Quick answer guide to Freegold, and FOFOA,FOA and Another.   v 0.3

Last updated: 14 March 2013

Please note: This is a work in progress primarily for my own benefit, so I can find and refer to specific Freegold points. Direct quotes (with references)  are mainly taken from fofoa.blogspot.com , FO/A archives or commentators there-on, to whom all the credit belongs. My own opinions or interpretations are not included.

Freegold is a “simple” concept that can however be difficult to grasp for those educated in the West. I hope that the points listed here might help interested students to direct their studies to the appropriate sources.

If you have any comments, questions, suggested additions or corrections you can contact me by posting at FOFOA’s website: fofoa.blogspot.com

Please do not repost anywhere in its entirety (as it’s preliminary and incomplete).

NB: if the link to comments do not work, try including “/ncr” (no spaces) after blogspot.com

Q Describe Freegold in as many words

FOFOA: “Freegold explained for my Grandmother (and Epic Fail Moron):

For a monetary system to work, anyone, anywhere, must be able to exchange the currency for gold at a floating rate. This is FREEGOLD. It is all of the natural consequences that will flow from the ending of fractional reserve bullion banking, an unsustainable modern carryover from the official gold standard of yesteryear.

The definition of store of value as a monetary function is how long participants are willing to hold any excess of said money for the purpose of storing value. The separation of this role from transactional currency means that excess currency will be spent rather than stored for its long term value. What you spend it on is up to you. Freedom of choice, bra!! But the "focal point" of this global activity will probably not be baseball cards.”

By Blondie:

As an unencumbered physical asset, gold is the single objective reference point from which the relative value of all else can be ascertained.

The difference with today being that gold is currently encumbered, and cannot function as said objective reference point until this changes.

“Leveraging gold is an oxymoron”

http://fofoa.blogspot.com/2011/03/reference-point-revolution.html?showComment=1301726561879#c6765783611392345645

Q What does the “Free” in “Freegold refer to?

de·mon·e·tize/dēˈmäniˌtīz/

Verb: Deprive (a coin or precious metal) of its status as money.

"This is what gold will be freed from: The fractional reserve banking practice, which is a carryover from the gold standard."

http://fofoa.blogspot.com/2011/01/freegold-foundations.html

Q Is all fractional reserve banking “bad”?

No, just fractional reserve bullion banking.  http://fofoa.blogspot.co.uk/2011/05/return-to-honest-money.html

FOFOA comments from: http://fofoa.blogspot.com/2012/07/interview.html?showComment=1341816111904#c1620321159420368151

Q What is Exter’s pyramid and How could one explain Freegold in terms of Exter’s pyramid?

http://fofoa.blogspot.com/2009/03/all-paper-is-still-short-position-on.html

http://neuralnetwriter.cylo42.com/node/1523?page=1#comment-8352

Q What is FOFOA’s dilemma?

FOFOA's dilemma: When a single medium is used as both store of value and medium of exchange it leads to a conflict between debtors and savers. FOFOA's dilemma holds true for both gold and fiat, the solution being Freegold, which incidentally also resolves Triffin's dilemma [Motley Fool]

http://fofoa.blogspot.com/2011/07/does-fiat-produce-endless-sea-of-wars.html

http://fofoa.blogspot.com/2011/05/return-to-honest-money.html

Q What is Triffin’s dilemma and how does the Euro solve it ?

the observation that when a national currency also serves as an international reserve currency (as the US dollar does today), there are fundamental conflicts of interest between short-term domestic and long-term international economic objectives... The country issuing the global reserve currency must be willing to run large trade deficits in order to supply the world with enough of its currency to fulfill world demand for foreign exchange reserves [wikip].

“The euro solved dollar flaw #1, the Triffin dilemma, by severing its link to the nation-state” http://fofoa.blogspot.com/2010/11/dilemma.html

http://fofoa.blogspot.com/2011/05/return-to-honest-money.html

Q What are the key aspects to Freegold ?

In order to understand Freegold you must at least understand the significance of these conditions:

1. The end of the dollar standard (the end of its timeline as the main global reserve currency)

2. The end of parity between paper gold price discovery and physical gold price discovery

3. The Euro-Freegold concept/project, (at least) 31 years in the making

4. The flow of oil

http://fofoa.blogspot.com/2010/12/freegold-in-proper-perspective.html

Q So Freegold is a competing monetary theory? Or a competing financial system?

No. It is a paradigm that explains what is currently happening in the world.

"Everyone knows where we have been. Let's see where we are going!" [Another]

http://fofoa.blogspot.com/2010/12/freegold-in-proper-perspective.html

Q Where is a good place to start reading to understand Freegold ?

http://fofoa.blogspot.com/2011/05/open-forum.html

http://fofoa.blogspot.com/2010/12/freegold-in-proper-perspective.html

http://fofoa.blogspot.com/2011/01/freegold-foundations.html

Q What is the real value of gold?

If gold was only an industrial commodity its true value would be relatively close to its LTV price because of the limited industrial uses for gold, or somewhere around $500 per ounce. […]

If gold were returning to its past role as base money in a fractionally reserved dollar-gold standard, its value would probably be around Jim Rickard's low estimate of $5,000. If gold were to take a more prominent role, as say an international currency, it would probably be closer to Rickard's high estimate of $11,000.

And as the international CB reserve asset (NOT currency) standard designed into the Eurosystem quarterly MTM reserve concept, gold's value is probably around $55,000 per ounce. And lastly, if all fiat money caves in like a house of cards and oil is forced to bid directly for gold, we're looking at a value closer to $100,000 per ounce. [...]

Look at the total value of currency versus the total value of wealth reserve assets denominated in currency. It is something like 10 to 1. Not dissimilar to my 55,000:5,000 ratio above!

http://fofoa.blogspot.co.uk/2010/12/value-of-gold.html

Q What will the future value of gold be in current USD? ie: the $50,000 question.

A http://fofoa.blogspot.com/2010/06/how-can-we-possibly-calculate-future.html

Gold holds its unique position because it is pretty much used for nothing else. It has an extremely high stock to flow ratio. "Stock" means those who are sitting tight on their physical gold, letting it lie still for the future, and "flow" means those who are presently trading their gold.

[Gold] will only find its point of equilibrium when enough "stock" is reassigned to "flow" to meet demand.

Understand that currency flows through assets, not into them. In fact, a limited amount of dollars can flow through the same gold many times, over and over, driving it higher and higher with each pass, as long as new gold stock is not coaxed out of hiding. And the interesting thing in this process is that, as I said above, it actually causes the opposite of the expected supply/demand reaction. With each pass-through of the dollar more "flow gold" is moved into "stock gold", not the other way around like commodities and paper.

FOFOA’s Freegold Price PRobability Distribution Curve (FFPPDC)

http://3.bp.blogspot.com/_cvdgPlEKW9k/TB2dVP7bmgI/AAAAAAAABNo/jw7RIviRsd8/s1600/Freegold_bellcurve.gif

Also see: http://fofoa.blogspot.com/2010/08/relativity-what-is-physical-gold-really.html

“In terms of today's currencies, gold will be "upvalued" to perhaps $10,000 to $30,000 an ounce”

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

This chart shows what the price of gold would be [blue line] if it never traded between the London a.m. and London p.m. gold fixes.

http://www.caseyresearch.com/gsd/sites/default/files/resize/1970%20ex-London%20Gold%20Price-470x342.png

Q What about the price in other currencies?

http://fofoa.blogspot.com/2011/04/reference-point-gold-update-2.html?showComment=1302478649512#c6219658602927266758

Q Why and how will the price of gold sky-rocket?

Also see: http://victorthecleaner.wordpress.com/2012/02/08/the-many-values-of-gold

“Gold bids for dollars. If gold stops bidding for dollars (low gold velocity), the price (in gold) of a dollar falls to zero. So you see, there doesn't need to be a stampede into today's "gold" for real, physical gold to become "priceless". ”

http://fofoa.blogspot.co.uk/2012/02/yo-warren-b-you-are-so-og.html?showComment=1329897980209#c4583704549733130146

Q Isn’t an advantage of gold that it has always had the same purchasing power throughout history? Why will that change now?

See Aragorn III (10/16/98; 15:40:56MDT - Msg ID:612)

FOA (10/01/99; 20:11:14MDT - Msg ID:15148)

FOA (10/08/99; 08:37:15MDT - Msg ID:15847)

FOA (11/1/99; 22:04:23MDT - Msg ID:18117)

FOA (03/10/00; 10:51:52MT - usagold.com msg#10)

in http://fofoa.blogspot.co.uk/p/after-thoughts-1.html

Q What is the predicted gold price over before, during, and after the transition to freegold:

People see the "paper gold market" working today and so they think that it can work all the way up. Like we'll go from $2,000 to $3,000 to $4,000 and so on all the way up to $55K. They think that as the pool of new buyers flood into today's "gold" the shorts (or the bullion banks) will simply have to cover their exposure and bid for any physical they need until the price gets high enough for them to get it.

http://fofoa.blogspot.com/2012/02/yo-warren-b-you-are-so-og.html?showComment=1329897980209#c4583704549733130146    FOFOA comments

http://1.bp.blogspot.com/_cvdgPlEKW9k/TJ1k2Kw5ipI/AAAAAAAABcc/n8pY_udAeQE/s1600/Freegold_future_chart.jpg

Q Has Freegold ever existed in the past?

“freegold' has existed in numerous small countries in disguise all the time. Well, it's not free*gold*, but rather free*dollars* [ie local fiat MoE, dollars SoV]...

via:http://fofoa.blogspot.co.uk/2012/10/debriefed-6-aaron.html?showComment=1350413361324#c4286501254614103090

Q What are the chances of someone standing for delivery and either driving the price of gold to the moon, or “crashing” COMEX?

“it ain't gonna happen!”...the central banks will band together to crush any delivery drive”. FOA

http://fofoa.blogspot.com/2010/01/gold-ultimate-hedge-fund.html

Q Why will gold price crash before freegold? Won’t it keep rising with demand?

Paper price will decouple from gold (metal) price.

“And with the supply of paper gold rising to meet demand while physical is being withdrawn, the only conclusion we can come to is that the gold buyers **IN SIZE** will have to stop buying from the price discovery marketplace because, if they do their due diligence, they'll clearly see that subsequent physical delivery has become impossible at the present price.

So, in conclusion, the price of gold will plummet!”

http://fofoa.blogspot.com/2010/09/shoeshine-boy.html

Q If the price of gold is going to crash to $300 or so in the transition to Freegold, why not wait until then to buy gold ?

It will be impossible to find (“in hiding”).

http://fofoa.blogspot.com/2010/09/shoeshine-boy.html

Q How does COMEX price discovery work and will it telegraph “the end” for all to see?

http://www.usagold.com/goldenchalkboard/gc_aricomex.html

Q What kept the price of gold from reaching Freegold prices in the past?

The CBs have used every weapon to keep it's price low.

Date: Sun Oct 19 1997 09:42 *ANOTHER(THOUGHTS!)*ID#60253:

Q why did Gold drop off a cliff (as measured in dollars) back in 1980? And what is to stop it from dropping of a cliff again?

“Real rates of return turned positive in a big way. In 1980 Volker had to raise interest rates up to an all time high of 21.50% (Prime Rate) on December 19, 1980. ...Today we have the exact opposite. The real interest rates are way negative, and the United States would bankrupt itself paying interest if rates got even a few percent higher. ”

Aquilus: http://fofoa.blogspot.com/2012/01/studebaker-effect.html?showComment=1326571628713#c9212481047788823636

Q What caused gold price suppression?

Do you think the CBs are selling gold to keep the dollar strong? They don't have to sell to accomplish that feat!

Date: Sun Oct 19 1997 09:42 *ANOTHER(THOUGHTS!)*ID#60253:

To avoid a spiking oil price the CBs first freed up the publics 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.

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

The reason for the "many long term selling announcements" [by CBs] is to keep the price down over time

Date: Sat Oct 25 1997 10:24 *ANOTHER(THOUGHTS!)*ID#60253:

What if the oil states offered to buy gold with oil, OUTRIGHT? [...] this almost happened!Instead, the BIS set up a plan where gold would be slowly brought down to production price.

Date: Fri Nov 28 1997 23:29 *ANOTHER(THOUGHTS!)*ID#60253:

Q How does paper gold suppress gold price? Paper wheat doesn't suppress the real wheat price does it?

http://fofoa.blogspot.co.uk/2012/07/fallacies-1-paper-gold-is-just-like.html

FOFOA: It's the flow between production and consumption where the price is discovered in the paper markets... In commodities the paper market regulates the flow between the producers and consumers, acting as a kind of a shock absorber against unexpected supply and demand shocks... But gold doesn't get consumed at a rate anywhere close to its next closest competitor. It just accumulates, so there is no supply side shock... Having a paper market as a shock absorber for the gold market only has the effect of keeping the price too low.

The second difference is that the vast majority of demand for gold is in currency terms, not weight terms... It logically follows that it is the very existence of the paper market which is keeping the price too low, because if you took it away, price alone would have to regulate the flow.

http://fofoa.blogspot.com/2012/07/interview.html?showComment=1341555221833#c1242334424269521334

http://fofoa.blogspot.com/2012/07/interview.html?showComment=1341555555740#c698237200922350040

http://fofoa.blogspot.com/2012/08/macrofreegoldnomics.html?showComment=1344729046702#c8452597312053439319

Q How does credit suppress the gold price?

http://victorthecleaner.wordpress.com/2012/03/18/how-credit-suppresses-the-gold-price/

If you use gold as a currency it will be lent, and through that process it will be automatically expanded in volume suppressing the value of physical gold held by the savers [FOFOA]

Q Does CB gold suppression mean they were manipulating the gold price?

Not exactly. One is automatic and the other is controlled or manipulated.

http://fofoa.blogspot.com/2010/07/gold-ultimate-wealth-consolidator.html?showComment=1279832023744#c8281762967516262602

Q Does the paper gold market also suppress gold price volatility?

“The paper market disconnected the price from the physical flow, and handed the price discovery function over to world full of paper traders” [FOFOA]

Q Aren’t the BIS evil for having suppressed gold price and delayed Freegold introduction?

Westerners should not be too upset with the CBs actions, they are buying you time!

Date: Sun Oct 05 1997 21                  05 1997 21          :29 *ANOTHER( THOUGHTS! )*ID#60253:
The Central Banks have known for quite some time the true value of gold in today's paper world. In a very real sense they are on our side

Date: Sun Oct 19 1997 17:26 *ANOTHER(THOUGHTS!)*ID#60253:

Q Are CBs still suppressing the price of gold?

The war between gold and the dollar has been over for a while now… Leaving gold bugs with a lot of questions that ask why this: both systems will strive for a higher currency price for gold; one doing it because they have to; the other doing it because they want to! [FOA]

Q What ended gold price suppression by the CBs?

Asia put an end to a sweet deal [gold for oil] for the West

Date: Sat Nov 01 1997 22                  01 1997 22          :43 *ANOTHER(THOUGHTS!)*ID#60253:

As for the old agreement of oil/gold ratio, it went out the window after the gulf war.

Date: Fri Nov 28 1997 23:29 *ANOTHER(THOUGHTS!)*ID#60253:

The most significant event in gold since the dollar's gold default in 1971 has been the successful launch in 1999 of a long-awaited new currency system built upon neutral (meaning, multi-national) management and, more importantly, a floating gold reserve structure that finally abandoned the now obsolete "fixed" gold legacy of the failed Bretton Woods structure.

With this new reserve structure, the prevailing institutional incentive -- from '71 to the end of the millennium -- need no longer be one of "price suppression" for the perceived market value of gold.

Randy (@ The Tower) (04/17/01; 13:37:02MT - usagold.com msg#: 52046)

http://www.usagold.com/goldtrail/archives/goldtrailfour.html

Q Why did the world go off the gold standard in the early 70s?

Nixon and Kissinger pulled the plug on the Bretton Woods gold standard for the specific purpose of raising the price of oil! We know this now because the Saudi Oil Minister from 1971 gave an interview to CNN just last year! [FOFOA/A h/t JR]

http://goldchat.blogspot.com/2011/12/my-thoughts-on-freegold.html?showComment=1324259471420#c3705155075993834424

http://goldchat.blogspot.com/2011/12/my-thoughts-on-freegold.html?showComment=1324259963423#c1143652558644021480

Q What is the relationship between international liquidity and gold reserves?

FOFOA 5 part response relating to the 1975 letter by Arthur Burns: http://fofoa.blogspot.co.uk/2012/07/jeff-blondies-open-forum.html?showComment=1343718016501#c6828959344407945482 (on page2)

Q Freegold requires that gold is unencumbered by gold leases/loans. How will this be prevented ?

FOA:  [By] changing international law such that no form of debt can force it's payment in gold! This opens a one way street for gold and a two way street in fiat currencies. No one will lend gold because they cannot force it's return in the courts, thereby making gold a physical only international currency.

"[FOA] Keeping gold out of the fiat arena would be more simple than many hard school advocates envision. The key to that is found in the implementation of international law. The leading economic countries (EuroZone in the future) would have but to establish a protocol that forbid the enforcement of collateral attachment anytime physical gold is traded, lent or involved in a trade. In this context, no banker would lend you gold to buy a house if, in a default, he could not claim your house in a court of law. Even private parties would never lend gold if the asset behind the loan could not be claimed for nonpayment. It's that simple. With a stroke of written law, the trading of gold as wealth would become a final payment with no possible credit implications. Our official fiats and wealth without a country would never again function as one.

To protect gold’s status as [the ultimate collateral], and its invaluable contribution to a stable monetary system, courts will not enforce the forfeiture of any lesser collateral in the failure of a loan of the ultimate collateral. This will be enough to prevent the lending of gold, which will be frowned upon by the system.

http://fofoa.blogspot.com/2011/06/from-treasure-chest.html

FOFOA: it is not a prerequisite of Freegold, but more like a natural consequence.”see also DP: http://fofoa.blogspot.com/2012/10/an-american-horror-story.html?showComment=1352210957352#c5844644026597015529

Q Will gold still be used as collateral for a loan?

No, there is no need. http://fofoa.blogspot.co.uk/2012/06/debtors-and-savers-2012.html?showComment=1340556839058#c1998375364315583901

“why not buy fiat and rebuy the gold later instead of borrowing money, secured by gold, that you hope to get back when you repay the loan”

http://fofoa.blogspot.co.uk/2012/06/debtors-and-savers-2012.html?showComment=1340557089418#c2210065175852007565

http://fofoa.blogspot.com/2012/06/debtors-and-savers-2012.html?showComment=1340557824053#c3907634861935064103

Q Under Freegold, what will stop people from holding a large portion of their savings in fiat (the transactional currency or MoE) rather than in gold (the MoS)?

Blondie: In FG, "If people hold a large portion of their savings in the form of the MoE" another actor who can see this (such as the MoE issuer) will remove this extra value from the MoE by exchanging it for gold, and thus the goldprice will flag this "hidden inflation"; because it ain't hidden from everybody.

http://fofoa.blogspot.com/2012/06/debtors-and-savers-2012.html?showComment=1340761220007#c6808108213652909813

Q But don’t we already have freegold? eg: gold is floating against all currencies today.

No, under Freegold, gold will float but will also be stable.

http://fofoa.blogspot.com/2011/02/how-is-that-different-from-freegold.html

Q Is gold “honest money” ?

“Honest money is simply money that does not pretend to be something it is not. And the only way you get there is with "two monies." One that is a primary medium of exchange but does not pretend to also be the primary store of value... And a second one that is the focal point primary store of value, but does not pretend it can also be a primary medium of exchange at the same time. [FOFOA] http://fofoa.blogspot.com/2011/05/return-to-honest-money.html

Q Is gold money?

“of course gold is NOT money! The true and pure concept of money is basically credit. More specifically, it is the recording of current balances of credit”

“In contrast to money is the pure concept of wealth.”

http://fofoa.blogspot.co.uk/2012/09/deutsche-bank-explains-why-we-hoard-gold.html?showComment=1348098579372#c162792963518644529

Q Why can’t gold be used as a medium of exchange as well as store of value?

FOFOA's dilemma: When a single medium is used as both store of value and medium of exchange it leads to a conflict between debtors and savers. FOFOA's dilemma holds true for both gold and fiat, the solution being Freegold, which incidentally also resolves Triffin's dilemma.

http://fofoa.blogspot.com/2010/07/debtors-and-savers.html

Q But isn’t Freegold the same as the Gold standard?

http://fofoa.blogspot.com/2011/02/how-is-that-different-from-freegold.html

Q How will the transition to Freegold occur?

credibility inflation (financial product hyperinflation) leads to consumer price hyperinflation (collapse of confidence) which leads to monetary base hyperinflation (govt. response).

“As the price of gold in USD becomes unknowable, the price of gold in Euro will skyrocket”

http://fofoa.blogspot.com/2011/03/more-freegold-fodder.html?showComment=1300240045376#c5329340695797155972 and the following comments [FOFOA].

Date: Mon Nov 03 1997     07                  03 1997     07      :31     Reify( @ANOTHER ) ID#413109:    

The price of the metal in currency terms will be made for all to see as it moves quickly upward for a very short period of time ( 30 days )... At first the US$ and gold will go up together against all other assets

Date: Sat Nov 01 1997 22                  01 1997 22          :43 *ANOTHER(THOUGHTS!)*ID#60253:

The third world markets are the first to go as their currencies are crushed time and time again. Europe will be next, closely followed by the USA!

        Date: Sun Nov 02 1997     23                  02 1997     23      :06     JTF( @Home- ANOTHER's Comments ) ID#57232:    

the price of oil in US$ terms is about to roar! It will crush the Pacific Rim and South America. It will drive the US$ sky high in terms of other major currencies but the dollar will collapse in terms of gold! Short term interest rates in the USA will be driven thru the floor much the way they have been in Japan from the early 90s. This will be done to combat a imploding equity market. Long government bonds will almost stop trading as their yield soars from the oil price fears of "inflation"! Because of todays "new digital paper markets" this entire act will be played out in 30 days or less. Yes, you are right! During that time we will have inflation and deflation

the oil states, they WILL bid for gold with oil! The BIS will do the only thing they can, halt all trading and declare gold a "world oil currency"

Date: Fri Nov 28 1997 23:29 *ANOTHER(THOUGHTS!)*ID#60253:

Q What do you mean by “all financial wealth  will go to zero”

I think it is mainly debt-based assets that will go to zero because their numeraire will be hyperinflated. Even if interest rates were to skyrocket they’d go to pretty near zero. Equity assets will suffer the ravages of economic hardship brought on by the dollar’s collapse, but you’re right, they won’t lose all value.[...]

http://fofoa.blogspot.com/2011/06/from-treasure-chest.html

Q When will the transition to Freegold occur?

Date: Sun Oct 19 1997 23:08 *ANOTHER(THOUGHTS!)*ID#60253:

Watch oil! If it rises much and gold isn't sold off then the game is over

Date: Sun Nov 02 1997 21:52 ANOTHER (THOUGHTS!) ID#60253:

The great mistake by the BIS was in underestimating the Asians. Some big traders said they would buy it all below $365+/- and they did. That's what forced LBMA to go on a spree of paper selling! Now, it's a mess. At some point the fire in Asia will drive all of them into gold. It will end at that time.

Q What is the amount of paper gold v real gold in the LBMA?

“...the paper gold trade within the LBMA bullion banking system...  by a recent LBMA survey, was around 250 times larger than the flow of new gold from the mines. That's a total turnover in the LBMA (sales plus purchases) of 5,400 tonnes every single day. That's the equivalent of every ounce of gold that has ever been mined in all of history changing hands in just the first three months of 2011” FOFOA

http://fofoa.blogspot.co.uk/2011/09/once-upon-time.html

Q What are the major signs that will indicate Freegold is coming (soon)?

Tue Nov 25 1997 10:06 ANOTHER (THOUGHTS!) ID#60253:

"support the dollar with oil and the currency system works" "fail the currencies and the dollar will come off the oil standard and the BIS will reset gold to $10,000+ with many conditions"

That is why they continue to accept the dollar as a reserve. If Japan or any other COUNTRY sells US treasury debt it's all over!

At first the US$ and gold will go up together against all other assets! Another

Q Why does oil back the dollar?

JR: The dollar is backed by oil because the dollar acts as a Store of Value as long as you can get gold for it.

Another: understand that for oil to back the dollar, the dollar must find value in gold … Cheap oil prices means oil doesn't get as many dollars and can't get as much gold. Which means bye bye $IMFS as reserve currency. Date: Sat Mar 07 1998 13:08 ANOTHER (THOUGHTS!) ID#60253:

Q Would the use of the Euro to price oil a threat to dollar hegemony (as argued by William Clark and others)? And the corollary: did the US invade Iraq to prevent this from occurring?

This theory “…at odds with A/FOA” [FOFOA]

You can't take exorbitant privilege, it must be voluntarily given.

 "Oil backing" does give a currency usage demand, but oil backing is an effect of being the reserve currency, not its cause. The cause is the choice of foreigners to support that reserve role, and that choice leads to oil being priced in dollars. The $IMFS is simply dying of natural causes, old age as it were. It's at the end of its timeline. It is not dying because Saddam wanted to price his oil in euro and now that they killed him that threat is gone.

http://fofoa.blogspot.co.uk/2012/04/peak-exorbitant-privilege.html?showComment=1334644065800#c6577323898328953058 FOFOA and following comments

Q What will cause the end of the dollar and the run to an alternative currency (Euro)?

"Breaking the dollar's hold on world reserve status means forcing it into a major price inflation at the end of its timeline. This is done by tying the hands of policy makers so they can only create (pump) more dollar assets into the world system. That "tying of hands" is done by creating for the first time an alternative currency structure that does not fail from continued dollar "crisis strength" or "crisis weakness". The world economy will run to just such a system as their current system (the dollar) fails."

the mass of this transition will not begin until the US has clearly embarked on a slowdown. And that slowdown, energy induced as it is, will, this time, force the fed to fight it with a super inflationary buyout of anything and everything that defaults. “

FOA Goldtrail1

Q Why doesn’t the US simply revalue its gold from $42.22 to a much higher value?

FOFOA: http://fofoa.blogspot.co.uk/2011/06/open-letter-to-ron-paul.html

FOFOA: see “Gold is off the table” in :http://fofoa.blogspot.co.uk/2009/08/confiscation-anatomy-different-view.html

Q What will happen to oil producer stocks post-Freegold el

St.One writes (h/t Woland): http://fofoa.blogspot.co.uk/2009/08/browns-bottom.html?showComment=1250105233074#c6068860251934326383

Q Who is the “Big Trader” that Another refers to?

FOA: “The HK / China central bank system, also known as Big Trader” h/t RLP

Q Who are the “giants” Another refers to?

FOA (9/25/99; 21:12:34MDT - Msg ID:14393): “There is actually quite a large group of [giants]. Nothing is written because they are very private”.

"It is not simply some entity that produces more than it consumes. That OF COURSE is a requirement for being a Giant. But there is more. It is an entity that has VAST excess wealth and they save it in physical gold."

ANOTHER: "I ask you, how many of your bars in tonne? This is the small purchase size [for giants]" FOFOA: “I'm going to go out on a limb and say, conservatively, that there are probably "tens of thousands" of these so-called "giants" in the world.”

Q There are about 170,000 tonnes of gold in the world, owned by giants and others. What if they all decide to sell it? The price will crash!

the intergenerational Giants who hold a great deal of this physical gold have no need to ever sell it. This is a key concept you might want to stop and ponder.

http://fofoa.blogspot.co.uk/2012/06/debtors-and-savers-2012.html

Q What about other precious metals such as silver, platinum, copper... ?

http://fofoa.blogspot.com/2010/12/kicking-hornets-nest.html

http://fofoa.blogspot.com/2010/12/focal-point-gold.html

Q Isn’t silver just “poor man’s gold”?

FOA (9/25/99; 12:28:42MDT - Msg ID:14356)

Which is more affordable $100 of gold or $100 of silver? Even if gold was $1,000 an ounce, why then, at that time would $1,000 in silver be more desirable as a "poor man's gold"?

Aragorn III (9/26/99; 2:53:37MDT - Msg ID:14408)

“the price of scrap iron is quite low...is this then the "gold" for the most wretchedly poorest of poor men, as you say silver is "gold" for the wealthier version of poor men”

Q If gold becomes so valuable, how will it be used for small transactions?

"if needed", fold will be alloyed in coins for the very smallest of transactions

FOA (9/25/99; 19:11:59MDT - Msg ID:14375)

Q Will Gold be taxed under Freegold?

http://fofoa.blogspot.com/2011/03/indicium.html

During that time, a gold stock in the hand will not trade on an open market! And the government of the country, of the land, of the mine, will no doubt speak with you of new taxes on GOLD!

Date: Sun Dec 07 1997 18 07 1997 18      :45 ANOTHER(THOUGHTS!)

ANOTHER: Gw, I would say, all forms of physical gold is good to own. Even the rare ones offer the "art form", yes? Even in war, the art work is looted first, then the jewels, and always food. I prepare for not the war of men, but the war of currencies! This conflict will bring forth a new concept for many: "western governments will encourage people to hold physical gold"! When the Euro has defeated the Dollar, citizens will be asked to use gold as a savings, for holding the Euro will be frowned on. Gold will not bring your "capital gains tax" as the mines will be taxed to compensate.

Date: Sat Mar 07 1998 23:37

ANOTHER (THOUGHTS!) ID#60253:

Mr. Mozel,

The USA placed a special "windfall profits" tax on domestic oil during the last major rise in prices. I do think the oil stocks would have shown a greater value had this tax not been in place. Because gold will soon become a currency, mines will be taxed in a much greater way. Also, domestic mines will be asked to sell directly to the treasury at the "preceived commodity value" value of gold, plus an operating margin. As no private company will be allowed do your treasury job, "produce money". Gold in the hands of the public will be thought of as a good thing, as citizens are asked to "pull own weight" as the government is much under.

Q What will happen to miners during or after Freegold? Will they receive a windfall profit as POG sky-rockets?

FOFOA: the mines will be treated in one of three ways: 1. They will be nationalized as gold in the ground will suddenly be viewed as national reserves (unlikely). 2. They will be forced to sell all production to the government at a low "commoditized" price (less likely). 3. They will be able to sell to the public at market prices but will have to pay a windfall profits tax and deal with many restrictions (most likely).

http://fofoa.blogspot.com/2011/12/unambiguous-wealth.html?showComment=1322888665472#c4872613172909940212

Q How does gold in the hands of individuals inside a currency zone strengthen that currency?

Under freegold, private gold is as good as official gold, and is redeemable for that currency anywhere - thus a currency is fully backed by private as well as official gold within that zone.

It is not necessary for this fact to be publicly understood, but is fait acompli, a consequence of the flow of gold from net consumers, and to net producers.

http://fofoa.blogspot.com/2011/04/reference-point-gold-update-2.html?showComment=13025

79561836#c6412652913518473681 and subsequent posts

Q But there is not enough gold in the world to use as currency

As some say "not enough gold to use as a currency", I say "gold not valued high enough to use as currency". At a high enough value ( price ) it is an excellent currency!

Date: Sun Jan 11 1998 01:16 ANOTHER (Thoughts!)

Q But “the elite powers” won’t allow hyperinflation or freegold to occur because it’s not in their interest.

“You see, those Power Elites that Rick thinks are going to support the dollar and its $169 trillion burden (excluding derivatives) simply to make sure you'll work off your $9 trillion dollar mortgage at today's purchasing power are the same ones that will resist personal austerity measures the most. And as all good deflationists know, you simply cannot resist the irresistible without breaking something. And what they will ultimately break in their competition to maintain lifestyle is the value of the dollar, which will actually break quite easily due to the mountainous (think: landslide) shear stress applied to it right now.”

http://fofoa.blogspot.co.uk/2011/04/deflation-or-hyperinflation.html

Who are the elite?

Q: **Who does BIS really represent?

A: "old world, gold economy, as viewed thru modern eyes" or "way to move from US$ without war". [Another]

Q But the SDR will be used to back the dollar

“The idea of any "basket" of finite commodities used to back a "super-sovereign currency" is this same supposed "perfect vehicle" as the old gold standard....Any "commodity basket" currency will ultimately be inflated beyond the commodity itself, punishing those who save that currency as if it truly represented those commodities.” http://fofoa.blogspot.co.uk/2009/10/your-own-personal-freegold.html [h/t Matrix Sentry]

Q Doesn’t storing one’s savings in gold deprive the world of your productivity/debt?

No, just the opposite,it preserves it.

http://fofoa.blogspot.com/2011/04/winner-takes-gold.html FOFOA’s response to Charlie Munger

Also: http://fofoa.blogspot.com/2012/02/glimpsing-hereafter.html

An extended response to the MMT suggestion that savings above "a certain level" are a "burden": http://fofoa.blogspot.co.uk/2012/06/debtors-and-savers-2012.html

The difference between buying financials and buying gold is that, when you buy financials you are giving your money to someone to spend who has not yet earned it in the physical plane. They have not produced in the past for that purchasing power. They are pulling that purchasing power in from the future. But if you buy gold, you are giving your money to someone to spend who has earned it in the past. They have already produced something to acquire that purchasing power. In other words, by buying financials you are, in essence, contributing to the lowering of lending standards which leads to asset bubbles

http://fofoa.blogspot.co.uk/2013/08/my-candid-view-part-1.html

Q Another and FOA were writing over 10 years ago. How do you know they’re still correct, since the global situation has completely changed?

Q What makes you think the Euro survive the transition to Freegold?

1. “[The Euro] is the first currency that has not only severed its link to gold, but also its link to the nation-state." Duisenberg, 2002 http://www.ecb.eu/press/key/date/2002/html/sp020509.en.html.

2. It has "severed it's link to gold" (Wim Duisenberg again). Presumably he meant this in terms of a fixed exchange standard.

3. ECB reserves are primarily in gold not foreign currencies.

Q Is the Euro “backed” by gold?

No, but it is linked by being marked-to-market and freely exchangeable. The Euro is the medium of exchange while gold is the reserve. http://fofoa.blogspot.com/2011/07/euro-gold.html?showComment=1310696000456#c8374957135736683744 comment by Costata

Q But I thought “All paper will burn”? Why would we then keep using the Euro, which is paper (fiat)?

“In working on this project, I was personally shocked when I discovered that we absolutely NEEDED paper currency in order to set Gold free.”[Aristotle] Paraphrasing Aristotle: Under Freegold, gold must not be lent, therefore fiat [“manos”] is required (will evolve) for the purpose of loans. “Such a system is not prone to shocks (bank runs and currency crises, etc...) because at all points the assets may freely come into balance against each other [through gold] in the free markets of the world” [Aristotle]http://www.usagold.com/halldiscussion.html

Q What is the purpose of gold in the ECB reserves?

the Eurosystem gold reserves act as a shock absorbing system for the Euro. As Euro issuance increases the gold “price” of the Euro falls but the value of those gold reserves improves their reserve position - the “latent backing” of the Euro.

... the Euro is designed to withstand, if not benefit from, a rising Euro gold price without diminishing its use as a medium of exchange

http://fofoa.blogspot.com/2011/07/euro-gold.html?showComment=1310696000456#c8374957135736683744 and subsequent comment by Costata

Q What will the effects of transition to Freegold be on the euro?

The third world markets are the first to go as their currencies are crushed time and time again. Europe will be next, closely followed by the USA!

Date: Sat Nov 01 1997 22                  01 1997 22          :43 *ANOTHER(THOUGHTS!)*ID#60253:

Q But haven’t you read anything about European politics? The Euro is doomed. Doomed, I say!

FOFOA: http://www.blogger.com/profile/17152544684132776239

“The important thing is that the euro is positioned for the free flow of physical gold at equilibrium with fiat currency for important surplus producers like oil. Contracts will be made, denominated and settled in such a currency post punctuation—inside and outside of that currency zone. That's what makes a future reserve currency. Not its store of value right now. “

“Spend some quality time with the Eurosystem's balance of payments and marvel at how remarkably balanced Europe is with the rest of the world. Then compare that with the US balance of payments. “

FOFOA:  http://fofoa.blogspot.com/2011/07/forum-1600.html?showComment=1311049362056#c5333697023963140198

“It is Goldman Sachs and the 66-year old $IMFS that has enabled the circumvention of the adjustment mechanism in Europe, not the euro”

http://fofoa.blogspot.com/2010/05/hair-of-dog.html?showComment=1273955811368#c1043310976105431888

Q But won’t Greece and others be forced to quite the Euro?

Greece can be saved: “At a high enough price, a small amount of gold can (and will) flow in the other direction, from Greece into Germany, and if its value exceeds the (net) trade difference between Germany and Greece” in http://fofoa.blogspot.com/2011/11/moneyness.html

Q What if the Euro does collapse - is Freegold out the window?

ANOTHER: If the Euro does fail, gold will become the "world oil currency". We do know this full well, "the Central Banks will horde all gold and buy any offered if this new European currency does not work" and "debt currencies fail". If this does comes, no paper asset of world economic system will survive, nothing! Not a good thought, no?

Q Under Freegold, how will the purchasing power of the currency regulate the debtors in the case of the Euro? ie: Will individual European countries be “tied” to the power (or weakness) of the Euro?

The market will increase rates on that government’s soverign bonds, and “Because the currency is part of a larger bloc that prevents local depreciation and the cultural austerity resulting from inflation of import prices, the imposed cultural austerity of less purchasing power must come in the form of the higher taxes imposed by the government” [Aristotle] http://fofoa.blogspot.com/2012/02/superorganism-open-forum.html?showComment=1328928408858#c2872717221489070342

Q What will life be like during the transition to Freegold? Will it be like Mad Max?

Any gold trading paper will evaporate in the heat of fire now starting to burn. I tell you now, when the currencies are at nuclear war, GOLD WILL NOT TRADE

Date: Sat Nov 01 1997 23                  01 1997 23          :55 *ANOTHER(THOUGHTS!)*ID#60253:

FOA: There will be full on, flat out, hyperinflation [http://www.usagold.com/goldtrail/archives/goldtrailthree.html]

FOA: Make no mistake, the entire internal US sector can and will function as its currency runs a price inflation just like these third world countries. We will adapt as they have, by dropping our living standard accordingly and adopting the Euro as our second money." (4/19/01; 17:50:29MT - usagold.com msg#65

It will not be the end of all things, only the changing of most things in "western thought"

Date: Sun Dec 07 1997 18 07 1997 18      :45 ANOTHER(THOUGHTS!)

All nations will use the same digital currencies for all trade, but will also add gold to the value. The world will not end, it will change

Date: Sun Jan 11 1998 01:16 ANOTHER (Thought!)

Q Will the US dollar continue to be used as inflation drives its value to nothing?

Plan on Americans using inflating dollars as their local transactional currency and Euros as their second currency” “I never expect the dollar to disappear.” [FOA].

How is QE inflationary?

http://fofoa.blogspot.co.uk/2013/08/my-candid-view-part-1.html from “Base money is easy”...

What is “base money”?

Base money is simply bank reserves aka central bank liabilities. "The circulating money supply" is made up of all credit money plus the cash that individuals have taken out of the bank. FOFOA

Q Wont the US fight to maintain the USD hegemony and prevent Freegold?

the US tanks are not a factor in this

 Date: Sun Jan 11 1998 01:52 ANOTHER (THOUGHTS!)

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.”

Another in http://fofoa.blogspot.co.uk/2010/10/its-flow-stupid.html

Q Will we return to a gold standard?

"I am afraid I am convinced that the hope of ever again placing on government this discipline is gone.

…My conviction is that the hope of returning to the kind of gold standard system which has worked fairly well over a long period is absolutely vain.

…it is the demand of gold for monetary purposes which determines that value of gold…

… I have said that it is an erroneous belief that the value of gold or any metallic basis determines directly the value of the money." F.A. Hayek, 1977. http://mises.org/daily/3204

http://fofoa.blogspot.com/2011/05/return-to-honest-money.html

The myth of a gold standard. (“A gold standard isn't worth the paper it's written on”).

http://www.lewrockwell.com/north/north177.html

Q What about “real bills” (Fekete)?

Introduction of real bills would require an active approach to re-monetize gold, whereas Freegold only requires passive patience until Gold is fully de-monetized.There are inherent contradictions in attempting to make gold fulfill the dual roles of store of value and medium of exchange

http://fofoa.blogspot.com/2009/11/money-talk-continued.html

http://fofoa.blogspot.com/2010/12/value-of-gold.html?showComment=1291461170647#c6968833014166155934 and nearby comments

Q What is GOFO?

Gold Forward Offered

http://www.zerohedge.com/news/2013-07-08/historic-inversion-gold-gofo-rates-turn-negative-first-time-lehman

http://www.lbma.org.uk/pages/index.cfm?page_id=55&title=gold_forwards&show=2013

Q Will Freegold DEmonetize gold as FOA said, or REmonetize it as Moldbug says.

FOA's demonetizing really means de-currency-fying, or removing any sort of link between gold and currency that would cause a direct correlation between their prices. Moldbug's remonetizing means gold moving from a commoditized role into a wealth reserve or store of value role FOFOA

Q Will Gold be confiscated like in...

http://fofoa.blogspot.com/2009/08/confiscation-anatomy-different-view.html

Q Does the Fed really have any gold in Fort Knox?

http://fofoa.blogspot.com/2011/04/forum-201.html?showComment=1303097097356#c7502113410434845011

Q Why doesn’t the US just sell all its gold?

The US gold hoard is now off the table.if the US ever put gold back on the table… the BIS would call in all of its outstanding claims in gold at the rate of $42 per ounce. And.... other entities would have legal claims for gold...The US government will never take this risk!

http://fofoa.blogspot.com/2009/08/confiscation-anatomy-different-view.html

Q How does Modern Monetary Theory (MMT) fit with Freegold?

http://fofoa.blogspot.com/2010/11/dilemma-2-homeless-dollars.html?showComment=1289101884456#c1341010246137159068 and subsequent comments by FOFOA

Q FOFOA’s opinion on Bill Still's latest 'The Secret of Oz' video ?

http://fofoa.blogspot.com/2010/08/credibility-inflation.html?showComment=1283046804145#c1517629770097809735

Q What’s behind the Moniker “Another”?

ANOTHER: “Sir, It was found far in the past. The true value of gold was often taken from view, with purpose. Today, paper debt currency does price gold as little and value all other assets as much. History has proven that " your assets never offer a return as great as your paper money say it does". As such, in time real money does always bring a true gain. Many will find our wealth of the future has been with them always, in Another form, Gold!”

Q What was the purpose of the “strong dollar” policy?

The Strong Dollar Policy has always been about controlling the commodity markets at the margins to enable a global expansion of the US dollar and the US REACH!

http://fofoa.blogspot.com/2009/07/how-dollar-made-it-this-far_05.html?showComment=1246991420853#c2042618413674368381

Another said they justified the "gold as a commodity" (strong dollar) trade because they thought it would induce the mining industry to produce greater and greater quantities of gold

Another Mon Feb 16 1998 14:40 in http://fofoa.blogspot.co.uk/2012/06/debtors-and-savers-2012.html

How did it work?

The BIS leads the creation of a paper gold market that will lower the world price of gold to the extent that it remains above "production costs".

Addendum

An illuminating conversation between FOFOA and Ender Sept 2008

http://fofoa.blogspot.com/2008/09/freegold.html?showComment=1222188480000#c3518291633800660327 and following conversation on the topics of :

Freegold,

What is more valuable, gold or fiat?

On the function of money, and the reason fiat competes for useage. http://tinyurl.com/3u4xzca

The Strong Dollar Policy - how does it function? (A: Strong vs gold) http://tinyurl.com/3nj6bfx

How does the fed make money? (A: interest) http://tinyurl.com/3rufj3c

Can the dollar stay strong in gold? Will other currencies remain weak in gold? Who has the gold?  http://tinyurl.com/3l4qdkm        

How does a currency gain strength? http://tinyurl.com/3nqbdxy

function of a currency is 90-95% of its value

at strong dollar prices, there is not enough gold in the world to settle claims

[In the future] any currency that will buy more gold in the future than today will be seen as a strong currency. http://tinyurl.com/3jnoull

What stopped FreeGold from happening between 1998 and 2001? http://tinyurl.com/3svd5sy

Interesting graphs

http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2012/01/Custody%20Account%201.12.jpg