Monday, December 3, 2012

Debriefed #10 – Motley Fool


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Aquilus said...

Motley Fool! Nice to see you!

costata said...


Good interview. Interesting to hear TMF's perspective on the barriers that people have to overcome in order to understand the concepts and topics we discuss here.


DASK said...

Great interview TMF and FOFOA; I'm still thinking this debriefing series is a wonderful complement to the headier topics of the blog.

I didn't realize that FOFOA's dilemma was your post; well done.. it sure helped me out. And nice work fighting the good fight over at TF's blog; I've tried arguing against other axioms there and it isn't easy.

best regards to all!

Anonymous said...

Good interview. Well done!

dojufitz said...

Nice interview....i have no economic background and i kinda get freegold....still reading & learning.....and still wearing my FOFOA cap....

Anonymous said...

The perfect gentleman at FOFOA,

really nice to see you.

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


Excellent debrief, perhaps my favorite so far! The gem in it is really there for all to see: if you seek understanding, the best path that takes the least amount of time is to simply read the blog. Some would immediately reject that notion when MF tosses a four figure number out there regarding hours of required reading. I think that the idea that thousands of hours of reading is required to glean basic understanding is wrong, certainly for most people. When MF talks about thousands of hours I believe he is talking about a deep and evolving understanding that flourishes with focused scholarship.

I came to this blog early in 2009 and the library was quite sparse compared to now. I simply read what was here and did not bother with the comment section. Honestly, I did not find the comments to be very interesting back then. It was easier for me I suppose than it is for a newcomer these days to ignore the comments and dive right in. There are a lot of interesting people and ideas found in the comments now and the volume of work posted on the blog is far larger and therefore more intimidating.

I believe basic understanding can come in just a couple of weeks, reading perhaps a couple hours each day. Say a month or around 60 hours. Deep understanding comes later and really never stops occurring. I rarely encounter a concept that I had wrong now after reading all the posts multiple times. However, certain concepts ring or resonate better as a result of a new post. I think one needs to get enough meat in the early stages to keep the curiosity level up. On that accord I must say that posts are definitely high in protein and will easily sustain the inquisitive mind.

Probably a good measure of progress for someone new here is to recognize whether they can acknowledge their own baggage. I really think it is unlikely that someone can arrive here without some. Baggage is dead weight that impedes progress and I doubt someone can attain real and deep understanding while holding on to it. So while there are many "aha" moments, a real big one is when you can say to yourself "wow, I have baggage!"

Another measure of progress may be when you find that your anger and pessimism towards government, bankers, and people in general begins to dissolve. Some people may not harbor anger, but I certainly did. I framed my perspective in terms of right and wrong instead of real versus ideal. I was trying to view the world and the people in it as a clockwork mechanism instead of a living and adapting organism. Debtors and Savers really changed my perspective when it occurred to me that the conflict between debtors and savers is built in and can never be permanently resolved by brute force. Our only hope is an organic solution where the organism itself adapts in a way that ensures survival and prosperity for both camps. The last vestiges of my Hard Money Socialist baggage and persona were ceremoniously chucked at that point.

BTW, do we have a date for the Vegas adventure? I need one ASAP because I am bidding January flying on the 12th of December. I will of course be there if I can get the day off! Also, I have passes that I can give out to friends for highly discounted tickets on Delta. They are for standby travel and the price varies but is usually quite low (covers taxes and fees).

Cheers, greetz, and RTFB!

Anonymous said...

Motley Fool, you genius ! To deploy the words of the infamous Richard Rorty - whose last lecture @ the Law School of the University of Chicago just before he passed away I would highly recommend: - you "synthesised by a concept before it works" for me (@27:00 --- > . Thanks, guys ;) I know understand, but remain unconvinced. Gold can't be a currency, I see, because you need the value stored separately. OKay. But what if currency is not currency? Would a definitional change to the word currency cause a reaction (for good OR for bad) in the FoFOA thesis? I mean, this rather wonderful lady wants to change the definition. Is that what enables Bitcoin, because it is not used as a currency? Just a value~~store ? Look forward to your learned criticisms, wise men of the Gold Realm. Maybe I am being unduly biased by aesthetic factors?

Michael H said...


In response to my statement that “On the face of it, bullion banking is a strange concept,” you responded:

Only if you haven’t shifted your frame of reference to consider gold as an accounting unit. Perth Mint runs accounting books in gold and silver alongside our AUD accounts. Banks pay for our coins with unallocated gold, which we use to pay miners for their physical to make more coins. It is all very natural.

It may seem natural, but does the fabricator of copper pipe pay the smelter in unallocated copper, and does the copper miner sell in exchange for unallocated copper?

Do cereal makers pay with unallocated Corn, and the grain elevators pay the farmers in same unallocated corn?

It's not so strange that the gold industry pays in gold up and down the supply chain; rather, it is strange because it is the only industry to do so. Why is it special?

(Haven't gotten to watch the debrief but looking forward to it.)

H. M. Socialist said...

Oh look another traitor to the hard money cause!

I see your logical arguments have been cast down by the overwhelming obstinance of our hard money warriors! The hard money crew rolls deep yo! You and your motley crew of freegolder cultist scum don't stand a chance against H-Mizzy and his minions! You ought to come back over on our side, we got a lot more soldiers over here you know what I'm sayin'?! BABY COME BACK!!!!


Anonymous said...

I think a common trait amongst the readership here may be that we have finely honed bullshit detectors. While understanding all of the concepts here is difficult and takes time (I still haven't mastered everything), understanding why competing schools of thought are wrong is not so difficult.

What first got me interested in these issues was when I read Simon Johnson's piece "The Quiet Coup" in the Atlantic. I started out looking at various easy money sites which essentially advocate that there is no consequence to printing money. That didn't even pass the sniff test. Then I dabbled a bit in the hard money school at zerohedge and other places, which made a bit more sense to me but it became clear that a lot of their ideas are also pretty unrealistic. Then I found FOFOA, and the rest is history.

So if both the easy money and hard money camps left you scratching your head, you're here pretty much by default.

Motley Fool said...

Thanks for the comments all.


I would just like to note I threw out two numbers. 200 hours as a guess for some basic understanding, and the larger for a deep understanding (of about 80%). So our guesses on the first is not too dissimilar.


Woland said...

Among the many wise observations in this charming debrief,
one stood out for me: the debtor and the saver are not two
mutually exclusive human types, but rather dual aspects which
are present in all of us, whether simultaneously, or at different
times in our lives. Well done.

KindofBlue said...

Great Debrief MF

FOFOA begins with a fairly accurate and tenable theory of human nature. Very few get this and that is why people struggle with these concepts, IMHO. We want to protect our egos, our views, and wag our finger at the world. The wise man says, better we wag it at ourselves. We are, by nature, opportunistic creatures. A simple test is when one gets another to acknowledge we are heading for a wall at high speed (a crack up, a collapse or TEOTWAWKI, if you will). To a man/woman don't we all prefer and hope that 'it happens after I'm gone'?

My 2 cents. Appreciate what you and others bring to the discussion.

Indenture said...

Fool: Great to see you! I also think the word "capitulation" is used correctly because it has a connotation of a battle well fought against something foreign.

Unknown said...

Good stuff FOFOA and MF

Unknown said...

Don't be too negative or condescending about posting on other HMS blogs, as you call them. I can't say I'm a converted freegolder yet, but I found Victor's comments on one blog that shall remain nameless a few months ago truly eye opening. His comments led me down a few rabbit trails which have certainly changed my perspective on things.

So, Victor and Motley Fool, don't think that you aren't making an impact when you are barraged with idiotic responses on those sites.

I think there are a lot of genuine seekers of truth regarding PMs, the economy, gold vs silver, peak oil (and I might not agree with you on everything but I will certainly listen to what you say) on those sites. I think the people behind those sites often have good intentions. But there are a lot of obnoxious and idiotic comments from people who stink the place up. Somewhere a fish will bite.

Woland said...

A fine thought, Lemuel. Freegold has much in common with
the mustard seed, in the Parable of that name. Where better
to sow this "invasive" species than in a hostile soil? 3 Cheers!

Anonymous said...

Good to see you, Fool.

This blog represents my version of Howard Christman and Lydia Purple

If that makes any sense:)

milamber said...


Excellent debrief. I think that of all the profound items that have been written and debated here, FOFOA's dilemma takes the cake. That single concept, to me at least, is the #1 reason why Freegold is the best way forward. As I had indicated a few months ago, I just hope the debtors and the savers are smart enough to get there with minimal loss of life.

Aside: whoever recommended to read Debt: The First 5000 years, should get a cookie (or a hat tip for the Turdvillians that are here :) )

That is an outstanding historical chronology that (at least for me) cements FOFOA's moneyness post/concept.

You can get it here for free

Debt: The First 5,000 Years

or buy it at Amazon like I did :(

And since Graeber is a self described OWS/anarchist/leftist/Anti-Capitalist, I don't think he really cares one way or the other :)

Currency is the bridge between them.

And Coinage is one of the worst things that ever happened to gold and consequently, humanity!


Dante_Eu said...

Really good interview MF and FOFOA!

Nice to see the man behind FOFOA’s Dilemma.

Talk about coincidences :
We discovered FOFOA blog almost at the same time, we have the same haircut (or lack of), I reckon same age and my apartment is also 25 m2!

I don’t smoke, though. Neither should you. :-)

Naughty Slumdog said...

Thanks for answers!

Inflation is just honest paper's way of saying:
"I'm paper, My purpose is transaction, please don't hoard me for savings!"
Paper hoarding is what causes the current economic ill's of the world.

You are so correct ! Unbelievable how you simple statement apply to life …. Look at US-China tensions – how much of that comes from USD reserves and trade account deficit ? They are waving their swords … or Eu, Germany vs Mediteraneeans ...

The essence of inflation? Transfer of value.

Yup transfer of value! From present to future or from future to present ? Or from one people to another ? Or all ? Still a riddle for me ...

Motley Fool said...


I have not yet watched the video you linked, and will do so tomorrow. But just based on the title I would say she is 40,100,500 or 5000 years late in that observation, depending on how you want to define it.


Ps. Thanks to others for the kind comments. :)

mr pinnion said...

Nice to see you MF.
The best out of a fine series of debriefs IMHO


costata said...

Edwardo et al,

GM Jenkins over at Screwtape Files has posted an interesting bit of TA work on silver.

Some of the TA inclined folks here may wish to check it out (as well as the comments). I have posed this question to GMJ:

Do you think this could be indicating a timeline for hyperinflation of the US dollar?

KindofBlue said...


I also agree that Graeber's book is an indispensable read. Well summarized.

costata said...

This article discusses another avenue for wealthy Chinese to get money out of China (my emphasis).

In recent weeks, police in mainland China and Macau have detained people from at least three of Macau's biggest junket operators, the middlemen who extend credit to high-roller players and collect the debts in China, according to people familiar with the situation....

Macau boomed in recent years as Chinese gamblers flooded into the former Portuguese colony, which now generates more than five times the gambling revenue of the Las Vegas Strip. International authorities, including in the U.S.,

...Chinese individuals aren't allowed to move more than $50,000 a year out of the country, including to Macau, which, like Hong Kong, is part of China but has its own financial system and its own set of laws. That restriction has prompted some high-roller gamblers to rely on junket operators to get around Chinese laws and provide access to greater sums.

According to a Wall Street Journal analysis of Chinese economic data, about $225 billion flowed out of China in the 12 months through September, a number that captures both legal capital outflow and some of the illicit flow.

Transfers where money flows across borders via casino accounts have raised concerns among casino executives and U.S. authorities that customers could exploit the intracompany accounts to launder money.

Incidentally when did Singapore drop its puritanical attitude to Casinos? ;)

costata said...


From the FT:

According to data produced by the Bank for International Settlements, and published last week by the Bank of England, the holdings of JGBs by Japan’s banks equate to 900 per cent of their tier one capital, compared with about 25 per cent for UK banks’ exposure to gilts and 100 per cent for US banks’ exposure to US Treasuries.

What could possibly go wrong?

Edwardo said...


Thanks for the heads up. One thing that I've long since found interesting with respect to market forecasts is when folks with seemingly very different methodologies seem to converge in their outlook. With that in mind "analysts" as diverse as GM Jenkins, John Williams, Martin Armstrong, and the folks at QBAMCO, to name just a few, seem to have targeted 2014-15 as a time when the game changes in a very marked way. In fact, for what it's worth, John Williams recently came out with 2014 as the year when HI rears its ugly head.

I always imagined you as older, heavier, and a tad more hirsute, MF. It's nice to become acquainted with you beyond your thoughts on the page.

RJPadavona said...

Loved this Debrief, MF!

And yes, nice haircut. Bald is beautiful. God only made a few pretty heads, the rest he covered with hair.
It's nice to see that all us bald FGers don't have combovers. I guess it goes along with us having good bullshit detectors, as Jim said. Although I suspect Victor has a combover as part of one of his many MI6 disguises ;)

FOFOA's Dilemma was also a key "a-ha" moment for me as well. I thank you much for that succinct summary. It's so ironic that Austrian econ is supposed to be about how human action affects the marketplace, yet the practitioners of that school don't consider how human it is to have that split personality of being both a debtor AND a saver, as you described. I don't know if FOFOA's Dilemma will be considered for a Nobel prize, but it's definitely worth a large stack of BEECs!

PS: Nice prop with the cigarette too. Lucky you. FOFOA edited out the bong hits in my interview :(

Tommy2Tone said...

"Among the many wise observations in this charming debrief,
one stood out for me: the debtor and the saver are not two
mutually exclusive human types, but rather dual aspects which
are present in all of us, whether simultaneously, or at different
times in our lives."


Bron Suchecki said...

Michael H: "It's not so strange that the gold industry pays in gold up and down the supply chain; rather, it is strange because it is the only industry to do so. Why is it special?"

Because gold was once money. Just because we went off the gold standard didn't mean the infrastructure of gold accounts and borrowing and lending gold stopped, it just continued on and then got a real boost when miner financing by forward selling gold was created.

Also, for physical gold businesses, you have to run "accounts" or inventory systems to keep track of your gold, so again the infrastructure is there on which to build (see

JR said...

Go Go MF!!!

Ore em' said...
This comment has been removed by the author.
Ore em' said...

Great debrief, it's quite fun to see what a(nother) Freegold cult member looks like.

As far as the number of hours committed to the topic, I would have to say my "expenditure" has been in the thousands of hours. And I have been an exceedingly obsessive reader my entire life. That said, it's also easily been the most enjoyable reading I've ever done. Put me firmly in the "bigger is better" category for post length.

I am meeting with an econ prof in the next several days. I sent him a very preliminary email, and he actually seemed rather receptive to the idea. We'll find out soon enough!

Michael dV said...

Debtors and Savers
interesting that that offering is getting recognition because it was the one that made me think "wow this guy is smart'. Anyone who can take down Marx in an essay has my vote.
The duality of the human as being both is an argument I have used many times...goes something like this say you want gold to be money but you really want easy money when you pay your mortgage off with cheaper dollars...sure you don't want to loose money by inflation, so don't save it.
If I have not been too obnoxious in the previous sentence I can usually move into the separation of the functions of money and before you know we have a freehold epiphany.

Anonymous said...

Nice interview, MF! Now I know who keeps stirring up the silverbugs...

Here is some Modern Monetary Theory h/t Stephanie Kelton:


Anonymous said...

Yess, naturalll eveything comes down to definitions, doesn it? How else coul d human beings even communicate, were it not for definitions? But I hasted to add like no body is conversant in every defination no single defination is by far and away THE definition. Please do send me back your thoughts, it seems to me this is a congregation of unusually smart people, but who are perhaps misallocating their time...Own gold? Ok. 3 words. You might have been able to invent free energy if you had spent your time differently rather than read 10,000 hours of literature on gld

costata said...

Evil gold hoarders, jerks, time misallocators and brainwashed cult members:

Jesse McL said...


In the previous thread you posted:

Personally I've only had former experience with Bullionvault. Had my fingers burnt there as my own bank went tits up. If state bad-bank (covering up to €100,000) hadn't taken over it would have been very cumbersome to get my BV funds.
Since my experience with BV+failing banking system I've been a happy owner of phys. gold in my possession solely.

Can I ask how your fingers got burnt? Did you mean that your bank went tits, and then BV had nowhere to send your funds? Did BV refuse to change your bank account details on record with them? Did you have gold with BV, and if so could you have tried to get it in physical (delivered) instead? Just curious.


Anonymous said...

@ Jesse Mcl and Burningfiat

As a BullionVault account holder I'd be interested in this. I was under the impression that you only need to write to them explaining the circumstances. The reason for the one bank account rule is to prevent someone from stealing your funds.

Anand Srivastava said...


A very good debrief. For me the best yet.

A lot of points were discussed. Some have been mentioned above. One that was striking to me was that to understand Freegold requires certain amount of imagination, as it is not something that you see around you, and that Science fiction lovers will have a good imagination. I don't remember the conversation exactly.

I have always been more interested in Science Fiction and Fantasy. My most favorite books have been Lord of the Rings, Hitchhikers Guide to the Galaxy, and the Foundation series.

I think there are 3 roadblocks to understanding Freegold.

1) Too much Printing results in HyperInflation and for the US too much printing has already happened.

For Keynesians it seems this is a major roadblock.

For me I started on the road to understanding the current economic environment when I found out that US was printing a lot of money. That idea alarmed me. Then I came across Gonzalo Lira's article on US HyperInflation. That is when I really started to look for more information. The implications of USD HI are horrible, to a person in the software industry.

2) Fiat is necessary.

This is the major road block for the HMS crowd.

When I started reading Gonzalo Lira's articles, I came across the gold standard thing, but I quickly got into a conflict, as a gold standard will result in deflation and deflation would result in people hoarding the currency. For me intuitively this was a big problem, as the currency will be sucked out of circulation. So Gold standard wasn't a nice option to me.

3a) Nobody will accept paper forever. It must at some point be converted into physical stuff, the least offensive being gold, antiques and other rare items.

This is a roadblock for people considering SDR as a replacement for USD. Another thing to remember is that when the crisis comes half of the currencies in the SDR basked will be toast.

It is a corollary of the following point.

3b) Governments, Elites, and Giants are powerless to prevent the coming of Freegold.

It is a road block for people thinking that the elites are powerful and they would not let Freegold happen, because it undermines their power.

Unfortunately for the world that is not invested in gold, the crisis is coming and it cannot be prevented, merely delayed. The reason is that paper must someday be converted to physical stuff. That time is coming, as growth can never be forever. There is a cycle of growth and contraction. This will still be there in Freegold. And that is where Fiat helps, because the growth and contraction can be managed by printing and absorbing the liquidity in fiat, but not in gold.

This last point took a long time for me to understand. It was a comment probably by Matrix Sentry, about the currency swap agreements as a precursor to RPG.

Unfortunately I still don't have a very easy reference for this 3rd point. The other two have been covered many many times, and in depth. Possibly because the two are the major stumbling blocks for most of the people, as they are coming from Economic backgrounds, from either the Keynesian economics or Austrian Hard money economics.

I had to rewrite it, blogger lost my previous post. I had another point that I had said then, and I can't remember now. Hopefully this one goes through.

burningfiat said...

Motley Fool and FOFOA,

Loved the debried. Nice curtains (both of you)!

Jesse McL and duggo,

Well, in the end everything played out well for me as I ended up getting my money (because of national bad bank take-over). I didn't have enough grams to get a whole physical bar (is it 1000 grams minimum?). How did I get burnt? A couple of good nights sleep missed until I knew the whole bad bank rescue thing would play out to my advantage...

Have you tried to investigate what it takes of paper-work to change associated bank-account at Bullionvault? NOT easy for sure... You have to get your new bank to sign all sorts of documents. Double-stamped and what not. My problem with the elaborate procedure was that another entity than you needs to get involved to finalise that account switch. Really annoying. When I get the time I can try to share the requirements they send me back then...

I don't doubt that Bullionvault has the physical they claim to have and that they are generally good guys.
But they and potentially the banking-system are still middle-men between you and your funds.
If you really understand the implications of the FG revaluation for the current system, a locked up'd banking system and gold market are definite risks when the SHTF.
To be 100% sure to don't miss out on this once in mankind history gold functional transformation event, there is only one way to go: Physical gold in your possession.
I'm 95% sure you will also receive a windfall after transition with your Bullionvault option. But 100% is infinitely better than 95%, isn't it? (5% divided by 0% risk of missing out = inf.)

"Think now, if you are a person of "great worth" is it not better to acquire gold over years, at better prices? If you are one of "small worth", can you not follow in the footsteps of giants? I tell you, it is an easy path to follow!" --ANOTHER (THOUGHTS!) 1/10/98

But you need to RTFB and buy some physical gold.


Beer Holiday said...

Thanks Burning, a real eye-opener, and great reminder of why to go physical.

Here's a repost of song posted by DP by The Housemartins that I can't get out of my head.


Beer Holiday said...

Awesome debrief MF, your even cooler than I imagined.

Anonymous said...

Dear burningfiat

Thanks for your story. None of us know the complications until they arise so it's good to hear people's real experiences.
As for the idea of holding 100% physical it's a nice idea but we live in different countries with different nationalities plus different circumstances.
I'd like to hear of someone's experience when flying out of a country carrying 10 or 20 Kilos of Gold. Would you risk it?
What I find from reading the accounts on this blog is that most people seem to have the same scenario as to what is going to happen with the general collapse of paper currencies. Real events have a way of making fools of all of us. The best laid schemes of mice and men etc. etc.
Flexibility, adaptability and being light on your toes is the way to go.

Unknown said...

The real fool is quite tame compared to that ferocious clown. Debriefs are always so enlightening.
I had even imagined FOFOA as a kind of Brainiac / Orson Wells holed up in the Caymans.
It just goes to show you that "humanizing" our iconic avatars brings it all back to an earthly reality.

Beer Holiday said...
This comment has been removed by the author.
costata said...


'd like to hear of someone's experience when flying out of a country carrying 10 or 20 Kilos of Gold.

Google 'hernia'.

Beer Holiday said...

Dear duggo, I was flying out with 21 kgs of and they charged excess baggage

Anand Srivastava said...

The other point was that IMO understanding Oil matters for understanding how we reached this present situation. But understanding Oil is not necessary to understand how things will proceed from here to freegold. If that was required I would still be groping in the dark :-).

Unknown said...

"Flexibility, adaptability and being light on your toes is the way to go."

Sorry, duggo. Going to have to disagree with you on this one. I'd say it's better to deeply consider in advance what you think is most likely to happen, and set yourself up accordingly. Dig your roots in firm and deep.

DP said...


#FunFact: 20kg of gold is 60x less heavy than 20kg of silver!!

(YMMV, terms & conditions apply)

Unknown said...

Possession is the timeless attribute of wealth because true possession is unequivocal.

Vote for Possession!

Woland said...

Satyajit Das is one of my favorite writers on things economic.
He has a post up today over at Naked Capitalism, "L'Age D'Or,
Part 1". I think y'all might enjoy it. (When do WE get our 1 & 10
gram vending machines??) "I'll trade ya a Hayek rookie card
for a 1960 Triffin and a Mundell Nobel year. Deal??

Woland said...

Fofoans might also enjoy Hugo Salinas Price's "The Price of
The Dollar", which can be found over at Jesse's Cafe Americain.

Anonymous said...

Hello all, I have been to FOFOA before and enjoyed the content. I wasn't aware of the youtube debriefing which has been both enlightening and entertaining.

Since I pretty much already believe in holding metals I reckon there isn't much point in posting another "go metals" comment, but I wanted you to know there are more of us out there. (yes I know that was a terrible sentence)

So hats off to the greater FOFOA community. GOLD POWER !

enough said...

Hi MF and Vic,

Why do you waste your time over at TF site?

I have never read such daily whining over paper price action as at TF site.

The personal attacks by "turd's army" against anyone that has a contrary view is shocking.

It is a waste of your time and energy to post and respond there.

Best wishes to all, E.

Robert said...


I think it is a bad idea to carry a significant amount of gold across any border unless the rules are very clear and corruption is not a problem. There have been several instances where I thought about taking gold across a border, and I only tried it once. I checked the rules posted online for the country I was going to. I emailed customs to make sure that no taxes would be payable. The reply was basically "No taxes and no hassle as long as you make a correct declaration." So I made a declaration at the airport -- one of the busiest airports in Asia. And the customs officials had no idea how to handle it! They guy frankly admitted that he had never seen a declaration for gold coins before. They could not decide whether gold coins were goods or currency. While they assured me that there was no customs tax payable, in the next breath they said I would have to pay VAT tax if the coins were classified as goods. After waiting around for an hour while they tried to figure out the answer, they came back and said that the coins are goods and therefore subject to VAT. I refused to pay, so customs held the goods until I left the country. And yes, they charged me storage fees. Fortunately corruption was not an issue in this case, but I learned the lesson that even when you do your homework and the rules seem clear, there is always room for interpretation, and therefore an unknown risk.

Anonymous said...

@Robert: Scary. I wouldn't chance it.
@Barry: Down in bunker and hunkered down. You've got a point.
@Costata: Ouch!!!

Through Europe by car shouldn't be a problem. (keep a low profile).

Actually if I knew some time in advance that I wanted to get Gold coins out of a country I would send them a few at a time by good old normal mail.

Edwardo said...

Anand wrote:

"3b) Governments, Elites, and Giants are powerless to prevent the coming of Freegold."

I tend to agree, but the elites, some of whom also have memberships in the giant and government cohorts, clearly have been quite effective at attenuating its arrival. And despite my own bias that the days of more delays in said arrival are growing short, "they" may yet buy more time than many of us imagine possible.

costata, tee hee on the hernia comment. I might amend the Google search to double hernia.

Anonymous said...

Dear Professor FOFOA
I have now spent some time attending most of the Freegold lectures and although, at this moment, I don't think I could get an honours degree I do think I have a basic grasp of the concept. I think at a future date the amount of study might become untenable for a beginner. Maybe there is an opportunity for one of the academic members of the Freegold University to produce all of the necessary lectures into a Readers Digest format.
Being a mature student I regard the onset of Freegold as a bonus if it happens in a relatively sensible time-frame but not my main reason for holding Gold. My own take on Gold is that it's my hedge against other income becoming compromised and a way of keeping a low profile as far as government's sticky fingers go.
There is always that war going on between saving and spending. The spending army has a powerful ally.... my wife. She is insisting I buy a new Mercedes rather than more Gold. I really cannot understand why she's not happy with a Fiat Panda.
Does anyone else have these problems? :(

Woland said...

Hello Duggo;

I happen to believe that there exists a "5 minute Freegold".
This view is probably not shared by most readers, but that's
OK. It can be found at FOA (3/14/99) 11: 17: 14 MDT, Msg
ID: 3351. It is the closest thing to a talisman I have found.
One simply reads it over, and over, and over.......... And
now FOFOA has provided the handy link to the Another/FOA
archives!! I hope it helps others as much as it has helped me.

Unknown said...

Or, rather:

FOA (3/14/99; 11:17:14MDT - Msg ID:3351)

Michael H said...


You have mentioned 4 pages among the archives that are of special significance to you, one of which is this post ID 3351 you just referenced.

I can't find references for the other three. Can you share?



Perhaps you should ask Poopyjim for marital advice.

Motley Fool said...


Haha! Your comments always amuse me.


I've read those, and many others. :)


I suppose I am a masochist. I have received some positive commentary in private mails thanking me for being there, so the main forum comments are not all there is to it. If I have helped a few people get a better understanding then I'd say it was time well wasted.


Well, I suppose it is my choice how I waste my time. ^^
I will be watching that video now and then responding to your question, as well as elaborating on my previous.


Thanks for the kind comments.


MnMark said...

I skimmed through "Debt: The First 5,000 Years", reading especially the first part and then the very end where he makes his conclusions and recommendations.

He does that thing that modern leftists do: he excoriates capitalism as unfair and greedy and not really about freedom at all...but as for an alternative, he waves his hands and says "something else better goes here." His one concrete prescription? Why, a debt jubilee!

Ok, it's quite possible, even likely, probably inevitable, that some degree of debt jubilee will occur. As for after that, the author has no concrete ideas. He knows he doesn't like capitalism, that's for sure. I suppose he can't quite come out and recommend communism given its history of failures. What's left? Mush. Here's his conclusion:

"If freedom (real freedom) is the ability to make friends, then it is also, necessarily, the ability to make real promises. What sorts of promises might genuinely free men and women make to one another ? At this point we can't even say. It's more a question of how we can get to a place that will allow us to find out. And the first step in that journey, in turn, is to accept that in the largest scheme of things, just as no one has the right to tell us our true value, no one has the right to tell us what we truly owe."

Allow me to translate from left-speak: "Sure, you borrowed someone else's money and promised to pay them back with interest, but no one can tell you what you truly owe! Promising to pay someone back money you borrowed is not a 'real' promise....What's a 'real' promise? Uh, I don't know, but I'm sure it doesn't mean having to pay back money you borrowed. We'll figure out what a 'real' promise is later...meanwhile, agitate for a debt jubilee and free money so we can all go live in a pasture someplace and dance with flowers in our hair and figure out what life is really about!"

Hobgoblin said...

Great debrief, gentlemen! It does appear that the maxim "longer is better" still holds true... at least as it pertains to posts and debriefs. :) There is some comfort to be found in the knowledge that there are others out there that see the world (and what may befall it) as you do especially given that it appears the same from entirely different vantage points. (SA in this case.) Here's to hoping we have some more years to prepare.

milamber said...

@ MnMark,

From my perspective (at least what I was alluding to in my comment) the reason the Graeber book is a great read, is NOT his proscriptions/Recomendations, etc. The guy (again IMO) is out in left field in that respect.

No, where I found value in Debt was the historical PROOF that he footnoted extensively explaining/defining the "money concept" that FOFOA has aptly demonstrated in his posts.

I take the Graeber book the same way I take Marx: Fantastic insights; Horrible solutions.

When I read things (especially written by those with whom I disagree with), I try and keep this thought in mind:

"It is the mark of an educated mind to be able to entertain a thought without accepting it."



milamber said...

FOFOA and Bron:

Thank you so much for taking the time to work through the LBMA survey discrepancy.

Bron, I do hope you are able to respond to FOFOA's critiques, as I think that this (combined with Warren's Bar list work is huge in understanding the relationship between physical satisfying demand, versus a paper promise satisfying demand.

Right now, Warren's work demonstrating the lack of Chinese Gold in the Database, combined with FOFOA's analysis that expansion in quantity of paper to act as a shock absorber in the gold market, are extremely important in validating (at least for me) my understanding of what is going on.


Woland said...

Hi Michael:

I guess I made myself unclear, as the message I referenced,
plus the "Texas story" you posted on another thread are, when
printed out, about 2 pages each in length, for a total of 4 pages,
rather than 4 separate posts.

Milamber, I think is spot on re Graeber; It is really 2 books, the
fine cross cultural anthropological first half, and the confused
solutions second half. Remission of sin and relief from debt
will always be with us. What is needed is a system (Freegold)
where the stresses are not allowed to build to the degree that
they did in the ancient world, which required a periodic general

Motley Fool said...


Wonderfully interesting video. Anyone who has 20 minutes spare should take a look.

I would modify her words and say that reputation is something that will enable you to earn (more) currency.

Reputation, unlike currency, is not something that can be transferred impersonally, and hence cannot function as a medium of exchange as she implicitly seems to imply.

My previous thoughts seem almost unrelated, but I will quickly expand on them nontheless.

Starting from the longest to short time periods I mentioned.

5000 years ago, dealing with strangers required a basic trust that they would not rob/kill you and that there is benefit in doing so.

500 years ago Real Bills came into existence, which required trust that all relevant parties would live up to their good name and repay such debt instruments in gold.

Already this shows that simply using money requires trust in others to repay their debts.

100 years ago the federal reserve came into being, and this only further removed currency from intrinsic value received. Hence reputation is what you got in payment, and you had to trust in it to perform.

40 years ago we completely unlinked from gold and fiat currencies today symbolizes pure trust, that when you redeem such promises you will get goods in return.

Any exchange with others where you accept some store of value, such as fiat or gold, involves a modicum of trust in the future and the counterparty(whoever it may be) to uphold their end of the deal.


burningfiat said...

Naughty Slumdog, BH and duggo,

I'm happy that some of my ramblings were useful to you.

duggo and Robert,

I admit moving gold across borders could prove a hassle. (I'm also thinking about expatriating at some point).
duggo, it seems you have already figured out some ways to safely move the gold.

A method I also thought of: In portions, sell some of your gold in your current country, travel to the new country and buy physical there (SWIFT or Western Union takes care of the magic involved in moving your currency).
An upside of this method is that you end up with gold that is easily recognized and accepted in your new country.
Downside is the premiums you pay (sell and buy).
Admittedly the portion you're selling is at a small risk of missing the FG upside if FG happens in the ~4-5 days between your sell in the home country and the buy in the new country. That would just be pure bad luck :D

Don't know if this strategy makes sense. Just something I have given a bit of thought...

Motley Fool said...

I will 3rd what milamber and woland said. Take note of what Graeber's research says, and ignore his prescriptions.

In that regard MnMark : this video is a nice summary, just stop before he takes questions xD

Debt the first 5000 years - authors@google


Michael dV said...

I have given much thought into overseas movement and storage of gold.
I decided I would be better off with gold here in the USA.
If one did want gold to be held overseas I would suggest selling or better yet not buying, until you get to the place where you will want to store said gold. Traveling with large amounts is simply always going to be dangerous unless you have friends in high places. My circumstances dictate that I stay in the US (I am a river to my people) but if you are foot loose you may see better options.
Marc faber, who suggests storage overseas, lives in Thailand. For him overseas storage means keeping it close at hand, that is what I decided to do too.
Storage in the Singapore airport vaults is a little over a grand ($ US 1000) a year....btw

Anonymous said...

@ Michael H

Actually my wife is my very best decision ever. Dare I say: worth her weight in Gold. My best friend.

Anonymous said...

"This is another reason I’m against the gold standard, I think it is good to have free gold that is not controlled by any government, and instead of trying to use it as a foundation for currency which they will try to manipulate. It is better to have it as free, as a store of value and it holds public currencies to account – people can see gold rising against other currencies and that tells you something. It is the final reproach for the other currencies; it is sort of the umpire if you like. It sits there as a store of value and it goes up and down and by its movement it tells you about the other currencies. It holds governments to account. The last thing you want is gold to be concentrated in the hands of the government, who then say we have a gold standard; worst possible thing. You want gold to be completely free."

From "The international business editor of The Daily Telegraph, Ambrose Evans-Pritchard, talks in this exclusive interview about...", aka the new member of this club.
Plenty of rubish but this one is stark.

Indenture said...

Alister: "You might have been able to invent free energy if you had spent your time differently rather than read 10,000 hours of literature on gld"
**People. We Could Have Invented Free Energy. Crap**

For All: I have a banker friend who I have introduced to RPG but I thought I would go about it from a different angle. He has firmly established set of beliefs and going about it from FOFOA's Dilemma or the revaluing of gold appears to be throwing myself agains a firmly entrench wall so instead I asked him a simple question. "Why was the Euro created?". That is where I have begun telling this strange FOFOAian tale.

Woland: I also would be interested in your other favorite FOA/Another passages.

Edwardo said...

I guess you could say, in psychoanalytic parlance, that Mr. Pritchard has freely made a free association about freegold.

Yes, Ambrose, it is good to have freegold.

Unknown said...

I continue to see more and more "almost mainstream" chatter that tends to support the basic understanding of this current gold market. I wouldn't be as meticulous as to try and quote them all, but I do read a lot along the "link trail" and I do see this tendency.

Where I see the break-in-logic is where the price discovery mechanism is given certain credence. It seems to be the last and hardest concept to relinquish that the so called "price" of gold has very very very little to do with actual gold.

Even Goldman's "babytalk" (as Jesse calls it, and underlying fade intentions not withstanding) is completely irrelevant, and of course focused on the currency trading mentality.

But progress, however slow, does appear to grind away, a bit slower than the wheels of justice, and that is not saying much.

At least we are seeing near 100 dollar divergences (in paper terms) intra-month - if only we could get to that intra-day, then I'd be on the lookout for that last big drop to around $800, hoping I can trade paper for coin if there's any to be had.

That is all the current discovery mechanism is "good" for to me -- a kind of heart monitor for the paper gold market, or "fiat gold" as I call it.

There will be great fibrillation before it finally flat-lines.

Go Freegold !

ampmfix said...

Hi TF, it was a great interview, and a pleasure to meet you. Thanks for all your invaluable comments and help to this mental shrimp...


RJPadavona said...

Hey Alister,

There's a little thing called the division of labor. If some of us were interested in inventing free energy, I'm sure we'd be drawn toward such an endeavor.

Believe it or not, some of us geeks here actually enjoy reading about monetary history (where we've been) so we can better understand freegold (where we are going).

If reading hundreds of hours of material doesn't interest you, then by all means, don't do it. But don't criticize others who do so. Just admire Aristotle's wisdom and go on about your business:

"Earn money/currency, buy what you need, save Gold, enjoy what life has to offer."

I know what I wanna do with my life. Do you?


byiamBYoung said...

@ Duggo,

"Actually if I knew some time in advance that I wanted to get Gold coins out of a country I would send them a few at a time by good old normal mail."

I once bought a small stack of silver from one of the online coin dealers, and it arrived in the US mail with a return address of "Phil and Bob's Bait and Tackle."


I had been looking forward to your debrief. It was very entertaining, and quite thought provoking. Congrats to you and FOFOA both.

Is 25 square meters a common size for an apartment in your parts?

Michael dV said...

I have been thinking about the issue of time spent on this blog. I try to read everything but still have not read every fofoa post. I feel I acquired the basic after a few hundred hours. One of the reasons for my gratitude is that fofoa did the heavy work of not only reading A/FOA but also translating it. I just do not think I could have done that...and had a life. In fact in the case of A I simply could not have done it.
Another of my top ten is Once Upon a Time. That one really clicked and put a timeline on the entire process.

Michael dV said...

This is COMPLETELY off topic but I just spent 90 minutes watching it and need to recommend it. It deals with fructose and health issues. I am a physician and this guy does the whole break down as one must when dealing with natural skeptics....biochem pathways and all.
The punchline is : fructose (5 carbon atoms) is more like a fat and alcohol than its sister the 6 carbon sugar glucose. It causes obesity, hypertension, fatty liver and insulin resistance. This is the so called 'metabolic syndrome".
If you want to live to spend your loot you might want to watch it (there I made it relevant):
called Sugar the Bitter Truth the guy is a physician @ UCSF
table sugar btw is 50:50 glucose / fructose

Michael dV said...

I have used the : "anything you lend decreases in value if the receipt for the loan circulates." It is not as direct as some approaches but it can get people thinking.

Unknown said...

I think it can be said that if free energy would be invented (as if it couldn't already have been) oil would squash it every time due to the expectation of a "full supply of cheap oil" baked into everything this blog is ultimately about.

But then it could also be said ... that CBs were actually buying time for a system they're killing (meritocracy based innovation) to invent or develop time travel, or teleportation (these problems WILL eventually be solved, but in our lifetimes? by humans?) so as to perpetuate the incredble growth that a debt based system of this proportion requires to further be sustainable.

Lofty aspirations of academics, or the ramdom mumblings of a partially coherant Wil?

Yes ... time proves all.

Unknown said...

Before you are deleted let me just say that argument is the greatest form of intellectual flattery ...

and further ...

The infrastructure bult around oil is "TBTF" in the parlance of todays central planners.

Nothing short of total collapse of their kick-the-can-ability will ever change this ... something to think upon.

byiamBYoung said...


My personal theory on time travel (Hoo boy, way off topic!)

If it was possible, we already would have some rich asshole's kid from the future here, in our faces, sneering at us primative savages. Based upon that alone, I deduct that it is impossible.


byiamBYoung said...

deduct => deduce

Anonymous said...

Freegolders are covert bankers' agents.

If this is true, could some of the other freegolders please get in touch with me? I too would like to be on the bankers' payroll.

And to think all this time I was mocking hard money socialists and silverados for free. =/

byiamBYoung said...


You didn't know? We're ALL on the Freegold dole. I, being a shrimp of small brain, get a rather modest stipend.

JR and Costata, however, must be pulling down the big coins.


Edgar said...

What surprises me is that things always take so long to come into being. The freegold concept originated in the late 90's, but after more than a decade still has not happened. Also, I sometimes wonder what the ECB/BIS is waiting for. Why not pull the plug RIGHT NOW?

vizeet srivastava said...

Great debrief Motley Fool!!! This one was really complete...

Being an Indian I think I always knew FreeGold. Something I didn't knew was fiat. Possibly because I didn't knew the current financial system and I never knew govt can print at their will.

The moment I came to know about QE1 I thought this is terrible they cannot fix economy by printing.

I had quite a few thoughts even before I heard about hyperinflation and freeGold.
1. Developing countries are becoming more important and transfer of power won't be smooth. I didn't knew what it meant :). So when I was heard about about HI I accepted it immediately.
2. Gold prices are going to rise because India is buying. I was wrong here because paper gold decide gold price and not physical gold. I knew this but I did not have any saving to invest in gold.
3. I felt that the way consumption has been growing it is not sustainable so we will hit the point where we are not producing enough.
4. We cannot fix a bubble by creating bigger bubble. Bigger the bubble bigger the collapse.
5. We humans don't learn. Same people who talk about saving in crisis take heavy loan when market is growing.
6. Reason for cyclic nature of boom/burst is that economy is too dependent on sentiments. It should depend on reality.

By visiting the blog and reading comments I am understanding lot of things like Medium of Exchange, Store of Value, Unit of Account, Reference Point Gold, Euro, dollar, hyper inflation, depression.

Naughty Slumdog said...


You are at FG from all angles, impressive!
“Easy money makes life easy” – this is fundamental, as everybody wants an easy life. The whole history of humanity is about making life easier. And damn right, money should be the same for everybody. If there is some big disagreement about money, at a certain point the other camp will split up and than we may have no money

“Hard money is the ivory tower”. So right, in the times of electronic systems, they still talk about gold coins … so true, the CB’s and all the set-up is not there for nothing. It is like denying the current history and stating that everybody now is wrong. It is like in communism, this leads to nothing …


Congrats for the community. The very few places where people like to explain and share, not to show off, to persuade or otherwise impress. The very few places where most of the comments, not only the posts, deserve a careful reading …
eah, indeed, a lot of reading, but no pain, no gain.

Anonymous said...


Please forgive me, I hate the idea of me telling other people how to spend their time - it's against everything I believe in... I just conveyed my thoughts poorly - I seems like this is a board full of highly intelligent people, who I don't honestly believe on this topic, or any many others as well probably, I could ever really successfully debate against, considering your nuanced ways of thinking. I just feel that, rightly or wrongly, future generations stand to benefit from freer flows of (learned) information in intellectually challenging environments whose costs of entry & participation is far lower than today, but I suppose I can stay content in the knowledge that there's probably a similar type forum for energy, etc... 1 thing that's always perturbed me about...Fofoa is this inclination to believe that a "key" has been found, unveiling all possible meaningful knowledge as it relates to global commerce and THE nature of just seems to me to be a bit presumptuous...the antithesis of these sorts of perspectives, I suppose:

Mot, you mentioned: "Reputation, unlike currency, is not something that can be transferred impersonally" ... but to what extent? Maybe reputation can be transferred impersonally by means of association - i.e. smart people tend to hang out with and know other smart people, then breaking it down the same applies to particular fields or disciplines...reputation may increase by mere association provided prior goods and services have been successfully delivered, is all I am saying... Peace! (and check at that Rorty Lecture @ the Chicago Law School!)

Anonymous said...

That antithesis (which I forgot to include in the above note) is...

Science Set Free!

Anonymous said...

I'd be grateful for opinions and further sources on the following idea.

Someone here linked this Financial Sense interview by Jeffrey Christian with Erik Townsend:

In the interview, Jeff Christian says that central bank gold leasing was very common in the late 1990, but that is has now been replaced by gold lending by private lenders. This raises an obvious question:

Which private investors own allocated gold loco London, are willing to lend it, and have sufficient gold to reach a volume that's at least somewhat comparable to what the European CBs used to lend?

If there are such private lenders, and if they perhaps even coordinate their actions, then they might be able to control the London gold market to a similar extent as the European CBs did in the 1990s.

So? Where are the candidates?

Then we have this:

6/2/98 Friend of ANOTHER

[...] The Middle Eastern bullion holdings are well hidden from official records. They control the gold market through the London/European gold paper markets. It was the BIS that handed them the market when it created the Central Bank lending deals. They were the prime buyers right off the bat! [...]


FOFOA said...

Hello Alister Cyril Blanc,

Presumptuous would be if I was running around acting arrogant on other people's blogs and telling them what they are doing wrong. From the beginning I have only posted here on my own blog. Those who have reposted my posts on their own sites, like ZH, 24hgold and SeekingAlpha, have all approached me and asked my permission to repost. One other site reposts occasionally without asking, but I've never submitted any of my posts to another site and I very rarely even comment anywhere else. But when I do, it's usually with respect.

So I have my own blog and people come here of their own free will (no one is forced to read my posts, watch my videos or leave comments here) to participate in the conversation. How is that presumptuous? In fact, the utter lack thereof might even make some wonder if a "key" had been found, and then want to spend some time deciding for themselves.

A better example of presumptuousness would be if someone showed up out of the blue and left a comment telling everyone here that they were misallocating their time and intellect. ;D


Anand Srivastava said...


I have been researching nutrition for the last few years, and have found that there are a lot of myths regarding diet. I think the mainstream ignores evolution and wisdom of the ancients. Fructose case is not so simple or straight forward. There is the case of Hormesis and dose making the poison. I think the current problem is overdose of toxins. Rather than any particular toxin.

This is offtopic so lets take it offline anandsr21 at gmail.

I have a blog, not very active, but I think I have some good articles there.

MichaelH here follows Weston A Price Foundation recommended diet, which is based on ancient wisdom.

Nickelsaver said...


Good show old chap. And I quite agree with your assessment of those not having any economics background being more receptive and easier assimilating the freegold concept. I have no background at all, and came to understand it, I think, rather quickly.

And I give you credit for helping me along in that regard.


Anonymous said...

@ anand srivastava

Alternative health is a fascinating subject and great fun. I got into it after a particularly traumatic time when I watched 2 cousins die of cancer.

Once you take charge of your own health rather than relying on the "petro-chemical" industry you gain an inner sense of self-reliance.

I'm into very unsual stuff including low current high frequency.dim
My latest investigations concerns DMSO (dimethyl sulfoxide) a very unusual substance.

Monoatomic Gold an Colloidal Silver are very interesting.

Monoatomic Gold is supposed to increase the intellect ..... I must try it sometime.

Anonymous said...

@ anand srivastava

Just a quick tip (sorry to bore others)

Brush your teeth twice a day with a spoonful of pure Xylitol (a form of sugar) After cleaning spit out the sugar but do NOT rinse your mouth. Leave the sugar coating your teeth.

You will never have to visit a dentist again. Nor will you have "morning breath".

Anonymous said...


Like I said to the guys, I have and never will expect people to exercise their time in anyway but the way they most like to, providing it's peaceful, though that does not therefore require me to shutup if I see a smart blog going around in circles. Naturally, I of course could be wrong, totally wrong, in fact, to think that the excellent analysis in posts and comments here do not practically achieve much more than serving as a sort of enjoyable blog for literature of history (which, I might add, is in and of itself an important role). But then, I trust you wouldn't deny me the right to express my thoughts simply because we don't always agree?

But really, that's besides the point, what do you think about the lecture? Mott called it "wonderfully interesting" ... (Hi DP! :D)

DP said...

Hi, Alister. :-)

I thought you were going off to concentrate on your career anyway? ;D

Anonymous said...

Now, moving on. Motley, your point raised is absolutely fundamental, I have come to recognise after standing all day at my desk listening to classical music, and by the way I hate you for smoking, it reminded me of the wonderful experience of smoking while staring into the world's greatest every encyclopaedia, the Internet, so much that I really...No! I will not smoke again! But anyway, moving back to point.... You said that...because reputation cannot be transferred ("impersonally") currency maybe...reputation "cannot function as a medium of exchange"....but what if, in this new world, reputation is THE most important medium of exchange? Most, you see, would agree about the indispensability of Law, no? Nobody wants to live in a lawless society, after all, and all the wealth in the world is pointless in a war zone, or at least far, far less valuable than would otherwise be...and for Law we require Reputation, no? But what else does a Judge base his authority on, other than his (intellectual) Reputation? You see, what if centres of Reputation (i.e. systems of Law) traded on a global exchange? Arguably, this already is beginning to happen (see here: ... But, if you do choose to provide me your insights on this point, Mot, I'd ask that you first place some time aside to consider the far more nuanced and thorough thoughts of this individual scholar, who recently was awarded a Guggenheim Fellowship:

Lord Acton & Polycentric Legal Orders

Beer Holiday said...

@fructose watchers.

I'm no doctor, but isn't fructose the sugar in fruit? So wouldn't our ancestors have eaten it for hundreds of thousands of years, and primates for many millions? Fruit is the energy rich food outside of civilization.

@free energy watchers

Suggest it's helpful to define by what you mean by "free" energy. It makes a big difference. FWIW I think oil will have centre place in the physical plane even with e.g "free" fusion. Heck even PM machines (the other free energy) don't store and transport energy like oil.

@Alister "but what if, in this new world, reputation is THE most important medium of exchange? "

That's poetic IMHO, and it strikes me that I lack credibility, but I do have some gold. I think this current world order is almost nothing but misplaced and imaginary credibility.


Beer Holiday said...

Further to the above - I notice time travel and teleportation are mentioned.

This is why we have to be careful defining free energy.

With teleportation, I can just teleport a large stream of water back upriver behind a dam for free hydro power. With time travel, I can go back in time and damn up a stream, ready for free energy hydro power in the future. Maybe bury more plants for oil while I'm at it.

BTW Aussie prime minister announces end of the world :-)

Motley Fool said...


Good question. I did some quick research to give you a proper answer.

The average for single bedroom/bachelors flats is 25->30 m^2.

The average for 2 bedroom flats is about 60->90m^2.

25m^2 is considered very small for a single bedroom, and say 50m^2 very very small for a 2 bedroom.

A lot of people stay in free standing homes, those average about 120->300m^2.

Obviously rich people have palatial homes, but this is true in any country.

I should also add that there is a large cultural divide in my country between the very poor and the rest.

My numbers given are assumed for the lower middle class to upper middle class.

The very poor live in smaller spaces. I am sure you have seen some pictures of the shanty towns here.

Hope this provides the context you seeked.


Unknown said...

An interesting comment above, something I've been thinking about but will have to post later.

Motley Fool said...


I have understanding for your thoughts on wasting time. For example if the economic system was 'right' we would not need to be spending all this time on it. Furthermore if it wasn't for the current broken system, we would not be wasting so much intellectual capital on the financial services industry.

I was amused by your 'free' energy comment. It is on my to-do list, but I haven't allocated time towards it, as there are more pressing matters such as my financial well being to attend too. ^^

A regards reputation, in that video she said they were busy figuring out how such measurements can be accurately made. Obviously in my mind, if someone of high reputation values you highly, that has more of a reputation meaning for you, than if someone of low reputation does.

However it is done, you will get an individual ranking that is your personal reputation, and that is not transferable. Reputation cannot be traded, as it belongs to an individual.

Hence reputation cannot serve as currency, but it can give an indication of your trustworthiness and as such has some financial gain for you, ito getting jobs, or getting paid more for the same job if you have a good reputation.

I hope this clarifies for you.

I will check out the other video you linked, from that guy you quoted, since the other on reputation proved to be so interesting( see your reputation just improved in my mind :P ).

I know of Lord Acton, he has a fine mind, but is a bit of a HMS. :P



Motley Fool said...


Again, thank you for the kind comments. :)


Woland said...

Good morning Victor;

I know you are familiar with this "attempt at remembering" an
old Another quote, but FWIW: "Why do so many important
middle eastern persons have a home in the City (of London)
It is not for the climate. It is there that the gold deals are
done." or something to that effect. If you have seen some
of those homes, (many of which, I believe, would fall within
the Square Mile which constitutes the City) it would not be
a surprise if, deep within their basements, a vault might be
found. What might be inside those vaults, if they exist?
Shiny yellow stones?? Greetz.

Anonymous said...

Haha, funny, I assure you I am not as smart as everyone here, I just limit my imagination less. I am tempted to wait until you post your thoughts on that talk to say so, but...I can't help but just make my point now... :-)

Refusing to place a price on (anyone's) life as a matter of well-intentioned but probably misguided thinking might actually produce LESS overall care for the well being of an individual(s). What do I mean? I don't know, this is just streaming from my mind...but isn't it the case that...the moral dimensions to every price are only observable because consent is not always necessary...insofar as one of the only ways to identify a (presumably bad) trader with whom you don't wish to transact to have (at least in part) formed an opinion (prior to) receiving said offer to trade...based around prior transactions that took place through said individual... I have lost myself...good job if you can make sense of this...All I am saying, I guess, is that:

You said: because reputation can only stem from 1 person then therefore it's not tradable, but what stops anyone from pricing their relationships?

Anonymous said...


"based around prior transactions that took place through said individual, up and until a point where others began to withhold their consent to transact with said person"... and I was sounding so smart...

Motley Fool said...


I would like to share a short zen story with you. No disrespect intended, just food for thought.

A Cup of Tea

Naan Inn, a Japanese master during the midge era, received a university professor who came to inquire about Zen. Naan Inn served tea. He poured his visitors cup full, and then kept on pouring. The professor watched the overflow until he could no longer restrain himself, “it is over-full, no more will go in.” “Like this cup,” Naan Inn said, “you are full of your own opinions and speculations. How can I show you Zen unless you first empty your cup!?”


LD said...

In my version of the zen story, the name of the master was All Inn. :)

Woland said...

JPM: Character, Capacity, Collateral: the three C's

Character: (Goethe: "The past casts its' shadow on the
future.") All you have done before.
Capacity: The willingness and ability to fulfill a promise.

Collateral: The residuum as proof of past achievements.

So where does "reputation" fit in with the above. I guess you'd
have to ask JPM.

Anonymous said...

@ Beer Holiday,
If you watch that video that Michael dV posted about fructose, you will see that the doctor addresses your question re: eating fruit. He also makes it clear that the main culprit in our epidemic is sugary drinks, including fruit drinks and "sports" drinks.

1. There are limits to how much fruit you will be willing to consume before saying enough. In contrast, we put fructose and sucrose in everything. Lately I have been disheartened to learn that you can barely buy ham any more that doesn't have sugar in it. Check out how many lunchmeats have sugar added (not to mention the preservatives). It's un-freaking believable.

2. Prior to the oil era, fruit availability in the world was seasonal. I am old enough to remember the concept of fruits and vegetables being "in season." The idea was "eat them now, there only going to be here for a few weeks or a couple of months." Except in the tropics, fruits were not available every day all year long.

3. Fruit is also high in fiber and other nutrients, which has compensating benefits.

The video is well worth your time. I saw it a year or so ago, and it really opens your eyes.

Michael H said...


What surprises me is that things always take so long to come into being. The freegold concept originated in the late 90's, but after more than a decade still has not happened. Also, I sometimes wonder what the ECB/BIS is waiting for. Why not pull the plug RIGHT NOW?

The Euro has been in the works since the 1960's; I think we can probably trace the 'freegold concept' to that time as well. By the late 90's, the process had been in motion for almost 40 years.

As for 'why not pull the plug now', we can do a thought experiment. What would Europe gain by pulling the plug now? What risks would they face?


Beer Holiday,

Four words: High Fructose Corn Syrup.

Michael H said...


Thank you for the clarification regarding your favorite 4 pages of FOA. I was hoping you had been holding back some other favorites besides the two posts you mentioned.

How about this one?

FOA (12/4/99; 9:50:30MDT - Msg ID:20235)


(FOA visits a metaphorical casino, and first describes the attitudes of a few gamblers in the house)


Then there was the simple quiet one at the end of the table. He had not made anything, but his phones were tapped, mail monitored and weird people followed him at night. Six monsieurs stood watch on him as he played and the cameras were well focused on his game. Even though he talked funny, a few people understood what this guy was about. His actions could bring down the house, even all of Monte Carlo! Clearly, something was very wrong with this picture. I walked to the table and talked. I was seen then as the only publicly known observer that knew of him.

" " " FOA: Sir, I see that your people keep bring in "golden chips" and stacking them on the table. For years, you just sit here and watched this pile grow. Still, you have yet to place a bet.

Another: My friend, I only bet when my play will win.

FOA: Sir, how can you win if you don't play the "paper cards" like everyone else?

Another: I do not intend to play the "rigged paper game of fools". I will bet but once.

FOA: Sir, Excuse me, but you have to play if you are going to win, no?

Another: I will bet only once and that will be enough.

FOA: But sir, how will you know when to bet?

Another: When the stakes are so large the house cannot afford to accept my wager. You see, I will play "my game" in "their house". In that day, in that time they will be the ones that fold. It be for the benefit of this new marketplace.

FOA: But how can you win if this house fails.

Another: Presently, this gaming house plays with their chips and their cards. Not real are these. This action has imparted the false value on the world money many use. The closing of this marketplace will impart a new value on my holdings and the holdings of all that know what is real.
The game I play is the game "ALL" win! It is "the good bet", yes?" " "

FOA: I get your drift, my friend. Let's stay in touch as I want to follow how the politics of this plays out.

Another: We watch this new gold market together, Yes?

FOA: Yes!" " "

My friend in the booth pointed out when I returned: Did you notice how he didn't get excited or mad as the value of his chips went up and down. That's because he is not betting yet. Everyone that hasn't taken the time to talk to him thinks he's nuts for building that chip pile. They think he is losing his shirt while waiting to bet. Still they are being taken to the cleaners as the "house politics" keeps changing the card game right under their nose's. Don't think for one minute that this guy works alone. There is a huge amount riding on how this plays out. The rise and fall of nations are being bet on that very table. What a game of human interaction this is. All the other players at the table don't know that this old, little man controls whether they even have a card house to play in.Hope you enjoyed my view from this seat, FOA? "Yes I did. Hope to return in five or ten years, say 1999 or 2000, and visit again.

Anonymous said...


I am the first to claim my thinking could be wrong. I am wedded to no particular idea, but I suspect thinking that is not clearly expressible in a concise way and stick to things that appear obvious, which may not necessarily produce profound insights but may be less prone to very wayward thinking...But I take your point, and I will refrain from commenting here, for at least a while, because I sense that my comments may not be appreciated...

Best Wishes

Motley Fool said...


Not at all, imo, at least. I have found the things you have linked interesting, and enjoyed the comments.

It's just seem to be flitting too and fro like a hummingbird, never stopping to drink deeply of one flower before moving on to the next.

Imagination is important, even paramount, and so is leaving oneself open to ideas, which come and go like the blowing of the wind.

I have found however that if you do not have a solid bedrock from which to view the comings and goings you are blown every which way.

I use my perspective as the bedrock by which I assess new information. My perception adjusts is leaps and starts, but it is almost a conscious decision how much stones I will add, or which will be removed.

The story of the empty cup applies to all of us at stages. It applied when I came here, it probably applies now, but as I mentioned I try and allow new thoughts to enter my mind without bias, a hard feat to be sure.



Indenture said...

Learn the basics of Freegold in less than 400 pages

Sit down with a great book and change your perspective!

ampmfix said...

Sir Tagio,

You are totally right, one should eat what's on the market (the old way), and then, if possible, olive oil and red wine, mediterranean cuisine, in essence.

Edwardo said...

Vic, regarding Mr. Christian's assertion, assuming it is correct, does he say anything about what sort of terms these lending operations involve? Are they materially different than what existed before?

Woland said...

Hi Michael;

I do vaguely recall the "casino royale" tale you provided above,
and it's an absolute gem. Thanks for bringing it back to all of
It reminds me of something either by Another or FOA from
the archives about how the Giants use their gold, not just to
maintain their wealth, but to increase it. Have you ever seen
footage of an African river, where some quadruped or other
comes to drink, only to be met by the rapid rush of a large
crocodile, which pulls its victim back into the water? Most
of the time, that croc lies very still, beneath the surface, with
just the eyes showing, like the gold of Giants. Of course,
they have sources of income just like we do, only for them it
may be vast agricultural estates in foreign lands, or mines,
or a network of palm oil refineries, or warehouses; in short,
real operating businesses that endure, in spite of economic
cycles. From time to time, someone with a valuable asset
meets distress; a loan is needed, what we might call a "hard
money loan". It is here that gold comes into play, serving
either as backing for a conventional loan, or the Giant makes
a loan with the asset as pledge. If the loan succeeds he
makes a good "hard money" profit. If it fails, he gets an
asset he was watchfully waiting for, like our croc.
I wish I could find that passage. Oh well, no doubt I'll
eventually run across it again. Cheers.

byiamBYoung said...


Thanks for the reply. I have always been drawn to small living spaces. My family of four used to live in a free-standing three bedroom home that measured 60 square meters. There wasn't a square foot (the unit of measure my brain understands best) of space that was wasted. We even hollowed out some of the walls to build in shallow cabinets. We were quite happy all packed in there.

Now there are three of us remaining at home, and we live in a big fat McMansion with a mortgage that is under water, so we're stuck here with three times the space we really need.

I sure miss that little house!


Anand Srivastava said...

Michael dV and others
My three rules for a healthy diet are
1) Eat food in as natural form as possible, cooking, fermenting, grinding are the only healthy processing methods.
2)Avoid seeds as far as possible. They are plants children, and chemicals or hard shells are their only defense.
3) Have a balanced diet. Eat animals and plants, cooked, fermented, and raw. Don't avoid any class of these foods.

Michael dV said...

need to correct an error
fructose has 6 carbon atoms but its has a 5 sided ring ...glucose has 6 carbon atoms but has a 6 sided ring...sorry for the error.

Indenture said...

Anyone else heard Max Keiser say the collapse happens in April 2013 because the Japanese Bond Market implodes?

DP said...

Just in time for my birthday!


Anonymous said...

Keiser has been predicting financial system implosion in April 2013 for at least three or four months now. I believe he first announced it on the Alex Jones show, because Alex compulsively asks everyone, When is this sucker going to blow? Max finally obliged him with a date. Your post is the first time I heard that he has ascribed the reason for it though. Recently he's been harping on the UK bond market imploding, and I assumed he thought that would be the trigger.

Keiser is long on bold statements and short on reasoned explanations for a lot of things. The guy is obviously perceptive, and I'm not saying he might not be right, just that he doesn't put much out there by way of "supporting evidence," so it's best taken for entertainment value, IMHO. The "Crash JPM Buy Silver" campaign is an obvious example.

Tommy2Tone said...

A better example of presumptuousness would be if someone showed up out of the blue and left a comment telling everyone here that they were misallocating their time and intellect. ;D

And BOOM goes the dynamite :)

(wait for it @2:30)

Woland said...

That was as painful as a root canal, with the added bonus of
no anesthetic. An ESPN contract is light years away. Ouch!!

The Dork of Cork said...


I guess I am looking at different data......(real goods trade, inter Europe)

I see the single European act and Londons big bang as the same event.
The UK went into current account deficit in 1984.

Polands journey is a good example.

The UK is turning Polands coal into London consumer grot consumer stuff
Uk trade in Goods by area (Balance of payments, £ millions)
Y2002 : +50
Y2003 : – 84
Y2004 : -412
Y2005 : -664
Y2006 : -879
Y2007 : -1330
Y2008 : – 1307
Y2009 : -1870
Y2010 : -2309
Y2011 : -2768

IEAs “energy balances of the OECD nations Y2011

Self suff. coal Poland
Y2000 : 1.26
Y2010e : 0.997

DB Schenker Rail launches second weekly rail freight service between UK and Poland

Tuesday 09 October 2012

“DB Schenker Rail has strengthened trading links between the UK and Poland with the introduction of a second weekly rail freight service between the two countries

Its the way the world works now (no final settlement)
The UK (& France) made Europe into its own little India (a surplus country)

Germany is very much a colony also much like China.

Motley Fool said...

Hey Dork

No argument here. Some first world countries are getting stuff for free and have been for a long time.

I think we all agree it can't continue like this indefinitely.

The various exorbitant privileges will be lost sometime soon.

I understand that things are bad there, but I do see light at the end of the tunnel.

As I said, politics is shaped by the fundamental underlying economic system, and a change is a-coming, which will remap the politics.



Michael dV said...

Beer Holiday...on fructose
I understand the skepticism, trust me you are not starting out more skeptical then me. I have had to listen to idiots tell me about diets for 40 years (doctors are forced to listen to the most unbearable crap). I present this here because the presentation changed my mind about something important.
He covers fruit vs has to do with the fibre in fruit.
It is worth watching as it could change your the power of science....not the opinion you can get anywhere.
He presents fructose as a toxic alcohol. I do not intend to give up either....but I will decrease the fructose....will ya drink to that?

The Dork of Cork said...

It can change in many different ways.

This BIS report suggests we will see a Eurobreak up soon with "British" banks flooding into German capital markets.

The British plan (North Sea trade deficits from both Norway & Germany is very important to them) seems to remain hooked up to the Rhine /Rhur industrial complex while the rest also leave the building in either a weak euro or national currencies

The French are in perfect trade balance with the UK while Ireland is one of the few countries in trade deficit to the UK (North sea oil & gas)

Given the trade balance with the French and the weakness of Gaullist forces now we could see some surprise or two.–Chevalier_Treaty

Motley Fool said...


In such things I like to take the wider view and consider the purpose behind the euro currency being created.

I do not expect any countries to leave it, but I welcome the flow of history to prove me wrong, and if it happens I will re-evaluate my working thesis at that point.

As I hinted in my debrief, I think you miss the forest for the trees. Very interesting trees to be sure, but still. :)


The Dork of Cork said...

Very big differences arise between Northern Ireland & southern Ireland transport data now.

Ireland needs a national currency & a poaitive money supply before all is lost to entropy - the waste both during the credit inflation and money deflation phase of the euro nightmare post 1986 has been epic.

The Dork of Cork said...

UK trade figures fascinating

Goods Imports Y2011
Japan : £ 8,868
China : £ 31,501
Germany : £ 50,457
Norway : £ 25,189

Trade deficit
Japan : £- 4,140
China : £ -22,203
Germany : £ -17,893
Norway : £ -21,791

What ever about the sustainability of North sea trade with the Rhine / Rhur region and the oil and gas imports from Norway.
Is the Indian ocean / med sea / up the coast of Spain , France route sustainable ?

I think much of the UK moves recently is got to do with the possible reversal of future trade patterns - with them using the resources hidden within the Gulf of St Lawrence

Although the UK no longer has a Navy it thinks in naval terms.

Mark Carney appointment has got more to do with Canada then Goldman Sachs in my opinion.

Canada is both French & German remember ?

France needs a safe supply of fissile material and a market for its Nuke plants & agricultural products in the UK.....

The UK can supply them with North Atlantic stability.

The Dork of Cork said...

Sorry french & British

The queen is German...............

Motley Fool said...


Interesting current account balances. This support my view that the UK is not far behind the USA in terms of how screwed they will be when those have to be paid for and not simply left as debts. Hell they may even be winning. :D


The Dork of Cork said...

Yes and no.

Both Germany & China have overcapacity in stuff.

Germany in cars for instance.

If Germany was like France (a more balanced economy)it would not itself in such a position.

This is a very complex situation that I am still trying to get my head around.

If for example Japan goes under and or no longer becomes a mercantile nation Detroit and the rest of the Gulf of St Lawrence could be back in business as Japan put them out of business.

(The journey across the Pacific is also too long at these oil prices)
Much Bunker fuel is wasted............

The Dork of Cork said...

This video gives you a impression of the breakdown of the demand supply loop in Europe....

Bank credit has pushed car plants & their supply chains to Russian & Turkey now with huge hidden costs (transport)

Henry Ford did have a point.......with the wages thingy.

All credit and no money down makes for a very poor working boy that eventually can't buy his own goods.

Rui said...

Hey ART,

Don't waste your time on this blog and come over to instead. We've got plenty discussion (tho more trading-related). Your posts will be welcomed over there.

We do have some occasional FGers visiting as well, and we bust their preaching pretty good with merely common sense.

Edgar said...

It is very well possible that one or more Club Med countries "leave" the euro.
In effect, the current state of the Club Med countries is very similar to that of South-East Asia during the years leading up to the 1997 Asian financial crisis:

1) Thailand, Indonesia and South Korea had huge current account deficits, Greece, Portugal and Spain have too.

2) The currency of Thailand, Indonesia and South Korea were 'slaved' to the dollar, Greece, Portugal and Spain are 'slaved' to the euro.

3) Before the crisis, Thailand, Indonesia and South Korea experienced huge speculative inflows due to artificial low interest rates, Greece, Portugal and Spain did too (construction boom).

The boom ended due to a sudden "scarcity of the medium". As a result, the Asia boom turned to bust and loans and credit were cut off. Same story for Club Med.

The lead to skyrocketing unemployment in Thailand, Indonesia and South Korea and a loss of competitiveness. Same story for Club Med.

By 1998, Thailand, Indonesia and South Korea "disconnected" from the dollar and devalued. A few years later their economies had recovered.
Greece, Portugal and Spain are still "connected" to the euro and still suffer from debt deflation and economic contraction.

Maybe it time to "disconnect" and grow again.

costata said...


This is off topic for this thread but I want to respond to BF's comment to me on the previous thread. I was discussing the use of Perth Mint certificates as a hedge against a domestic currency exposure with 'duggo' and a couple of other people. BF responds that we are taking a risk of default after a transition to a Feegold-RPG regime.

However small that possibility may be I have to concede that it exists. So it begs the question why hedge in a form of paper gold? I will try to explain as briefly as possible. This is a currency risk hedging strategy with a secondary risk management layer.

The AUD has been as low as 0.49 US cents and as high as $1.10 approx. Australia runs a current account deficit. If the AUD gets chopped in half then some import prices could roughly double. Under these conditions selling physical gold through a local dealer may be a big problem if his local demand dries up.

From a purchasing power perspective we would need to convert these certificates into AUD cash at the rate we paid for the certificates approx US$1.00 rather than say 0.49 cents. Timing would be important to maximise the benefits of the hedge.

We envisage that the position of the Perth Mint would be quite different to a local dealer. They routinely sell the bulk of their production into international markets (both wholesale and the retail channel via the global dealer network). So regardless of the exchange rate of the AUD I don't anticipate their certificates going 'no-bid' under normal circumstances.

The second layer of risk management concerns the possibility of a sudden, near term transition to Freegold-RPG. Regardless of the Pert Mint management's attitude to the revaluation the WA government has incentives that are dictated by their exposure under their guarrantee.

The government's interests are best served by the Perth Mint either shipping metal to unallocated certificate holders or cash buyers taking the metal at Freegold-RPG prices so the Perth Mint can pay out the certificate holders. So, no disrespect to Bron or the Perth Mint team, I don't care what their incentives are in this situation. They won't be calling the shots.

In my non-lawyer opinion the worst possible outcome for the WA government, from a legal perspective, would be to default on the certificates. I would be amazed if there wasn't a class action mounted. And yes it might take years but it would be an enormous cloud over the government's finances.

The soft option for governments in Australia (at both State and Federal level) is to take the windfall by some form of tax, royalty and/or quasi-nationalisation of the inground gold resources which are the governments' "property" until it is dug up, processed and sold.

Destroying the Perth Mint's reputation for a one-off "profit" subject to massive litigation risks would be pointless when government has a soft option that is easy, cheap and likely to win widespread voter support. But in closing BF I admit there is an element of risk in this strategy but the alternative was to hedge in FX and we wouldn't touch that with a barge pole.

The Dork of Cork said...

Sorry ,
They are not current account balances - they are real goods.....

i.e. they don't include Income and services.
The Uk has a positive service balance and until recently (all of time really) it has earned a income from the rest of the world.

It seems to be choosing real goods over income which is a very big event to say the least.

Motley Fool said...


Ah! Thanks for the correction. :)


costata said...

Great advice from Beavis' pal Rui for a change (my emphasis):

Hey ART,

Don't waste your time on this blog and come over to instead. We've got plenty discussion (tho more trading-related). Your posts will be welcomed over there.

Home sweet home.

We do have some occasional FGers visiting as well, and we bust their preaching pretty good with merely common sense.

A little weak on a few other topics of course - banking, gold, monetary systems, economic history, political economy and so on. But let's not be churlish and nitpick. Go Rui, ART and Team Turd.

Beer Holiday said...

@Michael DV

It's an interesting vid. I agree that eating heaps of sugary junk food is bad for you. I guess I concede your point.

But I think the HFCS is evil meme is misplaced. Did the US Gov. make some decisions RE HDFS that benefited Gov. and not people so much (Penn and Teller)? Add it to the long list.

We have been living with the products of farming for only thousands of years, and our bodies aren't evolved for those foods, but rather more the nomadic diet. High density living doesn't suit us, but it's what we must do in the modern age.
Guns, germs and steel

Carbohydrates aren't "good" (optimal) for us, but they form the bulk of most people's energy intake. We can't support modern populations any other way. I see HFCS as a modern addition, is not "good" for you, but it's cheap and efficient.

If people are silly enough to eat sweet tasting things with no regard for there weight and underlying health metrics then so be it.

Personally I try to avoid processed foods and eat seasonal fresh veggies and fruit, meat, and too much beer. I make my own beer and know exactly what's in it (converted barley malt sugars). I can't avoid some cheap carbs. It's no the healthiest lifestyle, but it's mine.

Unknown said...

Rui said...

Been a while coatata,

"A little weak on a few other topics of course - banking, gold, monetary systems, economic history, political economy and so on."


After all you guys still want a FIAT monetary system to be controlled by the same bankers / politicians who openly claim that "have to lie when it becomes serious". So I'm sure your steady faith in them must be backed up by certain "strong" reasoning over "monetary systems, economic history, political economy" or what not. Very strong. Very deep.

Anonymous said...

Beavis and Butthead (haha Costata!) have made their "points", numerous times...unfortunately.

Now let's see what the future brings, shall we, Rui? We're all wrong until we're right.... right?

I would like to make a large bet with one of these guys, but they probably wont pay up when I win! mwahaha;)

Breaking The Law!!!

byiamBYoung said...

Can anyone please help me with this?

Based upon this article, the US fed is gobbling up virtually everyone's sovereign debt. This would seem to make some sense in that said gobbling serves to keep the USD safe for a while longer.

This appears to be the ultimate in check kiting. How does this end?

My tiny brain is hurting from trying to extrapolate all of this. Can someone with more horsepower break this down for us?

Thanks, and Cheers,


Edwardo said...

I agree, byiam, it's a can kicking exercise that even as it guarantees the dollar's day of reckoning simultaneously postpones it.

How does it end? I think FOFOA has discussed how it ends, but here's a very simple, and perhaps simplistic answer. As rates head to the zero bound at the shortest end of the curve, and with the help of certain monetary authorities, rates seem intent on doing just that, what passes for (terminally impaired) capital these days will go into hiding. The system will lock-up tighter than a vestal virgin at a fraternity party. The biggest liquidity trap of all time will have run out of time.

And when might that be, I have my own bias which is around mid-decade, and I think that the odds for said timeline timeline should get a strong boost when the U.S. Government turns the fiscal cliff wrangling into a clusterfuck for the annals. As it becomes apparent that The Legislative and Executive Branches have nothing but bad ideas and bullshit to offer, we'll be getting what amounts to the checkered flag in this (pardon the plentifully purple prose) fantastically farcical financial race.

Michael dV said...

there is a very specific point in this video. It is that fructose is metabolized more like alcohol or fat than a carbohydrate. Glucose goes to glycogen but fructose goes to fat and bad lipoproteins. This was new to me. I bought the idea that a carb was a carb. That is wrong. With this understanding I will make dietary changes that I would not have otherwise. Unlike the low fat diet and others that have come and gone this one makes scientific sense.
The 'bad guys' are not the govt but those who profit...HFCS manufacturers and fast food, soda makers and juice boxers. They know sweet sells. They keep putting it in and we keep 'lovin it'. I am not a crusader but this is worth telling friends about.
I will keep drinking my favorite toxin, Remy Martin VSOP (in my moderate (usually) way. I am going to avoid excess sugar though. If you get fat you get unhealthy. If I can avoid hypertension, obesity, dyslipidemia, coronary artery disease and a fatty liver just by reducing sugar I believe I will.
I will not join his crusade to get the 'law' to help however. I am going to contact him on that issue. The government will just screw up the effort anyway.

Michael dV said...

you might be interested in the 'small house movement'. I have one book on the topic and it shows great use of space. The other thing that has my attention is the rocket stove. It creates a draft and sucks the smoke into a chamber the full burns wood, exhaust being steam and CO2. Cheap to build and good heat. Claims to use 1/3 the wood. I am a sucker for efficiencies. just YouTube it.

Beer Holiday said...


Thanks for the video, it really made me think, and answered some long standing questions of mine;

1. Some sugars are indeed processed like alcohol in the liver.
2. Some sugars are indeed artificially cheaper than others because of Gov subsidies.
3. There is a scientific explanation for the "Tapas" idea that eating snacks (fibre) and drinking is (slightly) more healthy.
4. Alcohol and sugars are poisons, even though we evolved to eat fruit (because of the fibre).

I will continue to use the poison of my choice (beers of all kinds), but my position has been strengthened that my kids won't be raised on soft-drink and two minute noodles. Not that I'll get much of a say in the matter ;-)

Here's too the good health of the nice folks here, and to freegold.


Michael dV said...

here is to beer...I too was a home brewer and a Edinborough pub crawler, I gave up most beer because I found cognac to be a better 'deal'. I can get a great 1/5 for 36 lasts a week or 2. I have such a well developed palate that I can not afford good wine (that I would enjoy), nor can I afford to go to England for real ale twice a week. Thus Remy Martin VSOP...thanks Sams Club.

Beer Holiday said...


Sounds like you have it all sorted, Cognac is an interesting drink. Our region is different, as always, and good beer here is unheard of below 18 $/ 6 pack.

A few years back Sam Adams sold for 20$ , but you could say "no more Sam Adams was available as the price sliced through 24 $". It's crazy.

I brew 20 L of excellent house beer for <10 $, cheaper than petrol and an excuse to have bulk grain at hand (tail risks, tin foil hats etc). It all adds up - more gold in the shrimp's treasure chest. Plus I like making the stuff, imagine that I'm doing something humans have for thousands of years.

If I liked wine beyond an initial taste, I'd move to Adelaide.

Michael dV said...

I have Bolivian friends who swear that the yeast source for home made Bolivian swill is baby poop. Not sure why it works but if you find yourself without yeast and with a baby...well you could at least make some kind of alcohol.

costata said...

BH and Michael dV,

You should hit RJP for some 'shine.

Anonymous said...


Thanks for the kind words, I think I'll print that out, amend it (just a bit!) and stick it up on my bedroom wall ! :-) It reminds me of a quote I once write, after I was inspired by reading Machiavelli:

“He sings the praises of “virtu” like it were a merry bee buzzing about from flower to flower according to its own mysterious reasoning, pausing momentarily to enjoy the fruits of one flower whilst skipping over that which may be offered in some equal or even greater amount by its solemn neighbour, amidst the sea of other flowers, attended to here and there by other busy buzzers, each of whom continues to lay droplets of wisdom taken from the chosen few behind his flying path, drifting further afield under the golden Sun through the clear blue sky.”

@Michael DV

A Tiny Apartment Transforms into 24 Rooms


Divestment and Privatization

of the Public Sector

Case Studies of Five Countries

costata said...

Michael dV,

So ART may have some uses after all.

Beer Holiday said...

Michael, thanks, now I've heard it all. I will try this one day. Reminds me of the brew masters ep with south american corn spit beer (whole ep is worth watching);

Maybe one day I'll make Bolivian baby poop-corn-spit beer :-)

@Costata, nice ice burn.

costata said...

This video from Bloomberg features Barry Ritholtz and Chris Whalen is well worth 15 minutes of your time if you want to understand how derivatives factor into this mess and some of the fixes required to return banking to its roots.

And in case your wondering, it's not going to be fixed until the next meltdown.

Anonymous said...


Based upon this article, the US fed is gobbling up virtually everyone's sovereign debt.

Do we know whose bonds they are buying? Which currencies?

This is the first time that the U.S. government holds any significant foreign exchange reserves. As I said earlier: I am still waiting for the day on which the Fed monetizes European peripheral bonds.

Has this already happened??? Why are they doing this? In order to prevent the dollar from rising or in order to acquire reserves that they will need later?


Bjorn said...


If Cognac is your thing I think you should really try some Spanish brandy as well. For example Carlos I

IMO much more bang (flavour) for the buck.

costata said...


Let's get real here:

Evil gold hoarders, jerks, time misallocators, cognac connoisseurs and brainwashed cult members:

FOFOA said...

How's that?

FOFOA said...

Cast a wide net, right?

Bjorn said...

ROFL we do love our poisons it seems. :-)

DP said...

Speaking of poisons…

+1 to Rui's call for more Art in the Turd bowl.

Why is he misallocating his time here? He could be making the difference at Turdville — raising the average IQ.

H. M. Socialist said...


+a gazillion


A little weak on a few other topics of course - banking, gold, monetary systems, economic history, political economy and so on.

LOL who even talks about this stuff? NERDS. That's what you freegolders are: NERDS. Not cool like me.

To be cool, you gotta run with the herd and do what everyone else does, say what everyone else says, and stuff like that! That's how H-Mizzy and his hard money warriors roll, and if you FREEGOLDERS want to stop being NERDS you will abandon rationality and reason and start conforming too! Now come on over to Turdville!


Michael dV said...

I used to do a lot of tastings and have enjoyed Armagnac, Marc de Bourgone and other higher better uses for fructose. The best I ever had was a mix of various ages some purported to have a few atoms from Napoleonic era batches. I love to find less expensive beverages. I found that while my wine preferences are expensive I can enjoy almost any Champagne. I'll see if the Spanish version is available locally. While I'm hip to FG that doesn't mean I store all my productivity in just metal! After all you can't drink gold!

KnallGold said...

Superorganism at its finest...there's something to that colloidal Gold IMHO:


Indenture said...

For those of you who don't live in the US I thought you should know that we are being inundated with 'Fiscal Cliff' this and 'Fiscal Cliff' that with 'Fiscal Cliff' for breakfast, lunch and dinner. The media has been shoving the words 'Fiscal Cliff' down our throats for two weeks and will continue right up to the December 31st edge. The propaganda is hard and heavy here.

Unknown said...

Relative to an earlier posted comment concerning the 'Nank's holdings of foreign paper ... I don't think 2 or 3 "billion" of any form of paper matters much in the scheme of things - all paper is locked together in a race to ZERO in order to maintain RELATIVE credibility.

But in RELATIVE terms, the inforgraphic link I posted earlier which depicts the holdings of reserve paper among developed vs. developing countries does infer that developing countries are increasing their Euro holdings, despite all the chatter regarding Euro "collapse" and these countries do appear to favor a freegold system of resrves, which is in keeping with the intent.

It also reveals the long hard road ahead for the RMB (or YUAN) which is included in the miniscule "all other" reserves slice of the pie.

These concepts, heady as they are, seem less time consuming to grasp when a good color graphic is presented.

Also, regarding the difficulty of following a user's thread in this format, try Control F, type in the user's name in the search box, and just "next" your way through their postings. Should work in browsers other than IE.

DP said...

Do not fear, your trusty saviour and faithful servant, Barak, will I'm sure ride to the rescue with a cunning plan in the closing minutes of your ordeal.

DP said...


+1 me for "a good color graphic"


Kieran O B said...

I went through A/FOA pdf recently and heavily bookmarked and highlighted text. It makes finding what you are looking for very easy.

Also since MatrixSentry produced the pdf, feel free to put it on your blog if you think it is useful.

Hope somebody finds it useful!

Woland said...

Yes, Indenture, I hear ya. The trouble with Communism is
the constant propaganda of the State to support their ill
conceived central planning. Thank God in America we've
PRIVATIZED that function! That way, no taxpayer $$$ gets
wasted! Cheers.

Unknown said...

On the Ritholtz Whalen video, I still argue that global notional OTC AND re-insurer derivative exposure is 14X global GDP. OTC does NOT include the AIG's and Generali's as I understand it.

But ... this is the tail wagging the dog. Derivatives will cancel themselves when they fail. Or ... does anyone here think that a 321 trillion USD derivative failure (multi-counter-party claim) will be "settled" in anything less than derivatives?

Another: Those who deal in derivatives will be paid in derivatives ...

Wil: They already are, and pretty much have been since 1973. The dollar is the grand derivative (of it's former self) from which all other derivatives are based.

They will NEVER be honored with anything other than derivatives (currencies) but if the system insists on attempting to connect derivative claims to unencumbered assets (including the ultimate numeraire) the failure will usher in freegold as quickly as you can say POOF.

Indenture said...

A PIIG: You know the time you spent indexing you could have been helping us discover free energy. Thank you for your personal allocation. This must have taken many nights.

FOFOA: I suggest adding the index below matrixsentry's link (or something). It is very impressive.

Kieran O B said...

Meh sarcasm all round, if you know these posts like the back of your hand then good for you.

Jeff said...

Wil, I like the cut of your jib, lately! :)

Indenture said...

A PIIG: My apologies for I meant no disrespect. I was being serious when I thanked you for your time allocation and when I suggested FOFOA add a link. I forgot my 'sarcasm' emoticon when talking about free energy. The effort you put towards indexing will benefit many.

Kieran O B said...

No worries as they say in Australia.

Lord Sidcup said...
This comment has been removed by the author.
Michael dV said...

Lord S
I have been a weight freak my whole life. I was a high school wrestler and had to make weight each week of the season. The I was a rock climber for 35 years. No weigh in but performance was an issue. I read all the diet/performance books with a physicians eye. I will say one thing in summary. Because a lot of biochemistry was overlook or not properly considered a lot of the boiler plate advise to patients was probably wrong. I am very open to new data of 2 kinds. The first is empirical data like you present...'it worked for me or for some group;. The second is mechanism of action data. A pound of observation is less valuable that an ounce of 'here is why it works'. When one can show a pathway that allows a diet to work it is much more worthy of further research than anecdotal data. Most good ideas however begin with anecdotal data.

Anonymous said...

Jim Willie derided me as naive last night, and has recently written an opinion piece titled "immutable gold laws", and I was tempted to ask him though I did not because he asked me to stop emailing him, if the Universe has habits opposed to laws, in terms of science, I mean...if scientific laws are not necessarily fixed in time, now and for ever more, how then could a commercial (gold) law be immutable, assuming one remains unwilling to (theoretically?) split commerce from time...? the question is all the less stupid because of this recent book, an excellent overview of which is given here:

Rupert Sheldrake at Litteraturhuset in Oslo (11.22.2012)

Beer Holiday said...

@ Michael

I'm a boulderer and free climber too, really puts life into perspective.

Hope to see you in Vegas...

Woland said...

I don't know, Jeff. I personally think Wil is being extreeemely
generous in offering to pay off derivatives (i.e. swaps) with
derivatives (currency). Why not just let them "roll over" their
swaps for free, forever. No heaven (buy stuff with the $$$),
and no hell (eat the losses), just an endless purgatory of roll
overs. Hell, it was never real insurance, anyway. Just "stickers".
Nonetheless, I can't help admiring Wil's generosity. Cheers.

Beer Holiday said...

"Evil gold hoarders, jerks, time misallocators, poison connoisseurs and brainwashed cult members:"

That's me :-)

Motley Fool said...

Beer Holiday

Cheers to that! :P


Tommy2Tone said...

"Given that this is the case, you have to ask yourself why the Central Banks are now hoarding gold. To me the answer is obvious: the entities that are in control of the money supply are taking advantage of this powerful position by buying the one asset, in advance, that will rise in value as the supply of printed money rises. And that would only occur if they intend to print a lot more of it."

I like this guys commentary but he always stops short. Like that paragraph above...doesn't it just beg the question of ok, after all that printing, what then? How much how longer can they print? So, we just print and gold rises and that's it??

BFOFOA, (Before fofoa) I would have read that and other similar things at Turd's place, ZH, etc and felt an odd something-missing feeling that I knew I just wasn't grasping.

I once asked him if he read FOFOA and he said he was aware of and had read some FOA?another stuff.

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