Freegold interview with Koenraad Verheyden - 6 Oct 2011

[Paul]

I think there is a difference between trading for 40 years, or accumulating for 40 years. Agree on this?

When he has been trading 40 years, the first 25 years wouldn't be the most profitable years to be in the goldmarket. If you've been accumulating month after month, year after year.......and still are in possesion of the gold accumulated then, Oh my god. Than it's the opposite of you're statement of being 25 years too early..

We're probably more late, than Koen was early .

But if you understand the principals of freegold, it doesn't matter how much you paid for your ounce....only the weight matters.

It is all timing, in trade, in accumulation and in judgement.
It all depends on the difference between the price and the value on the moment, the value of gold is not a constant through time. It does matter how much you pay for your ounce, when your timing is wrong you pay too much and you lose value, no ? Freegold does not change that. It is not only the gold that holds the value ...

Capital/value moves. The gold accumulated from the end of the nineties was smart. The goldcycle made low.
Before that smart money was everywhere but in gold. It is the rhythm of the markets, the invisible hand ...

I understand the principle of freegold, and I understand money, nothing tangible, just a social contract !

You're looking through the wrong glasses here in my opinion. This is through the currency one, and as Indy sais currency pricing gold. I think on this point it is hard for us too agree on this subject.

Or were the Saudi's also much too early on the gold party, with their oil for gold deal?

It only needs to be repriced once.....everybody behind the curtain is aware of this.

you can not compare micro and macro economy
to look at international trade, you better leave your own wallet at home.
I am not looking through glasses, I am using binocullars ...

there is a difference between the personal portfollio of Koen and the goldstock of the house of saud
Koen is a mortal, the house of saud is not. different perspective. Price is irrelevant there.

for mortals gold needs to be repriced only once to profit. agreed.
so what happens when you die before that ? bad luck ? or bad vision ?

[Paul]

To my perception, it is confidence in a substance to have purchasing power over time, that will put a price on that substance.

That price is in the legal tender currency or your region, and is temporary. Because the price will fluctuate (most likely increase, measured in fiat money), the legal tender rules might change, etc.

I agree
so question will always be how much confidence one can have in the issuer of the legal tender,
the gold is just a factor, there is much more to it.

personal gold can protect you against misusage, yes, in these times sure as hell will, but this is not always the case. this will change again in time. also under freegold. when gold will trade free and is much more stable, people will look for other assets to make money and they will leave gold. then the cycle starts again. on different level. with different rules.

[Indiana Jones]

what do you mean with permanent ?

It will never go to zero, I can agree there, but we do not need freegold for that, do we ?
The value will NEVER be a constant, impossible, nothing ever is, everything moves all the time.

it is never the gold that prices the money, at the end it is the confidence of the people ...

Value and confidence are a tough matters to discuss with you guys, but I'll give it a try.

In the end value is a perception. If that is what you meant I agree with you completely.
To some people a 1957 chevy corvette convertible may have more value than a 2011 camaro convertible.
In a freegoldsystem water will be more valuable in the Sahara desert and you have to pay a higher price, even in gold.

The thing with fiatmoney is that we use it as a store of value but inflation eats at people's savings e.g. accumulated value. In a freegold meganism your savings in fiatmoney will still inflate but physical gold doesn't because there's no debt attached to it.
So compared to fiatmoney, freegold remains constant in value. That's what I meant with permanent.

Rigt now fiatmoney is pricing gold and the papergold comextraders decide on the commodity goldprice. When freegold is introduced that comexgold game will be over.

Some day we will have a freegold system and it's up to the world to decide when. Maybe politicians manage to get out of the current debt problems and they show up at our doors with some new trick-or-treating currency system that will fail after a few decades and so on and so forth. But some day politicains and banks are unable to fool us anymore and that day people completely lose there confidence. That day there's only one way out .... freegold.

edit: untill that day gold will be a tradable commodity and investing in it is at everybody's own risk.

[Paul]

These are tough matters to discuss. nothing to do with the participants in itself,
the thoughts are fundamental. not understandig here is missing the point in both value and money.

we differ in opinion in detail, not that much in perspective.
perception is what gives value the value. agreed.

fiat money is not store of value, never was, never will be.
people used it that way ? perception and confidence my friend ...

in new freegold system this will not change, same mechanism is true, it will always be perception and confidence.
when done correctly over time, people will start trusting the fiat again, just as they did now,
this will have huge impact in the pricing of the gold. if trust in fiat grows, goldprice will decline. nothing permanent there !!

the only huge difference IMO will be the way we deal with debt.
money is value, not debt. we will stop this. we will have to just to survive.

[Boefke]

These are tough matters to discuss. nothing to do with the participants in itself,
the thoughts are fundamental. not understandig here is missing the point in both value and money.

we differ in opinion in detail, not that much in perspective.
perception is what gives value the value. agreed.

fiat money is not store of value, never was, never will be.
people used it that way ? perception and confidence my friend ...

in new freegold system this will not change, same mechanism is true, it will always be perception and confidence.
when done correctly over time, people will start trusting the fiat again, just as they did now,
this will have huge impact in the pricing of the gold. if trust in fiat grows, goldprice will decline. nothing permanent there !!

the only huge difference IMO will be the way we deal with debt.
money is value, not debt. we will stop this. we will have to just to survive.

We agree very much on this part Paul! Wanted to comment on Indy's post about the permanent price of gold, but you already did it for me. It's free floating indeed. And yes, when people start to have confidence in fiat (why again? It will never leave?), they will sell their gold and keep they're savings in fiat. Untill some day, people start asking themselves, hey......the gold price is low, and there is an enormous creation of currency (i know we disagree on this, as your thoughts about making new debts differ from mine) let's put our savings into gold again.

In my belief, when people are used to freegold, and that will take years i guess, the goldprice won't fluctuate that much when the task of monetary policies is done right. It will slowly rise in numbers, but as we know that doesn't say all about purchasing power NOW.

And about mortality, everything is mortal and with such a view we can't discuss anything anymore.....also the house of Saud is mortal? Or do we still have Romans and vikings? Don't think so, it will be repriced once during lifetime......when it's not for me, it will be for my children. See no problem over here,

[Paul]

ok
the debt is interesting and most fundamental discussion

do we print or do we borrow the money ?
I say print, but does printing mean, money can not be created by borrowing ?
I say no. when you allow credit, you allow leverage, and then you will allow money expansion by private sector.
this is human nature, IMO you can never stop this, people will borrow, and people will lend to profit from it.

It is regulation we need to control this and gold will be a market-enforcing factor also.

agreed on mortality
nothing is ever immortal
but we deal with different mortality time span
I think we can also agree there.

and therefore timing does seem the most important of all
(A broken watch is also wright two times a day)
patience can also be very wrong. it has nothing to do with the gold itself.
there is no universal constant value to be found, there is no correct goldprice.
It is as is. to be or not to be. that is the question

[Indiana Jones]

These are tough matters to discuss. nothing to do with the participants in itself,
the thoughts are fundamental. not understandig here is missing the point in both value and money.

we differ in opinion in detail, not that much in perspective.
perception is what gives value the value. agreed.

fiat money is not store of value, never was, never will be.
people used it that way ? perception and confidence my friend ...

in new freegold system this will not change, same mechanism is true, it will always be perception and confidence.
when done correctly over time, people will start trusting the fiat again, just as they did now,
this will have huge impact in the pricing of the gold. if trust in fiat grows, goldprice will decline. nothing permanent there !!

the only huge difference IMO will be the way we deal with debt.
money is value, not debt. we will stop this. we will have to just to survive.

I agree on this, is what I actually meant...

I think that the debt reform has to start with a switch in political behaviour. There will always be debt but in my opinion it should be more productive debt, no huge mountains of future financed debt. When confidence in money is 'temporarily' gone there has to be something in place to store wealth and because gold is accepted worldwide that could be gold, free floating gold.

[Rasta]

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[Rasta]

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