The US Dollar is not the only currency out there that is losing value; in fact, all the world's governments are depreciating their currencies at alarming rates. Part of this is a desire to maintain competitive pricing with other countries, but most of it is just plain old politics. In order to provide more goodies to the voters, and to support the programs dear to their hearts, politicians have only three choices: take the money by force (taxation), create the money out of thin air (that is, to steal it through inflation) or borrow the money and pay it back later using one of the first two methods. Since high taxes crush productivity and shrink the economy, and borrowing only works while savers are willing to lend, it all comes back to money creation and inflation sooner or later.
As you can see, there is a "race to the bottom" going on. As policies change, and news reports highlight problems or gains in various countries, one currency can become stronger than another, and fall less or rise more. Later, the currencies may switch places. But over the course of time, the trend for all of them is clear, and it is not good.
Gold is the only currency that retains its value over long time periods. For thousands of years, many money systems have been tried by people all over the world, but only one has stood the test of time, over and over: Gold. There is nothing magical about it – it just works better than any alternative yet tried.
One of the key things that makes gold such a successful currency is that it takes real work to dig it out of the ground, refine it, and transport it to its ultimate users; as opposed to modern government currencies that can be created by typing an amount into a computer and hitting "enter". This keeps the amount of gold in the world growing at a very slow rate, ensuring that gold's value is stable.
Canadian Dollar, Euro, Swiss Franc and US Dollar in Gold grams from 1980 to present:
click on the chart to download a pdf
Pings on CAD, EUR and CHF vs USD
Comments on CAD, EUR and CHF vs USD
peter f erickson @ 7:23 am
Dear Mr. Vollum,
I will hazzard the guess that the Loonie will win. Why? The goal of the North American Union is to comfortably merge the U.S. with Mexico and Canada, to crreate a supergovernment around them. Knocking the dollar offf its pedestal advances that cause. What they need is to do something which will put it closer to the Mexican Peso.
exchange rate calculator @ 5:42 pm
Great blog! I actually love how it's effortless on my eyes and the facts is well written. I am wondering how I may be notified whenever a new post has been made. I have subscribed to your rss feed which should do the trick! Have a nice day!
conveyancing @ 6:39 am
Such clever work and reporting! Keep up the good work guys
Havard Morkhagen @ 12:33 pm
Great site you set up here.
I thought myself original when I made out this one: http://postimage.org/image/2osnlv0w4/
Domenic @ 6:14 pm
@peter f erickson:
The power still is in peoples money. Stop buying GIC's and bonds and taking money out of your bank and parking it in gold and silver will get their attention.
I guess that is why our dollar is going to be 1.15 usd next year (Well thats what I'm hearing in our mass delusional media)
Silver is a super buy right now and will hold its value while everyone is being robbed. Have I bought silver?
465 troys at an average of 25$ an ounce and at first I was concerned that it was a bad move but now silver is going to 31$ and projections of over 50$ for 2011. This is money that my government will not be able to steal.
I worked hard and long hours for my canadian coupon currency to have pompous know it all gamble it to keep the dollar low to help exports. Its my fn money and I want to keep it.
Is that a crime?
curtis @ 4:51 pm
also, aren't most other curencies pegged to the dollar?
Barry Suckski @ 9:23 pm
How about the Yuan priced in gold?
editor @ 6:22 pm
@Barry Suckski: I finally got around to doing a page for the Renminbi (Yuan). Most of it looks identical to the USD due to currency pegging. I’ll try to keep it updated, and add some commentary. Thanks for the suggestion!
Dan Dinsmore @ 9:46 am
The Abbreviation CAD puzzled me a first I usually see it as CDN .
Which got me thinking about happens when the Bank of Canada just devalues the loonie to keep the US trade going. Do they hold the money they made in the Treasury or is it just siphoned off some where? And the over the top printing of US currency is theft of a scale unimaginable huge, That has Escalated beyond belief, so much so that as long as everybody likes the emperor's new clothes it continues. What happens when the goods and services sector figures out that no matter what they do they loose ground to the ones stealing and printing the money?
Alexis Rodriguez @ 11:35 am
I'm new in the economy world. This chart looks to me like a highway where everyone is trying to get to the finish line first, crossing lanes one another. Is this the so call "currency war"? What would happen if the value in gold grams of all or any currency goes to 0? Does that mean that a new monetary system would have to be created? Is this the reason why we are working harder and longer hours and yet earning less while prices keep going up due to monetary inflation? Isn't this stealing prosperity even for billionaire who are extremely affluent but still will be even more affluent if they never had to conduct business in a deprecating currency? If I'm right then nations all around the world should be enjoying a better standard of living under a gold standard due to a fair a preservation of purchasing power?
editor @ 11:22 am
Hi Alexis, I think we are indeed headed for a new monetary system, and I agree with you that under a gold -based system the world would be enjoying a better standard of living… but I doubt that that is what the monetary powers want, or will give us. However, my belief is that by choosing our own money: gold, silver, Bitcoin, whatever works for US, and storing our wealth there, and measuring the performance of our investments in those units, and simply treating government imposed currencies as a foreign exchange problem to be worked with and around (sometimes to our advantage!) we will create more prosperity and a better standard of living for ourselves, our families and our friends. And as others see the results, they will join us and spread the benefits throughout society to our mutual benefit.
Domenic @ 2:27 pm
@Domenic: This is an update. I would like to warn everyone going fool hearty on PM,s. A word of advice from someone who has been through the cycle. 1) know what money is, 2) Understand who you are fighting against. It's not only central banks it includes the people you walk among everyday. This includes people who depend on the system. Which is pretty much everyone. 3) Understand the mechanisms used to control the price of the pm's from the miners which are obligated to sell the product at a contracted price to the dealers that short their supplies to negate the volatility. To the comex that adjust margins to cool down rallies. To the Major bullion banks that control the PM's to favor the currency the governments use to project strength of their respective currencies. 4) The education system that refuses to educate the history of the bankers and the value of money. 5) the legal system that imposes new taxes and laws that control your ability to unwind your physical positions.
Literally the whole world is against you and for you. It all depends on how dependent one is on the system.