true or not true??, page-17

morning all,

And mods - this is all about fml - at the bottom you will see how it can effect fml and every fml shareholder.

I think all of you who have posted since last night have solid and valid points - I think you are all right.
Here is how I see it.

Infose is right - gold shouldn't be any different - it is a commodity like all others and is traded in paper with cash settlement like many others. Yes it is not being consumed much like coal or iron and it is being hoarded. imo the hoarding has probably not even really begun yet. But all hoarding is physical. And you may well be right in that miners won't be able to control the price - but, they might not have to, they might well be very very happy as price takers - but I think there is a solid possibility that they might be able to control a 'premium' for delivery - and we are a significant miner.

Kal is definitely right - the 100 to 1 thing is a definite - and I believe it just might be the blow that finishes the fight and sends the price of physical through the roof. Why?

Well,that's where Kingy2 comes in. "Gees, if you don't believe in the currency that we all run by, I've got some pretty shells and shiny rocks you can buy for a big stack of that worthless paper if you like"

Dead set correct.

How's this for a possibility.

There is so much debt, we can't control it - so what do we do? How about we get rid of the $ or more likely the pound and definitely the euro and replace them with sea shells?
We wipe out all the debt, write off all the leveraged contracts and start over with ---------- sea shells?

Great, sounds like a plan. A good plan today is better than a better plan tomorrow. So there is is - see shell currency and hand shakes all around.

Hmmmmm, possible? -- well it's been done before - many times.

Now what happens to all those investors out there both private and institutional who had old currency tied up in paper contracts for coffee, gold, metals, etc.?

Well, basically, they are broke.

What happens to the coffee shop owner who had 2 containers of coffee in his shed? Well, he can go on making coffee and selling cups of it for sea shells or other services if he wishes to.

What happens to the very very few holders of physical gold?
Well, privately, the owners can sell some off if they need to - the demand has skyrocketed because people feel NO confidence at all in the paper stuff now and they aren't really into these damm new sea shells.
Central banks are now handing over whatever they have to get physical gold because in the last few decades - they dumped physical gold and went to promises - and now those promises have just gone down the gurgler.

Patience - we are getting to fml - which at this moment is still digging like mad whilst all of this is happening.

Now there is a bloke down the road (Mr Jones) who owns 10 houses - but he only had a few dollars and now he has got very few sea shells - but he needs more sea shells to buy food and car polish.

So his wife says, why don't we sell of a couple of houses for some sea shells, we should get enough to buy lots of food and car polish AND mascara - do this or no sex!

Right - so there are a few smarties around with what seems a lot of sea shells - god knows how they got them, and they are happy to buy some houses - but only the 'best' houses.
So he sells his 2 best houses for 1m sea shells.

He spends .5m ss on food/polish/makeup (food 25%, polish 10%, makeup 65% - got to keep her happy) -------- and, he/they have 500,000 sea shells left.

She says, hmmmm, I don't trust these bloody sea shells and you can shove those new eft things where the sun doesn't shine - so how are we going to preserve the value in the remaining sea shells?

He says, well the only thing that has worked except for top qual. real estate (which the buyers are in complete control of if you need sea shells) -- is gold and silver - and mainly gold.

But it is useless in paper - everyone lost everything, and it can't be stored in a bank or similar - the rot there started when MF Global fell over and they took an axe to everyone's gold bar and chopped 28% off and it got worse from there.

So the only way is to buy some physical gold.

Now if we go to the refiners there is a 6 month wait for delivery and they take your sea shells straight away and say that the contract might vary if supply is interrupted.
So, bugger that.

But, I have a mate that has some contacts with Focus Minerals - they produce about 250k oz pa and we might be able to buy some direct from them.

Ok she says, lets go see them.

Now, darlings - following is a fictional picture of a mania, not a ramp, just a possibility.

So the Jones arrive at fml office in coolgardie - they get to the gate which is guarded by about 10 guards who for some stupid reason are dressed like pirates.
They say they are here to see the boss to see if they can buy some gold.
A silent smile crosses the guards face and he asks if they have any sea shells with them - they open a couple of suitcases and show him what they have brought.

He signals another guard who brings over a golf cart and the Jones's and suitcases are driven around the back of a building and wait in a que of about 20 people.

After 5 hours they are ushered inside.

Inside there is a bloke behind a counter waiting to attend. There is also a bloke called Chuck in the corner with a big hat and a big cigar and a six gun on his belt. Next to him is a bloke they call 'Chairman' - he has got one of those dumb pirate scarves on his head, an eye patch and a deadly looking short sword hangin from his belt - he is swigging from a bottle of 21 year old malt.

Now Mr Jones has done a lot of business, so he knows how to handle these things.

Focus want 2500 sea shells today for an ounce of their unrefined gold.
Secretly Mr. Jones is more than happy with this - but he knows how to do business, so he throws himself on the floor begging to buy a large lump of gold for 2400 sea shells per ounce - it's a negotiation technique he learned from when he worked in the bank.

Whilst he is on the floor pleading - Chuck slowly strolls over and puts the heel of his heavily patterned cowboy boot on mr Jones's fingers of his right hand and says

"Listen punk, any more of this crap and you will make my day"
"The price is 2500 sea shells right now and if you give me any more trouble it will be 2750 - do ya understand, punk?"

"And tomorrow the price will be 3000 sea shells if you are still alive - get it?"

Well, Mr Jones is at this point re-evaluating his negotiation technique and his wife says bugger this we will take it at 2500 sea shells right now - Mr Jones nods agreement.


so the deal is done and the Jones's leave by the side door - they walk past the que of buyers which has now stretched to about 200 m long around the corner of the building.

the next week 'Chairman' is talking to CB and the conversation went like this

CB - Chairman, what the hell am I going to do with all these bloody sea shells? We are storing them in the crib room, every safe is full, we have containers of the things and even lately I have been filling up some of the older pits with the stuff.

Chairman - arrh CW, ok, ok. I will get rid of some.

CB - How?

chaiman - I'll give another special to the shareholders.

CB but, you only did that 6 weeks ago!

Chaiman - well, we have to do it again, won't we.

CB - ok, but there's another thing?

chairman - yea?

CB - the joint venture mob with the mill up the road have asked us if we will sell them all our production out of hole 7. All we have to do is dig it up, they will pick it up themselves and they will pay us way above what it is worth in gold/sea shells.

Chairman - ? hmmmmm, well, if we didn't have to mill hole 7 we could bring in dirt from one of our other several dozen sites that we just can't process.

CB - Exactly.

CB and Chairman together -------- that just means more bloody seashells - and what do we do with them?

Chairman - arrh CB, also, we might need to speak about Chuck's customer relations.

CB - Oh!


that's it boys and girls - that's a little bit what a mania looks like.

I can also show you what the mania looks like from a shareholder pov - but that's for another day.

So this post is all about the article - and I say again - the article is a sign - just a sign, that things are changing.
MF Global was also significant - a blow to some that will be remembered by all.
The big blow that will change everything is if paper gold is wiped out - in only one institution - that will put the fear of god through the whole shebang.
And the price of physical will change overnight if that happens.
And if that happens - then the demand for pirate suits will go through the roof also.

Have a great one

Pinto