Tuesday, September 13, 2011

Some Gold & FOFOA Thoughts Today...

Almost all of you know that my Gold Trail Guide (the guy I respect the most among the many analysts of gold) is FOFOA.  (Immediate disclosure: I contribute to him, so I am BIASED!)

fofoa.blogspot.com

FOFOA is kind enough to allow me to use some of his graphics in my blog (I have it in writing!).  First, some history as to how I found his blog and wound up becoming a fan.

I clicked on to a FOFOA link in late-ish 2009 (via 24hgold, or dollarcollapse, etc.).  I was struck immediately by HOW LONG his articles were, but very interesting.  I got HOOKED when I saw this:

I then thought to myself: "Holy Cow!  This guy's a friggin' radical!"  (Actually the words I thought WERE a little different...)  Take a good look at that drawing...  2009 non-hyperinflated dollars...

Now, in some ways, I have always had a fond place in my heart for certain radicals, so I continued to follow him up to the current day.  And pretty much buy into his thinking.  One of his primary reasons WHY he foresees such a high price of gold is that there are some 100 pieces of "paper gold" that to a degree or other lay a claim on each ounce of physical gold.  Also, it is important to observe that what is likely to determine physical prices is the FLOW of gold (that is, gold is unique in that the movement of physical gold is a tiny fraction of the stock of gold).

[Note: a Junior Blogger like me suggests that you go to FOFOA's blog for a complete, accurate and coherent analysis of freegold, his shorthand way of referring to the future of gold]

This next drawing is from his EPIC post ("The Shoeshine Boy") that became an article there at Zero Hedge, and got into ZH's "Top 10" (number of comments) in 2010.  Note gold is at about $1800 now...


One of FOFOA's ideas that the price of gold COULD crater (go way down).  That would be PAPER GOLD'S price...  See his above.  Note his snappy "Robert Prechter's 15 Minutes of Fame" remark, LOL...  He writes that if gold goes WAY DOWN (say to $500 / oz, that would make various ZH gold trolls happier than a pig in...), you would then find:

NO PHYSICAL GOLD AVAILABLE!

The below also comes from his latest article ("Once Upon A Time"), it is pretty similar to the above.


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Yet another reason to go to FOFOA's blog is the extremely high caliber of comments about gold and freegold. There are people there who REALLY understand this well and contribute their thoughts and answer questions from those of us not really up to speed.

4 comments:

  1. Robert, I appreciate and enjoy your blog. I have a cool idea for you. You should explore the relationship of gold prices and its adherance to Benford's law. I think this could be a fascinating project for you and you would be intrigued by it being used a price predictive tool. Cheers mate.

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  2. Benford's Law... I will Google and/or Wiki it for ideas on that and gold. Thanks mate!

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  3. You will find some information. I am not a math scholar, but I believe it ties into exponential/log models on pricing of anything. In some strange way, I think it is the underpinning of technical price moves similar to Jim Sinclairs Gold Angels being based on square of numbers theories. Here is a link to get you started: http://goldbasics.blogspot.com/2011/08/ben-davies-gold-price-soon-to-exceed.html

    I actually havent watched the video as I dont have sound at my work computer. Like I said, I thoroughly enjoy your observations.

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