January 30, 2012

ECB independent?

Last week I received an interesting question from someone on Twitter about the independence of the ECB. He didn't believe the ECB is independent as politicians have a lot of power. As I am confronted with more question's about this independency, it is a good subject for a post. A post which I will try to keep short and most easy to read. Leading in this will be Mr Duisenbergs' speech (ECB president 1998-2003) in may 2002. Here, "The Euro-our money", was honoured by the Charlemagne Prize association. Link

In order to come to an answer to this question about the ECB we better begin to look at the currency issued by the ECB, the Euro. Known by many as the coins and banknotes in our wallet. Now, the Euro stands for far more than this. This currency has become a symbol for underlying political vision. It was born out of a believe that in reaching peace and prosperity we should unify Europe. Also, shown by the next quote, the Euro is some kind of social contract.

"What is money? Economists know that money is defined by the functions it performs, as a means of exchange, a unit of account and a store of value. But, just as importantly, money is also defined by the community for whom it performs these functions. Because it is an economic instrument for each of its users, it is also a political and cultural bond between them. Consider this simple fact: we engage in an exchange of goods and services everyday by using money as the means of exchange; and we offer our labour in exchange for money, which, in itself, has no value. We only do this because we believe that we will, in turn, be able to exchange that money for more goods or services. This fact tells us much about the confidence that we place in money itself. And it tells us much more about the confidence that we place in each other. Hence, money is, in essence, a social contract."

For the fiat-people: 
We can see that our currency issuer (ECB) is pointing to the fact that our money in itself has no value. It is the confidence that we as the people have in money, performing it's three functions well. So can we agree here once and for all that we can leave the fiat discussions for what they are?
You didn't invent the wheel again...fiat is not relevant.
All currencies are fiat currencies now, and will be in the future. We simply have to deal with this as it has far more benefits than disadvantages.
Besides, this Duisenberg statement, can we call this transparent communication? I think we can. That this is no coincidence shows us the next paragraph.

"The euro, probably more than any other currency, represents the mutual confidence at the heart of our community. It is the first currency that has not only severed its link to gold, but also its link to the nation-state. It is not backed by the durability of the metal or by the authority of the state. Indeed, what Sir Thomas More said of gold five hundred years ago – that it was made for men and that it had its value by them – applies very well to the euro."

Again, the confidence is highlighted. Than Duisenberg moves on with a very interesting line. "Severed its link to gold, but also to the nation-state". This sentence is probably the most quoted sentence by Mr Duisenberg.
My view on this is as following:
By saying the currency has severed it's link to gold and in the next sentence mention it is not backed by the metal, Duisenberg is making a clear statement. By severing it's link he means GOLD is not MONEY.
It is and will become more and more a physical asset for the people to use. That this was completely new back then, I already described in my post Euro vs Dollar.

Do you consider stop reading?
Please stay with me, because this does not mean the ECB is throwing the function of gold overboard.
It's made clear further on, by stating, "it was made for men and that it had its value by them".
Actually this is the opposite of monetizing gold (gold owned by central banks) and central banks setting the price.
Gold should be demonetized and start to flow through the hands of the people. As I recently made clear,  this is what's happening now. Gold is getting more and more in the hands of the people. Do we put our excessive savings in our currency (the Euro), in gold, or both. It's up to us.

The separation of the nation-state is explained further on in his speech. 
Besides, did you notice the word politicians already? No?

"That the euro has economic origins does not reduce its significance as a social contract. However, its success as a social contract is only possible because it is rooted in a second accord, a constitutional contract, between the citizens who own it and the institution to which they have assigned the task of protecting it.
The recognition that the management of the currency, being a policy function, requires a constitutional backing is not exactly new. In 1360, the French bishop and philosopher Nicolas Oresme was among the first to successfully argue that money did not belong to the state, but to "the community and [to] each of its members".
One can only give credit to the architects of the Maastricht Treaty. They recognised the need for the functions of money to be provided at EU level. The architects of the Treaty also understood that a single currency can only fulfil its monetary functions and its role as an integrating force so long as it retains its value. Therefore, they drew up a solid monetary constitution to protect those functions and its stability."

Here we come to the core of our question. After defining that the Euro is a kind of social contract between it's users, it's also a contract with the institution (ECB) which we have assigned protecting it. Money doesn't belong to the state, but to the community and each of it's members. The architects of the Maastricht Treaty saw it was needed to protect the functions of money at EU level and gave the ECB the task of protecting it. Here we now have the ECB's sole mandate, price stability.

As the ECB is independent it can't be forced to support fiscal wishes by the separate nation-states. That this has been regulated so isn't coincidence, as just learned.
This will not mean the ECB doesn't intervene in a crisis-situation as this would harm the stability. But when other options aren't available any more. Balancing budgets is a very important option where the ECB keeps on pointing. Now you know why, these politicians aren't always that happy with this independence. It's limiting their spending drift in a way.

By asking what the influence is of politicians (the state) on the mandate of the ECB or at the constitutional contract we can be clear.
By taking this constitutional contract away from the state we made a big step forward in the integration of our continent.
A necessary step, a giant leap.
Every time when we hear a voice calling to end the independence of the ECB, or that this independence is dangerous, we should think back to what we've learned. Taking this institutional contract back to the various nation-states means going back into time......and disintegrate.

This is the reason why the Euro-zone won't throw out members, or Germany will exit it. It would simply be the end of something big, started almost an age ago. With screaming for a Nordic Euro, you completely missed the reason of the creation of the Euro.
I hope you understand it was a logical step to make the ECB independent.
Independent of peasants, with other interests than price stability. Electoral interests clashing with monetary.
As we can conclude, the creation of the Euro has probably far more benefits as you might think of at first sight.
These giant steps are for us to follow. It's bringing us a different world.......

p.s. As I used some paragraph's from this historical speech, this post doesn't cover the speech as a whole. It's containing far more interesting statements, you'd better read it for yourself. Link


AdvocatusDiaboli said...

what a great speech for the euro.
Actually the whole post is about what the euro is supposed to be, but since the post is dated 30.Jan.2012 you should more look at it what it is right now.

Has it "united" the nations of Europe? Hmmm, being german, I'd rather not going to take my next holiday in Greece...not to speak about buying a holiday appartment in Greece.
And watching the northern nations people in Germany and Finland I do not really have the feeling that the majority loves you unification idea.
So to your thesis: "It was born out of a believe that in reaching peace and prosperity we should unify Europe."

Okay, we look at the other task: price stability.
Hmmm, I dont know where you go shopping in the Netherland, but I can tell you for sure that since the last ten years, where I go shopping the prices have almost doubled (food, fuel, services, average cars...).

Okay, you focused on what it should be. I pointed out what it is right now. And the future? EFSF & ESM. I bet we will have fun in europe with that. Lots of fires to come, since Athens is already burning. Let's watch them together on a Euro-Party, yes?
Greets, AD

AdvocatusDiaboli said...


Boefke said...

Hello Mr AdvocatusDiaboli,

The Euro is more than just a currency. As I tried to explain, it was the next necessary step for the unification and integration of Europe. What I see nowadays compared to the date of the launch of the Euro is more political will to arrange agreements on all kind of levels. Not only financial. This wasn't arranged then, IMO because it would be confronted with a lot of resistance, and not only political!

Has it united Europe? It's just the way you look at it. Has there been any wars in the last decade in Europe? No there weren't. Actually the Union is growing as we speak, ever asked yourself why country's still want to join the Euro? For you, Greece is probably not you're favourite country to spend you're holiday. I know a lot of people who have recently visited Greece, and had a good time. Tourism is a great part of the Greece's income in some regions so I don't see your problem here.

Price stability under this current IMF-$ system is defined as 2% inflation a year. We should look at this from this angle. Actually the tracking record of the Euro-price-stability has been better than the Deutsch-Mark before. There are enough data supporting this. So, what's your problem here?

IMO your view on current things occurring before our eyes is a bit troubled by the kind of view that you want to see. Some people only see what they want to see......is this the case with you? Are you really trying to engage in a discussion with the slightest possibility of coming to an agree on things? Or just playing the Devils advocate, resulting in an unproductive discussion.......tell me.

AdvocatusDiaboli said...

I just want to understand the Pro-Euro-fraction:
This "anti-war" argument is complete nonsense. The 50years before, had there been war? No.
Had there been war with any non-euro EU country? No.
I am married to somebody from the PIGSF nations and we meet before the Euro, just to tell you so you do not call me a Nazi, because that's a favourite corner the Pro-Euro people like to place others. It is more the opposite: Before, every german town had a partnership with a french town. That was really fun to visite each other. Now? Alot of those had been chancelled.

How can a currency that is not (s)elected by the peoble, but rather forced upon them, unit them? There is no reason for uniting european countries, they had been perfect in place before the euro. What kind of unification are you talking about? I prefer freedom of the nations and selfdetermination, no oppression by some Ex-GoldmanSucks people, just some bureucrat in Brussel considers what's supposed to be good for everybody else, dictating the made up rules, against the will of the people.
And looking closely at the lissabon treaties there are some passages they even suggest EU police forces using death shots in case of riots.
We will see how peace and national souveranity will play out in Greece. And although I am against force, I deeply wish that the greek people stop this madness by measures that I am not allowed to write on internet, because otherwise today you are considered a terrorist.

And about the price stability, that is simply a lie, at least when you look from the german angle. You might as well tell that Ben Bernanke tells the people that he defines the dollar by its great purchasing power and use that as an Pro-$-stability argument.
Greets, AD

Boefke said...


If you really want to understand the Pro-Euro-fraction we can continue with our discussion, you're welcome.

The 50 years before, had there been war? No.

>>I'm sorry to correct you here. There has been. Have you already forgotten about Yugoslavia? That's been a nasty war isn't it? From Germany to Yugoslavia it would probably take you a 12 hours drive....BY CAR!! That's what I call not far away.

I'm definitely NOT going to call you a Nazi, far from that. As I very often work with German workers employed in the Netherlands I think I know the impact of these words with Germans in particular.

The change in economic conditions are more or less leading to a more protectionist environment. This is a natural process taking place right now. This can have negative affections on the trade also (import taxes etc). My hope is that we can fight this consequences of protectionism as it will de-integrate Europe as a whole.

Eventually the people do decide how they exchange their goods for services et vice verse. As long as the Euro is used for what it's designed for, lubricator of the trade . My guess is that there aren't that many problems with the Euro at all. It's functioning. Did you ever asked for the D-Mark? Or did we asked for the Guilder?
Eventually the "asked" question can be brought down to the simple fact of, do we "use" it. We do, so we have trust in it, do we? If we don't trust the Euro as a store of value, we can tax-free buy gold (marked to market), ALWAYS. Problems here? I really don't see them.

That the situation before the Euro was perfect is arguable. The fluctuating exchange rates of all the different currencies wasn't that great at all. It was bringing uncertainty to the economy, and as you might know.....that's far from supporting growth.

About the politics I can be short. It's some kind of a sideshow. Politicians take hard measures when there are no other solutions left to them. That's why the ECB is independent. The power of politicians is dependant of the buying power of their currency. When this is destroyed, so is their power. That's how the Roman period ended also......
Good examples of this is Silvio Berlusconi. There seemed no problems ahead for him, until....until the rates of his country for lending were exploding. It took only a couple of weeks for him to retreat from office. The emperor had no clothes, and someone showed it. If the ECB wanted the rates to stay at low levels they could have acted. Why did they let it rise? IMO to get rid of Silvio, and get a government installed who knew what measures had to be taken.

In fact the $ buys the American a lot under this system. Debt driven consumption in a way that's hard to copy.
For Europe this is totally different. Europe as a whole has a trade surplus, contrary to the USA. Eventually the boomerang will come back at the USA with the Dollars worldwide spread, bidding at the physical plane. Hyperinflation as a logical consequence. Than we can argue perhaps about the price stability issue?

As a last thing I would like to say that I really appreciate it that you are willing to discuss this subject. As long as it is on a fundamental base, and with respect for each others opinion. The last thing I want to create is a place where people shout at each other to convince, convince by understanding has the best result in the end...

AdvocatusDiaboli said...

Hi :)
What a great example. What had been the essance of Yugoslavia? Nations forced against their will to live under a centralized (socialist) regime.

...hhmmm.... that reminds me of what...?

you say: "We do, so we have trust in it, do we?"
I do not trust in it, that's why I am only holding the euro to buy gold and to pay the bills forced upon me in euros. I am not buying gold because I am greedy waiting for that fantasy 20-bagger, if gold drops 50%, okay with me. I just want to get rid of euros. (If I had a choice I would even prefer dollar as legal tender over the euro).

So why are you buying gold, if the euro is so great?

Just imagine everybody like us in the EURO zone would be buying gold? The fraudulent socialist EUro system would collapse immediately.

Is that a free continent or free european nations, if people are forced in a currency against their will?
And before you start with that ANOTHER lalala-Eurogold: read the EU laws: you are not allowed to pass the EU borders with >10000€ worth of gold without registrations, shows alot where the train is headed, but I rather drop my gold in the north sea or die with a gun in my hand defending it, than to hand it over to the EUro-fascists-GoldmanSachs-Politians-crooks.
Greets, AD

Boefke said...

Fact that you don't trust the Euro, and can buy gold with it (tax free) hasn't that ever thrown up the question why this is possible? This isn't everywhere in the world the same.

Why I'm buying gold you ask?
Simple because I got a little wealth that I want to transfer from this $-IMFS into our next monetair system. It this implies a 20- or 100 bagger is out of my reach, so I don't worry about that. We will see that afterwards. But, if eventually all currency returns to it's value zero, this can be any number in the end.

When everyone would buy gold, it won't collapse the EU. Ever watched the left side of the coinfinstat? It would strengthen the asset side of the ECB. Gold isn't the enemy of the ECB. It's offered to us to put value on it....when we collectively decide to buy gold, there's something wrong in the currency management. Eventually at a price you and I will be eager to sell, measured in purchasing power I mean.

You keep coming up with the fact the Euro has come down on us against our will. I fight this conclusion. All statistics show there is indeed an opposition against the Euro. But this is a small group. It should be looked at it for what it is, a small group.

Why do you show so much hatred against the EU. Does this fit to your attitude towards the Union, or is it made up by facts? Ask yourself....

February 25, 2012 8:25 AM

AdvocatusDiaboli said...

did you ever ask yourself, who lent the money to the PIGSF? Sure, financial institutions, but these do not have any money, it's other peoples money. Who's money is it? 1.) freshly printed from the ECB 2.) retirement accounts of the northern population.
If the people werent forced into these retirement accounts, but rather buy gold, the PIGSF would collapse immediately, therefore also the EUro gone. To think this can be compensated by the Eurogold-MTM is just a big joke. Some bureucrat cooking the books by MTM will not prevent a HI. If this EurogoldMTM would be honest, they would not state Gold+GoldCLAIMs. And to an honest MTM also means, that as a holder of Euros you have a legal claim on the gold at the MTM, but you dont. So Eurogold is just a big fat lie.

Why I hate the EUDSSR? Because I think it is evil to rule completely undemocratic over nations against their will, by force and propaganda.
So I am pretty much on the side of Ayn Rand.
Greets, AD

Boefke said...

Indeed, we the Northern of Europe lent our "savings" to Southern Europe. They spent it on our products and so on, and so on......So why do you hate the Southern country's? We all made this terrible mess.

And true, also through our retirements which we are forced to take part of...The reason for this IMO is described in the following post http://endotworldasweknowit.blogspot.com/2012/01/pension-fund-spvg.html

About Eurogold MTM significance we simply have different opinions. I'm not going to try convince you about this significance as already others tried.

Again, against their will is your view, my view is a bit different. We can step aside and buy gold. It's our hedge like the valley was in Atlas Shrugged. Under this current system, we probably agree more than we both know. Remember just one thing, the persons in AS didn't stay for all their lives in the valley, did they?

AdvocatusDiaboli said...

you have a complete misconception, that I "hate" the PIGSF. No, it's exactly the opposite: I like them, accept and respect them and want them to be the way THEY WANT TO BE.
If they prefer to lie at the beach with a bottle of Uzo, why not? Why send an EUcrat there to tell them how to live?
On that topic I completely agree with Nigel Farage: "Who the f*ck Mr. Barosso you think you are?"

So we have two evil criminals: The totalitarian EUcrats, lieing to (their) people about this setup of the euro and the financial institutions selling the drugs, saying, hey this is good for you.

And really, I absolutely can not understand how a Pro-Euro-person can see any good point in that.
Greets, AD

Boefke said...

Sorry for the misunderstanding. I agree with you, if someone wants to spend his days at the beach with a bottle of Uzo, be my guest. What's the problem here is that with lying on that beach (which is the greatest misconception!!) there also have been huge debts. This will stop the economy to function in the end......doe the Greece people really want that?

In the end we're moving to our next system. IMO the imbalances we currently face will not be that great any more. That's the reason the Pigs countries hang on through this difficult times......and that it are hard times is for sure.

What I see in your view is that you have a hard time in separating the influence of peasants (political figures), and the road drawn for Europe as a whole. Eventually we will experience the consequences as the $ will die...and Europe will transit into a more Eastern oriented continent.

AdvocatusDiaboli said...

Hi Boefke,
You say: "In the end we're moving to our next system. IMO the imbalances we currently face will not be that great any more."

That shows me, that you have not understand the Euro-System at all. Maybe you should read less FOFOA-Eurogold MTM-worship stuff and wishful thinking, but rather the real FACTS!

A nice summary you can read here:

The original more "sophisticated" version here:

These imbalances will increase, no matter what the ECB/EFSF/ESM does, with (due to inflation) or without money printing (due to industrial deflation in the PIGS) this imbalance will be increasing. It has to, there is no way out of it until the Euro breaks.
Sure, the FOFOA american worshippers have no clue about this detail and just simply ignore it whenever I pointed it out, but you as a european at least should look at it, no matter what your personal political ideology is.

Greets, AD

Boefke said...

Hi AD,

It will take me some time to read the links you posted above. I definitely will read them. The fact that it's written in German is no problem for me.

I will come back on this later.

By the way, what you say about FOFOA worshippers and all that is not mine opinion. On the contrary, as I can only speak for myself, I'm looking for someone to blow this thesis up. Confirmation is all around us, when you only want to see.....so, like I said, come back on this later.

Boefke said...

Hi Ad,

I've read the article in der Spiegel, and scanned the PDF you sent me as the content is pretty much the same. As you found this information shocking, I'm not with you. The article clearly shows us the road ahead as one-way-traffic one. I don't like the way the writer is talking about the Germans being held hostage to bailout the rest of Europe.

This action was no coincidence, you think it is? It is a way to keep this Union together for the time being under this current system. That the Bundesbank is doing what's it's doing is a perfect example of this. When they hadn't done this, the PIGS probably would have gone bankrupt. What would this have done with their bonds? What would this have done to your pensions?

The Euro is (like I said) a necessary and great step in the integration of Europe. With great consequences for EACH country taking part in this. Not only for the PIGS.

Ever asked yourself where your country is selling those good quality products? What the devastating consequences of a bankruptcy would have on your exports? Did you ever ask? Remember, our current system is build on pure debt and debt alone. This creates enormous imbalances in the trade worldwide. We currently face the consequences of this bad functioning system. It's a matter of buying time until the system breaks...

The one-way-traffic road we're on is for the sake of our continent. More and more people are seeing the benefits of this course. Germany has no advantage in a strong D-Mark. It will affect the exports negatively, with the known consequences. The Bundesbank is acting with this in mind, and without electoral problems.

What you said about the Germans opposing to the Euro. Maybe it's a bit simple thought, but why isn't there a political party jumping in this enormous sea of opposition? It would make them the leading party overnight! No, AD this seems to me a misconception.

AdvocatusDiaboli said...


"Ever asked yourself where your country is selling those good quality products? What the devastating consequences of a bankruptcy would have on your exports?"

Just dumb them in the harbour bay? For the physical plane of Germany would be the same result.

"Germany has no advantage in a strong D-Mark."

What a BS propaganda crap. Show me any circumstance in human history where from a weak currency the people of a nation prospered, or the other way around. It has ALWAYS been the opposite. Oh yes, I forgot in Zimbabwe people must be really prosperous.

"As you found this information shocking, I'm not with you. The article clearly shows us the road ahead as one-way-traffic one."

Okay in your eyes maybe just peanuts. Any actually really peanuts, looking at this:
Just look at the diagram and tell me where the bubble is.
4.6626 trillion euros of private savings, majority in AAA-€-crap-bonds!!! Which means these people have not been paid. I wounder what these dumb sheeple will say, when they find out that they are srecwed from their life time savings. I guess they will be happy about the socialist european unification.


AdvocatusDiaboli said...


I suggest that you stop looking at the world like you want it to see due to your personal political bias, but rather at what's really going on and the options:

1.) Greek default and stays in the Euro: Every other PIGSF will default as well => BOOM!!!

2.) Greek default and leaves: Bond-Holders & sheeple find out that emperors in general have no clothes => BOOM!!!

3.) Kicking the can down the road: Printing to infinity, sooner the problem grows exponentially, but rather later the dumbest sheeple find out => BOOM!!!

So before you continue to dream your wet european socialist dream of a transfer union, it would be rather intersesting to have your opinions on how the different actual options may play out.
Greets, AD

AdvocatusDiaboli said...

and to add:


so I guess all your dutch compatriots will also hail the euro, once they figured out, that by now (still accelarating) they got already screwed by 10.000Euro PER PERSON!!!
Wait, no they will understand that all this is for a major far supiour aim.

Boefke said...

Dear AD,

Let me start with the most necessary part first. I'm noticing a more hostile approach from you towards me. This doesn't give me a good feeling, so let we please continue with our discussion in a more behaved way, thank you.

A good example of a relative weak currency is the Chinese Renminbi. Ever heard the Americans complain about the exchange rate with the $. The Americans think it's to low. I hope we can agree on the fact that the recent years have brought the Chines more prosperity. I doubt it if we ever can agree on one issue....even when the facts are there for every blind man to see.

"Just look at the diagram and tell me where the bubble is.
4.6626 trillion euros of private savings, majority in AAA-€-crap-bonds!!! Which means these people have not been paid. I wounder what these dumb sheeple will say, when they find out that they are srecwed from their life time savings. I guess they will be happy about the socialist european unification."

This people haven't been paid, and when they wait to long will never be paid. Eventually all paper will burn (what's so hard to understand here?) Their holding their savings as debt (bonds). You and I see this very big problem and choose for the gold to hold, with no counter party risk. What this has to do with the UNION is totally unclear to me. Our current SYSTEM is based on debt. Is Europe responsible for this system? Is the Euro the world reserve currency? Please, stay real will you.

My guess is that option 3 is the most probable. Printing to infinity was referred by Another. "Print it outright for cash and throw it at you front lawn." Again, what is so hard to understand? What they IMO try to do, is force politicians to a certain austerity on their budgets. Not print it outright. That's what's happening now. The Greek take on the hard task to try to get their budget more in balance. The BRICS also want to bring in the needed capital, but demand also that same austerity.

What you keep doing is keep pointing at figures. 10 billion here, 1000 trillion there. Like I said above "print it". We only need one repricing of something on the asset side to get things in balance again. You know what I'm talking about but something is troubling your view. I really don't know what it is....and don't mean this disrespectful.

To continue this discussion by yelling each others' view on this subject isn't contributing much to both of us. We both seem to stay to our view. In your words, a "wet european socialist dream."

This last sentence implies probably one of the 2 next conclusions:

1. You really haven't the slightest idea of what I'm talking about.

2. I cannot explain clearly enough my view on current developments.

AdvocatusDiaboli said...

1.) I apologize for my expressions. Any kind of euro cult get's my nervous.

2.) We agree that stacking up debts as "savings" is a useless ponzi scheme.

3.) I still dont see a reason why the euro ponzi scheme differs from any other.

4.) Any ponzi scheme is about to screw the productive people. Therefore logically the euro is 100% the same.

5.) If the chinese would keep their goods for themself (e.g. by letting their currency flowed), instead of hoarding worthless paper they would be even more wealthy. If they enjoy making themself slaves: Let them be as stupid as they wanna be. On the other hand like Peter Schiff calls it: They give the US more rope to hang themself. I am not going to judge of that, not my part.

6.) You, as well as FOFOA completely underestimate the social and cultural backlash that will happen when this blows up, but first cracks can be seen all over europe. And I hope for the nations of europe that this euro ponzi scheme blows up earlier, because the later it will, the more haterate it will bring.
Greets, AD

Boefke said...

Hi Ad,

Stacking up debts is in favor of the debtor. The purchasing power lost by the saver is in favor of the debtor. So this current system has only one "camp" as a winner, is imbalanced, this won't last forever.

3. the concept of the Euro is totally different. With the establishment of a physical only market in gold you can always buy gold (but at a much much higher price) with your Euro's. This will inflate indeed to a great extend but will keep a certain confidence.

Imagine yourself what would happen if all the $'s in the world would go bidding on physical gold....it would be devastating!

5) the Chinese IMO are creating a growing market in their own country. Don't overestimate the wealth of them. A lot of people still are very poor with only a couple of $'s to spend. This is changing, and the Chinese are buying themselves and us time here.....This is probably the reason Another wasn't right on the timing issue, Chinese buying Treasury's like madmen.

6. You wouldn't hear me saying these things happening don't have any impact on the world around us. In fact the changes will be huge! But in the end we're moving to a more transparent system, with benefits for all the people adding value to our world. In this light, the Germans have a huge advantage as they are net producers, and have a huge possession of gold inside their borders.

But don't get me wrong, I'm not saying the transition period will be the nicest period of our lifetime. On the contrary. To start something huge, maybe it's important to let the current system show it's real benefiters and it's victims. It's not that clear to everybody (smile).

AdvocatusDiaboli said...

"the concept of the Euro is totally different."
No, not really: When a debtor goes to a $-restaurant he pays with counterfeited money.
When a debtor goes to a €-restaurant he will let the servants pay for the meal and the chief will tell the servants that this is good for them.
Both ways: servants are fucked and the meal's gone.
Tell me, which one is more sick?

"With the establishment of a physical only market in gold you can always buy gold"
Nope. Do you have any kind of real prove for that statement (not some ANOTHER-lala-worship stuff please)?
Greets, AD

Boefke said...

Hi Ad,

It's becoming everyday more clear to me why you can't grasp the differences between the Euro and the Dollar. This is essential as they both threat gold differently. I'm not going to repeat what's the main difference because I already sent you a link. Again this is essential.

Tell me how we can look into our history and see the signs of our future system which hasn't been implemented before. It's like asking me to show signs that people ever been to Mars. we both know eventually it will happen, can I proof this by looking into history?

I think we will not come to an agreement about this "freegold" thing ever. Let us stick to the fact that we both buy gold for different reasons ;)

AdvocatusDiaboli said...

Forgot something, a really great quote from the Duisenberg 2002 speech:

"Money must be as solid as a law."

I guess it's not just me, also Draghi must be also laughing his butt off.

AdvocatusDiaboli said...

sorry, maybe it is me, but about what link are you talking about?

In case you mean the speech by Duisenberg, 9 May 2002.
So what? Are you so naive that you base your confidence on one single SPEECH and in particular just one sentence (of a member of the club)?

Or do you mean your own post?
"So the ECB is showing us something."

No the ECB does not show us anything at all. It does not show us who receives the money, it does not show us which bonds they are holding. It does not tell us how much gold they actually have. THESE ARE JUST THE FACTS!!!
About the other "indications" everybody can just draw conclusions like the Ex-GoldmanSachs club I better not start (again).

Besides all that euro is better... stuff. Regardless on how to judge that form the national vs. international economical viewpoint, these are just different opinions between the two of us, I guess both of us have good reasons to believe what we do.

You know what really pisses me off?
I own a company. If I would run my balance sheet and my transparency like the ECB, I would be put right away to jail. But hey, I am just one of the dumb idiots running the show in real physical terms for the antidemocratic EU-burocracy crooks and the socialist regimes. And hey, I better do not touch the taxation issue...
And you can not imagine, how mad I am. So what I am right now only working on, is to sell my company, to somebody who is hopefully going to manufactures in China, I've really had it. Because the more people work here in the EUro-zone, the more they will be robbed and the more power is handed over to the slave owners, time to take my contribution to stop this.
Greets, AD

Boefke said...

I meant this link: http://endotworldasweknowit.blogspot.com/2012/01/euro-vs-dollar.html

That you've really had it is one of mine conclusions also ;)

Boefke said...

Dear AD,

Knowing that you hate quotes, I want you to show just one. It's from FOA dated 1998.

I doubt that the common man will feel there is gold in the Euro. He will know it butnot fully understand it. The currency confidence factor comes from a strong positive exchangerate, much like that enjoyed by the dollar today. The average European will buy from the USAin the same way that Americans buy bargain goods from other countries. Using an overvalueddollar makes one feel as their is no inflation, even though there has been massive dollarcurrency inflation over the last twenty years (the real cause of price increases when theexchange rate is allowed to balance a negative trade deficit). As for the Euro being a clean,unmanipulated money system? Of course not! There will be all kinds of problems, but theydon't carry the debt that the dollar does after all these years of reserve currency status. TheEuro will be the lesser of the two evils. Perhaps by a factor of five. That is also why manymajor investors will hold gold as a proxy for Euros. Not to mention that it will increase in valuea great deal. What exchange rate for gold in Euros? I think it will be more of a free markettype system, but Another thinks $6,000 in todays dollar buying power. We shall see. Thanksfor the consideration! I wanted to reply to your first posts but lost them? FOA

Boefke said...

As an answer on your February 28, 2012 9:05 AM post please read this.


See? A to strong currency will harm your economy. Crazy, isn't it?