Wednesday, May 25, 2011

Gold, Bitchez! Part 1

Gold, Bitchez!

I would for sure lose all credibility, especially among my new ZH, (that would be ZeroHedge.com a most excellent website for financial topics, especially for those suspicious of the banksters and Wall $t. fraud, highly recommended) readers if I go for long without writing a gold article.

As I write, I have my laptop on my lap at the airport, so my writing may not be at its best.  Nor have I put much thought into this, but I felt the need to get something out about gold.  So I am just going to wing this one.

FreeGold


Many people claim expertise on gold.  I make no such claim, although I have looked into the subject since the 1980s, mainly by buying it!  Almost every day I read something about gold.  There are many "camps" (FOFOA's term) in the Precious Metals Community.  I am in FOFOA's camp, pretty much, read on.

FOFOA (fofoa.blogspot.com) writes about FreeGold, a concept first taken up in the late 1990s by a European ("Another") purportedly highly placed among those designing the Euro currency.  He contributed his THOUGHTS! at some gold site back then.  After a couple of years, he stopped writing.  A bit later a Friend of Another" (FOA) who continued exploring the FreeGold idea.  FOA was perhaps an American.  But, he too stopped writing after a couple of years or so.

And then came along FOFOA who started writing his blog in +/- 2008 (sorry I do not remember what year FOFOA!).  FOFOA continues writing to this day, mostly about FreeGold.

Disclosure: I am a contributor to his blog, so I am biased.

FreeGold is a concept that is either intuitively clear or not.  It has taken me a long time just to get to my limited understanding.  But, there is an essential believability that I find in FOFOA's dramatic prediction of gold priced from $25,000 - $60,000 (non-hyperinflated 2009 dollars)!  When I first ran into FOFOA and started reading, I thought "Wow this guy is a real radical".  I have a soft spot in my heart for non-violent radicals (well, of a certain kind), so I continued to read his stuff.  I started in mid-late 2009.

FOFOA describes his concept in great detail at his blog, but it is hard for many (like me) to really "get" the concept although feel that I basically do.

FreeGold will happen when the physical price of gold diverges from the "paper price" (gold futures prices, etc.).  There are apparently 100 times as much "paper gold" (claims on actual physical ounces) as there are actual physical ounces (that perhaps is within the USA only).  At some point there will likely be a failure to deliver real physical gold to holders of paper gold wanting the real thing.  Gold is "leased out" by the Bullion Banks (sort of market makers in gold and gold derivatives, you will have to dig into FOFOA's rich detailed writings for more details).

Probably all of a sudden there will a demand for the real gold.  And there will be many who will not be able to deliver.  Then gold will NOT be available at the COMEX price (paper price).  It might not even be available AT ALL for a short time, at ANY price, as any real gold left disappears...

FOFOA explained in one of his articles ("The Shoeshine Boy") that Robert Prechter (often a gold bear I understand)b will have his 15 minutes of fame, as gold falls to $400 / oz.  OK, they say $400, so you go to your favorite coin shop or to APMEX, and guess what?  No gold for sale.  You would be prepared to pay a premium of, say, $200 / oz?  Sorry, no gold.  $1000 / oz.  No gold.

After this all shakes out, the market for physical gold will lead to a likely quick quantum-like jump in the price of gold to prices like $50,000 / oz.  He also makes a great case for saying you do not even have to UNDERSTAND FreeGold, just buy some, and you will be very happy with your purchases.

FOFOA makes a great case.  You should read his blog.  The best one IMO regarding the Ancient Metal of Kings: Gold!

He does not (much anyway) like other PMs like silver.  GOLD is where wealth is HELD, sitting still for generations.  Silver gets spent.

***

The only real point of difference I have is that I do not know the future, and what is predictable or no.  I hold other PMs myself: platinum, silver and palladium.  But, the bulk ($ value) is in gold.

***

Please discuss!  I am here to serve and learn from you.

FOFOA has helped me in starting and improving my blog!  Thank him by visiting his blog, and consider contributing, his blog takes NO advertising even though he has a large following.

fofoa.blogspot.com

Thanks again, family, friends and "virtual friends" for stopping by my blog.

11 comments:

  1. fofoa.blogspot - great blog, and probably the most important one on the internet (yes, on the entire internet) if you're concerned about the deepening financial crisis and paper currency.

    When you realize that:
    - paper currency inflates by definition and by design.
    - that paper currency is not a localized problem, but a global problem.
    - that history is a wheel.
    - the role gold has played through said history, and
    - that there is enough gold in the world to offset global debt,
    then you begin to realized the inevitability behind freely floating gold (freegold).

    When one feels powerless to affect change in the current system, there is a real sense of pro-action and freedom in exchanging one's pseudo-money (paper) for hard money (gold). That's probably my favorite part of Freegold, the personal sovereign action of it..

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  2. Shell Game. I sent your comment above to The Great One himself. He just replied to me by email:

    "Haha! Great comment! Thanks for sharing. Now go read my 17,000 word post! LOL"

    I guess he has his new and very long post up!

    Get his email (you can from his blog I believe) and consider contributing (if you do not like giving out credit card info over the 'Net). I have, three times. Cash in the snail mail! Yeah, I guess I am biased...

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  3. The main thing that I don't "get" about Freegold is why anyone would bother using fiat transactional currencies once everyone is saving with gold, and the devaluation machine is fully revealed for what it is. It would be like people finding out that microwave ovens produce gamma ray bursts that are killing them, but continuing to use them in their house, just not for reheating leftovers. The fact is, everyone would throw out those microwaves! Similarly, with the devaluation machine exposed for what it is, no-one would transact in it.

    The fact is that gold is money (as are silver, platinum, and palladium, even though those are useful industrial metals IN ADDITION to the fact that they are money). Money makes the best currency. There WILL be a gold standard again, whether an official one, or simply a gold specie standard. After the coming industrial user panic, silver will be money again as well, as the higher price of silver causes miners to go apeshit to try to meet demand, and the need for change for gold overwhelms the industrial need. I would expect a ratio between 1:10 and 1:5 to hold sway long term, simply because the gold that is mined sticks around, while the silver is consumed.

    This is why owning silver NOW is good. During the industrial panic, you can certainly trade for gold, and profit handsomely, while you ride the gold revaluation train right on up to 50 fold station.

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  4. FOFOA has seriously educated me on inflation/deflation and the relationship between money and assets. I remember feeling like my whole cranium had been opened up and the morning breeze was blowing over my brain after reading his main argument in that regard. A friend of mine saw me shortly after and commented that I even looked dazed in comprehension.

    Anyway, I was looking though a few Martin Armstrong articles today and he had a few comments on the history of gold and silver standards (particularly in the Roman Empire) where he states that silver circulated but gold tended to be kept as a store of value outside of circulation. He also mentioned the history of manipulation of a fixed gold standard to wit - that governments would often only accept taxes in gold/silver but would make payments either in copper or in their own diluted PM coins.

    By this reckoning then a freegold system would be less likely to become a tool used against the populace by the issuing government than a gold standard per se. The idea put more fuel to thought for me on the merits of freegold and the advent of the sovereign individual as per Shell Games comments above.

    Link

    http://www.martinarmstrong.org/files/Other%20Side%20of%20Inflation%20Martin%20Armstrong%2004-13-2011.pdf

    Interesting read, personally I just discount all the talk of the supercomputer he built and look for little tit-bits of new info in there.


    Thanks all & hi Robert,

    Matt (Matto per ZH)

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  5. A historical note:

    The first use of "GOLD BITCHES!!" on ZH (look in the comments):

    http://www.zerohedge.com/article/implied-correlation-hits-new-six-month-high

    ZH immortalizes it:

    http://www.zerohedge.com/article/gold-bitches-1200

    - Chumbz

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  6. ANYONE who has spent serious quality time at zerohedge.com knows of chumbawamba.

    Warning to those NOT familiar with chumba. If you tangle with this guy, I suggest the following for your protection:

    1) An AK or AR with at least 4 loaded clips
    2) A 9mm (or larger) pistol, 4 loaded clips
    3) Body armor!

    I was once chopped to pieces by this guy when I wrote there at ZH that I had NO SYMPATHY for the Turk jerks who did their Peace Flotilla thing.

    Chopped Robert (into tiny little pieces) was not a pretty thing!

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  7. Just to clarify then, bitches was originally spelled ending in s?

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  8. Get that as your epitaph, CW.

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  9. Finally got on this blog and able to post(Had to use Chrome. Hi Zhers and everyone else.Thx for the smaller community Robert.

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  10. Yes, Dagny 's' was first. I do not know who coined the 'z'. Maybe it was MOST notorious troll Johnny Bravo (Master B).

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  11. Better late than never....
    Thanks for the invite Robert looks nice here, although I am allergic to Wheat ! I'm sure we can still get along....

    Personally, I'm holding my weatlth in Silver, mostly coin, in the expectation of transferring it (spending?) when the inevitable critical shortage of this strategic metal is peaking. For me, with no heirs, holding wealth in gold for the long term makes no sense, especially if you are a believer in TEOTWAWKI. If things get bad enough, even the mention of gold will be a security liability and any PM may become unbarterable at some point. I will always keep a portable supply of silver dimes for obvious reasons - all things point to this being our best, final, recognizable, un-counterfeitable "money" prior to complete societal disintegration. In the worst case, they can easily be melted into bullet molds for ammo. Oddly, the terminal ballistics for 80-90% cupro-silver bullets are actually quite good, even if there are no werewolves about.

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