart last night.

Max De Niro said...

Perhaps he was an Englishman whose first language was French.

His syntax is not that of an Englishman, is all I'm saying.
I have learnt many languages, and in doing so, have listened to many foreign people speaking English. He repeats the most common (honest ) errors that competent, but not totally fluent, French people make whilst speaking English. It would require an expert, who paid extraordinary attention to his writing in order to accomplish this deception.

Mr Occam would have had something to say about this.

I was not aware that FOA had given away any information on Another's identity.

Max De Niro said...

If FOA did say that he was English, then given the evidence, I would say that it is more likely that FOA is involved in a deception (perhaps to cover tracks), rather than Another.

One of them is involved in a deception of sorts. FOA's would have been much easier to accomplish.

Wendy said...

Believe what you like Max, but, if you read the post from FOA and consider the events that were happening on that day, you would agree that Another was English.

Further, Another's posts we edited by FOA for clarity, but the crypticness left ..... I suggest for good reason.

Wendy said...

It's a beautiful fall day in southern British Columbia, time to take in some sun. Maybe rake some leaves, while avoiding dog shit .....yuk!!

DP said...

As alluded to by Blondie, it may be detrimental in your quest to understand for yourself the message of FO/FO/A, if you knew for sure who they all were/are. It may introduce more baggage, preconceptions and biases, to your view of the Thoughts as presented. IMO it may be superior to understand the Thoughts primarily, and perhaps secondarily try to establish who they are/were as a matter of intrigue but not necessity.

BTW, Max, is your syntactical transliteral analysis leading to French specifically, or Romance languages in general?

Max De Niro said...

"IMO it may be superior to understand the Thoughts primarily, and perhaps secondarily try to establish who they are/were as a matter of intrigue but not necessity."

Oh, I totally agree with you DP. I am talking purely out of interest here, as I have a lifetime love of languages.

From my experience with many Romance speakers learning English, I would say specifically French. The biggest giveaway is his use of past tenses. The French often get confused because of how they use the past perfect and the imperfect which don't really translate perfectly into English in all circumstances. It requires context and experience with idiosyncratic phraseology.

Of course, perhaps he did like to play with language, I do. I often mess around syntax, I like to imitate Brazilians, they are hilarious in how they use English.

This would mean that he would have to have significant experience with it though, which I suppose is not out of the question - having a high level position in finance would expose one to many different languages I would have thought.

Max De Niro said...

Pay attention to Draghi and Trichet in how they use past tenses when speaking English, you will notice significant differences.

ampmfix said...

Max,

Yes, French culture. Belgium?

ampmfix said...

And FOA, definitely Anglo (includes USA of course).

costata said...

JMan1959,

You wrote:
But surely these neo-classical economists have seen circumstances where inflation/hyperinflation takes off before wage increases.

It's partly a causation vs correlation issue in their analysis of data. Another obstacle to sound analysis arises from their ideological biases. Then add in flawed models and theories. (Steve Keen did a good job of exposing some of the neo-classical idiocy in his book Debunking Economics.)

These neo-classical economists see what they are trained (want?) to see and dismiss what they cannot explain. To complete the picture ask yourself cui bono? Who benefits from these economic policies?

Once you attempt to do this it becomes obvious that advancement in politics, academia and the FIRE corporate sector is tied to toeing the "party line". Once an economy is sufficiently "financialized" this corruption in thinking permeates every part of the economy.

I think the "antidote" to this poisoned thinking is to follow the advice of S. R. Ovshinsky:

"In God we trust, all others must present their data."

M said...

"As evidence to the process, notice how oil prices began their dollar rise only 6 months into post EMU. Clearly, there was no longer a need to support our dollar economy once the Euro was established"

"I think, at first, China was leverage against the oil producers. Then Arabia was allowed into BIS for Euro. "

China also joined NAFTA at around the same time. I wonder how that fit into this...

Edwardo said...

I suppose if he was trying to throw folks off his scent then Another may well have been English/British, but, if there was no deception involved, then I agree with Max that Another was not a native English speaker.

Anonymous said...

On the question of Another's language, I'd like to second Max. His choice of words and his little mistakes in English clearly identify him as someone whose native language is French and only French - I think this rules out even many bilingual people from Belgium who also speak Flemish and many from Switzerland who also speak German or Italian. He is definitely not Italian, Spanish nor Portuguese (nor German or Russian or from the far east).

FOA is pretty clearly from the US, not Canadian nor Australian nor British. He also gives this away several times.

Two observations are inconsistent with the idea that Another is French: First, a few days after 9/11, FOA is attacked by some other writer in the forum and hits back. In that message, he claims that Another is English.

Second, on reading everything for the second time, I thought that Another knew more internals from the BoE than from any other CB. My first idea was to put him into the pro-European faction inside the BoE that has again and again been overruled by the pro-US faction.

A further idea is to ask which BB might have implemented the gold for oil deals. Do you think this would have remained a secret for decades if it had been done by JPM, HSBC, Deutsche or UBS? No. Too many fluctuations of the relevant people. This leaves us with small private banks. So one obvious question to ask is whether Rothschild London had French native speakers in key positions?

Also, some well known people started their career at J. Aron. How foolish of me to forget that detail. Any idea?

Victor

Anonymous said...

Some more on the role of Sarkozy as the US agent in the Euro zone:

Apparently, at the G20 meeting, Obama, Sarkozy and Cameron tried to get the Bundesbank to commit part of their gold to the IMF in exchange for SDRs so the IMF could support the bond markets. A friend emailed me these URLs - the translation is horrible:

http://translate.google.com/translate?sl=auto&tl=en&js=n&prev=_t&hl=en&ie=UTF-8&layout=2&eotf=1&u=http%3A%2F%2Fwww.spiegel.de%2Fwirtschaft%2Fsoziales%2F0%2C1518%2C796100%2C00.html

http://translate.google.com/translate?hl=en&sl=auto&tl=en&u=http%3A%2F%2Fwww.faz.net%2Faktuell%2Fwirtschaft%2Feuropas-schuldenkrise%2Fschuldenkrise-euro-retter-wollen-an-goldschatz-der-bundesbank-11518707.html

Perhaps someone who reads German can look at these articles. From reading the second one, it sounds to me as if the ECB and the Bundesbank had clashed over the question of whether to use the gold or not.

Victor

Anonymous said...

Sorry, the URLs did not survive. Put the following two into Google translate:

http://www.spiegel.de/wirtschaft/soziales/0,1518,796100,00.html

http://www.faz.net/aktuell/wirtschaft/europas-schuldenkrise/schuldenkrise-euro-retter-wollen-an-goldschatz-der-bundesbank-11518707.html

Wendy said...

JR, your Miss Elly was quite a talent.............

Wendy said...

Here's some interesting stories about the BIS. The first one was posted on this blog some time ago, by mortymer I believe..... anyways I found it interesting, and came across it again while googling today looking for something else.

http://www.bilderberg.org/bis.htm

costata said...

Is The Tide Turning For Gold In The West?

I think this report is interesting even if it is a case of being right for the wrong reasons.

(2011-11-02 — forbes.com)

``Rasmussen's "October Surprise" is contained in a recent poll showing 44% of likely voters favor returning to the gold standard, 28% opposed. That intensifies. If the public knew that it would "dramatically reduce the powers of bankers and the political class to steer the economy" support goes up to 57%. Opposition drops to 19%.''

h/t Implode-O-Meter and Dollar Collapse

costata said...

The European banks appear to be "taking their medicine" and writing down their exposures to sovereign debt. I think this is a positive development.

http://in.reuters.com/article/2011/11/03/idINIndia-60307320111103

Also the EU banks appear to be recognising losses and working toward the new Tier 1 capital target of 9 per cent.

http://news.businessweek.com/article.asp?documentKey=1377-aLzWE97vxz6w-0MB2061A74KBMM551T62S676ST

Is this an indication that the new EU bank regulator (EBA) is getting results?

Piripi said...

"... a case of being right for the wrong reasons."

That's very generous, Costata.

costata said...

That's Uncle costata for you Blondie. Generous to a fault (and polite too).

tripper said...

WSJ has some coverage of the G20 IMF news:
Merkel Rejected IMF SDRs to Fund EFSF

I don't really understand what's it all about, but it looks to me as if IMF wants to use the crisis to increase it's influence in Europe. Am I reading this right?

Max De Niro said...

I really wish someone would get to Martin Armstrong, sit him down and force him to read through the whole FOFOA archive, or at least the most important posts.

He always seems to be on the verge of arriving at the same conclusions as FOFOA, but something just seems to cause him to veer off course at the last moment.

Sometimes his arguments can be very compelling. The most being that global capital flows will never stay stationary and hence will always chase yield and returns.

So, once gold has had its upturn and day in the sun, and global debt has been repudiated or printed out, capital will flow back into these markets - much in the same way that capital flows back into markets of countries that have recently defaulted, even though the common claim is that they will be locked out as investors will be wary of these countries.

Well, history has shown that investors have very short memories, and greed forces them to go back in to chase returns.

This is a very compelling argument and I would love to see/hear someone debate this with him.

The low profile of the freegold analysts always means that these debates never occur and we are stuck with standard and unfulfilling shouting matches between the various entrenched ideologies which never uncover anything and whose participants seem to have eyes in the back of their heads, always looking to the past.

Why is it that no one ever talks about the centre piece of the world monetary system changing to something else? Why is that no one can see that 'it's the debt, stupid!'. It seems so goddamn obvious.

So frustrating.

Could someone with a good grasp of freegold write an open letter to Martin Armstrong? I think opening a debate in that line could be seriously interesting and fruitful.

Max De Niro said...

As I see it, Armstrong seems to advocate printing money, rather than loaning it into existence as the bulk of the national debt is consumed by interest payments.

Would this not then destroy the market for US Treasuries, which forms the central and most liquid parking place (risk free :-0) and reference point for global capital as it searches around for suitable investment options?

Does Armstrong address this issue? It's not something that I have seen in his work.

DP said...

Kinda sounds like Euro-Freegold to me, no?

Max De Niro said...

DP,

Yes, a lot of Armstrong's work does sound like euro-freegold, but he absolutely insists that gold will spike and come down and that stocks will also perform well in the coming turmoil.

He seems to have a very good grasp of economic history and of manipulation, but doesn't ever talk about gold for oil, or paper gold manipulation. So I don't know if he is aware of it.



Here is his latest *nearly* very good piece.

An excerpt:
"Some lick their lips for they think gold would be $10,000+ an ounce and they see themselves as rich. What they overlook becomes like the guy who is frozen for 50 years and then is revived. He calls his stock broker firm and the $1 million he deposited is now $100 million. He jumps for joy – until the operator says that will be $1 million for the next 3 minutes. Gold cannot rise in value disproportionately to everything else on a sustained basis. It is undervalued no doubt and is playing catch-up. But under a complete monetary system collapse, everything is revalued. INFLATION is when a storm wipes out the organge crop. MONETARY INFLATION is different. That is the COLLAPSE in the purchasing power of MONEY that is seen in EVERY sector, not just one commodity. When you talk about revising the MONETARY SYSTEM, we are in the category of a wholesale change in the value of absolutely everything."

Max De Niro said...

He also has very insightful things to say, such as:

"Even a balanced budget will no longer work because the proportion of interest within total expenditure will continue to rise until it consumes 100% of the whole budget. Interest is like the Energizer Pink Bunny that keeps on going until you default or monetize the debt. If we eliminated all banking, credit, leverage, and could create a one-for-one gold standard with ABSOLUTELY no fiat money at all, what will that accomplish? The proponents will argue that this will create a discipline and stop inflation. Aside from creating the worst economic collapse in history eliminating credit, it would be no different than a balanced budget and the interest expenditires would eventually still consume everything. It is the unrelenting DEBT that keeps growting. If you only printed money to cover the spending, that would have been FAR LESS inflationary! As of 2010, the national debt stood at $13,561.60 billion while the total accumulative interest expenditures were $8,575.5 billion. In other words, had we just printed the money and spent it, the debt would be only $4,986 billion. Total interest is about 63% of the debt. So a gold standard will do nothing but collapse the economy and a balanced budget will probably create a civil war and ALL social spending would have to be cut to pay the interest on the debt. The ONLY resolution is MONETIZE the debt and STOP borrowing unless in time of war ONLY, or we DEFAULT and wipe out all pension funds, which would probably spark civil war. So let us stop the peripheral nonsense dancing around the real problem – it’s the DEBT, not what is MONEY or a BALANCED BUDGET!"

Anonymous said...

Victor,
seems that the Bundesbank doesn’t agree with the ECB. The ECB is looking to dismantle the Bundesbank of its voting right with the IMF. They would also pledge
the German gold for SDRs. People in Germany expect Merkel to cave in like she always does. Merkel is not different from Sarkozy, she’s also a CIA tool in Europe.
Looks like only the BuBa is against this plan and yes, you are right the ECB plays a nefarious role in this.

sean said...

The subject of Another's native language is intriguing. I speak French but it did not occur to me that he sounds particularly French. Rather, his declamatory style with his "hear me now"'s etc. sounds to me decidedly Arabic. But then I don't speak Arabic. In any case, since the text may have been edited by FOA for clarity it is probably impossible to know for sure.

DP said...

1/2

Armstrong, via Max: "gold will spike and come down"

Come down against what?

Dollars? UST's? Paper gold? Other paper commodities?

Other real goods?

The way i see it, many commodity markets today have some degree of fictional paper objects within them affecting the price discovery mechanism. But none more than gold, since there is uniquely no production requirement to actually take physical delivery of it, while everything else has a much larger, to varying extents, need to actually perform delivery. You can only have so very much paper gold swamping the tiny relative amount of physical gold traded in this market, because very few people actually have a current need or desire to take possession of it. This doesn't apply to anywhere near the same extent in any other commodity. So the breaking of paper markets will release more pent-up price discovery energy for physical gold, than for other physical commodities like sugar, oil, steel, coal, silver, corn, copper, rice, coffee, etc. In fact, many real things are IMO overvalued today - I am thinking of things that people generally buy with leverage: large consumer items like cars, houses, etc. These have been pumped up over the years by the easy availability of credit - "paper cash" if you like - and many of them have some way left to fall. This is why and how gold will be revalued against ALL things IMO. It will rediscover its ages old real value against all other real, deliverable, things.

In the heat of the rapid release of the springs holding back this energy at the moment, yes I can see that it's entirely possible for the relative revaluation process to perhaps overshoot temporarily, as market participants get over-enthusiastic while watching gold rocket past everything else in sight. Gold might temporarily become overvalued against the real world of things, and come back down to earth a little again. But I can't see it returning to the kind of relative valuations that you see today, because I can't foresee a similar degree of paper speculation as today returning. Maybe I would have FOFOA's orbital launch pattern with a "sustained orbit" slightly lower than the initial peak, perhaps not I couldn't say for sure. But really this seems like real nit-picking at this stage of events, bearing in mind we are at the very footslopes of that inverted waterfall.

As a decidedly shrimp-sized holder of gold, I for one will not be holding a signficant inter-generational gold hoard for my offspring to carry forward, unfortunately. I plan to exchange most of my gold post-transition for other tangible assets, ones that will generate an income (rather than the expected capital gain people are generally seeking today) - because I intend to live! :-) From where else in a hyperinflationary great depression will I find income? In a job like today? Gimme a break! It'll be swap gold for income-producing assets, or sell off my assets and burn the furniture little by little. Perhaps eat the curtains rather than burn them - that may prove a tough choice in a cold climate though. So, yes, I will personally be adding some small amount to the momentum in revaluing certain non-gold assets upwards and gold back downwards.

...cont'd...

DP said...

2/2

Getting back to the point on no deficits except in time of war, I note that the Eurozone governments are being somewhat encouraged to remove their deficits lately, and every so often I see a mention along the lines of "before 2013". They all come out and speak then about how they will stop running deficits and will instead move to running a surplus. Great! This doesn't strike me as an insignificant detail, and it seems germane to Armstrong's comments over time about debt and deficits being the real problem.

I also note that it seems whenever a sovereign finds itself borrowing at 7%, the ECB steps in and monetises their bonds while they are simultanously chastised about running deficits and borrowing.

Finally, I notice that the EFSF gets a lot of talk, but not much seems to happen so far, while in the background the crisis demands that the ECB runs around the back and monetises. Something it seems to me it can do because the debt crisis puts a brake on the economy, which stifles demand for goods and services bringing down their prices, which means that the euro needs to be weaked to track down with (slightly faster than - 2%/annum) the value of goods and services ("single mandate"). Pretty handy if you want to print euros to monetise some past debts and finally deal with them, once and for all, if you have a mandate that tells you that you have to weaken at the moment anyway. Way to get a tail wind! Similarly, forcing the commercial banks to forgive sovereigns half their debts or more, is a pretty good way to deal definitively with some more of the past debts, and again the monetisation of this failed debt, recapitalising the commercial banks in order to ensure the depositors are made whole, is a great way to dilute your currency and track down with dwindling demand as people are out of a job and out on the street rioting.

I really don't, personally, see too big of a divergence between my understanding of Armstrong's view, and my view of a Freegold world that I am more and more convinced is coming down the tracks right at us with each passing news story I encounter.

costata said...

Hi tripper,

"..it looks to me as if IMF wants to use the crisis to increase it's influence in Europe. Am I reading this right?"

Yep.

mrbeyond said...

Things get interesting when german gold enters the scene. http://www.zerohedge.com/news/g-20-demands-german-gold-keep-eurozone-intact-german-central-bank-tells-g-20-where-stick-it

Warren James said...

Max, DP, fwiw I've been long pestering Martin Armstrong to read and respond to the freegold topic. In September he replied: "I have been working on a piece that deals with this...". And some of the core elements have been communicated to him; he writes: "...This dilemma between The debtors and the savers is the essence of the debt crisis...". He also writes recently (in his PDF's) about a 'gold revaluation' being a 'pipe dream', so in the absence of an official response my own conclusion is he too sees the need for a non-currency reserve reference point balancing global trade but instead of gold he would prefer this to be a debt instrument or some kind of super-SDR.

Max De Niro said...

DP,
You wrote:
“Armstrong, via Max: "gold will spike and come down"

Come down against what?

Dollars? UST's? Paper gold? Other paper commodities?

Other real goods?”
I suppose he is talking about measuring it against the dollar. When we talk about it here, it seems so obvious, which makes me think that surely he will have appreciated this. How could he not have? Armstrong is obviously successful (kinda!), experienced and has predicted lots of things. There is always the feeling that given that he has a track record and is so sure… maybe there’s something that he understands that I don’t, something that I’m missing, that he understands on a deeper level.

Whilst I’m doing my best to learn, I am not an expert in this field, he is, and I am trying to make massive decisions which will undoubtedly affect the rest of my life. This is not some academic exercise, not an inconsequential debate. Actions I take in this are have serious consequences, the stakes are high. Not just for me, but for my family, so it’s difficult when faced with conflicting information and not having a totally assured understanding. Doubt creeps in, which ain’t nice.



you wrote:
“I plan to exchange most of my gold post-transition for other tangible assets, ones that will generate an income (rather than the expected capital gain people are generally seeking today) - because I intend to live! :-) From where else in a hyperinflationary great depression will I find income? In a job like today? Gimme a break! It'll be swap gold for income-producing assets, or sell off my assets and burn the furniture little by little.”

Yep, me too. But the question comes which comes to my mind, forced by Armstrong’s analysis is that perhaps I should be doing that, at least in part, before ‘the transition’? That is the big choice with which I am wrestling.

This lack of certainty is why I would like to see some serious direct debate between Armstrong and a knowledgeable RPG observer. That way I would feel like I would have more information for making the tough decisions. I do my best, but I recognise my limitations. In the end, I suppose we have to make our choices and live with it don’t we. That’s life, it’s an inherently risky business.

Max De Niro said...

Warren,

Well done on contacting him!

I find his writings a bit confusing.

He seems to contradict himself now and then, but he does seem to be so close to Freegold.

Perplexing.

DP said...

In the end, I suppose we have to make our choices and live with it don’t we.

What you said! :)

This whole 'money' thing is complexticatid innit? If only someone would finally come along and just 'splain it to everyone, life would be easy...

dumnonia-watchman said...

ZH article regarding some huge withdrawals from the Fed last week. I don't claim to understand it, hoping maybe someone brighter than me might be able to shed some light on it?

Could it be the start of something big?

http://www.zerohedge.com/contributed/hit-big-withdrawals-fed-sells-assets-borrows-cash

JMan1959 said...

Iranians now trading oil at Kish in non US dollar terms:

http://www.zerohedge.com/article/guest-post-iran-opens-oil-bourse-harbinger-trouble-new-york-and-london

Now I know why so many US/Israeli dignitaries are rattling their sabers against Iran's "nuclear program". It's not about nukes, it's about our attempt to maintain reserve currency status at all costs, the exact thing that is postulated as the reason the US invaded Iraq. Hussein (Sadaam, not Barry, although they were similar, lol...) wanted to sell his oil in non dollar currencies also.

Edwardo said...

I didn't want to discuss this, but now I feel compelled.

Martin Armstrong has become something of a fetishized character, and I, for one, am quite tired of it. Does he add value to the "discussion"? Yes, but, equally his ideas are prone to rely on the over emphasis of issues that, by dint of some very bad personal experiences, are near and dear to him. At times, in his idiosyncratic essays, he has crossed the line into what seem to me to be incoherent rants.

In the meantime, Mr. Armstrong, who almost certainly was doing things he ought not to have been doing before he wound up spending many years behind bars for, it seems, contempt, is, in my estimation, near to Freegold in the same manner that a hobbled man standing on the Tanzanian side of Kilimanjaro can be said to be near Kenya. So close, and yet, so far.

FOFOA said...

My new post is up, finally! Sorry it took so long. Moneyness

DP said...

Max: What better way to destroy the bond markets, and hence the $IMFS, than through massive QE?

I hope he gets printing, and quick. Get this freakshow system over and done with.


This caught my eye at the time but I thought I'd leave it to see if anyone else might pick it up, and also I didn't want to send the conversation of the moment off on yet another tangent. The conversation of the time seems to be over now, and nobody else picked it up. Also there is a whole new shiney post that new comments will be placed against. So I thought it was perhaps time for me to come back and revisit this Thought of yours, above.

What I was intrigued by, was how massive QE might destroy the bond markets?

I only ask because this is taking my view of the situation for a 180 degree magical mystery tour: my view being that QE supports the market value of bonds, and hence the $IMFS. It would not be unprecedented for my view to be rapidically shaken up, turned around and end up facing the completely opposite direction, when it came to these sort of things - so I stand ready for an education?

Cheers!

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