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Archive for 09/07/2010
Race to debase
09/07/2010 by Philinje.
A dealer of gold and silver has an interesting report on the value of currencies around the world relative to gold. Here is the latest that covers the first half of 2010:
http://goldsilver.com/newsletters/newsID/8580/ref/1
There isn’t a single case where the value rose against gold and in most cases the loss is well into double digits! That’s a nice affirmation of why people like me are promoting gold as a store of value. Also check out the chart at the bottom of that page showing the prior gold bull against the Nasdaq bubble against the current gold bull.
For a bit of international intrigue, here is a longish interview with a smart guy who sees geopolitical reality in financial terms, and basically concludes that Russia and Euroland could easily establish a gold-backed alternative to the dollar:
http://us1.institutionalriskanalytics.com/pub/IRAMain.asp
Finally, there has been some news recently reported in the Wall Street Journal about central banks backing loans from the Bank for International Settlements with gold. There have even been theories circulating that this news is the reason why gold took a sudden dive at the end of last week. Well, the WSJ updated the story to say commercial banks, not central banks got the loans. That’s probably BS because commercial banks wouldn’t have that much gold and they typically act as agents for entities like central banks, when it’s convenient for the originating party to hide its tracks.
There’s a loose statement toward the end of the article that could have scared the market, about what happens if the banks can’t repay the loans - the gold ends up on the open market. Sounds to me like a journalist speculating on something someone said. Whatever. Even when central banks sell their gold on the open market, the price usually rises shortly thereafter. And if it’s commercial banks, why would they insist on losing money by not paying back their loans, since all currencies are dropping relative to gold (see the first article, above)?
Make of this what you will:
Posted in Gold | Print | No Comments »