It has been in "real decline" since the internet bubble burst. The FED was cutting rates to fight "recession", that created a credit bubble, not real growth.
Posted on 03/21/2013 11:36:46 AM PDT by blam
Let me consider this... GOLD IS GOING TO TANK.. (be worth less)..
The fiat dollar is daily becoming worth less and less.. because they are printing too many of them..
YET!!!.... gold is going to be worth LESS DOLLARS than before..
Does anyone else get the feeling this advice is BULL SQUEEZE?...
This financial pundit may have Down’s Syndrome..
possibly. but that would only impact demand.
if the demand stayed the same, yet the dollar continues to devalue, the value of gold would increase
At issue is the US Dollar.
When you look around the world, the US is the best house in a bad neighborhood.
The US Dollar will likely strengthen well before the SHTF in the US.
It is highly likely the triggering event will occur outside the US and we will be seen as a safe place to park cash.
This is not to say the FED’s printing is not creating a weak Dollar or real inflation, because it is. I would suggest that the FED has actually done a good job managing this deflationary cycle.
Most people don’t understand deflation, since we have almost always had growth and have only needed to deal with inflation.
I was able to get a full copy of this 25 page study.
Is U.S. Economic Growth Over? Faltering Innovation Confronts the Six Headwinds
Robert J. Gordon
http://www.nber.org/papers/w18315
The paper explores real GPD growth throughout the history of the US. In addition, the paper examines true innovation or industrial revolutions, their residual “mini-revolutions”, productivity gains and standards of living.
It seems they are charging for access to the full paper. I have it as a PDF.
Well, if the dollar is devalued .. that’s a whole nuther ball game.
I’m not talking about that. Of course, that could happen, but the dollar has been gaining lately .. so I didn’t figure that into what I said.
My premis as stated is correct.
Yea put your money in the stock market NOW, BWWWAAAAAHAHAHAHA.
“gaining”... relative to what?
Other currencies that are being devalued at a greater rate?
Tell me how creating $85 billion a month out of thin air doesn’t devalue the dollar.
actually, in 1800 an ounce of gold was worth about $20 (we had $20 gold coins consisting of 1 ounce of gold)
so, in relative terms, what you could buy in 1800 for $20 would cost you roughly $1600 today, an 80x increase. this results in the dollar being about $0.0125 of its value in 1800
to check if the numbers are close, we can compare weekly earnings.
around 1825, i see the earnings ranging from $1-8/day. this would put the weekly earnings around $5-40/wk... an average of $20 wouldn’t be too far off... or about 1 ounce of gold.
in 1926, the average was around $1,313/yr .. or $25.25/wk. which was just more then the price of an ounce of gold (it was $20.63/oz in 1926)
today, the median household income in 2011 was $50,054.. or about $1000/wk. this would be about 2/3s of an ounce of gold... showing Americans are losing value and making less as the push offshore continues.
the point is that the buying power of the dollar may have decreased, but the value of gold really hasn’t.
It has been in "real decline" since the internet bubble burst. The FED was cutting rates to fight "recession", that created a credit bubble, not real growth.
Forgive my ignorance, but what is that top chart indexed TO?
What is the “dollar index” measured by?
If it’s a “basket” of constant goods and services, it means something...
Before taking their word for it, watch this: It’s Coming: “A Pan-Global Collapse Is Inevitable” *Must Watch Video*
The US Dollar Index (USDX) is an index (or measure) of the value of the United States dollar relative to a basket of foreign currencies.
It is a weighted geometric mean of the dollar’s value compared only with
Euro (EUR), 57.6% weight
Japanese yen (JPY) 13.6% weight
Pound sterling (GBP), 11.9% weight
Canadian dollar (CAD), 9.1% weight
Swedish krona (SEK), 4.2% weight and
Swiss franc (CHF) 3.6% weight
China is not on the list because their currency is technically “pegged” to the US Dollar.
That being said, we do live in a globalized world and while locally we feel the inflation from printing money, the question or issue of the original post was not the cost to buy food, gas etc, the question was the possible downward move in gold.
So, if the currencies in the basket are being debauched at a rate greater than the dollar, the dollar will look “stronger”.
Yes,
Keep in mind that there are a number of ways other currencies can be debauched.
1. If a countries central bank cuts their interest rates.
2. If a countries central bank increases their money supply with the printing press.
3. If investors lose confidence in said countries ability to pay their bond holders.
4. If a country experiences a real economic slowdown, (see number 1. above)
has the administration cranked up the printing press?
yes. therefore, the value of the dollar will continue to get smaller.
I agree with what you write and would add the Europeans and the Japanese have also cranked up their printing presses. The value of the dollar will get smaller relative to gold, but not necessarily relative to other currencies.
Look at gold from the perspective of a Japanese investor. A couple of months ago the yen was worth 1.25 to the dollar. Not it is worth just over 1.00 to the dollar. For the Japanese investor gold has increased in price 25% in the past couple of months.
Gold sitting in a vault doesn’t pay the bills or put food on the table, at some point, especially if everything else is going to crap economically, it will be sold.
Gold should represent, at most, 25% of your net worth. If you have gains in gold, you can sell it and use the profits to buy food.
“This financial pundit may have Down’s Syndrome..”
Surly you did not mean this the way it comes across?
Goldbug ping.
Surly you did not mean this the way it comes across?
I used Down Syndrome instead of idiot..
The word idiot can be trite and cliche’....
An idiot is an idiot but some are so by choice..
Others can not help it.. it is a birth defect..
And there are degree’s of idiocy...
Using Downs Syndrome was my way of being “nice”...
-——therefore, the value of the dollar will continue to get smaller——
Correct
While it is true the US$ might strengthen relative to other countries, that doesn’t mean that all the currencies will not still be devalued against hard assets.
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