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Old 08-19-2013, 01:49 AM   #1
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FOFOA & "the rational actor" consensus

It surprised me to see that Dochen's thread on FOFOA's sudden 'surge' of posts got relatively few reads here. I would have thought there to be keen interest in the topic, but being new to the forum, I know nothin... nothin a'tall.

Starting this new thread is one way for me to learn a bit about people's positions here. Apologies in advance for any breaches of protocol which the uninitiated may be guilty of.

Anyways, the exchange between Edwardo and FOFOA is a valuable distillation of the underpinnings of the freegold thesis - and for those who can appreciate, but not necessarily buy into that thesis - affords a chance to evaluate it relative to the rest of the pm world. Here's the quote I find of compelling interest:

Quote :
The way I view Freegold, I think that it actually is inevitable. Mainly because Freegold is simply the end of the current status quo, and that end is inevitable. The necessary conclusion that follows is that gold will no longer be undervalued because the system that undervalues it will have failed to keep physical flowing.
So... even though FOFOA can make fun of the gold\manipulation conspiracy advocates, and laugh at the naivete of other 'goldbug' approaches, freegold shares in common with them all the underlying belief that behind the curtain exists 'rational actors' - people\powers\players, whatever, whose motives and methods can be understood and anticipated based upon tools such as logic, rational self-interest, social stability and the like. The end of a defective system will necessarily bring about the arrival of a superior system to replace it - because the actors are 'rational' -and markets are capable of overcoming the many and various well known and documented means of distorting their function in human economic life.

Just to keep this brief, I will simply invite comment on the proposition as laid out - which, to sum up, is this - the entire superstructure of logic which the freegold thesis is built up with rests upon the foundational belief that rational human action can be relied upon to guide the performance of the players who control our destinies from behind the scenes as the future unfolds.

Pretty shaky foundation as an investment thesis imo. I'd be happy to say why, if there is any interest in this critique of the pm communities' unspoken "rational actor" consensus.
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Old 08-19-2013, 06:51 AM   #2
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hi man, welcome

I think one of the reasons, why we can assume, that ON AVERAGE (which is all that matters, long term), Humanity makes rather well-informed choices & decisions, is that because it is that way... Problem is, when the Humanity is fed BS, 24/7 - the rational choices, based on irrational, falsified input variables, are inevitably irrational, objectively speaking. GIGO in action. And sometimes, we have to be FORCED, to make a rational change - if it involves big societal re-engineering. Guess what, the reality always wins.

Personally, I am not that big fan of FOFOFOFOFOA (or however many "FOs" there's expected to be), because to me, his thesis are philosophical musings with preciously little practical application - probably correct as an exercise in logic & reasoning, but little more than this. I am also chronically allergic to people who use rather complex and opaque rhetoric, to describe something that is way less complex, if you take away their elaborate ways of telling stuff, and focus on the concept itself. To a degree, that I've spend a lot of time trying to research what that whole concept of "freegold" means to him - and finally get across some succinct executive summary written by someone else, but I don't even know if it is his concept. Generally, it seems that all what he means, is "keep your savings in Gold, use cash for day to day liquidity". No shit, Sherlock! I mean, that's what we all are doing here on this site, no?

Definition of wasting my time, if you ask me, and all too similar to sectarian leaders approach of finding followers and attaching them to themselves, if you ask me.
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Old 08-19-2013, 08:10 AM   #3
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Originally Posted by roguefaction View Post:
It surprised me to see that Dochen's thread on FOFOA's sudden 'surge' of posts got relatively few reads here.
I skimmed through it a bit, but I'm challenged right now to sit still for too long and deep thought is difficult when you can't avoid certain distractions (like never ending pain). It takes a lot of effort for me to digest anything complex (or convoluted) right now.

Originally Posted by roguefaction View Post:
... Anyways, the exchange between Edwardo and FOFOA is a valuable distillation of the underpinnings of the freegold thesis ...
Direct link to the blog post (or blog comment)?

Originally Posted by roguefaction View Post:
So... even though FOFOA can make fun of the gold\manipulation conspiracy advocates, and laugh at the naivete of other 'goldbug' approaches, freegold shares in common with them all the underlying belief that behind the curtain exists 'rational actors' - people\powers\players, ...
This reminds me of a criticism I leveled at Denninger back in the day:
Originally Posted by pmbug; on another forum several years ago :
Karl ... doesn't seem capable of seeing any faults in his own reasoning. For example, in this piece:

http://market-ticker.denninger.net/a...yson-Paul.html

He calls Ron Paul delusional for arguing for hard money as chasing a fantasy and then proceeds to propose that the Federal Reserve system be constrained, government never engage in deficit spending and forgo all bailouts (which could be logically extended to include entitlements IMO).

Who is more deluded? Ron Paul correctly calls for sound money (competing currencies) precisely because he knows the bankers, politicians and regulators/policemen cannot be trusted.

~~~

Hmmm... Did Denninger pull that old page? Luckily there is a copy preserved here for posterity:

http://www.gold-speculator.com/marke...yson-paul.html
Originally Posted by roguefaction View Post:
... Just to keep this brief, I will simply invite comment on the proposition as laid out - which, to sum up, is this - the entire superstructure of logic which the freegold thesis is built up with rests upon the foundational belief that rational human action can be relied upon to guide the performance of the players who control our destinies from behind the scenes as the future unfolds.

Pretty shaky foundation as an investment thesis imo. I'd be happy to say why, if there is any interest in this critique of the pm communities' unspoken "rational actor" consensus.
As I touched upon in my criticism to Denninger, we can either trust in people or design a system where trust in people isn't required. I don't know that there is sufficient political capital or intellectual awareness to institute a sound system (or at least a system that offers free market checks and balances) to replace our existing one, but if we continue to rely on centralized power with respect to banking / finance, there will, IMO, continue to be hidden agendas, "insiders" or a separate "power class", etc.. What is rational (or good) to (for) the unwashed masses isn't necessarily the same as what the "NWO (thought) leaders" / power class desire.
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Old 08-19-2013, 09:02 AM   #4
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RF,
I saw DC's post, but since I already visit FOFOA it was something I knew beforehand and so was on top of it. Without a doubt, the largest percentage of visits here are lurkers, hanging out in the shadows reading in from the sidelines, so it likely helped FOFOA with a huge surge irrespective of the recorded views on DC's post.

FOFOA is a very good read and I enjoy the viewpoint he delivers, however it can be challenging to plow through some of the technical stuff to get at the really interesting parts of his posts. That said, the series is well done and quite informative.
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Old 08-19-2013, 10:07 AM   #5
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An interesting post, but if it depends on humans behaving rationally, I am not sure I would bet my life savings on it.
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Old 08-19-2013, 10:35 AM   #6
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Thanks for the response ancona, that gives me a valuable clue as to how to read the tea leaves here. Every site seems to have it's own particularities on the part of it's readership, so I'm trying to give myself a quick orientation.

I think the current series of postings made by FOFOA has a level of clarity in explaining the 'freegold' thesis that heretofore was unavailable to the casual reader of his site...and that this in itself is a good reason for people who might ordinarily skip FOFOA to have another look-see; not necessarily to buy into the idea of freegold, but just to get the notion straight once and for all; because they were prepping for a mainstream interview, the two interlocutors were stressing simplicity and opacity for a change! As bushi pointed out, it's a chore to wade through the jargon and feel like you've come out ahead in terms of time invested, if you are not already a believer.

That said, I would have changed the wording of my original post a bit, with hindsight, because I think the 'rational actor' phrase is just too vague to have caught most people's attention here. If allowed to rephrase the central idea of my post I would have said:

What really interests me about the freegold thesis is[to quote FOFOA from somewhere in the 5 posts of this current series]the idea of "windfall profits" accruing to the lucky few who are invested in AU, at the magic moment when the BIS decides it's time to revalue.

This is at the core of what the freegolder believes will happen: a radical upwards revaluation of their\our holdings which will allow them\us "shrimps" to bask in the glow of the major players' moves.

As much as I would love to be the beneficiary of such a future development... I find the idea hopelessly naive, and have asked myself many times why so few others in the gold community seem to share a similar skepticism about how tptb regard our 'shrimp' status\role in their master plan!

My current answer to my own question is - you've just been visiting the wrong sites dude! Hoping to prove myself correct in this case!

nb - pmbug... the lack of links to the relevant part of the FOFOA is duly noted as a lack of follow through on my part - apologies: spent some time looking for the right parts from his series to link and could not find them. Decided to post anyways... I'm off-grid, and with a solar system down at this moment, have to watch my battery minutes religiously. Burning diesel to get charged up is a definite downer!
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Last edited by roguefaction; 08-19-2013 at 10:38 AM.
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Old 08-19-2013, 11:02 AM   #7
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Originally Posted by roguefaction View Post:
...
What really interests me about the freegold thesis is[to quote FOFOA from somewhere in the 5 posts of this current series]the idea of "windfall profits" accruing to the lucky few who are invested in AU, at the magic moment when the BIS decides it's time to revalue.
...
Whether FOFOA's "freegold revaluation" or Rickards' "gold revaluation for underpinning a new reserve currency", I personally am skeptical. I really don't see any centralized authority effecting a radical revaluation for gold (or other precious metals). Whenever centralized financial authorities do radical revaluations, it's always to debase their currency (usually with capital controls and other heinous [to a free market] actions).

I stack gold because I believe it will eventually re-assert a prominent monetary role, but I think whatever outcome is on the horizon is likely going to happen naturally (ie. not centrally planned) or possibly with a bottom-up (populist) movement (small likelyhood at the moment IMO). Like with a bull market, any move up (revaluation) is going to occur over time (boiling frogs to the unwashed masses). This is what I realistically expect as the BRICs continue their push to get out from under the thumb of the US Dollar.

The only caveat to that is a complete implosion / breakdown in the leveraged paper markets, but as the saying goes (more or less)... it can stay irrational longer than we can stay solvent. Even though I think we can see signs of stress in the physical markets, I will be very surprised if the exchanges or ETFs implode catastrophically in my lifetime.

Originally Posted by roguefaction View Post:
... pmbug... the lack of links to the relevant part of the FOFOA is duly noted as a lack of follow through on my part - apologies: spent some time looking for the right parts from his series to link and could not find them.
No problem. I was just hoping to see this distillation to clarify my understanding of FOFOA's freegold.

Originally Posted by roguefaction View Post:
... I'm off-grid, and with a solar system down at this moment, have to watch my battery minutes religiously. Burning diesel to get charged up is a definite downer!
Congrats RF. We've got a lot of discussions about off grid living in the BSTS forum room here. DCF is another member here who has extensive experience with off-grid living.
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Old 08-19-2013, 02:31 PM   #8
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hey roguefaction

welcome aboard and thank you for your challenging opening thread.

I think Im just smart enough to decline the offer to try and explain FOFOA logic and RPG but I would offer this -

He writes at a level that I can just cope with and actually enjoy having my brain fried at times from the sheer intellectual challenge.

My attempts to wade through his posts and the commentry have given me a far deeper understanding of the real depth of the gold market.

There are several reasons why gold always becomes the default currency and while it can be argued that this time is different, its got good form and when it comes down to trust, real trust in something tangible, those who really think about the long term protection of their past efforts, that they will rely on for future exchange for things they need, often seem to end up with shiny.

Its inevitable

However we may die waiting
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Old 08-29-2013, 07:00 PM   #9
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Originally Posted by roguefaction View Post:
Just to keep this brief, I will simply invite comment on the proposition as laid out - which, to sum up, is this - the entire superstructure of logic which the freegold thesis is built up with rests upon the foundational belief that rational human action can be relied upon to guide the performance of the players who control our destinies from behind the scenes as the future unfolds.
Can humans always be trusted to act rationally? I don't think so.
Also what is in one persons rational self interest may not be in another's and how do we know tptb share our interests?

Having said that I think 'free' humans on average as individuals & therefore almost always when acting as a group consistently choose short term pleasure in exchange for long term pain.

So unlike most, I can see the need for a group (tptb) who tries to allow as much individual freedom & democracy as possible while also trying to ensure the long term success of society.
(Edit: I think the fact that tptb are currently demonstrating clearly that they are intent on removing as much democracy and individual freedom as possible in The US and the EU shows tptb do not have our best interests at heart.)

I can see the advantage of replacing Iran & Syria with Western friendly governments which seems to be tptb's current priority.
Unless we act soon, we will be broke/collapsed while Iran will rise up to the position of a superpower as it is sitting on 60 trillion dollars + of black gold. While peace is maintained at the moment with the current superpowers through mutually assured destruction, Iran glorifies self destruction and is fundamentally opposed to the West, there are also many small radical groups that may gain control of nuclear weapons which tptb will not be able to protect us from.

I think the opposition to Putin, had they been elected, would have been more Western friendly but they weren't so now tptb are playing with fire on their current trajectory. There can't be a solution that doesn't involve getting Russia being on board IMO.

In answer to your question, no, because I don't think rushed desperate people can be relied on to act rationally. I think we may be facing just that situation right now.

Last edited by Unbeatable; 08-30-2013 at 05:11 AM. Reason: See 'edit:'
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Old 05-25-2015, 11:22 AM   #10
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Hey !

has FOFOA gone and left us ?

http://fofoa.blogspot.co.uk/

Hes offering a subscription based alternative site and comments are closed on the regular site.

He deserves to earn from his thinking and writing but Im a bit reluctant to subscribe to any financial site ...... happy to paypal a bit when it seems to be needed though.

So no Turd and no FOFOA for rblong2us )-:
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Old 05-25-2015, 12:25 PM   #11
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...

Hiya, rblong2us!

I am still trying to figure out what FOFOA is up to as well re his free blog. Maybe in a few more days we'll get some clarification.
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Old 05-26-2015, 08:36 AM   #12
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Originally Posted by rblong2us View Post:
...
So no Turd and no FOFOA for rblong2us )-:
Seems to be a trend. TraderDan also recently went that route. I need to remove his (now defunct) blog from the news feed page here.
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Old 06-14-2015, 07:45 PM   #13
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ah ha !

hes only gone and mostly gone

a tantalising 25% of his recent posts are still available albeit with a bit of a delay

similar to Turd then (-:

http://fofoa.blogspot.co.uk/
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