[ Update - November 15th 2012. To anyone reading the link from TFMetalsReport, you're being led around by a troll. Yep. Analyze closely what was said by user JY896 and you'll find that this link, the graphs, and the assertions were expressed entirely out of context. Whoever it is, is trying to misrepresent the argument. Latest freegold discussion here: LINK Cheers, Warren]
[ Update - November 30th 2013. So JY896 has a long memory and saw my counter here at the top of a relatively unimportant article and rolled it out here to discredit me (link) .. cool. His main contention is that I didn't give the original source of his original comment here (link to TFM). I stand by my assessment - the original comment was Freegold Trollism, was certainly out of context and did not fairly address anything I said here. His comment (on TFM) had the misfortune to appear at the height of our Freegold Troll infestation on Screwtape Files last year and at the time I (wearily) figured I would nip it in the bud because I'm sick and tired of FOFOA's stuff being taken out of context as well as social media manipulation (or just simple F.U.D. spreading). It's not my fight but I am still interested in the timing and matters discussed in my article here, I think the
fact we're viewing things in 'Internet Time' just makes it seem a whole
lot slower. Cheers, Warren ]
Having given up waiting for Martin Armstrong's rebuttal of Freegold, occasionally I raise an eyebrow when his writing contains some of the same titles as some FOFOA articles (like the classic 'It's the Debt Stupid'). Most of Armstrong's ideas appear solid, but like my friend at the Christmas party he believes the Euro system is doomed, so I take what he writes with a healthy amount of salt and wonder what percentage of his views are incomplete. That there is no unified consensus between the heavyweights should be a cause for concern - the diversity of opinion means it is mathematically impossible for 100% of a single person's views to be proven 100% correct, 100% of the time.
But I do like Martin's latest: "Financial Border Controls" [link] (a solid read), in which he points out the primary cause of today's economic ills as being an out-of-control government, which lacks the ability to contract and must gobble up capital and productivity in order to increase it's bloated girth. This is easily documented in the home - where the simple task of renewing car registration includes the following charges: 'stamp duty, goods and services tax (11%), statutory insurance scheme levy, nominal defendant levy, hospital & emergency services levy, administration fee, Traffic Improvement fee', or where the Tax Office suddenly harasses my elderly mother regarding a property sold more than 5 years ago, citing a clause that a property over 2 acres in size has a different capital gains tax rate. Even the accountant had never heard of that one and had to look it up. No doubt they need the extra funds to cover up the various mis-allocation of capital in the public sector, like the Queensland Health Payroll disaster where a $219 million overhaul of the payment system resulted in workers not being paid AS WELL AS overpaying other staff by at least $60 million. It will take at least another $20 million to clean up. So you can see why the Tax Office is doing data mining and going after my mother for extra revenue. This whole process is exactly what Armstrong writes about. I don't see the monetary system failing - I see that it is working very well indeed for the people who run this gig. In fact, and they will continue to keep it running this way at your expense, as long as they are able to coerce you into surrendering your savings and productive effort.
I wanted to mention Armstrong's piece, not just because he does some great commentary on Roman History, but because he includes (again) the chart from 'Decline & Fall of the Roman Denarius Based on Silver Content':
... or the old semi-legible version:
... which is this chart which FOFOA uses as the basis for his inverted waterfall / orbital launch pattern, simply by turning it upside-down:
... which projects the movement of GOLD during its Freegold transition [link].
Just wanted to point out that the collapse itself took place over decades - something as big as the Roman Empire doesn't just disappear overnight (despite the problems), and in my view neither will the modern constructs of the US Dollar. In a Giants time-frame, the movement over decades would be appropriate. It's what we've just seen in the last 11 years with the gold price. But applying a slightly-longer-than-expected timeframe yields all kinds of goodies - this doesn't require the 'physical' and 'contract' price of the metals to decouple. It still allows the investment banks to slice and dice newbie investors and scalp value like they have done for years, without affecting the core trend. It also allows for FOFOA to be right, and parts of the 'currency is doomed' crowd (but probably not in the apocalyptic way they anticipate, since a longer play has the same effect from A to B, but society can cope better with the disruption).
So I figure in 100 years time, they'll see that Freegold movement on the 100-year charts and they'll say "oh my goodness, look at that period where the value got sucked out of fiat currency due to credit expansion and where gold took over the store of value function". And chapters will be dedicated to FOFOA's writings, but they'll nod their heads sagely with the knowledge that during that same period, the contract markets, though manipulated and volatile, still formed part of the fabric that forms the metals markets. Perhaps too, Turd Ferguson will get a mention in that history book, but they will still look up from that page and toast a portrait painting of the great GM Jenkins who in the early part of the century provided the legacy of their wealth through successful negotiation of the precious metal charts.
The one-ounce Christmas Dinner bet about the 'end of the euro' is a good example of how some folk will in the short term become 'richer' at the expense of another, based on an interpretation of the market and world events. At the minute, the best 'safe-haven' for your capital seems to be 'wherever the government can't get it's dirty mitts on it'. This includes silver, gold, and hard assets, but requires vigilance to protect yourself from whatever random liabilities will be thrust upon your balance sheet. That includes a consideration about the time-frame for conversion of your metals to fiat, where required.