FOFOA is on a mission to describe Freegold in as many ways as possible to facilitate understanding. Everyone is different and what makes sense for one is confusing to others. Here is another approach to the concepts of Freegold that I find compelling. FOFOA describes how gold must flow, being a real and physical medium that responds to real goods and services. The monetary realm is an imaginary construct based on confidence that exists separate and above the physical realm. The monetary realm assigns nominal value that cannot possibly exist in the real and physical plane. To the degree that this monetary plane assigns fictional notional value to real goods and services through the production of fictional money (paper gold), the true signals physical gold can provide to guide rational decision making are obscured. Physical gold, being anchored in the physical realm, has a finite and very predictable supply where paper gold (dollars) has potentially infinite supply. Paper gold (dollars) when used as a reserve asset places no rational limit on the production of credit and the accumulation of debt. FOFOA shows why this unfortunate situation cannot and will not continue indefinitely. Real gold will once again reassert itself when the imaginary monetary plane collapses along with its imaginary notional value.
The story I am about to relate to you was first told in a lecture hall at the School of Political Sciences in Paris (L’École des Sciences Politiques) on March 17, 1932, from the depths of the Great Depression. It is, perhaps, more relevant today than it was on the day Jacques Rueff delivered it. Rueff began with this:
“The story I am going to relate covers a long period…”