tinfoil hat time?

http://www.professorfekete.com/articles/AEFRemobilizeGoldToSaveTheWorldEconomy.pdf

The Raven is nothing short of amazed at the press coverage of this open letter to Paul Volker. He is inclined to think that the media attention has something to do with the renewal of Bernanke's tenure at the Fed pretty soon and the positioning of Volker as a replacement. The characterisation of QE as money printing by the media has been reckless and far from the truth, sound bite journalism prevails, even at the FT.

The letter calls for the Fed to mint gold coins for every bond holder that would want to redeem their bonds for gold has received in some unlimited fashion (uhm how?). The arguments in the letter are motivated by the fact that the gold forward price is lower than the current spot price, this apparently is evidence for there not being enough "paper gold" ie physical in the current market for end investor needs, harking back to the paradice lost that was the 70s halycon days when he was young and senile perhaps coinciding with the peak in the gold basis.

The Raven knows not a jot as to the long term trend in the cost of carrying gold, he does know storage is going to be relatively expensive as its going to need insurance from theft, security, etc. which would all other things being equal raise the forward price, he also knows that interest rates are pretty low and that too would be a good reason for forward prices to be lower. The biggest unknown for the Raven is the question of how much an institution could get for lending their gold out like a stock holder does with their equity. The higher this lending rate the lower the forward. The Raven would point out however that the spread on secured lending might be higher over the last year because of fear of counterparty and systematic risk, rather than any specific demand for physical gold.

The Raven is also a little intrigued as to where the Fed is going to get these gold reserves from to mint an unlimited amount of coins, he thought the thing that attracted goldbugs was that it was strictly limited?

Fiat currencies have value as citizens are able to pay their taxes, does this mean we will see a return of tax collectors with large Robin Hood style purses collecting gold coins?