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Not to mention houses are assets, and gold is money... currency... the most powerful symbol of money.*

 

 

*I know, it's a mouthful.... but it does help to avoid the metaphysical disputes. :D

 

Well I used to say "gold is money", but FOFOA has educated me a little more recently, so it seems to be "a really good store of wealth" :D

 

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Kevin Kerr and John Doody on gold.

 

http://www.cnbc.com/id/15840232?video=1599044164&play=1

 

 

Notice the silly interviewer:

 

Interviewer: Kevin, you two are talking about hyper-inflation. where is the hyper-inflation going to come from?

 

Doody. No, I'm not talking about hyper-inflation in my scenario. I'm talking about negative real interest rates.

 

Interviewer: I know, I said Kevin!

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The Shoeshine Boy - from FOFOA

 

http://www.zerohedge.com/article/guest-post-shoeshine-boy

 

My bet, when the shoeshine boy tells you to buy gold he'll be talking about small gold coins only. GLD probably won't even exist anymore. And in this unique historical case, the shoeshine boy will not be the bad omen of a bubble top mania phase, but he will instead be the amazing bell-ringer of a new era. One in which even shoeshine boys can save their surplus wealth in gold. One I like to call Freegold. Because a physical-only gold market can actually handle everyone PLUS the shoeshine boy, unlike any other market.

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The Shoeshine Boy - from FOFOA

 

http://www.zerohedge.com/article/guest-post-shoeshine-boy

 

My bet, when the shoeshine boy tells you to buy gold he'll be talking about small gold coins only. GLD probably won't even exist anymore. And in this unique historical case, the shoeshine boy will not be the bad omen of a bubble top mania phase, but he will instead be the amazing bell-ringer of a new era. One in which even shoeshine boys can save their surplus wealth in gold. One I like to call Freegold. Because a physical-only gold market can actually handle everyone PLUS the shoeshine boy, unlike any other market.

 

 

To recap, a rising gold price is evidence of increasing investment demand, which confirms the belief of those that already invested in gold that it was a good investment. And because investment demand is over and above the relatively stable industrial supply and demand dynamic, any new investment dollars must bid gold away from its current owners. And because saving in gold is a Nash Equilibrium, the price will rise very high. And because gold is THE monetary metal with the highest monetary to industrial use ratio, it will have no reason to fall back when it reaches its top.

 

this begs the question: why did this not happen in 1980 then?

 

and then i remember jim sinclair on kwn, who talks of how close the $ came to capitulating, but didn't

 

therefore, i think to myself, beware of bubbles and how people may justify them (no matter how high they go - granted this one may go a lot higher)

 

 

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afaics, the only way gold will stay permanently high in fiat terms is if we reach a new gold standard as the end point

 

But, what happens when lots of people switch from gold to dow if this ratio <2? This assumes that the new gold standard will be in place by then, otherwise gold will surely fall in fiat currency

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afaics, the only way gold will stay permanently high in fiat terms is if we reach a new gold standard as the end point

 

But, what happens when lots of people switch from gold to dow if this ratio <2? This assumes that the new gold standard will be in place by then, otherwise gold will surely fall in fiat currency

By that point, investors will have had the desire for owning stocks [like houses] hammered out of them. I reckon the move back into assets will only be a long slow process for the bulk of "investors"... climbing a wall of worry.

 

Where near everyone became an investor in the recent bull market, in the near future, at the bottom of the bear market, investors might be a dying breed.

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this begs the question: why did this not happen in 1980 then?

 

You will find your answer here

 

 

FOA (9/23/2000; 9:26:10MD - usagold.com msg#39)

ONWARD!

 

"Go back and read the most recent speeches and comments by the ECB president, Mr. Duisenberg. Truly, the ECB is not interested in "crashing" the system, rather let's "transition" the system into a more fair order. If intervention is needed, it's needed to keep the American economy from failing too fast from the coming hyperinflation of its currency. If the ECB is worried about the "exchange rate" being too far out of whack, it is a worry about its effect in generating a dollar-system meltdown from deficit trade. Not a total failure of the Euro as so many report. When the time comes, and it will, the dollar will begin its fall away from its own past policy failure. Until that time, for the benefit of oil producers and many others, let's move as far down this Euro / gold trail as possible. Without a breakdown.

 

 

6/4/98 ANOTHER ( THOUGHTS! )

 

The last small gold war ended in the early 1980s, as the choice was to use the US$ or go to a gold based economy. No other reserve currency existed, and gold lost the war as all continued to buy dollar reserves.

 

But by 1980, Europe was working with the BIS to implement a new "reserve currency".

 

The European plan was to support the $IMFS at least until a new fiat "reserve" currency could be established, one large enough to absorb the shock of a failing reserve currency, to avoid being forced back 100 years into a physical gold-based economy which would have been very traumatic. This effort took 20 years from 1980.

 

Did the Euro have some challenges along the way? Yes indeed.

 

 

 

The urgent drive to create a new "reserve currency" began in the early 80s, after the last small "gold war". The road to making this new Euro did never include gold in large amounts, until the last few years! Even one year ago, the news would say, 5% or less. Today, we speak of a much greater amount! This is interesting, yes? The BIS did "hatch" this deal in a very late fashion! The future of the Euro was found to be "weak", as the Middle East oil imports onto the continent would continue in dollars! This was so, from the dollar being made strong in gold. Gold priced in dollars at near production cost offered a "no switch currency" position, for oil. This position has been unstable for the last year, and the alternative of a switch to gold was in progress! You have read my "Thoughts" before. Now the BIS does offer to "change the rules of engagement", a real reserve currency is offered!

 

Few do grasp what is happening and why! They think the holding of gold reserves by the Euro is of a little point, as to what good are gold reserves? One cannot use gold as Marks or Yen to intervene in currency market to support the Euro. My friend, the BIS has played the, as you say, "big poker hand"! The holding of large reserves by the ECB and the withholding of sales from the market will not only bring the end of the London paper gold market, it will, thru a high USD gold price, "make the dollar weak in gold"! From this position, the dollar will lose the "oil backing" from the Middle East! At first, all oil for Europe will be in Euro's, then all producers want "strong currency"!

 

There is more: Many say, how to defend Euro without much currency reserves? If gold go to many thousands US, what will be used to bid for Euro as defense? I say, these persons will find a problem on their computer screens! You see, the Euro will start as "nothing", no holdings of size, anywhere! The dollar is held as reserves as "the stars in heaven"! It is to say, "the dollar will bid for the Euro", not "the Euro will bid for the dollar"! All currencies will "flow into the Euro for trade". But, if the Euro becomes so strong, how to compete in world trade? It will be the price of oil that will make the "trading field" level! The soaring US$ price of gold will make even a 10% Euro reserve be as 100% today, in USD! Oil will become, very, very cheap in Euros and allow that economy to do well! Many other countries will see this and also want to join the new "world reserve currency" that has become"the new world oil currency"!

 

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afaics, the only way gold will stay permanently high in fiat terms is if we reach a new gold standard as the end point

 

But, what happens when lots of people switch from gold to dow if this ratio <2? This assumes that the new gold standard will be in place by then, otherwise gold will surely fall in fiat currency

 

Yes gold will fall in fiat perhaps to less than $200/oz. But there is a big difference. The gold that will fall to less than 200$/oz will be paper gold. If you go to a dealer and pay $200 you wont get any gold. That is what FOFOA was implying in his latest post.

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Yes gold will fall in fiat perhaps to less than $200/oz. But there is a big difference. The gold that will fall to less than 200$/oz will be paper gold. If you go to a dealer and pay $200 you wont get any gold. That is what FOFOA was implying in his latest post.

Crikey! Is that a typo? Don't you mean $1200/ oz?

 

Consider that any weakness in the "paper" market will be [is] supported by investors, fund managers, and central banks now lined up to buy. That line may be at 1250 odd now.

 

A large pullback of $200 or so is always possible, but also possible is that may come after gold first climbs another $200.

 

 

Though gold could remain volatile at times, it should remain in this upward channel:

 

 

longt.gif

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For countries like the UK, at present Gold is not money.

Gold is central bank money. Even (or in particular?) in the UK.

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Crikey! Is that a typo? Don't you mean $1200/ oz?

 

Consider that any weakness in the "paper" market will be [is] supported by investors, fund managers, and central banks now lined up to buy. That line may be at 1250 odd now.

 

A large pullback of $200 or so is always possible, but also possible is that may come after gold first climbs another $200.

 

 

Though gold could remain volatile at times, it should remain in this upward channel:

 

 

longt.gif

I think d2thdr is referencing Prechters 200 dollar call on the gold price at the botttom of deflation as picked up by FOFOA's article. This is possible but only for the price of paper gold, is I think what is being suggested here. There simply wont be any physical for sale.

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I think d2thdr is referencing Prechters 200 dollar call on the gold price at the botttom of deflation as picked up by FOFOA's article. This is possible but only for the price of paper gold, is I think what is being suggested here. There simply wont be any physical for sale.

 

Thank you.

freegoldfuturechart.jpg

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Yes gold will fall in fiat perhaps to less than $200/oz. But there is a big difference. The gold that will fall to less than 200$/oz will be paper gold. If you go to a dealer and pay $200 you wont get any gold. That is what FOFOA was implying in his latest post.

 

 

I read this and had some trouble following his thinking. Why pick 200 USD as a price? In the scenario that he predicts where physical will not be available at any price, presumably the paper contracts would fall to near zero as there would be no chance of delivery. At this point the published prices at Comex would be completely meaningless - indeed, how could any price be put out - when the whole thing had fallen apart?

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I read this and had some trouble following his thinking. Why pick 200 USD as a price? In the scenario that he predicts where physical will not be available at any price, presumably the paper contracts would fall to near zero as there would be no chance of delivery. At this point the published prices at Comex would be completely meaningless - indeed, how could any price be put out - when the whole thing had fallen apart?

 

As Steve Netwriter keeps saying ,' You got to change your paradigm'.

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As Steve Netwriter keeps saying ,' You got to change your paradigm'.

 

Well actually I would say "there are other paradigms, and maybe better ones than your current one".

 

The problem I see is looking at the "gold price". It makes it look as if gold is rising. It looks LIKE a bubble.

Invert the chart, showing the currencies falling, which most people KNOW they are, and things look a little different.

 

Saying "will the gold price peak and fall back" is like saying "will the currencies drop and bounce?".

Yes, possible, but by how much? And they may not bounce. They could hit zero and disappear.

 

Could the US$ fall to GoldUS$=2000. Yes, very very likely.

Could it get to 5000? Yes, very very likely.

Could it get to 10,000. Yes, very likely.

Could it get to 50,000. Yes. That is one solution to the US debt problem. The only solution I know of!

 

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No doubt I have but you have not addressed the question I asked.

 

Jake did answer your question. The number is just a random number, perhaps Robert Prechter's 200$/oz prediction is used in this context. It really does not matter. We are all on the same path, we are all buying gold. 200$ figure might be theoretically equal to zero when a loaf of bread might be worth a lot lot lot more in $.

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Jake did answer your question. The number is just a random number, perhaps Robert Prechter's 200$/oz prediction is used in this context. It really does not matter. We are all on the same path, we are all buying gold. 200$ figure might be theoretically equal to zero when a loaf of bread might be worth a lot lot lot more in $.

 

I looked back but cannot see Jake having answered this question.

 

I admire the writings of FOFOA - especially his use of language to explain difficult concepts and have learned a great deal. However, this last part about a paper price of 200 USD or any other price for that matter when no physical is available is something I just cannot understand. When no physical is available for fiat currencies, how can any price be generated as there will be no value at all in paper claims and their price will be zero.

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I didn't read any reason for GoldUS$=200.

Maybe it's just a number picked out of the air, or maybe it's just mimicking the large fall callers.

Or maybe there's an assumption that some people/traders will still think paper gold has some value.

 

It's not an aspect of the article I particularly made note of.

 

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I didn't read any reason for GoldUS$=200.

Maybe it's just a number picked out of the air, or maybe it's just mimicking the large fall callers.

Or maybe there's an assumption that some people/traders will still think paper gold has some value.

 

It's not an aspect of the article I particularly made note of.

Prechter bottom is I think 252 for gold in 2012 then changed to 2014 and now 2016. I think FOFOA was alluding to this.

Prechter would have done well to simply hold gold in 2001. What was it then about 252? :lol:

FoFOA says that price may come but only for paper gold which will be worthless. There simply wont be any physical for sale.

 

At least that is correct to the best of my understanding.

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Prechter bottom is I think 252 for gold in 2012 then changed to 2014 and now 2016. I think FOFOA was alluding to this.

Prechter would have done well to simply hold gold in 2001. What was it then about 252? :lol:

FoFOA says that price may come but only for paper gold which will be worthless. There simply wont be any physical for sale.

 

At least that is correct to the best of my understanding.

So, e.g. we're going to see $2,500 for real physical gold at the same time as a similar amount of gold 6 months out on the COMEX will fetch only $250 due to doubts about it being delivered?

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So, e.g. we're going to see $2,500 for real physical gold at the same time as a similar amount of gold 6 months out on the COMEX will fetch only $250 due to doubts about it being delivered?

So we have a dichotomy in the "paper" and the "real" market. Isn't this really just reflecting a perceived dichotomy between institutional and "free" gold? And then doesn't this notion of "free" gold only go to show that certain political presuppositions/ prejudices are at play here? Considering this, the perceived dichotomy is more the result of a particular/ peculiar view of the world rather than representing anything real.

 

 

imo this dichotomy reflects the error of taking an overly abstract and theoretical approach to gold..... one devoid of a concrete and practical context.

 

Remember, if gold is to function as money in the real world, then we should be looking at it practically, and keeping an eye on the players, markets, and institutions which will make it so. Implicit here is the idea that money [come currency] is a social institution.

 

Monetized gold may also play a social role; it may in the end be the means by which an increasingly chaotic monetary system is stabilized [which may serve to disappoint the ghoulish glee that some seem to have with the prospect of a complete collapse].

 

 

Did you hear about the statues of Daedulus? They were so life-like that if they weren't tied down to earth, they flew away into the stratosphere when no-one was looking. :lol:

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