Freegold Forum

skyscraper wrote: zijn engelen niet ongeslachtelijk?

hoe snij je een taart in 7 stukken

http://www.nycake.com/7piececakepiedivider.aspx

http://www.youtube.com/watch?v=NzNftnbY ... re=related

daar moet je mee leren leven

pascaline wrote:

skyscraper wrote: zijn engelen niet ongeslachtelijk?

hoe snij je een taart in 7 stukken

http://www.nycake.com/7piececakepiedivider.aspx

http://www.youtube.com/watch?v=NzNftnbY ... re=related

daar moet je mee leren leven

http://www.jsmineset.com/2012/05/05/in- ... oday-1181/

sinclair has also dogs

it is all connected

aline pascaline ...

ik ken je ook al van op het cash forum sinds 2006 geloof ik dus 25 is beetje te jong geschat met nadruk op beetje

Ik heb nergens gezegt dat ik denk dat dollar of euro "gedekt" zal worden hé.
Heb enkel beetje LEAP en FOFOA nader bekeken en vergeleken en proberen!!! te verklaren.

en ik heb trouwens gezegt dat ik het meest "geloof" in de theorie van Another/FOA/FOFOA en daar blijf ik bij... Enkel probeer ik de onderzoeken van LEAP daar ergens in te "matchen".



Mvg

Koba

Eigenlijk kan ik het niet genoeg herhalen dat iedereen in principe de tijd eens zou moeten maken om het archief van FOFOA te neuzen en zijn zéér duidelijke posts en al de comments te lezen. Alsook Another en FOA (the gold trail)

Al je vragen ivm deze crisis (en de enige mogelijke uitweg) zullen verdwijnen als sneeuw voor de zon (mits de nodige uren,dagen,weken studeren)!!!


Toelichtingen:

Hier enkele toelichtingen ivm de vorige Posts…


Wat is de oorzaak van eventuele/onvermijdelijke hyperinflatie in dollarland en wat is de eventuele oplossing om hyperinflatie tegen te gaan in Euroland:


Om te beginnen de oorzaak van hyperinflatie in Amerika aan de hand van een goede post van FOFOA:

http://fofoa.blogspot.se/2012/04/peak-e ... ilege.html


Hier enkele stukken uit deze post maar het is een enorme lange post en ik raad iedereen aan om de tijd te nemen om deze volledig te lezen alsook alle links in deze post naar andere posts van hem!!!!!!!!!


Onder meer om een duidelijk overzicht te krijgen over de werking van Centrale banken, commerciele banken en de clearing van banken!!!!



Second Warning

By the early 1960s, Jacques Rueff was not alone in speaking out against the American privilege embedded in the monetary system. Another Frenchman named Valéry Giscard d'Estaing, who was the French Finance Minister under Charles de Gaulle and would later become President himself, coined the term "exorbitant privilege". [7] Even Charles de Gaulle spoke out in 1965 and you can see a short video of that speech in my post The Long Road to Freegold.

But perhaps more significant than the obvious French disdain for the system was Robert Triffen, who stood before the U.S. Congress in 1960 and warned:
"A fundamental reform of the international monetary system has long been overdue. Its necessity and urgency are further highlighted today by the imminent threat to the once mighty U.S. dollar."
To put Triffin in the context of our previous discussion, here's what Jacques Rueff had to say about him:
"Some will no doubt be surprised that in 1961, practically alone in the world, I had the audacity to call attention to the dangers inherent in the international monetary system as it existed then.

I must, however, pay a tribute here to my friend Professor Robert Triffin of Yale University, who also diagnosed the threat of the gold-exchange standard to the stability of the Western world. But while we agreed on the diagnosis, we differed widely as to the remedy to be applied. On the other hand, the late Professor Michael Heilperin, of the Graduate Institute of International Studies in Geneva, held a position in every respect close to mine."
And here is what Wikipedia says about Robert Triffin's Congressional testimony:
"In 1960 Triffin testified before the United States Congress warning of serious flaws in the Bretton Woods system. His theory was based on observing the dollar glut, or the accumulation of the United States dollar outside of the US. Under the Bretton Woods agreement the US had pledged to convert dollars into gold, but by the early 1960s the glut had caused more dollars to be available outside the US than gold was in its Treasury. As a result the US had to run deficits on the current account of the balance of payments to supply the world with dollar reserves that kept liquidity for their increased wealth. However, running the deficit on the current account of the balance of payments in the long term would erode confidence in the dollar. He predicted the result that the system would not maintain both liquidity and confidence, a theory later to be known as the Triffin dilemma. It was largely ignored until 1971, when his hypothesis became reality, forcing US President Richard Nixon to halt convertibility of the United States dollar into gold, an event with consequences known as the Nixon Shock. It effectively ended the Bretton Woods System." [8]
(For more on the Triffin dilemma, please see my posts Dilemma and Dilemma 2 – Homeless Dollars. And for a glimpse at what I view as an even more fundamental dilemma, you'll find "FOFOA's dilemma" in my post The Return to Honest Money.)

As noted above, Triffin's prescription in the 1960s was at odds with Rueff and the French contingent. In fact, even today, the IMF refers to "Triffin's solution" as a sort of advertisement for its own product, the almighty SDR. [9] From the IMF website:
Triffin's Solution

Triffin proposed the creation of new reserve units. These units would not depend on gold or currencies, but would add to the world's total liquidity. Creating such a new reserve would allow the United States to reduce its balance of payments deficits, while still allowing for global economic expansion.

But even though Triffin proposed something like the SDR (a proposal the IMF loves on to this day), I think that actions speak louder than words.

Robert Triffin was a Belgian economist who became a U.S. citizen in 1942 after receiving his PhD from Harvard. He worked for the Federal Reserve from 1942 to 1946, the IMF from 1946 to 1948 and the precursor to the OECD from 1948 until 1951. He also taught economics at both Harvard and Yale. But in 1977 he reclaimed his Belgian citizenship, moved back to Europe, and helped develop the European Monetary System and the concept of a central bank for all of Europe which ultimately became the ECB five years after his death in 1993.

Final Warning

With the end of the Bretton Woods monetary system in 1971, three things (besides the obvious closing of the gold window) really took hold. The first was that the U.S. began running (and expanding) a blatant trade deficit. It went back and forth a couple of times before it really took hold, but starting in 1976 we have run a deficit every year since. [10]

The second thing that took hold was something FOA called "credibility inflation". You can read more about it in my aptly-titled post, Credibility Inflation. This phenomenon, at least in part, helped grow the overall level of trade between the U.S. and the rest of the world in both nominal and real terms. In inflation adjusted terms, U.S. trade with the rest of the world is up almost eightfold since 1971. [11]

The third thing was that the U.S. federal government began expanding itself in both nominal and real terms by raising the federal debt ceiling and relying more heavily on U.S. Treasury debt sales. From Credibility Inflation (quoting Bill Buckler):
Way back in March 1971, four months before Nixon closed the Gold window, the "permanent" U.S. debt ceiling had been frozen at $400 Billion. By late 1982, U.S. funded debt had tripled to about $1.25 TRILLION. But the "permanent" debt ceiling still stood at $400 Billion. All the debt ceiling rises since 1971 had been officially designated as "temporary!" In late 1982, realizing that this charade could not be continued, The U.S. Treasury eliminated the "difference" between the "temporary" and the "permanent" debt ceiling. The way was cleared for the subsequent explosion in U.S. debt. With the U.S. being the world's "reserve currency," the way was in fact cleared for a debt explosion right around the world.
Here are the debt ceilings through 2010 as found on Wikipedia:


That's all well and good, but to really see the U.S. exorbitant (is there a stronger word?) privilege of the last 40 years in stark relief, we must think about those empty containers we export from the picture at the top. Those containers come in full and leave empty, just to be refilled again overseas and brought back in. Those empty containers represent the real trade deficit, the portion of our imports that we do not pay for with exports. Those empty containers represent the portion of our imports that we pay for with nothing but book entries which are little more than lines in the sand. [12]

Here's my thesis: that the U.S. privilege which began in Genoa in 1922, and was so complicated that only one in a million could even fathom it in 1931 and 1960, became as clear as day for anyone with eyes to see after 1971. And so, to see it in real (not nominal) terms, we can very simply look at the percentage of our imports that is not paid for with exports. So simple, which might be why the government doesn't publish that number and the media doesn't talk about it. All you have to do is compare the goods and services balance (which is a negative number or a deficit every year since 1975) with the total for all goods and service imports.

That's comparing apples with apples. For example, in 1971 total imports were $60,979,000,000 and total exports were $59,677,000,000 leaving us with a trade deficit of $1,302,000,000. It doesn't matter what the price of an apple was in 1971, because whatever it was, we still imported 2.14% more stuff than we exported. 1,302 ÷ 60,979 = 2.14%.

A trade discrepancy of 2.14% in any given year would be normal under normal circumstances. You'd expect to see it alternate back and forth from deficit to surplus and back again as it actually did from 1970 through 1976. But it becomes something else entirely when you go year after year (for 36 years straight) importing more than you export. And that's why I showed that little dip in the above timeline visualization of the U.S. exorbitant privilege at 1971.

And now here's what it looks like charted out from 1970 through 2011:


As you can see, the U.S. exorbitant privilege (essentially free imports) peaked in 2005 at an astounding 35.5%, or more than a third of all imports! Stop and think about that for a second. For every three containers coming in full, only two went out full. So how do we reconcile that number (35.5%) with the report at the top of this post that said 45% of containers are exported empty?

The answer is simple. The trade deficit includes both goods and services. But services are not imported in containers. In fact, the U.S. has been running a trade surplus on services every year since 1971. Imagine that! So if we look only at the portion of goods coming and going, we get an even higher percentage. So let's look at 2005 in particular.

In 2005 we imported $1.692T in goods but we exported only $911B for a goods balance of payments of negative $781B. That equates to 46% of all containers being exported empty in 2005. That goods deficit has since dropped down to around 33% for the last three years, so perhaps 45% empty containers in 2010 can be explained by the location of the Port Elizabeth facility being only 200 miles from Washington DC, consumption capital of the world.

But all of this is kind of beside the point. The point is that the U.S. exorbitant privilege peaked in 2005, for the last time, at its all-time high of a third of all imports, and soon it will go negative, where it hasn't been in a really long time.

I can say this with absolute confidence because the signs are everywhere, even if nobody is talking about them in precisely these terms. Here's one bloodhound who's at least onto the right scent (from Barrons):
But more recent Treasury data show China has been selling Treasuries outright. And while the markets have been complacent to the point of snarkiness, MacroMavens' Stephanie Pomboy thinks that's wrong. Unlike other Cassandras, she's been right in her warnings -- notably in the middle of the last decade that the U.S. financial system was dangerously exposed to a bubble in U.S. real estate. Hers was a lonely voice then because everybody knew, of course, house prices always rose.

As for the present conundrum, there's an $800 billion gap between the $1.1 trillion the Treasury is borrowing to cover the budget gap and the roughly $300 billion overseas investors are buying, Pomboy calculates.

[…]

But Pomboy has little doubt that the Fed will step in to fill the gap left by others. In other words, debt monetization, a fancy term for printing money to cover the government's debts, which in polite circles these days is called "quantitative easing."

"Having pushed interest rates to zero, launched QE1 and QE2, there's no reason to believe that the Fed is going to allow free-market forces to destroy the fragile recovery it has worked so hard to coax forth now. And make no mistake, at $800 billion, allowing the markets to resolve the shortfall in demand would send rates to levels that would absolutely quash this recovery…if not send the economy in a real depression."

But her real concern is a bigger one. "The Fed's 'need' to take on an even more active role as foreigners further slow the purchases of our paper is to put the pedal to the metal on the currency debasement race now being run in the developed world -- a race which is speeding us all toward the end of the present currency regime." That is, the dollar-centric, floating exchange-rate system of the past four decades since the end of Bretton Woods system, when the dollar's convertibility into gold was terminated.

[…]

That would leave the Federal Reserve as lender of last resort to the U.S. government to fill the gap left by its biggest creditor. Think this Zimbabwe style of central-bank monetization of an unsustainable government debt can't happen in one of the world's major industrialized democracies? [13]
That was from March 2nd. Here's another one from the same writer at Barrons just a few days ago:
Our friend, Stephanie Pomboy, who heads the MacroMavens advisory, offers some other inconvenient facts about the Treasury market: Uncle Sam is borrowing some $1.1 trillion a year, while our foreign creditors have been buying just $286 billion.

"I'm no mathematician, but that seems to leave $800 billion of 'slack' (of which the Fed graciously absorbed $650 billion last year.) Barring a desire to pay the government 1% after inflation, there is NO profit-oriented or even preservation-of-capital-oriented buyer for Treasuries," she writes in an email.

"For the life of me, I can't understand why NOBODY is talking about this???!!!"

Having known Stephanie for a few years, I can't recall her being this agitated since 2006, when she insisted the financial system's hugely leveraged exposure to residential real estate posed grave risks. She was called a Cassandra then, but both ladies' prophesies turned out to be right.

The U.S. fiscal situation hasn't mattered as long as the Treasury could readily finance its deficits at record-low interest rates. Even after the loss of America's triple-A credit rating from S&P, Treasuries rallied and yields slumped to record lows.

That's no longer happening. For what ever reason, assurances by the Fed Chairman aren't impressing the bond market. Neither is weakness in the commodity markets. Maybe Stephanie is on to something. [14]
Of course they are looking only at the monetary plane, the silly market for U.S. Treasury debt which the Fed can dominate with infinite demand. As I keep saying, the real threat to the dollar is in the physical plane: the price of all those containers being unloaded and then exported empty.

The U.S. government has grown addicted to its exorbitant privilege over the years. It is a privilege that has been supported by foreign Central Banks buying U.S. debt for the better part of the last 30 years. But as I wrote in Moneyness, and as Ms. Pomboy has noticed above, that ended a few years ago. From Moneyness, the blue that I circled below shows the Fed defending our exports **of empty containers** with nothing more than the printing press and calling it QE:


I would like you all to give this some serious thought:

1. The U.S. exorbitant privilege peaked in 2005 (before the financial crisis) and is now on the decline, meaning it is no longer supported abroad.
2. The U.S. government (with the obvious assistance of the Fed) is now in defensive mode, defending that inflow of free stuff with the printing press.
3. The U.S. federal government budget deficit (DC's "needs" minus its normal revenue) **eclipses** the trade deficit by more than a 2 to 1 margin.

So what could possibly go wrong? The recession has already contracted the U.S. economy, all except the part that resides in Washington, DC. And just to maintain its own status quo (when has it ever been happy doing only that?) our federal government needs to insure our national business of exporting empty containers at its present level.

What could go wrong? Prices! If the price of an apple doubles, what do you think happens to the price of a full container? Those of you who think we are due for some more price deflation in the stuff that the USG needs to maintain its status quo should really have your heads examined. Even Obama is winding up to pitch the whole ball of twine at the problem. He just delegated his executive power to print until the cows come home to each of his department heads. I quote from Executive Order -- National Defense Resources Preparedness:
"To ensure the supply… from high cost sources… in light of a temporary increase in transportation cost… the head of each agency… is delegated the authority… to make subsidy payments"

In case you're having difficulty connecting the dots I've laid out (not) so subtly, I'm talking about a near-term dollar super-hyperinflation that will make your hair curl and make Weimar and Zimbabwe seem like child's play in the rearview mirror. If you're new to this blog, you should know that the rate of hyperinflation does not follow the printing. An apple does not end up costing a trillion dollars because they printed enough dollars to price all apples that way. Hyperinflation comes from the margin, from the government defending its own needs, and there's never enough "money" for us mere mortals to pay the prices which are running away from everyone during hyperinflation.

Also, hyperinflation turns physical (as in physical cash) very quickly once it takes hold. So if you're expecting some sort of electronic currency hyperinflation, fuggedaboutit. If you think we're more technologically advanced than bass-ackward Zimbabwe or ancient Weimar, you are not understanding what really happens during currency hyperinflation. It cannot play out electronically all the way to the bitter end because, when prices are rising that fast, physical cash always brings a premium over electronic deposit transfers which require some amount of time (and thereby devaluation) to clear.

Here are a few of my recent posts in which I explore what little we can do to prepare for what is inevitably coming our way:

Deflation or Hyperinflation?
Big Gap in Understanding Weakens Deflationist Argument
Just Another Hyperinflation Post - Part 1
Just Another Hyperinflation Post - Part 2
Just Another Hyperinflation Post - Part 3

That's right, I saved the "crazy super-hyperinflation talk" for the tail end of a really long post. Because A) people who think they have it all figured out already tend to abandon a post once they read the word "hyperinflation", and B) the stuff in this post really happened and is still happening so it's only fair to you, the reader, to give its inevitable denouement the appropriate weight of a bold conclusion. If I didn't do that, I would not have done my job, now would I?

And in case you didn't figure it out yet, this third and final warning was only for the savers who are still saving in dollars. It's way too late to fix the $IMFS.

Sincerely,
FOFOA

Verder een toelichting over oil for gold deals, papiergoud en flow of gold :

http://fofoa.blogspot.se/2010/10/its-flow-stupid.html
http://fofoa.blogspot.se/2010/10/flow-addendum.html


There is an extremely important point hidden in those articles. Can you guess what it is?

It is that the price of gold does not matter to the producer/saver, only the flow of gold matters. I'll say it again. The producer/saver doesn't care about the price of gold, only the flow. To the producer/saver the price doesn't matter because it is a straight currency exchange, like exchanging dollars for euros.

Did you see it in the article? Aramco owed the Saudis $3 million a year, but it had to be paid in gold. They didn't owe 2.67 tonnes of gold per year, but that's what they had to pay because the US fixed the price of gold at $35 per ounce. The US could have raised the price of gold to $100/ounce and then it would have only had to ship .93 tonnes of gold to the Saudis! Would the Saudis have been displeased with such a move? No. The guaranteed price of gold only matters to the printer of paper gold. To the producer/savers, all that matters is the guaranteed flow of physical!

Up until 1971 the US administered the flow of physical gold within the official international dollar banking system. If you were not an insider you paid sometimes as much as $70 per ounce for the same gold:
The bullion coins were crated and shipped to Bombay, where the $35-an-ounce American gold was sold for $70 an ounce. Most of the coins were melted into bars and later sold in Macao.
(New York Times, 1991)

During this time dollars outside the US were "as good as gold" while dollars inside were not. FOA called these internal dollars "Fiat 33" after the Presidential order of 1933 that made all internal dollars irredeemable in gold. Oil produced inside the US or even in Canada and Mexico could be purchased with "Fiat 33" dollars, while overseas oil required paper gold, redeemable in US Treasury physical gold. Even the Saudis eventually accepted the US paper gold, as long as a portion of it was regularly redeemed.

Then, in 1971, the US stopped the flow of official gold. What followed was this:

We all know why the flow of official gold was cut off, right?

Well, maybe not. Here was FOA's explanation:

FOA (12/5/99; 17:38:01MDT - Msg ID:20347)

The world did begin to walk away from the dollar! It plunged and remained on a downward trend for several years! The US knew their option was to raise gold prices prior to 71 (just as I offered in the last post). But oil was the major problem link! Every oil person in the US knew we were running out of local reserves at the old "gold backed" dollar price. All the Middle East had to do was wait us out as they were happy to out produce and supply us in exchange for "real dollar backed gold". You see, oil was and is the real driver of all economic production.

We could have raised the dollar price of gold to settle our accounts but that would not have raised the local oil price enough to make deep reserves available. Yes the dollar would have depreciated somewhat and foreign oil would have gone up, but not enough. The need for more local reserves and the higher dollar prices that could make them available is what drove the 71 gold window closure. They had us and we had them.

…

At that time we were buying local oil with "fiat dollars" (made so by the 1933 internal gold confiscation) and foreign oil with "gold dollars". But, as you pointed out, dollar production was so far past its "gold backing" that it was obvious they (USA) were pegging dollar printing to oil prosperity. Still, with London gold and oil mostly settled in dollars, the foreign dollar oil deals fully well expected to cash in unneeded dollars for gold. As we can see, reality and present day events of that time were as "mismatched" as today!

…

The US wanted new oil reserves to be "Local" (the Americas), because it could be paid in "fiat 33" cash, not the more golden "foreign cash". Both our neighbours to the north and south never asked for much gold. In this light they acted like the local oil companies that received post 1933 dollars for oil (as mentioned above). Yet, to get these new reserves for fiat 33, they had to prevent the very cheap Middle East oil from supplying it all.

Wow! So I think he said that the 1970's spike in oil prices was actually desired by those in charge of the dollar's management. That they had out-printed the gold reserves already and wanted to somewhat temper that development. Did it work out exactly as they hoped? Of course not. But that's not the point. The point is that the producer/savers need gold to flow. And the US cut off that flow.

Now obviously (at least I think it should be obvious to everyone) I believe ANOTHER and FOA were 100% credible. I believe they had some unrevealed yet deep inside connection to European central banking and the gold for oil deals in London that only a European central banker would know about.

But I do realize that most of you do not share my credulity toward these two. So I think that you may find this interview from last week somewhat intriguing. In it, John Defterios of CNN International's "Marketplace Middle East" interviews Sheikh Zaki Yamani, the Saudi oil minister from 1962 to 1986. That's right, he was the Saudi oil minister during the 1973 oil shock!

It's a short video and the relevant part is in the first 90 seconds. I'll even give you the transcript:
John Defterios: 1973, the Arab oil embargo, you were a key player during that process. The former US Secretary of State Henry Kissinger said it was political blackmail what Saudi Arabia and OPEC were doing to the rest of the world. In retrospect how did you see it?

Sheikh Yamani: Well that’s a very long story, and the reaction of America for what happened is not a one reaction. They decided to raise the price of oil 400%. They needed to help the oil companies to invest outside OPEC. In Mexico, in North Sea and so on. And this will not happen without a high price of oil.
According to Yamani, what happened in 1973 was twofold. There was an American plan, and also an OPEC overreaction. 1973 was, according to Yamani, the first time that OPEC flexed its muscles as an organization. From the full transcript of the interview:
Sheikh Yamani: Yes and there was an agreement between the Shah of Iran and between Dr.Henry Kissinger to raise the price of oil… I really highly respect Henry Kissinger. He is really a planner and strategically he is a man to be respected.

Is it true? I don't know. But I think it's true. Not because I believe Sheikh Yamani, but because I believe FOA and ANOTHER were 100% honest, credible and deeply resourced. And Sheikh Yamani happens to corroborate what FOA wrote eleven years earlier.

But whether or not it's true is beside the point, which is the same point ANOTHER made in his very first post, quoting his friend and fellow poster, "Hong Kong Big Trader":

It was once said that "gold and oil can never flow in the same direction". If the current price of oil doesn't change soon we will no doubt run out of gold.

Now you might think he was saying "If the current price of oil doesn't RISE soon we will no doubt run out of gold." But he didn't say rise, he said change. And it is not as simple as you would think.

From 1980 through 2001 gold did flow, though not in the efficient way it would in a free market. With the expansion of the gold forward sales and futures markets, the Saudis and the third world bought up all excess physical gold flow. As ANOTHER said in his very VERY first post, which is prior to even the USAGold archives:

September 14, 1997 by "ANOTHER"

The CBs are becoming "primary suppliers" to the gold market. Understand that they are not doing this because they want to, they have to. The [CB] words are spoken to show a need to raise capital but we knew that was a [smoke] screen from long ago. You will find the answer to the LBMA problem if you follow a route that connects South Africa, The Middle East, India and then into Asia!

Remember this; the Western world uses paper as a real value, but oil and gold will never flow in the same direction. Big Trader

"South Africa, The middle east, India and then into Asia!" This was where the physical was flowing while we, in the West, were becoming enamored with paper gold trading. No longer did the US Treasury have to supply ITS gold, the market was supplying gold for it. But keeping the physical flow bought up, cornered as it were, was putting a great deal of stress on the paper market of the LBMA by the mid-1990's. It's all about the flow remember, the flow of PHYSICAL that is. FOA:

FOA (12/04/99; 21:34:03MDT - Msg ID:20282)

Earlier this year, old bullion supply dried up and it looked like the last of the private "old stocks of gold" had finally run out. Then the price shock from the Washington Agreement flushed out some more. I've written on this before (and ORO told it better than I), but the more the old holders sell out in return for holding "unallocated gold accounts" the worse the shortage will be when the marketplace fails. Slowly, over many years, the people that now hold the real bullion that was sold to create a lot of paper gold, have literally locked up the ownership. The old liquid gold market we used to know in years past functioned because of all the private physical holders that traded it. Now, it's all paper being shuffled around.

This gets back to your LBMA item. The old, deep private bullion pool has been replaced with a paper commitment pool. In the past, if someone defaulted, we just grabbed their bullion. Today, if they default, they just default! Again, if that big African mine does tell them to take a hike, the whole modern gold market could just collapse. This is why I smile when I hear someone question why the big funds and traders don't just take delivery against OTC paper. The question is just exactly what are they going to take delivery of?

All the gold movement is just for show. Same for Comex. Sock a little gold in there and complete a few deliveries so it all looks right. It's all the same game we played with the dollar before 1971. Only when everyone asked for delivery did we find out that the world was awash in paper gold,,,,,I mean dollars! It's going to happen again, real soon.

ANOTHER:

Date: Tue Oct 07 1997 22:37
ANOTHER (THOUGHTS!) ID#60253:

You see, when paper trading volume dries up it's a bearish sign, but when real physical gold volume drops it's bullish! That's because gold is being cornered on a scale never seen in history. LBMA is doing its best to show real volume exists!

Date: Sun Oct 05 1997 21:29
ANOTHER ( THOUGHTS! ) ID#60253:

The Western governments needed to keep the price of gold down so it could flow where they needed it to flow. The key to free up gold was simple. The Western public will not hold an asset that's going nowhere, at least in currency terms. The problem for the CBs was that the third world has kept the gold market "bought up" by working thru South Africa! To avoid a spiking oil price the CBs first freed up the public's gold thru the issuance of various types of "paper future gold". As that selling dried up they did the only thing they could, become primary suppliers!

In my post, The Shoeshine Boy, I wrote that I would revisit the context in which ANOTHER made the statement at the top of this post because it portends vast changes in the international monetary system directly in front of us. So I guess it is time to take a look at that context. Here is ANOTHER's entire first post archived on USAGold:

Date: Sun Oct 05 1997 21:29
ANOTHER ( THOUGHTS! ) ID#60253:

Everyone knows where we have been. Let's see where we are going!

It was once said that "gold and oil can never flow in the same direction". If the current price of oil doesn't change soon we will no doubt run out of gold.

This line of thinking is very real in the world today but it is never discussed openly. You see oil flow is the key to gold flow. It is the movement of gold in the hidden background that has kept oil at these low prices. Not military might, not a strong US dollar, not political pressure, no it was real gold. In very large amounts. Oil is the only commodity in the world that was large enough for gold to hide in. No one could make the South African / Asian connection when the question was asked, "how could LBMA do so many gold deals and not impact the price". That's because oil is being partially used to pay for gold! We are going to find out that the price of gold, in terms of real money ( oil ) has gone thru the roof over these last few years. People wondered how the physical gold market could be "cornered" when its currency price wasn't rising and no shortages were showing up? The CBs were becoming the primary suppliers by replacing openly held gold with CB certificates. This action has helped keep gold flowing during a time that trading would have locked up.

(Gold has always been funny in that way. So many people worldwide think of it as money, it tends to dry up as the price rises.) Westerners should not be too upset with the CBs actions, they are buying you time!

So why has this played out this way? In the real world some people know that gold is real wealth no matter what currency price is put on it. Around the world it is traded in huge volumes that never show up on bank statements, govt. stats., or trading graph paper.

The Western governments needed to keep the price of gold down so it could flow where they needed it to flow. The key to free up gold was simple. The Western public will not hold an asset that going nowhere, at least in currency terms. ( if one can only see value in paper currency terms then one cannot see value at all ) The problem for the CBs was that the third world has kept the gold market "bought up" by working thru South Africa! To avoid a spiking oil price the CBs first freed up the public's gold thru the issuance of various types of "paper future gold". As that selling dried up they did the only thing they could, become primary suppliers! And here we are today. In the early 1990s oil went to $30++ for reasons we all know. What isn't known is that its price didn't drop that much. You see the trading medium changed. Oil went from $30++ to $19 + X amount of gold! Today it costs $19 + XXX amount of gold! Yes, gold has gone up and oil has stayed the same in most eyes.

Now all govts. don't get gold for oil, just a few. That's all it takes. For now! When everyone that has exchanged gold for paper finds out its real price, in oil terms they will try to get it back. The great scramble that "Big Trader" understood may be very, very close.

Now my friends you know where we are at and with a little thought, where we are going.

What I find most intriguing is this part:

In the early 1990s oil went to $30++ for reasons we all know. What isn't known is that its price didn't drop that much. You see the trading medium changed. Oil went from $30++ to $19 + X amount of gold! Today it costs $19 + XXX amount of gold! Yes, gold has gone up and oil has stayed the same in most eyes.

Like he said, all oil producers don't get gold, just the swing producer, Saudi Arabia. They control the flow of oil from all the other producers. If gold stops flowing and the Saudi's turn down the oil taps the price will rise. As long as gold is flowing, Saudi oil is flowing at $19/bbl and the rest of the producers must sell their oil for just the $19 cash.

So was there really a deal like this made? Of course there was! ANOTHER even gave us the math:

Date: Sat Oct 18 1997 21:04
ANOTHER (THOUGHTS!) ID#60253:

Let me fill in the Xs.

First a reprint;
"You see the trading medium changed. Oil went from $30++ to $19 + X amount of gold!
Today it costs $19 + XXX amount of gold! "

If you owned a commodity in the ground that had to be sold for paper currency in order to realize value what would do? Yes, the oil in the ground may last another 50+ years but will the bonds and currencies of other governments last that long? One thing you don't do is buy gold outright, it would cause it to stop trading as a commodity and start trading as money! You learned that in the late 70s. Nor do you acquire "real gold money" in any fashion that would allow a comparison of price trends ( graphs ) ! There must be a way to convert the true wealth of oil into the outright wealth of gold. We know that oil is a consumed wealth of a momentary value that is lost in the heat of fire.

The stars blink and it is oil wealth no more!

It has become "the debt of nations " now owed to you. Gold on the other hand is not a commodity as many assume, as it is truly "the wealth of nations " meant to last thru the ages! A wise oil nation can strike a deal with the paper printers and in doing so come out on top. Go back a few years to the early 90s. Oil is very high, you offer to lower the US$ price in return for X amount of gold purchasing power. You don't care what the current commodity price of gold is, your future generations will keep it as real wealth to replace the oil that is lost. Before the future arrives gold will be, once again valued as money and can be truly counted on to appropriately represent all oil wealth!

The Deal:

We ( an oil state ) now value gold in trade far higher than currencies. We are willing to use gold as a partial payment for the future use of "all oil" and value it at $1,000 US. ( only a small amount of oil is in this deal ) And take a very small amount of gold out of circulation each month using its present commodity price.

If the world price can be maintained in the $300s it would be a small price for the west to pay for cheap oil and monetary stability.

The battle is now between CBs trying to keep gold in the $300s and the "others" buying it up. In effect the governments are selling gold in any form to "KEEP IT" being used as 'REAL MONEY" in oil deals! Some people know this, that is why they aren't trading it,, they are buying it.

Not all oil producers can take advantage of this deal as it is done "where noone can see". And, they know not what has happened for gold does not change in price! But I tell you, gold has been moved and it's price has changed in terms of oil! For the monthly amount to be taken off the market has changed from $10 in gold ( valued at $1,000 ) /per barrel to the current $30 in gold /per barrel still valued at $1,000! Much of this gold was in the form of deals in London to launder its movement. Because of some Asians, these deals are no longer being rolled over as paper!

Date: Tue Oct 07 1997 22:37
ANOTHER (THOUGHTS!) ID#60253:

Ever notice how many important Middle Eastern people keep a residence in London. It's not because of the climate. The most powerful banks in the world today are the ones that trade oil and gold. It is in the "city" that the deals are done by people who understand "value"! Westerners should be happy that they do because the free flow of oil and gold has allowed this economic expansion to continue this past few years.

Understand that oil is still traded for a certain number of US$ but after the deal is done a certain amount of gold is also purchased "with the future flow of oil as collateral".

Date: Sat Mar 07 1998 13:19
ANOTHER (THOUGHTS!) ID#60253:

A Noble Purpose, This Oil For Gold

When one considers the merits of a specialized world oil currency, the thought usually turns immediately to "send in the military and stop them". I must ask, why? If an oil currency is born before or out of the shambles of an financial meltdown, and it offers great benefit to all, again I ask, why stop it? Look at the merits of such a move:

In a very real "currency sense", oil will be devalued in terms of gold. As one makes a currency weaker by increasing the money units per ounce of gold. Oil will become very cheap in gold, as the amount of gold paid per barrel will fall dramatically as compared to today's ratio. There will be much more than enough gold worldwide to quantify a "world oil currency". To that end, the world paper "reserve currency" at use in that time, will continue to be traded for oil at an extremely low price relative to today. The only change will be the addition of a "unit of real value" added to each trade, a "world oil currency", gold! However, in terms of today's currencies, gold will be "upvalued" to perhaps $10,000 to $30,000 an ounce. So as not to rewrite what is already an excellent piece on this coming readjustment, I will repost part of Mr. Allen ( USA ) 's perfect article on the subject along with his requested changes per his :
Date: Mon Dec 15 1997 11:06
Allen ( USA ) ID#246224:

Last one on this topic until more ANOTHER posts. I'm not sure that it would be necessary to have that large a cabul in on the "offer" of oil for gold. Given the rather small market in gold in comparison to oil/currencies it would only take one or two well endowed oil states to pull this off. Here's why.

Let's say the Saudi's have been accumulating gold through the back door ( approx. 5,000 tonnes ) . They sell say 20 Mln Bbl oil a day. Close enough. At one ounce of gold per thousand Bbl oil that's 10,000 ounces of physical gold per day. That's a lot of physical gold.

The first few moments after the Saudi's proposal to trade oil for gold at a very steep discount of 1000 Bbl/oz ( approx. 1.5% of current US$ price ) there would be
roars of laughter. One fast thinker after another would think "Hey. I buy some gold at $300/oz, trade for oil to receive 1 Mln Bbl, then sell the 1 Mln Bbl for US$ 10 Mln. Net profit is

$10,000,000-$300,000=$9,700,000. Easy money.

Everyone at once turns to the gold market to buy, which promptly shuts down. Now no one is laughing. Because everyone realizes that gold is now worth at least $10,000 per ounce and no one is prepared for that revaluation. Whoever has gold now has 66.67 times the purchasing power in that stockpile. What appeared to be a stupid offer has now become a complete revaluation of all gold stockpiles vs all currencies.

Who has the gold?

( per corrections ate: Mon Dec 15 1997 11:06 Allen ( USA ) ID#246224: )
Saudi stockpile guest-imate 5,000 metric tonnes = 5,000,000,000 GRAMS not ounces. Gold now at US$9.65 per gram revalued by multiple of 66.67 = US$643.37 per gram x 5 Bln grams = US$3.2 Tln.

Germany 2900 metric tonnes = 2.9 Bln grams, revalued to US$1.8 Tln.

USA 8,085 metric tonnes = 8.1 Bln grams, revalued to US$5.2 Tln.

Is this plausible??? How is it possible by making one little change in oil dealings could this ever happen? It is simply the very intelligent use of the scarcity of gold and the necessity of oil. It is the desire of one party, who is big enough to swamp the gold market, to make it the preferred vehicle for buying oil. In fact if not one ounce of gold is ever transacted for oil, but the offer is continued intact, then gold will be revalued simply by the possibility of trading. Those who are in a bad way in their currency situation can always get oil with their gold.

What would the impact of this revaluation of gold and currencies do? It would instantly shift economic and financial power into the hands of those who own large amounts of gold: CB's, Saudi's, Roths et al. It would mean that gold/oil would be THE CENTRAL POINTS OF ECONOMIC REFERENCE. It would mean that currencies would be devalued by a factor of 1000 in relationship to the new standard of gold ( as a proxy for oil wealth ) It would upset an awful lot of people. There would be no TARGET to shoot at or take over, however, because all other oil producers would immediately jump on this band wagon. Its a simple matter of what an interested party is willing to receive for their goods. Venezuela, with gold and oil reserves and production capacity, would be one of the wealthiest nations on earth. The world would be turned upside down geopolitically, wouldn't it. Literally "..the 'have-not's of the world will become the 'have's.."

Mr. Allen ( USA ) ,
Another thanks you for this thinking. It should be read by everyone with an interest in this area. It should also be studied by students wishing to learn of market dynamics. We also offer this piece as an addumnum to the above, also by the same author.
Date: Mon Dec 15 1997 10:49
Allen ( USA ) ( Quick Note to JTF re: 23:05 post - US$ oil float ) ID#246224:
US$ price of oil is floating. The "proposal" to offer oil for gold at say 1000 Bbl/oz is far below the present float price in US$. The gold market is SO SMALL that if the oil nation that made this proposal was pumping enough oil the gold market would be swamped by oil buyers who were looking to make a few ( !! ) US$ on the discrepancy in price. In effect this would revalue gold by inserting an entire different group of buyers into the gold market who have ALOT of money.

Why is it the oil nation would not just buy at market? Same as above. Their effect in the open market would basically shut down the market thereby frustrating their efforts to buy gold. Conversely, why would they then make the "proposal"? Because either they have enough gold to buy the world at the new price, there is a crisis in which they feel it is to their advantage to do this ( such as a US$ crisis ) or they might have a geopolitical rational. In the new valuation the US$ would still be intact. But its monopoly role would be altered. Its not that currencies would become worthless but that gold would become worth much more in relationship to paper currencies.

To answer the "military" question, asked at the begining of this article, I say:

The massive increase in the "reserve currency" price of gold would, no doubt be ushered into the USA house of congress as a godsend answer to Americas debt problems. With the "full production" of oil, now viewed as a sure thing, The world may well see the USA send the military into the Middle East just to ensure that this "deal" [Freegold] is not disturbed. After all, it is oil that will be massively devalued by gold.

Thank you

Did you catch what he said there? He said the US would not use its military to stop Freegold. Instead, it would use it to ENSURE Freegold once its benefits to even the US are recognized! This is such a simple concept yet so few of you seem able to grasp it.






Met in diezelfde post ook wat uitleg over De Euro Architectuur:

Recall this chart from Euro Gold:



It shows the change, over time, in relative value of the two kinds of reserves held by the Eurosystem: 1. gold reserves and 2. foreign currency reserves. And in RPG #4 I explained the difference between reserves and assets on the CB balance sheet. Assets are claims against residents of your currency zone denominated mostly in your own currency. Reserves are either gold or claims against non-residents denominated in a foreign currency.

You see, after 1980, "oil" started trusting paper gold again, just like it did in the 1950's, as long as some of it could be exchanged for physical. But having been burned once, in 1971, they weren't about to be burned again. And what the euro CB's figured out was all that mattered to the producer/savers of the world was the guaranteed FLOW of physical gold, NOT the guaranteed price or weight/mass. (And this is why we pull it out of the ground: so it can FLOW!)

This is what the euro architecture guarantees in the case of a dollar (paper gold market) failure: that physical gold will flow… uninhibited! It does this through its "severed link" association with its own official monetary gold reserves, allowing them to float against the currency and publicly proclaiming this policy every three months in its quarterly "marked to market" consolidated statement. This is something the Fed simply cannot do because the Fed's "gold stocks" are irredeemable paper gold Treasury certificates marked at $42.22 per ounce. The US Treasury owns all the gold. The Fed owns paper (and electronic book entry, post 1935) certificates that are irredeemable to the Fed, so how can it possibly mark them to market?

You see, the European gold reserves are far better, far more credible than the US gold reserve, simply because they engage in a two-way gold market, and have for decades. The US gold has been hoarded and locked away for more than 30 years, never deployed in case of emergency. The European CB's took a lot of flak for selling gold over the past two decades, but that action is precisely what makes them so much more credible (and valuable!) than the US gold hoard. Any trading partner knows full well that if all else fails, gold will be paid.

The price of gold today is unstable. Anyone with eyes can see that. Worse, it's rising. Which means the flow of physical gold in the quantities needed (at today's gold price) to lubricate global trade is drying up.

"Gold has always been funny in that way. So many people worldwide think of it as money, it tends to dry up as the price rises."

But the flow of physical gold WILL be reestablished. The world demands it. It doesn't care how high the price goes, only that the flow is guaranteed. Only the $IMFS seems to care about how high the price goes. And, apparently, that is because the $IMFS is the main printer of paper gold. Flow WILL be credibly and sustainably reestablished, which means paper gold WILL be discredited. Flow is sustainably and infinitely guaranteed at a floating, physical-only price. What that price is in today's world is anyone's guess because we haven't had such a market in centuries.

Verder hier de reden waarom hyperinflatie kan vermeden worden door deze Euro architectuur:


http://fofoa.blogspot.se/2011/07/euro-gold.html

The point is, all the market wants is a stable currency, not too hot, not too cold. It is like a sleeping giant. Give it a stable currency and it will keep sleeping. Wake it and you (the printer) will lose control of the value of your currency and everything else you try to control. The market is the demand side of the equation. And the market is by far the more powerful of the two sides in this tug-of-war. If this isn't making sense, please read my post linked in the paragraph above because I'm not going to explain it all here.

To summarize, there is a whole menu of options for the aspiring money printer to choose from when stepping into the supply side shoes of the monetary game. And as a supply sider, his job is providing a service to the demand side, the market, which wants one thing and one thing only, a stable currency. And if he wants to keep his job, he'd better give his clients what they want, because if they wake up to an unstable currency, they can easily take the reins of control away from him. So if his mandate is—or evolves into—anything other than a stable currency, he will not be long for this monetary world. And one last thing; instability means quick changes both up and down. The client doesn't want drastic inflation or deflation.

The Debt

Most of you already know this quote from FOA:

"My friend, debt is the very essence of fiat. As debt defaults, fiat is destroyed. This is where all these deflationists get their direction."

Now that's not the whole quote, of course. But that's enough to warrant some extra thought. Just think about it for an extra few seconds before continuing onward. And then next I want to jump from that to this; chapter 82 from The Triumph of Gold by Dr. Franz Pick, written in 1985:

"82. How currencies die

As currencies become more and more devoid of substance, they perpetuate their existence through their multiples. The milreis replaced 1,000 reis, and the bilpengoe tried to substitute for a billion pengoe. The conto was worth 1,000 escudos. The Greek talent was equal to 6,000 drachmae or 36,000 obols. In Java, the bahar was good for 100 million candareens. In India, the nil replaced one hundred billion rupees…

Some coins were flattened to the point where they were as thin as a sheet of paper, or actually chopped up into strips, or cut into bits of all sizes and shapes. Some were punctured and the holes then plugged with inferior metal.

These strategems did not and will not save currencies, which are all doomed by the passage of time."

He's talking about debasement. Debasement is not monetary expansion through credit expansion. Debasement is the base money behind the credit being expanded in volume by the supply side as its only possible response to value degradation coming from the demand side. Note in particular the last line: "doomed by the passage of time." And here is some more FOA from 2000 which I reposted in Freegold in the Proper Perspective:

"...Our dollar has had a usage period that corresponds with the society that interacts with it. Yes, just like people, currencies travel through seasons of life. Even gold currencies, in both metal and paper form have their "time of use". Search the history books and we find that all "OFFICIAL" moneys have at one time come and gone with the human society that created them. Fortunately, raw gold has the ability to be melted so it may flow into the next nation's accounts as "their new money".

This ebb and flow of all currencies can be described as their "timeline". We could argue and debate the finer points, but it seems that all currencies age mostly from their debt build up. In a very simple way of seeing it, once a currency must be forcefully manipulated to maintain its value, it is entering the winter of its years. At this stage the quality of manipulation and debt service become the foremost determinant of how markets value said money. Suddenly, the entire society values their currency wealth on the strength and power of the state's ability to control, not on the actual value of the money itself. Even today our dollar moves more on Mr. Greenspan's directions than from the horrendous value dilution it is receiving in the hands of the US treasury.

This is where the dollar has drifted into dangerous waters these last ten or twenty years. If you have read most of Another's and my posts, it comes apparent that preparation has been underway for some time to engineer a new currency system. A system that will evolve into the dollars slot once it dies.

Out here, in deep water, we can feel what the Euro makers are after. No one is looking for another gold standard, or even something that will match the long life and success of the dollar. We only know that the dollar's timeline is ending and a new young currency must replace it. No great ideals, nor can we save the world! But a reserve currency void is not acceptable.

Now look back to shore and watch the world traders kick ankle deep water in each other's faces over the daily movements of Euros. From here, up to our necks in blue water, you ask "What the hell are they doing?" I'll tell you. They are trying to make $.50 on a million dollar play! Mostly because they are seeing the chess game one move at a time. (smile) Truly, their real wealth is in long term jeopardy.

Our dollar has already entered a massive hyperinflation. Its timeline is ending and there will be no deflation to save it..."

And to complete FOA's quote at the top of this section:

"My friend, debt is the very essence of fiat. As debt defaults, fiat is destroyed. This is where all these deflationists get their direction. Not seeing that hyperinflation is the process of saving debt at all costs, even buying it outright for cash. Deflation is impossible in today's dollar terms because policy will allow the printing of cash, if necessary, to cover every last bit of debt and dumping it on your front lawn! (smile) Worthless dollars, of course, but no deflation in dollar terms! (bigger smile)"

Saving the Debt

Now I want to talk about "the process of saving debt at all costs, even buying it outright for cash" because this is something they are doing in Europe as well, and, therefore, is one of the arguments the euro critics use to claim that the euro is no different—or even worse—than the dollar. Should we be surprised or shocked that they are doing this in Europe having read A/FOA all those years ago? Well, no. Unless, like many, you didn't really understand what you read.

In my 2009 post Gold is Money – Part 2, I wrote, "And it was always known, but has now been proven, that the system will be saved at ANY cost." When I wrote that I was discussing the dollar and the dollar system, aka the $IMFS, aka Wall Street. But this applies to any monetary and financial system. The system always takes political precedence over the currency. The currency will always be debased if that is needed to keep the system functioning nominally. This is nothing new and it should not be surprising, yet it's apparently very surprising to 99.9% of all financial analysts.

Politicians and central bankers can only expand the monetary base in volume. They cannot expand its value. And at the first sign of systemic trouble, this is what they do. They do this because to not do it would make them redundant. A void, a vacuum of empty space with no politicians or CBs would do nothing which would allow our money, credit, to collapse down to its base, so the politicians and CBs have to do something to distinguish their fine selves from nothingness. Sure, they talk the hard money talk during normal times, but at the first sign of systemic trouble they print. Here's one more chapter from Franz Pick, 1985:

"83. The pious pronouncements to hold the money supply in check will not be kept

The fellows in the central bank make pious pronouncements about fighting inflation and holding the money supply in check. But they panic immediately when they see signs of distress-borrowing in the banking system, as debtors, many of whom are corporations having interest payments larger than their pre-tax profits, try to keep their enterprises from going under.

Although the Federal Reserve system makes a lot of noise about controlling the money supply and reaching monetary targets, it is at times difficult to understand just what exactly they are controlling. Be that as it may, they will in time revert to form and resume the process of what is coyly referred to as "reliquifying the economy."

This will lay the groundwork for another cycle of currency destruction, which could assume unprecedented dimensions. Though "to deflate or not to deflate" may be the question, the only answer to America's growing financial and economic malaise is to debase."

The point is that the Eurosystem's response (volume expansion) to its current systemic threat (the debt crisis) is not surprising. Does this mean the euro will collapse (experience hyperinflation)? No. Because, for one reason, it has severed the link to the nation-state. The euro is behaving perfectly predictably in maintaining the nominal performance of its system through expansion, but it cannot be forced to fund the future government profligacy of the PIIGS through volume-only expansion. That link is severed.

A ‘fairy’ tale

Let us look at another historical instance of clearing that was vitally important in the Middle Ages: the institution of city fairs. The most notable ones were the annual fairs of Lyon in France, and Seville in Spain. They lasted up to a month and attracted fair-goers from places as far as 500 miles away. People brought their merchandise to sell, and a shopping list of merchandise to buy. One thing they did not bring was gold coins. They hoped to pay for their purchases with the proceeds of their sales.

This presented the problem that one had to sell before one could buy, but the amount of gold coins available at the fair was far smaller than the amount of merchandise to sell. Fairs would have been a total failure but for the institution of clearing. Buying one merchandise while, or even before, selling another could be consummated perfectly well without the physical mediation of the gold coin.

Naturally, gold was needed to finalize the deals at the end of the fair, but only to the extent of the difference between the amount of purchases and sales. In the meantime, purchases and sales were made through the use of scrip money issued by the clearing house to fair-goers when they registered their merchandise upon arrival.

Those who would call scrip money “credit created out of nothing” were utterly blind to the true nature of the transaction. Fairgoers did not need a loan. What they needed, and got, was an instrument of clearing: the scrip, representing self-liquidating credit.

The Modern European Fair

Now imagine if you will a giant fair with dozens of E-Z Up tented booths and tables full of merchandise, kind of like a swap meet at your county fairgrounds. As Fekete says, you show up at the fair with your goods and services for sale, your E-Z Up tent, your table and your shopping list. But when you arrive you must first check in with the fair operator to pick up your scrip money. I imagine the husband then works the booth while the wife goes shopping.

At this particular fair we are imagining, let's call it the Eurosystem, when you register with the fair operator you pay a small fee, deposit your gold for safekeeping during the fair and also for publication of your amount of gold to the other fair participants, and you are issued your scrip money for trade at the fair. But your scrip money is not a receipt for your gold. It is simply the clearing system for trade at the fair, so you are issued an amount consistent with the goods and services you brought to market.

There are a wide variety of booths at this fair. To give you a bit of a mental image, there's a large booth called Germany where you can buy fast cars and good beer! (I know, a strange combination.) There's another one with a fancy custom tent called France. There you can buy funny hats and cheese. And then there are smaller booths, one is called Greece. At Greece you'll find a table loaded with stacks of colorful vacation brochures.

Our fair, however, is a little different than Fekete's fair above. What we've seen over time at our fair is that some of the smaller booth operators like Greece took home more goods and services than they brought to market. And they did so on credit. Large operators like Germany, it turns out, gave Greece some extra goods in return for promises to pay later, and those promises were denominated in units of scrip money from the fair.

After some time, it became apparent that Greece could never pay back the debt at full value. This realization actually threatened the system, I mean the fair. So what the fair operator decided to do was to buy those promises to pay from Germany at face value, with newly printed scrip. This kept Germany in the game although it did devalue the scrip since now there was more of it than there were goods at the fair. But this was fine because the fair operator published a ConFinStat in which he told all the fair participants that the fair's scrip money was now worth less.

Those, like Germany, that had actually saved some income in promises to pay denominated in scrip, and then found those promises severely devalued by the recognition they would never be paid back at full value, received a nominal gift of the same number loaned to Greece, even though it was now devalued. Those that had not saved in scrip, but instead had cleared with gold at the end of each fair, simply carried on trading at the new, lower value of the scrip. You see, the fair operator, we'll call him the ECB, did not participate in the fair itself, primarily because he had severed his link to any specific booth operator. His only job was providing scrip, announcing its value, and maintaining the system, I mean the fair, even if it came at the cost of debasing the scrip money.



http://fofoa.blogspot.se/2012/02/todays ... -gold.html

Rickards advertises the return to the gold standard in particular with the claim that the first country that makes this step, would gain a considerable international advantage through the gain in confidence in its currency.

The problem with this statement is that the advantage of the first adopter is no longer available. The first step was made as early as 1999, and it was done by somebody else: by the Euro (€). It was accomplished in a fashion slightly more sophisticated than just a plain old-fashioned backing of the currency with gold at a fixed exchange rate: The Eurosystem of Central Banks, i.e. the European Central Bank (ECB) together with the National Central Banks of the member countries of the Euro zone, account for their gold reserve at the current market price of gold in €.

[…]

From these balance sheets, we can see that there is no advantage of early adoption that could be captured by the United States. The Euro zone has already anticipated this step, and the Euro enjoys an even more robust gold backing. In fact, all else being equal, the comparative advantage of the € over the US$ increases with an increasing price of gold.

[…]

■ Since the ECB has never claimed that the Euro were as good as gold, they need not redeem any Euros for gold. If somebody purchases gold with their Euros, these Euros continue to circulate. The Euro is explicitly advertised as a transactional currency, but not as a store of value. Gold is the store of value. This is Free Gold, the separation of the store of value from the medium of exchange, i.e. from the credit money that forms the transactional currency (also see Section 7 of The Many Values of Gold and FOFOA’s The Long Road to Freegold).

…The ECB, however, which does not guarantee a redemption of the Euro for a fixed weight of gold, can engage in various types of Gold Open Market Operations.

Firstly, in absence of a liquid market for physical gold in Euros, the ECB can act as a market maker and, say, bid for a fixed weight of gold at € 8745 per ounce and offer to sell a fixed weight at € 8755. If they bid for and offer more than 10 tonnes each at any time, they are able to make a liquid market for physical gold in Euros, a market in which other central banks can trade the quantities that typically arise in the settlement of international trade balances. As soon as it turns out that there is more weight of gold sold than it is bought (or vice versa), the ECB adjusts the bid and offer prices accordingly. This amounts to assisting the price discovery for large quantities of physical gold while the reserve of the Eurosystem remains essentially unchanged.

Let us stress that as of February 2012, there exists no liquid private market for physical gold in € in which bid and offer would be quoted for tranches of 10 tonnes or more at any time. In fact, this is apparently not even possible in the London market in which gold is traded in US$:
James G. Rickards, Currency Wars, page 26:
In ordinary gold trading, a large bloc trade of as little as ten tons would have to be arranged in utmost secrecy in order not to send the market price through the roof [...]


Secondly, the ECB can manage a dirty float of the gold price in order to smooth fluctuations in the currency exchange rates, in order to influence the domestic price level, or even in order to affect the competitiveness of goods and services from the Euro zone in the international market. If they expand the monetary base and purchase gold in the private market, they lower the exchange rate of the Euro relative to gold, creating domestic consumer price inflation and rendering exports more competitive and imports more expensive. Conversely, if they sell a part of their gold reserve and cancel the base money they receive, they raise the exchange rate of the Euro relative to gold, reducing consumer price inflation and rendering exports less competitive and imports cheaper.

In particular, if things ever turned hostile, for example because not only a book author but also some government officials started talking about ‘confiscating’ the gold owned by foreign countries, the dirty float could be used in order to terminate Rickards’ experiment with the new gold standard in the United States at any time, simply by expanding the monetary base in € and purchasing physical gold in the open market. This operation is always possible because it relies only on the ability to expand the € money supply, but does not require any existing official gold reserve. In fact, any major currency area or trade block who exports enough goods and services for which there exists a global demand, can make this move. So far, none of them has.

[…]

pascaline wrote:

skyscraper wrote: zijn engelen niet ongeslachtelijk?

hoe snij je een taart in 7 stukken

http://www.nycake.com/7piececakepiedivider.aspx

http://www.youtube.com/watch?v=NzNftnbY ... re=related

daar moet je mee leren leven

The TRUE range for 2012 is 1700-2012 in dollars // Sinclair does not talk about gold any longer, but more about LIFE QUESTIONS : please stop asking "will gold rise" take a gold / indian roepiah chart . '''''
It's so simple that we look like idiots''''''
Vind ik leuk · · Vriendschap bekijken · een paar seconden geleden ·
Pascaline
The answer is in the picture, need a friend buy a dog I have my most respect for Sinclair (only 1 here is not convinced, he will learn!) It takes guts to do is all for FREE ! maybe it was all for me and 100/000 others don't know, they never believed me nor him, but in the end HE was correct ! ( i don't take credentials ) i just followed
Vind ik leuk · · Bericht niet meer volgen · Vriendschap bekijken · 5 minuten geleden ·

Pascaline Yeah sure, x million or x billion dollars and then your kids move to africa, I understand it all, would pay this guy his bills just to talk 24 hours ; he is a gr8 person !! wish I had his knowledge AND MAYBE i HAVE think I visit him with my little son or daughter in x years Think that will make us all happy
2 minuten geleden · Vind ik leuk

skyscraper wrote: zijn engelen niet ongeslachtelijk?

dak het niet weet

ken enkel sinclair zijn "angels"

over geslacht spreek ikniet daar je op zijn minst denk 5 soorten heb

M
V

M is V

V is M

da zijn er 4

en de vijfde dan ???????????????

m is m en doet graag v

v is v en doet graag m

voila nu heb je er 6



it is a fucked up world TRUST ME

vraag me af ////////////////////////// mag iedereen hier zeggen wat hij denk van goud ????????????????

ja maar ze overwegen ook een ban want gij bent gek

ik ben niet gek

als jij 1 oz koopt en denkt dat gaat x10 dan ben je gek
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zo simpel is het niet ! (helaas)

Indiana Jones wrote:

ge zijt een goud mens en mooie clip

als ge grond hebt al is het maar en pot

doe er iets mee

zo simpel is dat

'alle beetjes helpen'

=)

5 pepers
5 tomaten
52 preien
1 komkommerplant (bizar)
en nog 3 salades

maar WIL MEER
=============

kunt rentenieren gij

a) in bos kastanjes

b) patatten opt veld

who needs money ANYWAY

ik keek ernaar en tligt hier
======================

Het beroerde is vaak dat postings onbedoeld niet duidelijk zijn geschreven of niet worden begrepen, en er miscommunicatie gaat optreden.

Ik zeg maar wat "goud X 10" zegt niets, want zonder nominaal of reëel of tijdslijn weten we nog niets. Tuurlijk gaat goud omhoog, alles gaat al jaren omhoog. Over 100 jaar staat goud hoger. Het is een voorbeeld hè