gold hot, or merely warming?
under the brainwashing with which so many of us grew up, it’s easy to say, “Gold price rockets to 27-year high” ($748.10/oz). however, as many have noted recently regarding the canadian/US dollar exchange rate at unity, what it’s “up” in relation to is an increasingly inescapable parameter. can one accurately choose from 1) “the canadian dollar rose”, or 2) “the US dollar went down”? what about gold and the US dollar?
the US dollar is the primary denominator for gold prices. if one tries to objectively nail down the historical value of the dollar, i guess there’s no better reference theoretically than a CPI, though the administration of such an index is crucial, and all such indicators should be used cautiously.
even assuming large CPI flaws and author bias, this older article and its charts help remove some of the “absolute dollar value” bullshit we were sold since childhood (e.g., price inflation is driven by greedy businesses, not the runaway counterfeit presses of the official US crime syndicate; the dollar is blameless). the author charts “real gold” prices (CPI-adjusted), giving a much better picture of gold price and the psychological barrier of the $850 spike in 1980 — solid, visible indication that the $900-$1000 range now wouldn’t be that big a deal when looking at the dollar as the flawed piece of dropping dung it is. at least it puts some perspective on the apparently widespread view that the 1980 spike, in its spikiness, damned all future measure of gold in the $850 range as absurdly volatile. his adjusted number in jan 2006 for the 1980 spike: $2,176.
not earthshaking, but something gold hobbyists might wanna check out if they haven’t see such an adjusted chart before.
October 12th, 2007 at 15:33
Thanks for the link, Salty! That Safe Haven article was interesting reading and gave me a new perspective on gold in relation to the dollar.
I wonder if and when the next gold boom might take off? Certainly trying to “time the market” is often a pointless exercise, but with several countries and OPEC-oil producers talking about backing off the dollar for their exports, you’ve got to wonder what the future holds.
October 12th, 2007 at 16:21
i think there will be a mini-crumble within 3 years, leading to the rampway toward hyperinflation by 2025. won’t it be fun if the dollar goes even farther into the toilet under president ron paul? oh, but that would be impossible.
what’s needed is a bold, violent invasion of some other country.