Question: Isn't Gold Saying Japan...USA and China Least Worst Impacted Ecomonies?

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Nichoman's picture
Nichoman
Status: Gold Member (Offline)
Joined: Nov 1 2008
Posts: 422
Question: Isn't Gold Saying Japan...USA and China Least Worst Impacted Ecomonies?

Been comparing cost of Gold compared to numerous International Currencies at...

http://www.kitco.com/gold_currency/charts.htm?EURO

It appears, as I understand things, market is saying Japanese Yen first and then USA and China Yuan are relatively less impacted in past six months or so.   Then compare w/r/t past 60, 30 days, week and so on for temporal issues. 

Isn't this a useful, convenient metric on markets views of relative states of individual countries?

Any thoughts and comments on this and why?   Am I diagnosing this incorrectly?

Thanks,

 

Nichoman

 

 

Farmer Brown's picture
Farmer Brown
Status: Martenson Brigade Member (Offline)
Joined: Nov 23 2008
Posts: 1503
Re: Question: Isn't Gold Saying Japan...USA and China Least ...

As I've said before, I'm no economist, but all that tells me is the relative quantities of those currencies today, not the future quantities of them.  That is, since everything is supply/demand driven, then the price of gold is directly proportional to whatever the supply of the currency you are measuring it in is.  That, however, is no indication of what the supply of X currency will be tomorrow or next month or next year.

On Deninger's website (I think in a post today or yesterday), he made the case that the Euro would be in better shape after a total collpase than any other currency, because their money-printing mechanism is disfunctional compared to the US and others.

In any case, there is one simple way to outmaneuver any currency devaluation, and that is, buy physical gold.  

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