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Posted on 23 Apr 2015 by BullionStar

Introducing FreeGold

In my last post, US Dollar as Reserve Currency - Credibility Inflation, I briefly touched on a few ideas relating to FreeGold such as the demand for the US Dollar as a savings instrument temporarily propping up the fiat/debt/money system.

What is FreeGold? 

FreeGold is not a single theory but an understanding of how past events have formed a gold trail which will significantly change our monetary system in the future. It's a set of all-encompassing explanations tying together trade and geopolitics with the monetary system. The foundation of the ideas constituting FreeGold was laid by two writers, Another and Friend of Another (FOA) and is built upon today by a third contributor, FOFOA.

One of the key tenets of FreeGold is that the monetary functions of Medium of Exchange (MoE) and Store of Value (SoV) can, should and will split, where:
1. Fiat currency will continue to be used as Medium of Exchange.
2. Gold will be used as Store of Value.

In my previous post, Gold or Fiat? That is the question..., I described how lending expands the money supply, whether in gold or fiat. When savers save in the same medium as is used for the Medium of Exchange, a collapse always follows money expansion.

Under gold standards, fiat and gold are always tied together in some way. Reintroducing gold as the international settlement medium for net debts doesn't however necessitate fiat to be tied to gold.

Under FreeGold, gold is reintroduced as Store of Value but without being tied to fiat. By using scrip money/fiat/debt for short term settling but using freely floating gold for long term settling, the horrendously skewed trade balances we see today will be a memory of the past. Gold is thus set free from its role as medium of exchange, thus the name "FreeGold".

Under a FreeGold system, politicians will still be able to overpromise and overspend  in the short term but the value of their monetized debt (money) after fiat has hyperinflated, as measured in gold, will be minuscule compared to today.

Debt is the Essence of Fiat

Fiat money is created as debt out of thin air. And there's a lot of it created.

The US Dollar has already been hyperinflated monetarily but it isn't visible yet in terms of consumer price inflation as the excess money created has been saved rather than spent on consumption. As long as the (non-US) world is buying roughly the same amount of US Dollar investments as the US trade deficit, there's no price inflation.

Capital flows can and will turn on a dime though. Just imagine how much (little) the US Dollar would be worth if the US Dollar depreciated to balance the US trade deficit.

The cause of the low price inflation we see today, despite the high monetary inflation, is the hoarding of credit. Credit implies future production revenue. What's the chance of future production living up to the debt it's built upon?

Put another way, saving of credit increases the purchasing power of money that isn't saved. The saved credit causes bubbles whereas price inflation is delayed.

The absence of price inflation is incorrectly interpreted by central banks as too little money supply when there is already too much. Their knee-jerk reaction is to lower interest rates further and inject even more money through QE, thus increasing the underlying problem even more. Banks are complementing this by lowering lending standards to expand their fractional reserve lending as much as possible.

The problem of too much credit competing for a limited pool of credible borrowers can't be solved by lowering lending standards and flooding the market with even more credit.

The credit must find vehicles to be hoarded into. This is creating massive demand for passive investments without adding any sort of productivity or innovation to the economy - a more realistic determinant of the health of the economy. Instead - to the detriment of the economy - we get bubbles, malinvestment, misallocations, debt saturation and unprofitability. Entrepreneurs which would have been successful in a sound meritocratic economic system are punished. Creating new innovative products have become secondary to putting companies on the investment markets. Companies even operate at a loss just to service debt, often with government stimulus as a substitution for keeping people off the dole.

Hyperdeflationary head fake

Governments around the world are fighting deflation labelled as evil. We are nowhere close to hyperinflation, right?


Hyperdeflationary pressure precedes hyperinflation. It's the loss of confidence in a deflation that triggers the hyperinflationary phase. In terms of gold as a unit of account, what's called a hyperinflation in a fiat money terms, is actually deflation, as gold typically strengthens its purchasing power when fiat currency hyperinflates.

The only reason the US Dollar is still holding up at this point, is its demand as a form of a savings instrument from the private sector. It used to be central banks providing structural support for the US Dollar but this structural support has ended. Surplus countries like China and Russia are no longer interested in accumulating any more US debt. They know it's worthless. Instead, they try to diversify as much as they can without imploding the value of their existing US debt holdings. They know the monetary system is going to reset and they are planning accordingly by accumulating real tangible assets generally and gold specifically.

So yes, deflationists are right in their analysis of the current environment but miss what follows next.

Hyperinflation is Guaranteed

With our current monetary system, US Dollar denominated (debt) assets are held as future claims on US Dollars i.e. held with a promise of the counterpart to deliver US Dollars. The problem is that cash or digital cash only makes up a very small percentage of the total money supply. When cash is claimed en masse, there is no cash to finance the redemption. As the cash doesn't exist, the government will have to monetize the debt with newly printed cash to avoid a massive hyperdeflationary depression.

When debt defaults, fiat money is destroyed. It's not the printing of new money that lead to hyperinflation. If that was the case, we should already have seen hyperinflation in the light of the excessive printing the last years. Think Japan! It's hyperinflation that leads to printing. Hyperinflation is just not more inflation progressively.

Depression and hyperinflation are built up in the same way. It starts with expanding the money supply followed by debt defaulting. When this is realized among the general population, there's a loss of confidence leading to further deflationary pressure. At this point, governments start to monetize debt at all cost. Whereas bank issued fiat debt money is elastic and can contract, government issued fiat base money (cash) can not. The issuance of inelastic cash coupled with the demand for that cash is what causes the hyperinflation, which in the end leads to the physical money printing.

Hyperinflation is thus the process of saving debt at all costs replacing debt with cash.

We can already see the signs - the beginning of the end - of a guaranteed hyperinflation.

One sign, is the excess credit created that is steadily siphoned into the stock markets, which delays the price inflation of real goods and services but cause massive asset bubbles.

Another sign is that governments monetize credit with newly created base money/cash.

Remember that strong deflationary pressure always precedes hyperinflation, which is exactly where we are now.

It's when the confidence in the economy is lost on a broader scale that hyperdeflation turns into hyperinflation with governments monetizing debt at all costs.

But what if they don't?

They will.

No country outside the gold standard has ever allowed a depressionary deflation to run its cause. The primary objective for a government is to get re-elected. If they can kick the can forward, they will. Sure, the coming hyperinflation will be destructive, but a hyperinflation may be less visible to the general population than a deflationary depression with immediate economic failure.

When the hyperinflation is coming, you don't want to be stuck with fiat denominated assets as all the empty promises will be exposed in daylight. Fake capital will be destroyed whereas gold will shine as the ultimate store of value.

How about the price of gold in a hyperinflation? Financial media, bullion dealers and investors alike are always ranting about the price of gold. Will it go up or down?

The price of gold is irrelevant. The price of gold has got more to do with how worthless the fiat currencies become. The only way to accurately measure data like e.g. food, assets and commodities is to do it in terms of gold. Gold needs to replace fiat currency as the unit of account for us to get a stable ruler.

That's exactly what you can do with BullionStar Charts. Measure e.g. S&P 500 in terms of gold. Are stocks always better in the long run? Not necessarily...

SP500 in Gold

Unless the physical gold market will be rejuvenated by the initiatives we see in China and Singapore, the hyperinflation may at first not be reflected by a rising price of gold on the paper markets. As the price of gold is set on the London OTC spot market and on the futures markets, it may very well decrease at first due to a loss in confidence of paper gold.

There may instead be a shortage of physical gold on the real physical market. If/when this happens, there will be a mass scramble into physical gold with the physical markets significantly revaluing gold to entice any physical flow at all. Having built a sound marketplace for physical gold trading, China is likely to take over the pricing power of gold and with it emerge as the new dominant player in the world economy.

Encapsulating all of this, FreeGold can be said to be the adjustment mechanism correcting the imbalances between the artificial debt/credit/paper system and the real physical world represented by gold.

Debts come due.

Do you want to sit on paper or gold when the monetary system resets. I know my choice (although the silver is substituting partly for the gold below:-)).

DSC_1858 (2)



Credit (gold?) to you for not only organizing the thoughts of Another and Friend of Another but for expanding and lengthening their visionary path to the future.

I've read your blog for several years and was a slightly provoked when reading that "no bullion dealer understand FreeGold" a couple of years ago (although I don't find the reference now). It took me a while to object as I've been busy building BullionStar following the gold trail in the following ways:

- BullionStar charts - Measure in gold (and anything else) as a unit of account.

- Launching this blogging platform used by our renowned precious metals analysts Koos Jansen and Ronan Manly.

- Acquiring FreeGold.com where we plan to assist in publishing information about the trail we're on.

Walking on this gold trail, we have an ambitious development plan for the future reintroducing gold as store of value and unit of account.

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  • B.

    Good for you, Bullionstar! Even the so-called ‘Titans’ in the anti-establishment circles that attracts gold advocates are fearful of even uttering the term ‘Freegold’. I won’t mention any names because they know who they are. There used to be a page on Wikipedia about it. First it was removed. Now Wiki doesn’t even acknowledge that it existed. I saved it. Let me know if you want a copy for your ‘research’. “We know where we have been. Let’s find out where we are going.” – Another

    • http://PeterPalms.com/capital peterpalms

      Thank you and please send me a copy of the former Wikipedia free gold article at Palms@peterPalms.com

      • https://www.bullionstar.com/ Torgny from BullionStar

        Yes, I’d like it as well. Please feel free to e-mail it to support@bullionstar.com and we can perhaps republish it. My colleague, Gustav, who is customer support manager at Bullionstar, and an avid reader/writer himself, also pointed out that there used to be a Freegold page at Wikipedia but that it had been removed.

        Yes, it’s unfortunate like you state that no one else is basically even mentioning FreeGold.

        At BullionStar, we are for an open debate presenting different concepts. Sometimes I feel that the, as you call it, ‘anti-establishment’ writing about gold is very narrated and we need to widen the debate further.

        Sure, FreeGold is a game changer compared to normal ‘gold bug’ ideas but I don’t understand the antagonizing with Austrians. It’s very helpful to have an understanding of especially the Austrian school but also the Monetarist/Keynesian schools.

        I think that some writers struggle with the polarization of options though as you are expected to be either a Keynesian or Austrian. Paul Krugman or Peter Schiff. It’s just that there’s more options…

        • LV


          At the 5th paragraph it reads:
          “Under FreeGold, gold is reintroduced as Store of Value but without being tied to gold.”

          It´s a typo? Or some obscure technicality.

          Keep up the good work, Bullionstar!

          • https://www.bullionstar.com/ Torgny from BullionStar

            Typo, thanks for pointing out. Fixed now.

        • B.

          Content sent. Also, I agree with your sentiment: balance is key in every aspect of life. Also, you may want to check out this relevent work and its source, http://www.goldstandardinstitute.com/documents/TheGoldStandardJournal30.pdf

    • SLK_R

      I would like to read the wiki freegold page too. Could u send me a copy? Slk350i@gmail.com, many thx.

  • http://roacheforque.blogspot.com Roacheforque

    You seem to have the crux of it my good man. I do believe that China plays both ends against the middle, and the “trap” set by LaGarde will be turned on its end and sprung upon the West. Always they try to dilute the gold with paper and spread the debt between the fiat exchange. This SDR will burn, though not without a fight. We watch!

    • Torgny from BullionStar

      Thank you for the support! I agree with your comments that China is playing both ends. The Chinese push for more power and inclusion in the SDR and LBMA fix is perhaps mostly posturing. The most important development imo is the gold marketplace itself that they are building and the internationalization of it providing a solid base for physical gold trading and a real price proxy. This is something they’ve been building quietly for a decade. It doesn’t require any marketing but will be there when fiat is collapsing. China is all about a strong core and taking control of the marketplace although not the market which is opposite to in the west to some extent.

      • http://roacheforque.blogspot.com Roacheforque

        Knowing what you have read, perhaps the question now pertains to the “currency in place” designed to absorb contractual dollar debt. Hard core Freegolders still see the Euro role as being paramount, but our world is changing. We never step into the same monetary river twice. Cheers!

  • Ros

    This is a very watered down account of even the most basic Freegold tenets. Furthermore, there are errors. My suggestion would be that the writer abandon FOFOA’s contribution to Another and FOA’s writing, for it is clear to most now that FOFOA has misrepresented and misconstrued a great deal of what the founders of Freegold wrote. It is not always easy going, but if you want to truly understand Freegold you must wade through as many times as necessary all Another and FOA had to say. Fortunately you will find their words to be a gift which keeps giving no matter how many times you read it. It is there in the original postings that you will find true enlightenment.

    • Sam Slaughter

      I don’t know anyone that thinks FOFOA has misrepresented freegold except for a few of the gold charlatans out there trying to sell something. I’ve scrolled the comments for years and haven’t seen anyone effectively use Another or FOA’s words against the current FOFOA message. I noticed you didn’t either. Maybe you are one of the charlatans.

      • https://www.bullionstar.com/ Torgny from BullionStar

        The purpose of our blog platform is to allow different bloggers to share their perspectives on the precious metals market and monetary economics.

        This blog post isn’t setting out to be an all encompassing representation of FreeGold. That would be rather difficult in one post… The idea is instead to share some the basic FreeGold tenets to raise awareness of its existence and thereby hopefully encourage more people to study further.

        Although, it’s fine and encouraged to discuss concrete details in this comment field, I won’t engage in or debate any polarizing debate between people/camps sharing 90+ % of their understanding but infighting personally. I believe it’s more important to raise an awareness for different concepts to more people.

        FOFOA is the only one I’m aware of even attempting to expand on the insights provided by Another and FOA. It’s not an easy endeavor but he’s doing a good job with his blog in my opinion. If you, Ros, or anyone else you know about cover the FreeGold tenets in better fashion, please feel free to share the content.

        • TimeToPanic

          Hi there.

          Actually, gold was freed in 1971, you my have noticed its price rose to $850 an ounce. The FOFOA version of Another’s tall tales is merely the latest iteration of goldbuggery, one that has attracted a very small but very devout following.

          The followers believe that gold will explode to new price levels once the unallocated London bullion market somehow disintegrates. They quote the draining of GLD as evidence of the squeeze on London physical gold bullion, so I wonder what they’ll say when GLD starts to refill over the next cycle?

          They used to trumpet the rising gold price, with FOFOA posting a nice table showing the price rising month by month. But then the price started falling, so they decided that too was a sign that ‘freegold’ was imminent (4 years ago now). Another/FOA did the same back in 98-99 though, it’s a common freegold ploy. How will they cope when the price starts to rise again?

          They have invented a magical post US-dollar world where everyone will save in gold, and gold can only ever be stable in price and rise gently for ever more (amen). They ignore long-term interest rate/inflation cycles, as well as the business cycle to reach this conclusion. History of course shows that the gold price will always be volatile in nature. But that doesn’t suit their dream. Interestingly, Another/FOA never suggested that gold would be a long-term stable asset for savers, just that it would be the best asset to hold during the dollar’s demise. No freegold supporter has ever produced a quote from the originals to back up their goldbug dream. Fascinating stuff, but pure fiction.

          Also, the original proponents didn’t spot that China joined the BIS, and so the entire plan changed forever. No longer was it to be a crash & burn for the dollar, instead a carefully managed transition to a multi-currency system. Of course, the dollar, yen, yuan and sterling will all devalue versus gold, as they have been doing for the past hundred years, hardly big news though.

          The freegold blog is left with just a few devotees these days. Anyone that dares to question any aspect of Fofoa’s dream is chased away, note his recent outburst because a couple of posters mentioned false flag operations. So many governments (the US especially) admit these operations, yet it is too ‘real world’ to suit the fofoa agenda. He likes to believe in a virtuous America, but one that has been cursed with the ‘exorbitant privilege’ of the reserve currency. So Building 7 at the WTC just collapsed because…..?

          Finally, the original Another/FOA postings (encouraging investors to buy gold) were hosted by a ….gold dealers website.

          Everything seems to come full circle, but you’ll still be waiting for the prophesied *event* in 20 years time, as the world is managed away from the dollar, via defaults, inflation and a rising gold price.

          For those with curious minds, do read fofoa posts from the start, and you’ll quickly realise it’s not worth reading the latter stuff.

          • Gene

            Anyone who is interested please check the blog out for yourself. WTC7??? Are you freaking kidding me??? Which butthurt former poster are you?

          • TimeToPanic

            So, Gene, why do YOU think WTC7 collapsed then?
            And that ‘plane’ that hit the Pentagon, with no ‘plane’ debris at all?
            Just vapourised I guess?
            And John McCain meeting with the ISIS guy? All very innocent?


            It’s fine to ignore facts, ignore reality, if it helps you to get through life, whatever. But to then make grand predictions about the future from a ‘head-in-the-sand’ position, really? Madness.

          • Sam Slaughter

            P1: Oh how sad…yeah the Nixon shock and freegold are not the same thing. A whole lot more than a small devout following understands that very basic and elementary part of the freegold theory.

            P2: The speculation on GLD by FOFOA and commenters has been explained in length much better than your dismal summary. I could expand on this sub topic but it is so small and irrelevant to the freegold thesis my time would be wasted on someone that is still lacking comprehension on the much simpler and obvious bigger points.

            P3: Nobody had/has a crystal ball and freegold isn’t a trading strategy. That being said gold going up from the birth of the Euro up until the removal of structural support makes really good sense when applying the freegold lenses, its recent fall in price also makes really good sense. If
            you have a better lenses by all means use it and be merry. However FOFOA can’t control the fools trying to time the spot price of paper gold using freegold theory. I know there were a few that got mad because
            they bought gold at around the recent top. If you think spending an extra $600 for an ounce of gold dis proves something you don’t understand freegold at all and you are probably too poor to be worrying about savings and wealth anyway. The message has always been to buy and accumulate physical gold at today’s prices and hold. In fact the real
            message is to buy as much as you want and understand. There are no direct investment advice.

            P4: Its not a stretch for a reasonably competent mind to understand that gold as a physical object, unmanipulated by governments and paper proxies, would not fluctuate in price like a commodity (because of
            the 60 year supply overhang) but would instead act like a rare piece of
            physical wealth like a fine painting.

            P5: The real difference that China made was buying up treasuries as soon as Europe stopped. This wasn’t predicted by Another/FOA but all
            it did was temporarily allow for the continuation of the system by holding
            together the overvaluation of the dollar. Timing for them was always a guess. It’s the foundations of freegold that can’t be shattered by the minor sways of politics and current events and the China wild card did no such thing.

            P6: You think the 911 building 7 collapse, or maybe the whole attack, is all a conspiracy. I would have been wholly justified in simply writing “LOL” in response to your entire post because that little nugget sums up the minuscule amount of effort you have put into pursuing actual truth.

            P7,8,9: In summary freegold is wrong because it already happened in 1971, speculationon GLD is questionable, some commenters thought gold would just go straight up and FOFOA had the audacity to point out the strength of the Euro’s design in a high priced gold environment, high priced gold can’t be stable because of interest rates and business cycles (lol), none of the foundations have been disproven but the guess of timing was so dissenters must be right, and FOFOA runs off 911 truthers.

          • TimeToPanic

            ‘Interestingly, Another/FOA never suggested that gold would be a long-term stable asset for savers, just that it would be the best asset to hold during the dollar’s demise. No freegold supporter has ever produced a quote from the originals to back up their goldbug dream.’

            Sam, report back when you find it ok? You missed that point by the way.

            Also, we’ll review matters when the gold price is on the rise once more shall we? It’ll be fascinating to see a post entitled ‘Forum 2000′ won’t it?

            Interested parties (Sam, dare you?) should read this rare example of Fofoa venturing away from his flock, and being made to look somewhat foolish on geopolitics (which don’t support the theory at all):


          • Sam Slaughter

            Another and FOA didn’t spell out everything in black and
            white. A lot of it requires a littlethought and analysis. There are two different worlds to look at. One is before freegold and one is after. Gold acts very differently depending on which world we are viewing. Before freegold, gold will carry you through
            the storm better than anything else as Another and FOA said. But right now let’s be real. Gold is not stable, it is not good for saving, it’s not a hedge against inflation, and it is not really high in price at all. It fluctuates like a commodity and trades based on paper investors who have no desire to hold the real thing. For all intents and purposes gold is an investment or speculation if you will that freegolders speculate will sky
            rocket in value as it transforms into something else. After freegold, gold will be something entirely different. It will be stable and high in price. It will be for saving not investing or speculating. It will not act like a commodity and it will not be traded in paper form. They key is that if it doesn’t change into
            something different there is no reason for it to experience a revaluation in the first place. Therefore knowing what
            it is turning into is the key. Gold will become the best saving asset in the world. In order to be the best savings asset in the world it will need to be stable. Saving is not investing so there
            will be no tolerance of booms and busts from true savers.

            So to recap A/FOA said gold will carry though the storm and
            there will be a revaluation of gold’s price.
            In order for that statement to be correct logic dictates that post transition gold must also be stable. If it wasn’t it would never experience the revaluation in the first place. If A/FOA told me that X =2 in the following equation: X+Y= 5 I would not tell people that it is wrong to conclude Y = 3 because Another and FOA never directly said it.

          • TimeToPanic

            Sam, gold is constantly revaluing, and it has risen from $32 to a high of $1900 a few years ago.

            You mentioned fine art, you think that’s a stable asset?
            There’s a chart at the bottom of this link:

            There will never be an asset that forever moves up in value in a stable fashion. It’s just something that Fofoa plucked from the air way back, with no basis in reality, purely wishful thinking, something goldbugs seem to . Your little mathematics exercise and supposed ‘logic’ used above simply demonstrate better than I could how the theory is baseless, so well done,

            A couple of things you should ponder. Banks create money from thin air by making loans. Those loans become deposits. Let’s assume that all savers decide to move into gold after some FG-event you expect. For every buyer of gold there will be a seller you realise? The buying of gold will not reduce the volume of savings in currency by a penny, and banks won’t in any way be restricted by anything that happens to gold. Ironically fofoa writes about this in some of his posts, he knows how MMT works, but he hopes his followers will just ignore the inconvenient facts. Feel free to ignore this point Sam (and all fofoa followers). By the way, what will restrain banks,and create a stable savings asset, will be the EZ approach where banks are allowed to fail, and we will see this in the next downturn. The Euro will be stable, gold will not. (Again, fofoa acknowledges this in some posts, another irony). His theories are full of holes.

            All one needs to do to is read the early fofoa posts, it will soon become apparent he’s just another American with a vivid imagination who has developed a nice little business peddling his myths.

          • Sam Slaughter

            Ahhhh, all is revealed. Your freefiat nonsense means you are either one of three people. Two are actually bright guys so I am going to guess you are the third…..aka Gary. For those interested Gary was one of the fools that bought his first ounce of gold at the top of the market and is now upset because he thought freegold was a trading strategy. He has changed his mind and screen name at least 10 times since. I’m going to safely guess that RoS is also you. How sad. You obviously still read FOFOA posts and comments every day.

            Stop obsessing over FOFOA. Here’s some A/FOA quotes for you. Ask VtC to translate them for you and tell you what to think. If this thread doesn’t work in making you look cool you can always change your name and hopefully nobody will notice:

            8/10/99 – Gold is an international savings account that spans every generation through out history. Further along, compared to the time line of gold, the use of paper currency “by itself” is an experiment of this current era only.

            10/21/99 – However, physical gold will come into tremendous (unlimited) demand as it becomes a savings asset.

            12/19/99 – We have taken a step further and proclaimed that gold should be held as “real money” in a savings account concept.

            12/28/99 – Gold, the only investment needed for the next thousand years!

            1/31/00 – My thrust and feelings for gold as stated in from hundreds of posts, are most clearly stated in the end of FOA (12/28/99; 8:34:38MDT – Msg ID:21734):

            Gold, the only investment needed for the next thousand years

            2/10/00 – Therefore, Gold will be the money of savings

            2/11/00 – And Yes, it’s impact on the relative value of gold will make that metal the monetary wealth investment for the next thousand years!

            9/16/00 – “Free Gold” is not going to compete against them as it would against the dollar because it’s their policy to mark all it’s rise to the market. In addition, national citizens would own gold as a wealth savings, not a currency.

            9/23/00 – So why not hold gold the way it was always intended; not as an officially denominated currency but as an officially declared savings asset

            11/1/00 – Today and tomorrow will be no different as we use the fiat for trade and hold the asset for savings. Ages old game with a new twist, at least it’s new to us; use real gold for savings!

            When the Western world returns to thinking and using gold in a savings perception,,,,, the way it was for a thousand years and the way major players think today,,,,,,,, the sooner we will be free the shackles of fiat money control.

            1/11/01 – The Free Gold marketplace will do what no government ever could; make gold a savings wealth, not a medium of exchange.

            6/18/01 – Certainly this drive is behind the need to withdraw from the dollar and re introduce gold savings to common people.

            6/29/01 – the only reason people are under the (economic) control of authority is because they save their wealth in the form of the defined money! If they saved their savings in gold, and spent the money as it was earned,,,,, there would be far less control over their economic life.

            11/5/01 – GOLD:

            — value it with official contracts and currencies and your wealth is their power ,,,,,,,,,, keep it as your savings of ages,,, and your wealth becomes their master!


          • TimeToPanic

            Sam’s quotes above are the basis for freegold beliefs, much like a religion. They ignore the real world of finance in their beliefs. Time will prove everything however.

          • Sig

            Nice retort. I’d say you wrapped up your case and his proof, that you requested, must be ignored as you did.

            I do believe you ARE phycho Gary (so many screen names!!!)
            How did you blackmail STFU to let you post there? And to think your first post there touched on human behavior and pshycos….very interesting.
            Pot, meet kettle.

            Safe to say, anyone or any web site that associates with Gary, sugar lover, Ros, TimetoPanic, stu ungar, flatshoelance,(top of my head, add others if you recall them- we need to shine the light on this nut job) is not worth your time.

            You need help dude.

            Gary/timetopanic said:

            “‘Interestingly, Another/FOA never suggested that gold would be a long-term stable asset for savers, just that it would be the best asset to hold during the dollar’s demise. No freegold supporter has ever produced a quote from the originals to back up their goldbug dream.’

            Sam, report back when you find it ok? You missed that point by the way.”

          • TimeToPanic

            I too read STFU, and I read that post. It was interesting.

            The weak follow along behind the leader. Very apposite to so many situations.

            It’s interesting that Mortymer, Blondie, Costata, Martjin, and so many others had to leave the blog, and now all that remain are bitter old Americans, waiting for Godot. An echo chamber, producing a diminishing income for the writer.

          • Sig

            Of course you read it Gary! You wrote it.

            STFU knows you are still crazy for fofoa? yet they bring you on board?

            The shark has been jumped at STFU.

            I consider costata, blondie, vtc to be quite smart yet that is in serious question now due to their association with you.

            I’d like to add Gazza7 as another discovered Gary avatar on youtube. Check it out, Gary likes to waterski.

          • TimeToPanic

            Sig, it’s been interesting to demonstrate to readers here the two approaches that fofoa’s followers employ. Sam’s approach is to quote the religious text of Another, ignore reality, and demonstrate a lack of understanding of world affairs and human behaviour.

            Yours is pure ad-hominems, as I assume you have nothing much you can add to defend a whacky theory.

            I am already bored of this encounter, but the years ahead will be interesting for you believers, we watch together yes?

            Good luck.

          • TimeToPanic

            BTW…none of those quotes mention that gold will be stable, and gently rising in value forever. You’ll never find one that does, because the originals never believed that.

            You believe it because the blog writer has imagined it, and his word is your law.

            I’d be interested in you explaining why you believe gold will be stable and rise gently forever, just to see if you have any real grasp of how ridiculous that idea is. Be careful though, you’re not on home territory now.

          • Sam Slaughter

            Gold will experience a revaluation because it will transition
            into a new role. This role is “savings asset.” Part of the reason
            the trail guides said “follow in the footsteps of giants” is because people in
            the know already realize this. These aren’t investors looking for a big score, these are savers looking to preserve their wealth.

            FOA 12/30/99 

Consider Historic Reality: Yes, gold has for some
            time been accumulated as a savings / reserve currency by people “in the
            know”. What do they know as opposed to the masses? They understand how gold gains in value directly in proportion to the amounts a currency is
            inflated. Even though the long term inflation of our paper money has yet to be reflected in real goods prices, gold holds these gains “before the
            fact” of this price inflation. Hidden from view to the masses, these
            (gold) gains date back decades and form a kind of savings account that always balances once the currency begins its final timeline.

            Now if I took your pedant approach like you have with the word
            stable I might center my argument around the fact that FOA called it savings and not an investment. But instead lets stick to the topic and debate the point directly. Savings are held for the long term whilst investments are to be bought low and sold high. The system today has many investments but it also relies upon the stability of a poor global savings asset: debt. This can’t and wont hold together forever
            for reasons I hope I don’t need to explain but will at another time if you
            dispute this point. In the meantime FOA is explaining the replacement for the savings portion of the dollar’s current role will be gold, not another debt instrument.

            If gold plays the role of global savings asset it will revalue much higher in price. This new higher price will automatically create a statistical stability for gold because its sheer mass will require larger buying and selling blocks to move it in the first place. This should not be disputed. The second factor is the for-profit investing class will have no interest in gold and its boring stability. Their absence will further the stability of gold.
            Thirdly a true saving asset is only sold to another saver. This means
            that if a saver wants to sell his gold he will only be getting bids from other
            savers who will be more than happy to scoop up any and all of the gold
            available for sale. Typically something goes down in price when there are more sellers than buyers. If you are imagining a situation where
            a whole bunch of savers are desperately trying to sell their gold all at once, and there just isn’t enough other savers ready or willing to buy up the gold they are selling, you are dreaming a whole lot more than I am. The current reserve asset is a freely printed highly overvalued debt instrument sold in mass at alarming rates yet for decades the US government has never overwhelmed the market with too many
            treasury sales. There is a great thirst for a stable savings asset. A/FOA called it unlimited:

            10/21/99 – However, physical gold will come into tremendous
            (unlimited) demand as it becomes a savings asset.

            I’d say it’s just a smidge under that but I won’t obsess over their exact wording. I prefer wrapping my mind around the concepts.

          • TimeToPanic

            Sam, you really are hopelessly confused, and heavily brainwashed.

            I have neither the time nor inclination to point them all out but here are a few examples:

            ‘Gold will experience a revaluation because it will transition
            into a new role. ‘ That is a *belief* of freegolders, yet it forms the whole basis of their theory. Mankind will somehow suddenly en masse shift into saving in gold. They just believe it.

            ‘Savings are held for the long term whilst investments are to be bought low and sold high.’

            Sam’s view of investments doesn’t mention that buying an investment low and selling high can also take place over the long term, and frequently does. There is no such thing as *savings* of course, all assets carry risk, whether money in the bank, currency notes, gold, all of it. It’s another FG fallacy.

            ‘If gold plays the role of global savings asset it will revalue much higher in price.’ If Sam, if. Good luck with your hopes and dreams.

            ‘This new higher price will automatically create a statistical stability
            for gold because its sheer mass will require larger buying and selling
            blocks to move it in the first place. This should not be disputed. ‘ Resistance is futile eh Sam? A higher price creates ‘statistical stability’? Is that different from normal stability then? So, gold today is $1,200, c.40x higher than in the 1970s, yet it is still up and down with economic cycles. Maybe a 40x revaluation wasn’t enough Sam? But I note your point ‘this should not be disputed’. Direct orders from the boss there I think.

            ‘If you are imagining a situation where
            a whole bunch of savers are desperately trying to sell their gold all at once’

            Well Sam, ‘me and my homies’ will be selling immediately if there is a Fg revaluation. That’s a quote from someone who suffers from severe cognitive dissonance disorder BTW. Humankind has suffered many financial and natural catastrophes through the ages. The Chinese have the highest affinity for gold because wealth has been concentrated in China for millenia, and so they’ve witnessed plenty of currency collapses. But what do we see in China today? Over a million new share-dealing accounts being opened every day. Your theory ignores the fact that history repeats,mankind does not seem to learn the lessons of history, and we swing from one extreme to another.

            Maybe there will be an increase in gold savers after the next interest rate cycle and the bust of governments, but it will be marginal, and it won’t last for long. Eternal widespread golden savings is just a nice dream an old man had 20 years ago

          • B.

            Sam, ignore the chatter and don’t let them rattle you. I respect that you want to help them. Stop. My father used to say, “You can lead a horse to water but you cannot make him drink.” Freegold is already here… its manifestation is forthcoming. You will see it very soon. That is as much as I can say for now.

          • Sam Slaughter

            Hello B

            I get what you are saying. I take the philosophy that my words are for everyone else except the person I’m arguing with. Even if its sinking in his pride won’t let him agree with anything I write. Gary (aka Ros & TimetoPanic) came here to teach not learn. In fact I don’t think he wants to achieve anything except dissuade people from reading FOFOA’s blog. It will have the opposite effect as people are always curious to see what someone is trying so hard to stop you from reading. Strangely the person that cares the least is FOFOA. He doesn’t advertise or promote his blog at all. The freegold message resonates best with people that discover it and decide to learn about it all on their own. Unfortunately the brilliant ideas Gary has bought into has pretty much no following. There isn’t even consensus amongst the few (like 5) of them that have fallen off the trail tweeting nonsense at each other.

          • B.

            Don’t worry, Sam. Freegold is already here.

          • http://herrborjesson.wordpress.com Börjesson

            Hello B,
            I don’t suppose you’d care to elaborate on this VERY interesting statement of yours? Like for instance narrowing down what “very soon” means? I’ve come to learn that in Freegold circles, this is a very flexible expression…

          • B.

            Borjesson, (sorry, my keyboard doesn’t ‘speak’ Swedish), I cannot elaborate much at this point. I will say this, “The push for a cashless society to enable insolvent banks to charge account holders with negative interest rates for the privilege of lending banks their capital will drive people out of the banking system to a more secure and private form of wealth preservation.” A wave of hybridized gold-backed cryptocurrencies will emerge in the new multilateral monetary paradigm. The noblest form of democracy is the right to vote with your stored labour and the definition of freedom stems from the idea that one has the choice to peacefully opt out. “The issue which has swept down the centuries and which will have to be fought sooner or later is the people versus the banks.” – Lord Acton. “Fighting” need not, necessarily, involve violence.

          • http://herrborjesson.wordpress.com Börjesson

            Thank you for your answer, B!
            So you’re saying it will be a mass movement out of the banking system and into gold (and gold-backed constructs) by lots of “little guys” that will usher in Freegold? I don’t share that view, and it’s not the impression I’ve got from reading FOFOA, either. But I guess we’ll just have to wait and see!

          • B.

            Bingo! I suspect FOFOA will be surprised, too. We will all have to “wait and see”, where we are going. I cannot wait.

          • TimeToPanic

            I am sure that those unaware of the freegold stories will have got a very good idea of its flavour from the comments by Sam S and B on this thread. Both are typical of their ilk. If you start reading their blog from the beginning you will have many a chuckle along the way.
            Do yourselves a favour, read the original Trail, at least that made some sense 20 years ago, even if no longer valid today.

          • B.

            Ad hominem attacks do nothing to inspire positivity; nor does any attempt to appear superior. You can choose to believe whatever you want. However, given the tone of your comments, anyone reading your posts is likely wondering about your motivation. I am. Care to share?

          • TimeToPanic
          • Ros

            Yes agree completely that FOFOA on geopolitics is woefully naive and often plain silly. This is not lost on any of the respected Freegold converts. I have lost count of the numerous examples raised by his readers (no Sam, you won’t find these mocking voices in the comments section at FOFOA ‘s blog). I believe most mockery was reserved for FOFOA’s analysis of the BuBa gold repatriation fiasco and in particular his comments on the logistics issue, which had readers wondering if he had not completely lost the plot.
            Torgny there really is no point whatsoever in regurgitating FOFOA ‘s theories and misinterpretations here too. If you want your readers to become aware of his work why don’t you just put a link to his blog? FOFOA’s earliest work on Freegold was inspirational but the very bright earliest commenters and fans very quickly saw FOFOA ‘s severe limitations when it came to insights which confronted his views. Unfortunately FOFOA does not like to be challenged and the best thinkers at the blog began to disappear. The commenters who have taken charge at the blog today are the most pale imitation and a terribly inadequate bunch. FOFOA has himself expressed this view of the pitiful quality of comments over the past two years or so.
            So Torgny if you want to truly understand Freegold and disseminate that understanding to your audience you need to return to the original postings, where back in 1998 many of us were enchanted and excited by the spectacular observations and commentary at Michael Kosares forum where Another and FOA were just two of the great voices engaged in group discussion.

          • TimeToPanic

            A few nice lines to consider from Sam:

            ‘ It’s the foundations of freegold that can’t be shattered by the minor sways of politics and current events’.


            ‘gold as a physical object, unmanipulated by governments and paper
            proxies, would not fluctuate in price like a commodity (because of the 60 year supply overhang) but would instead act like a rare piece of physical wealth like a fine painting.’

            Sam, you mention gold has a 60-year supply overhang (lots of it still around). Yet you compare it to a rare piece of art? Care to explain, they would appear to be very different? Do you understand what gold really is?

            As for your first quote, the ‘minor sway’ of China joining the BIS, cleaning out the LBMA system, buying USTs for a dozen years, having its own dealing window at the Fed (that was neatly ignored by freegolders BTW). All just minor sways of politics eh?

            Well, there are plenty more ‘minor sways’ to look forward to, and all of them are likely to result in a managed transition, rather than collapse/war (that was the plan you may recall, how to move from the dollar). Times change, Another/FOA left because they realised their prediction had been voided by the Chinese involvement. Ever since then it’s been a different world.

            Just like the originals, the current pretender will see time prove him wrong. I can tell you in confidence, I had an email a few years ago from one of his confidantes, saying that fofoa’s biggest fear was that they’d just manage to inflate away the debts and that gold would be managed slowly upwards with no reset at all. His worst nightmare. You will see it happen.

          • B.

            It will be “managed slowly upwards”. That’s the point. However, “the outcomes are not pre-ordained”, as Mark Carney stated. Economic chaos benefits only the extremists. I don’t want that. Do you? FOFOA, nor his/her predecessors, did not want suffering. They wanted honesty.

          • TimeToPanic

            It is totally irrelevant what you, me, or FG writers (past or present) want. However, honesty is one thing that we will never find.

            There is no truth, it’s all bullshit.

          • B.

            Forgive me for not resigning myself to an attitude of fatalism and despair. There is much to be thankful and hopeful for. Attitude is everything.

        • Ros

          Yes Tony your lack of knowledge about both the Freegold core philosophy and the many Freegold writers out there is all too self-evident. This does not serve you very well nor does it augur well for the future of this Freegold blog. The state of the art a Freegold message has advanced so far beyond what you have produced here, that your post is infantile in comparison. I hoped to set you on the path to greater wisdom with the not unreasonable recommendation that you return to the original source of the Freegold philosophy and that you engage directly with the writings of Amother and FOA, and not rely on the interpretations of a 3rd party impostor. Your response to that sensible suggestion is disappointing and again suggests that this site is not going to contribute anything to advancing understanding.

      • Ros

        Idiotic response Sam. The comments section is policed by FOFOA and dissenting comments removed. So yes his blind faith followers are left to provide unstinting support and skirt kissing to his frequent misinterpretation. FOFOA would himself recognize that his is only a personal interpretation and would not assume he has unequivocally cracked the code. He leaves that foolishness to his followers and providers of his meals. But there are an enormous number of Freegold converts who today dismiss FOFOA as irrelevant and as having misunderstood vast amounts of the protagonists message. Sam I think I can safely assume that you do not have the intellectual requirements to escape your blinkered thinking so you will forgive me if I ignore all future inane responses from you no matter how helpful I’m sure they purport to be.

  • anandsr

    Great to see that you have finally started to understand FreeGold. I was expecting you to come around, as you seem to have an open mind. Hopefully sometime James Rickards will also come around. But I think he is too invested into his position on SDRs, which are a non-solution for the problem.

    I do think you have got one basic thing wrong.

    “Gold needs to replace fiat currency as the unit of account for us to get a stable ruler.”

    “One of the key tenets of FreeGold is that the monetary functions of Medium of Exchange (MoE) and Store of Value (SoV) can, should and will split”

    The problem is not really MoE it is the UoA.

    Think about it.

    Unit of Account requires that the unit remains stable against CPI.

    How can UoA remain stable?

    The trick is to have it be infinitely elastic. Just create as much as is required when the requirement increases and destroy as much as is required when the requirement goes away.

    This is the function of Central Banks, and the UoA is the currency. Forget for the moment that it is also the legal tender and therefore the preferred MoE.

    This is where the duality of nature comes in the picture. Something that can be fixed in the short term cannot be controlled in the long term. This is why you need a SoV. Something that is not in control of anybody. Something that can absorb the value as the UoA loses value abruptly in an uncontrolled phase.

    So the dichotomy is between UoA and SoV. The MoE is not the real issue here.

    • https://www.bullionstar.com/ Torgny from BullionStar

      Hi anandsr,

      Thanks for the compliment:-) Have we been in touch previously? I’ve been reading about FreeGold for a long time but hasn’t expressed, exposed much of it more than some snippets occasionally. It does require more of a background explanation than e.g. talking about FRB, inflation or gold standards specifically and I believe it’s important for us not to alienate people new to the precious metals sphere. That’s why I tried to summarize a few of basic FreeGold tenets to make it more accessible.

      On a personal level, I’m rather nerdy in the sense that I actually like the details but it’s not for me to delve to deep into the mutual admiration society of discussing the details as I’m too busy running three bullion dealers. My hope is that if we can get more people encouraged to study FreeGold and spread the ideas, we can also widen the narratives and spark debate in the gold community.

      Why would the unit of account require that the unit remains stable against CPI? Maybe you can elaborate on that.

      Both fiat and gold can the used for unit of account. The unit of account for short term settling, individual transactions etc. can continue to be fiat.

      How I think of unit of account though is as the starting point in relative value when considering other prices i.e. as a more stable ruler in terms of purchasing power over time. If I e.g. have business revenue of USD 1500 in one year which corresponds to 1 oz of gold and business revenue in another year of USD 50,000 still equivalent to 1 oz of gold as fiat depreciates against gold, gold is a better book keeping currency/unit of account. That’s what I mean when I refer to gold as a more stable unit of account.

      • anandsr

        Unit of Account function of money is to measure everything else. If it varies against CPI, why should it be considered a good UoA.

        Gold can vary greatly for a short time based on availability and demand. Of course in Freegold it will not vary wildly, but still it will not be as stable as a well managed currency in its own zone.

        You are thinking over the long term. But UoA is not defined for long term measurement. Actually if you want to hold something over decades its a good idea to measure its performance in gold.

        I had actually thought this article was by Koo’s Jansen.

  • https://www.bullionstar.com/ Torgny from BullionStar

    How do you think we should structure the Freegold.com site?

    I’d be happy to allow for different writers/bloggers on the site posting differing views leaving the labelling, bickering and bitterness out though.

  • Tuna


    Unfortunately, you have been given a taste of what will transpire if you try to create an open forum to discuss Freegold.

    Gary (aka sugar lover, Ros, TimetoPanic etc.) will devolve any FG Forum into ad-hominem attacks and bloviated dissemination of misinformation. He has even gone to the point of responding to himself. It would be humorous if the extent of his illness wasn’t so genuinely sad and scary.

    What I am suggesting is (I’m sure you now see) that you need a way to block this damaged individual from destroying open discussion if you intend to pursue a Freegold site. I appreciated your article and I believe that you will find that you will hone your FG knowledge by continuing to discuss the theory – either in your new site or FoFoA’s blog.

    Best of luck,

    • TimeToPanic

      The very last thing fofoa supporters want is any sort of open freegold blog. They prefer to ban debate, disagreement, and free minds, seeking only consensus.

      The poster above demonstrates their fear, and appears adept at firing ad-homs himself, whilst not attempting to tackle the issues raised here. Typical.

      Very telling.

    • https://www.bullionstar.com/ Torgny from BullionStar

      Hi Tuna,

      I do appreciate the support! I certainly don’t intend to sit on the truth and have a certain knowledge of how things will transpire.

      All I encourage is an open and friendly debate where different opinions can be shared and discussed whether Austrian, Keynesian or FreeGold ideas.

      It’s good that you put perspective on this discussion thread as I was certainly surprised by the vocal opposition, attacks and labeling back and forth. I may have to approve comments from now on when discussing FreeGold. Although I’m a believer in FreeGold, it’s after all our platform and it’s not helping anyone discussing when the ad-hominem attacks are totally taking over.

  • TimeToPanic

    An interesting twitter discussion here (do read it all):


    A twitterer called ‘freegolds’, a renowned fofoa supporter, is poised, ready to dump his gold post-reset:

    ‘One must look at the world and the opportunities at that time. I find gold the place to be untill it resets’

    Only until the reset. Then he’ll assess the ‘opportunities’ in other asset markets.

    Him and his homies seem to be ready, sell high, buy low, sensible investing.
    Saving eternally in gold, not so much.

    Oh freegolders, you’re a funny lot.

  • Tom

    It is my opinion that Freegold is only partially correct. Fiat currency will continue to be replaced as the medium of exchange by open-source or credit form the marketplace via digital golden promises. Gold need not move physically to be used as a medium of exchange. A simple promise to deliver gold is what will change hands, meaning ownership of gold in the vault changes, the value flows, but the physical gold doesn’t. See GoldMoney, BitGold, etc. That is what banking used to be; store gold in a vault, and circulate the ownership & delivery certificates aka Custodianship.

    It is the lending of something that one is already holding in trust for another, that leads to problems. So the abuse of trust & credit. When people forget to ask for delivery every once in a while to keep the Trustees honest, promises run wild! It which point Voltaire is correct.

  • carefix

    Wow! Seems I am not the only one to have thought of this. Well it was always going to be the case if there was any sense to my cause. I am not economist but thought for a while and decided that in my simple world a gold based international trading system coupled with a debt free fiat currency at sovereign level was the way forward. In this sytem the treasury issues the fiat so there is no debt. Sure they can over print and cause inflation but they cannot produce debt. I have been looking (without success so far) for a natural negative feedback which would prevent or limit inflation in a sovereign currency.

    In this system loans can be made interest free by private banks which act as slaves to the treasury. Instead of charging interest they retain a proportion of the repaid loan installments as their profit. The treasury can keep a handle on the lending rate and thus inflation through a variable called the “Bank Retention Rate” (BRR) i.e. the percentage retained by the bank from the loan. The banks job is then to minimize moral hazard within the boundary set by the BRR.

    It is riskier for the banks to make more careless loans when the BRR is low and vise versa. So the treasury (directed by the government) can increase the rate at which loans are made by increasing the BRR allowing more risky loans. The treasury of course has strong control over the money supply in this sytem.

    Gold hangs over the currency like a sword of damocles of course as excess inflation puts up the price of gold in the sovereign currency which provides some negative feedback. Perhaps the hand on the BRR lever should watch the price of gold in the sovereign currency and try and hold it steady or close thereto?

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