Fascinating.

I’m not sure I really understand this post.  But to the extent I might, I think the author, who styles himself “FOFOA”, is claiming that we are already experiencing an historic bank run with respect to what is often termed “physical gold”.  Physical gold contrasts with the “paper gold” or perhaps “virtual gold” that is most often traded on “markets”, although last time I checked I thought the London market was different.

I’m going to have to re-educate myself on some of these gold-monetary dynamics before I can speak coherently about this.  But in the meantime, I highly recommend the linked post to those readers who might have some background in markets and trading.

Of course this may have relevance to the little 28th amendment project I’ve been engaged in, so it is likely I will have to delve deeper into this at a later time.

 

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5 Comments

Filed under financial crisis

5 responses to “Fascinating.

  1. You are having a hard time with gold because you look at it as a commodity. Gold, through the ages, has not been considered a commodity. People who treat gold as a commodity, measured in fiat currency, stand to lose everything.

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    • I don’t think I look at gold as simply a commodity. If you read the amendment I drafted, I’m basically figuring gold is money. In any case that blog post is fascinating, but dense. At least for me.

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  2. An Old Man

    I most strongly suggest that you put in a great deal of reading and learning from FOFOA. The concepts that he discusses are the most useful discussion of money in the net. At that point, you will likely see some holes in your amendment. Then again, I wouldn’t expect for a lawyer to get it right on first crack 😉 .

    On a more general note, I applaud the cause for which you have started this blog. Unfortunately judgeships are for sale just like everything else in this society, and power is more and more concentrated in a few individuals and organizations. Part of the appeal to the Freegold concept is that it could really create a more level playing field worldwide. Currencies would float against gold based on what the local region is actually doing. Makes sense from my vantage point.

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    • Thanks for the encouragement, but whether this blog will ever be anything other than the proverbial voice crying in the wilderness is a question I often ask myself.

      Regarding the “freegold” theory, I have to say that there’s more than a little serendipity going on here. I’ve been something of a student of the gold market for years, and the historical monetary role of gold. But I have never come across that particular theory before, other than that it is generally what gold bugs believe, but usually not so explicitly.

      Yet by accident the freegold concept is very much aligned with the 28th amendment that I have proposed on this blog. Freegold sees a massive upward revaluation of gold after the “collapse”. I have proposed, as part of a return to the gold standard, that gold be revalued to something in the area of $27,000 per ounce. But it wouldn’t surprise me at all if it worked out to be much higher.

      Nevertheless, whether there is a “collapse” or not, I think the world will still have currencies. I noted elsewhere (in a post entitled “Gold Standard”) that the purpose of currencies is to establish a convention limiting the otherwise infinite divisibility of gold so that things can be rationally “priced”. Otherwise divisions in amounts of gold would get smaller and smaller without end as people haggled and trade would be impeded rather than facilitated.

      FOFOA sees basically the same thing happening without decree. But it not only should be by decree, it must be by decree. It’s one of the basic functions of the law to define a monetary unit of account.

      Law trumps economics, or we don’t really have law. And civilization itself requires law.

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      • An Old Man

        FOFOA makes a compelling case that FREEGOLD will come about through natural, ‘organic’ processes. Gravity pulling everything downhill. What was unique for me as I started to digest his material, is the notion that gold will FREELY float against all currencies, separating out the ‘store of wealth’ function from the ‘transaction’ and ‘denomination’ functions. And you and I BOTH know enough to know that ‘law’ is a very loose concept when taken out of the hands of the Divine and entrusted to flawed human beings. It’s in our nature…

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