2011 FOFOA Compendium Table of Contents It's Déjà vu All Over Again ................................................................3 Reference Point: Gold - Update #1 ....................................................9 Freegold Foundations ......................................................................27 Who is Draining GLD? ....................................................................54 The View: A Classic Bank Run ........................................................73 Reply to Bron ...................................................................................97 Defending the Precious ..................................................................123 How is that different from Freegold? ............................................133 Wendy's Open Forum - Part 2 ........................................................142 Via Email ....................................................................................... 158 Indicium .........................................................................................171 More Freegold Fodder ................................................................... 183 Reference Point Revolution! ..........................................................214 A Winner Takes the Gold ...............................................................239 Big Gap in Understanding Weakens Deflationist Argument .........257 Reference Point: Gold - Update #2 ................................................267 Deflation or Hyperinflation? ..........................................................278 Costata's Silver Open Forum .........................................................324 The Return to Honest Money ........................................................366 Open Letter to Ron Paul ................................................................424 Bitcoin Open Forum ...................................................................... 431 Bitcoin Open Forum - Part 2 .........................................................437 Bitcoin Open Forum - Part 3 .........................................................439 From the Treasure Chest ................................................................449 Euro Gold .......................................................................................487 Does Fiat Produce an Endless Sea of Wars? ..................................510 Treasure Chest 2 – Game Changer ................................................532 Once Upon a Time .........................................................................548 On Scary Corrections .....................................................................577 RPG Update #4 ..............................................................................587 Moneyness ..................................................................................... 603 Unambiguous Wealth .....................................................................676 Unambiguous Wealth 2 – The MF Global Chronicles ...................691 Happy New Year! ...........................................................................707 Tuesday, January 4, 2011 It's Déjà vu All Over Again Did you experience a slight case of déjà vu today seeing the price soften as the London bullion banking community newly returns from its long-weekend holiday? More to the point, a MTM-minded person can ignore today's trading shenanigans because, more importantly, gold's price remained neatly elevated right through the key year-end revaluation period... Friday, July 2, 2010... Timing Is Everything: I'm sure you've all heard it said (usually by puffed-up market players, or especially in old movies featuring that sort of character) "My boy, timing isn't everything... it's the ONLY thing!" To be sure, timing ISN'T everything, and it most certainly isn't the ONLY thing... but one thing about timing bears saying right here, right now.... Did you notice how gold's little slide yesterday occurred... (hmmmmm... how shall I put this for proper emphasis...) YESTERDAY!!? I don't mean to say did you notice HOW it occurred, or even so much to emphasize THAT it occurred at all (that's a small matter), but rather, that such an event happened YESTERDAY! And more precisely to the point, it isn't even so very notable that it happened yesterday (or today, or next week, or even at all) because the very significant fact is that it did NOT happen PRIOR to yesterday!! "Yesterday", of course, being July 1st, the day AFTER June 30th, a very "special" day in the lives of many young central bankers across the world, when love is in the air and their thoughts turn to unwrapping the presents delivered to them (monthly for some, quarterly for others) on the shoulders of the resolute MTM Giants. After the "snapshots" are taken, who really gives a hoot what happens the day after? And of course, such volatility quickly shakes loose those outsiders of least conviction, and then the price again moves upward as the giants come around again, picking up crumbs dropped by weak hands, bearing their load, bringing the gift of value... FOA (06/12/00; 19:48:25MT - usagold.com msg#26) Put your cards on the table! The current paper gold world will die (burn) as its value to users erodes, not increases! We have to remember that some 85% (or more) of the long side of our world paper markets will not (perhaps cannot) take delivery of physical gold. If the paper trading price is driven ever lower from new derivative supply, these longs simply "trade out" and take their cash hit. The major banks and players in this arena know this and therefore are not at risk from expanding their positions. Truly, they are only playing behind the real political game today. Indeed, if the Euro function will ultimately burn the dollar and its paper gold markets and replace it with a physical "free gold" market, then selling paper gold is free money! Right? This is but one segment of the coming currency transition and to date it's progressing right along! Again, most everyone in the Western Gold bug game is running with the ball in the wrong direction. They are trying to understand just how the Euro zone players are going to get out of our current gold market liabilities when the Euro makes use of the dollar gold market! These same thinkers are looking for some kind of "work out" of our system so its price discovery function will value gold where it should be! My observation from the "Euro Makers" is that one should "forget this notion!" "Nobody" gives a hoot about holding "price discovery" paper contracts as the real thing. Except for those with the real power to trade something for full payment! OIL! Today, paper gold derivatives are for selling because they will eventually be politically defaulted once their discount to physical drives their value next to nothing. So who is in danger of being hurt as this unfolds? That's right, the Western paper gold long! I'm not talking about just the US market! This is about the entire world gold market as we know it today. The real play will be for the ones that get out in front of the move by owning physical. This stampede out of "paper physical" by the "big boys" will first discount that medium as all the selling comes to play. Then the real buying of physical will ensue. It seems every Gold bug sees only half the trade and has great faith that contract law will favor a short squeeze. Yet, none of them see where it is the long that will be dumping and forcing the discount! So what did you think of the gold "take down" yesterday? Did July 1st mean anything to you? Well, if I were a Central Banker who marked my reserve assets to market price (MTM<--MUST READ) like all Central Bankers should... Then perhaps my quarterly performance "kudos" might reflect my performance. Yes? And then, once the "snapshot" is recorded in the books, it is good for what, another three months? Ladies and gentlemen, think this through carefully. Because if any of this rings true, then one conclusion we can draw from yesterday's "price action" is that Freegold can't be very far away. What if yesterday's "dip" was not the result of a coordinated pounding, but from the abrupt and unexpected absence of certain "giant" "longs"? Why did paper gold hold its own all through June -- at or near its ALL TIME NOMINAL HIGH -- only to drop off a small cliff on July 1st as if one of its main support pillars called in sick for the day? Were the "commercials" REALLY just waiting to turn the calendar page before pounding the snot out of gold? Or were certain "giant" LONGS propping up PAPER GOLD to book important numbers... on an important day? And if so, what does this imply about the real PHYSICAL prospects for the paper gold market going forward? As long as the "paper gold" price is imputed widely to all pieces of real physical gold held tightly in vaults, it is fairly important to certain... how shall I say... published reports? Yes? The timing of yesterday's "attack" on gold is most auspicious for physical gold. Notice I didn't say suspicious, but auspicious! What do you think about yesterday's gold action? Please tell me in the comments below. Happy 4th to everyone! Have a great weekend and please be safe and sane! Sincerely, FOFOA And from July 7, 2010 5:33 PM: Eurosystem gold reserves climb by 65.4 billion euros Jul 7th, 2010 13:30 by RS In the consolidated financial statement of the Eurosystem released today by the ECB for the week ended Friday July 2nd, the numbers therein capture the latest mark-to-market quarterly revaluation of assets. With no material transactions