US Dollar

I heard you and website name on Tellman's training audio. Your site is great. I am going to market to approximately 95% of those approaching retirement who are totally unprepared financially and get them to look at web-based marketing as a way to build their asset base.

I will definitely provide a link to your site once I am up.

Best wishes to you.

Ron Cooper

Wow! I remember learning in school that FDR and WWII saved the economy. Looks like that was a bunch of blank. In the first chart, it looks like the value of the dollar leveled off after the crash of '29, and was holding steady, then fell off during and after WWII.

What's really frightening is that today's dollar is rapidly becoming worthless.

Glenn

Oops, I meant the SECOND chart.

For my introductary free chart I asked for a chart showing gold vs the Canadian dollar. I never received it. Why? Bill

I agree 100% with your comments. Could you give me the address of a serious gold coin dealer in New york City ? Thanks

Convincing data, I'll have to look into my future investments with care.

I fell upon your website by accident and I am awestruck by the horrendous consequences of our 100 years or so of monetary interventionism. The only thing that comes to my mind is 2 words: Wealth transfer! Inflation is nothing else by monetary plundering! And we are taught to fear deflation! In what kind of Orwellian paradigm are living in nowadays?
Thank you for your work; I will try to spread it around as much as I can.

I have been following economic data very closely for the last year and loosely a few years before. I have been losing confidence in the dollar for well over 4 years now and have been warning people of the outcome. The only reason the dollar remains in circulation and has been devalued so slowly is because it is the worlds reserve currency and is backed mainly by the Chinese Yuan. Right now gold is 1,563.17 per ounce and climbing fast. Our currency devaluation is hurting Chinese investments in the US bond market and they announced on April 25 2011 they will begin a sell off of treasury bonds. With QE 2 officially ending on June 30 2011 we will start seeing bank failure rates on a massive scale if congress does nothing to raise the debt ceiling on May 16 2011. The 2008 run on the banks will seem like a minor event compared to the catastrophic dollar value collapse in which all the world currency markets rely on. The US credit line with the federal reserve will be maxed out and with no more ability to borrow money from the fed, the treasury will have to default on its debtor obligations on interest payments and we all know what default means. For the majority it is too large of a credit crunch that most can comprehend. Keep in mind that treasury bonds are basically IOU's to the federal reserve and we all know what extents the Fed is willing to go to if we can't pay them back. The bottom line is QE 2 is the iceburg that sunk the titanic. It is a sad reality but it is happening. The point is if you invest in gold using US dollars and the dollar does collapse, the Fed will reposess all of americans monetary assets to include silver and gold. To me, gold is no better than a car or a house payment that has defaulted, it will be reposessed and possibly using force to do so. Remember, we don't own anything if we by products using federal reserve notes. It is merely borrowed from the Fed. The financial trap is set and when triggered, they gotcha. If we fail to learn the lessons of history (I.E. 1930-1940's Germany) we are doomed to repeat it. The real strategy for ending financial entrapment is to end the fed. Do the math and the research for your self and it will be self evident. I am not a very smart person or a financial pro, however, I did learn math in school and I am guessing you did too. Just do the math.

The beginning of the end for the dollar started in 1913 with the creation of the FED imho. That was the beginning and now we are witnessing the end. This is a sad time for America.

With regards to what Sean Blanchard said about the government taking possession of peoples gold and silver, I agree that is a real posibility. They have done it before. I'm not sure if it will make a difference but coins that have a numismatic might be a safer bet if the government does decide to take peoples gold.

I believe that banking institutions are more dangerous to our liberties than standing armies. If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around [the banks] will deprive the people of all property until their children wake-up homeless on the continent their fathers conquered. The issuing power should be taken from the banks and restored to the people, to whom it properly belongs.
Thomas Jefferson,

"The end of democracy and the defeat of the American Revolution will occur when government falls into the hands of lending institutions and moneyed incorporations."
— Thomas Jefferson

These comparisons to gold loose much of their meaning when we realize that the price of gold was fixed for much of the timeline.
This means that the United States DEFENDED its currency with gold. It made gold available no matter what. This was of course Nixon's little problem in 1971. After seeing the US pot of gold shrink from 22k tons to 8k tons he could no longer defend this assertion that the dollar was 1/35 of an ounce of gold. He finally threw in the towel and refused to allow conversion of the dollar for gold.
This implies that the true value/price of gold was actually MUCH higher even though 'for the record' the price of gold was officially $35 per ounce. If the US had let the currency fall as it went way over budget in the 50s 60s and 70s the POG would have no doubt gone way up. This would have allowed Nixon to keep more gold but it would have allowed the world to see the true value of the dollar was not really $35 but something much different perhaps $100/OZ.
When gold is used properly it balances things out in terms of international trade. The problem for politicians is that they do not want to be seen devaluing the currency so they set fixed prices which eventually always collapses.
Even now we see a POG which is certainly 'not right'. I believe the market is actively manipulated but for those who do not want to have to form opinions based on some nuts belief I will say that the mere existence of paper markets for gold is manipulation. The ability to satisfy someone's desire to own gold by selling them a piece of paper is manipulation. Only when all gold is allocated, that is it has your name on it, is the market real. Right now for every ounce of gold held for investment there are multiple claims against it. If push comes to shove many of those people will get cash settlements for their precious paper and not a quantity of physical gold. This is satisfying to many but it keeps the price of gold low and that paper won't help much if the event that precipitates the cash settlement is hyperinflation. Only physical gold in our possession is safe. Even allocated gold held at a prestigious institution is subject to criminal betrayal. Witness MFGolbal.
So for me these comparisons are amusing but mean little to predict a future in which the actual sum of physical gold meets the actual sum of printed money.

This shocking, everyone in America should see these graphs and realize they are pissing away their money investing in the us dollar.

What these charts show me is that I should go out and get as much real estate as possible fully mortgaged at a fixed rate. As the dollar free falls my mortgage will get cheaper and cheaper since the payments won't adjust to the new value of the dollar…

Sorry, but these graphs do not really mean anything in the real world. Yes, the dollar has "dropped" against the price of gold, but the world does not operate on gold, it operates on currency – mostly the dollar.

The dollar, operating in a healthy economy, always has some inflation. What these graphs don't show is that inflation cuts across the economy and while it increases the price of goods it also increases wages, so that there is very little net effect. For most goods and services the real cost has been dropping for decades, if not centuries, due to productivity gains.

The reality is you can buy gold and keep it in box doing nothing, or you can use dollars to invest and get a yield by creating productivity (innovative goods and services) for society. During severe times gold can be used to store value, but as soon as the crisis passes gold value drops and the real gains go back to investors using currency to make investments in goods and services.

To suggest gold is a wise investment for people looking to grow their assets, as opposed to preserving assets during times of extreme conditions (like war, disease or famine) is just a deceitful practice by those looking to make money (paid in dollars!) from the gullible.

@J Moo:
"inflation cuts across the economy and while it increases the price of goods it also increases wages, so that there is very little net effect."

Unfortunately, this just isn't true. Abundant data is available comparing growth of price vs wages, but I found a nice, simple chart for a quick example:

http://saintpetersblog.com/2011/12/chart-the-toil-index/

Gold clearly isn't an investment for profit. It's a hedge against a greedy and traitorous government's attempts to debase the currency to the point that their debts are sustainable, (or at least kept relatively small enough to get them through one more election cycle.)

If you don't think gold is a fair measure, since it has some price fluctuations, pick anything else you like. The trend will be the same, simply because gold isn't the underlying metric, but is simply a close approximation/representation of REAL value. (just like sound currency would be)

The media, a brokers are rotting your brain. Of course brokers, and all the analysts that work for broker or get paid by brokers tell your "oh gold is for the apocalypse only, it isnt an investment." Really?!? It isn't an investment because they don't make money selling gold.

http://dailyreckoning.com/why-buffett-and-gartman-are-wrong-about-gold/

There is a nice graph. Be smart. Gold is an investment, and it is security.

These graphs are a representation of what happens when you monetize debt. The more money you print (in the trillions) and add to the money supply, the less the currency is worth. The US dollar is a Fiat currency which means its value is directly related to the transactions which take place in its name. Gold and Silver are commodities which have risen sharply against the ever sinking price of Fiat currencies. Next will be the fall of the US currency as the international trading currency for OPEC, once the Muslim Brotherhood limit trade to Russia exclusively. On the day that occurs (soon) the US fiat currency will fall by 50% in value. Keep up the good works folks and keep these graphs available.
Thanks

@RP: Inflation does not always increase wages, you can have inflationary effects on commodities for example which are not reflected in wage increases, as we have experienced for the last 3 years, therefore your logic is incorrect. Inflation in commodities winds up effecting expendable income and actually reduces tax revenues, causing the government to monetize more debt and increase taxes which causes inflation in commodities, starting the same cycle over and over. The end result is hyperinflation.

@Chris:
That is 100% correct! Except 100% wrong. You are painting a target on your back. Property taxes are going to go sky high, and real estate can't hide from the taxman!
The income tax is being phased out with half or more citizens paying nothing already. The rich are flocking to escapefromamerica.com. As the productive escape the opressive income taxes, how is the evil bureaucracy going to be maintained?
Double digit sales and VAT taxes don't work because they spawn a 1% black market for every 1% tax over 7%.

Economist Henry George had it right 120 years ago. Tax property, don't tax anything else.

@RP: I used to think the exact same way! Until I realized that oil, bot and sold on the world market, is priced in dollars here in the US, and if you want your savings to be able to buy as much gas in the future as you do now, you'd better have investments that have world wide pricing. Yes, supposedly you will be making more dollars in your job in 20 years. But what if you don't? Look at the charts on disposable income vs gold.

So let me get this straight: The more QE that the Fed keeps pumping in the economy, the less the value of the dollar is. The less the value of the dollar is, the more the value of Gold is – which, historically runs inversely to the dollar.

US Debt now is up to near 15 1/2 trillion, yet our GDP as a country is only 2.7. Unemployment is still around 9% or so. So with all these cold hard facts and with basic arithmetic telling you that we're spending 7 times more that we are worth, you would think that unless we start increasing taxes (I suggest going to the fair tax suggested at fairrtax.org) and leaving that across the board at ALL INCOME LEVELS – so unless we do this WHILE raising interest rates dramatically (certainly not keeping them at near zero levels) we will never get out of the situation we are in.

Now, you can interpret this in a number of ways:

1) Since the value of the dollar will set to implode probably around the next ten years and the US – if kept on it's current QE path) will eventually default, wouldn't all collective debt be erased and everyone would start back from square one? Isn't that what happens when regular every-day citizens default?

So this scenario leads me to believe that while the US will have to default of its debt eventually, we will all be safe and when this happens we will simply start over, so if you believe this, keep your money in stocks, mutual funds, IRA's, CD's, etc.

OR…….

2) With Gold running inversely to the value of the dollar, – again – basic arithmetic will tell you that since the Debt/GDP ratio is so messed up now that we're spending more than 7 times than we make, Gold, which is as of now trading at $1706.71 per oz. will CONTINUE TO SKYROCKET FOR A LONG TIME. So, with this being said, if you're very bold, you can put all of your eggs in one basket and invest in Gold at least for the next 10 years or so (of course while keeping a close eye on your site (pricedingold.com/us-dollar) to see how it is keeping up.

Keep up the great work, Sir Charles!

@Michael Butler, 24 Sep 12, 5:23pm: Fair argument, but if gold was the be all and end all, everyone would be buying into it (many are, but not everyone). At the end of the day there just isn't enough gold for everyone to have a piece, but there are plenty or greedy/corrupt individuals who are happy to sell it to you. Just don't expect to ever see it. The biggest problem with gold is that because of its worth, when the US dollar tanks (and it will, soon) the US government will confiscate it to prop up its failing currency. Why do you think Germany can't get its gold out of the NY Fed vaults even now? Unless you have a physical piece of real solid gold in your posession and you bury it under your house so that you and only you know of its existence, you have no gold. Gold as a currency hedge is worthless to commonfolk, because they will never have the capability to secure it when it really matters. By the way, I have been following Peter Schiff for a while now and I agree with pretty much everything he says, but I don't see owning gold exchage traded funds being of any use to me personally as a currency crisis hedge because it's just like any other investment; I don't actually "own" anything but a piece of paper. Debt-free property is probably the best hedge against inflation, so put all your effort into paying off as much of your home mortgage as you can. Leave stocks, commodities and bonds to the idiots with more dollars than sense.

I agree with you 100% except on the following: 1. Only less than 2% of all Americans own gold or silver which is not enough for the government to bother with, keeping in mind most of the < 2% are the "big boys(millionares/billionares)" and they controll the govermnent thus they don't want THEIR wealth taken. 2. Those of us which are "debt free" will not owe, the Federal government will as well as Americans that owe to banks which owe to "the FED"…………….. BUT: "BRAVO" on the rest of what you wrote especially: END THE FED A.S.A.P!!!@Sean Blanchard:

It is pretty clear that QE is working and the dollar will get stronger over the next few years. The commodity underlying that is Petroleum and natural gas… "Petrodollar" has a new meaning – it is a US based asset. Compared to other currencies however, gold will do okay – at worse holding steady… but not so good if you live in the USA or spend your money here. If one is worried about inflation, better to buy TIPS… and the US treasuries are not going to collapse. The argument is that at some point the Fed will have to sell what they bought — Really? Who said that? They can hold on forever if they want. As for the US deficient, once the economy picks up and creates jobs – many in the fossil fuel market with high paying jobs – the deficient armeggedon so long predicted will be a thing of the past… even now California is experiencing a surplus – a few years ago that was said to be impossible with a likely default – NOT. If you value your money – Gold had its day in the sun – for 12 years – now best to start looking elsewhere – unless you live outside the USA.

@Joe Vargas.
Petrodollar = doomed.
Oil is running out in the end game. Alternative sources of energy is one of the solutions.

@findftp I'm sorry. Oil is not running out. We have discovered formations that make Saudi Arabia look pathetic, the best part? They are here in the USA and not just up here in the Bakken, but in other states as well. I think I'm going to invest in oil companies actually. Oil will be here to stay for decades to come.

"THE USD'S INFLUENCE ON THE GOLD PRICES AND OTHER CURRENCIES"
http://ow.ly/d/1oWE
Pp. 137-139.

heh, anybody else find it odd that around the time hippies appeared the united states starting falling apart?

While the U.S dollar having lost upto 98% of its value over the last century, gold has retained its value. There is no secret that the strength of any currency is protected when there is less of it in circulation. So as the FED continues to print more money to stimulate the economy the dollar will continue to devaluate. Gold on the other hand is recessionproof given that it is limited in supply. That's why buying of gold for long term investment remains to be quite popular.

@Goldpriceth: I like planners and thinkers like you. Stock on up with that gold and in the not so distant future, like when the fiat petrodollar dies I will be happy to trade you , ounce for ounce, for rice and beans. Invest smart and survive what is coming. Land, seeds, food and a container to bury your "wealth" in. Not to mention guns, fishing gear, survival supplies, solar system, water well, tractor, gasoline still. etc

@RP:

You appear to be a bit misinformed abour the 'net' effects of inflation.
1. When the Fed prints the money, it is spent by the government. That means they get the full value of the dollars they are spending, because they haven't yet been circulated. Eventually, the money goes through the hierarchy and circulates. government, high-profile businessmen, other capitalists, officials until it reaches to working-class. By this time, the dollars have fully circulated into the economy and through this are worth less than when they were spent by the government.
2. 7 out of every 10 US citizens are zombies. That means they receive more from the government than they are paying in taxes. So taxes are no longer an effective way of accumulating money.
3. The 'official' inflation rate is 3% or so. Yeah, your wages are also inflated. But is you do the weekly shopping, and have been for some time, you will know that the price of food items (just one example) is increasing by more than 3%. It is more like 15%.
4. 'Tapering' will never actually happen. You see, the Fed likes pumping money into the economy. It drives stocks up and makes Fed officials and governments richer. If you follow the charts, you will have noticed that at the mere thought of tapering, markets went nuts. Stocks dropped while gold soared.
5. The Us Empire is failing. Fiat currency, the backdown on Syria and many more are typical symptoms of a failing empire. The US' debt can't be paid off, so they know they have to keep inflating 'Zimbabwe-style' until the dollar is toilet-paper money. That was, its debt is worthless. NOte how this is similar to point no. 1, where the government prints money for its own selfish reasons and everyone else gets screwed over.
When stocks fail along with the US dollar, there will be only one way safer than Treasury bonds to hold your money. Gold.
Mark

@J Moo: The dollar has only been the world's reserve currency since the end of WW2, a very short period of time. The reason it was made the reserve currency is because 35 dollars could be redeemed for an ounce of gold (only for non-US citizens, FDR stole everyone's gold in 1933, blaming gold and not wall street bankers for the great depression) until Nixon stopped all that in 1971.

To quote JP Morgan himself, gold is money, everything else is credit.

Now that gold is crashing thru the $1200 mark this forum has become very quiet.. What happened, goldbugs bite your tongues? I also foolishly bought @ $1700/ounce and am now sitting with big losses in dollar terms, at the time I bought gold as a hedge against the euro taking a serious dive. Also didn't happen.
Looking back thru the comments, only Joe Vargas got it right, but by then it was already too late, gold was on its way down.

Why are goods priced in miligrams of gold, as opposed to ounces? Are there charts available in ounces of gold?

@editor: gold is money. period. 10,000 years.

Unlike most of you I'm not an informed financial guy. I do know this, My "Zeros in the bank account" will drop to one "0" when the crash happens. The US must at some time write off the debt. So, for me, I'll put some money in Silver and Gold and hold it physically. I still hold US dollars and investments but I feel that putting eggs in many baskets will help when one of the baskets is emptied. A little guy like me with a small financial means is just trying to hedge against the FED money destruction policies. As every month goes by I hold a little more of precious metals. I don't consider it an investment I consider it Insurance.

I don't believe that US citizens are in danger of having their gold confiscated by the Fed, not really. When FDR confiscated the nation's gold in 1933 we were on the gold standard. It was common public knowledge at the time that gold and dollars were basically one and the same. So when they have their gold taken away they were settled in cash which was to them basically the same thing as having gold. Today the situation is much different. Gold is no longer considered money, certainly not by the Fed. Ben Bernanke he has even said so to Congress. So whether it's the government or the common citizen gold is today considered simply to be private property. If they're going to confiscate gold they might as well confiscate your house along with it. Do you really think the government could get away with such a confiscation today anyway? Just look at what happened in Colorado when the state government tried to get the police chiefs to enforce unjust gun laws. These are much different times we're living in today and people will not put up with nor trust the government the way that they did back in the 30s. But back to my original point gold will probably not be confiscated simply because we are no longer on the gold standard anymore.

Gold is not finished by long shot, people. read about the London gold pool in the 60s. History repeats itself.

Okay so I have seen gold go up, under nixon AND come down under reagan. gold went up under bush, and have a sell down under obama and it seems to be on a rally again. there are going to be ebs and flows in the business cycle, but in the end, everything is compounding in one way or another. as more dollars are circulated, anything tied to it will rise and ovetime the dollar will fall. stock market compounds to the + on average overtime. dollar compounds down. remember for every action there is an equal and opposite reaction. everything tied to the dollar banking system will continue to rise in dollars as long as the there is more demand for money. and as long as people continue to use it as a means of trade. prices are going to continue to climb forever. one way or another. one currency or another. as long as people keep producing more people the demand for more money will continue to rise. this will lead to more money in circulation. by the us government allowing the creation of the private banking system the created another tulip mania by law, we are living in DOLLAR MANIA, by law our government made this happen. look at the dollar, it is cotton paper with ink on it, it is not a good or service and they are being sold to us as inflation and loans, take a look around at the mania, people love dollars, people hoard dollars, die for dollars, kill for dollars, do anything for dollars. the people that owns the central banks want to issue as many bank notes as possible. they want everyone to have these, want these. look on the money it says "this note is legal tender for all debts public and private", it doesnt say you can get anything for it, it just says you can use it to satisfy a debt with someone who is willing to take it from you, you can get for what someone it willing to give you for it. everytime people take more notes from the banks the richer the banks become. paid in inflation tax and tax on loans from 3rd parties. you can try to hedge against it with gold but i am not so sure that will work. let me tell you why. i dont really at this time see where the fed is going to stop producing dollars unless it is the fed itself is destroyed. the fed in its self is the matix, think about it. we are plugged in to thinking we have to have these dollars these people make in a factory, use at will and sell to us and keep the profits from the loans and inflation. okay to back to gold rush of today, heres the deal. it is kind of a scam. remember ALL gold rushes have ENDED. it is a trend. people are making money off of this trend. here is an example the US treasury is selling $1 gold coins for $32. okay so it is $32 is gold. and $1 in dollars. right? okay. so i go to the store down the street and i say i need $32 gas to the attendant and hand him the $1 gold coin. guy says, I need $31 more dollars. i say but i paid $32 for that gold. the guy says, man i want to tell you something, if i take this $1 dollar gold coin to my bank, the are going to add $1 to my bank account. that means a $31 dollar loss for me. my BANK does not trade gold for dollars. do you see my point? and unless people are going to start weighing gold everywhere and start lugging it around i dont see that happening. besides, the fed is NEVER going to give this game up, they have us all. we give the dollar its worth and the law says so too. if people will take your dollars for trade of goods or services, give them to them! but spend your money wisely. it is going to go quick, they are making more everyday, they will not give this up. they can enforce this any way they want as long as people keep using the banking system. if people pulled all there cash and went to a black market that would put a hurt in the top end of the pyramid for sure. that is why in the end they are even getting rid of cash, it will all be digital in time and it will be what we are told. dollars will always be sought after and as long as people keep banking in the US, dollars will be needed. Remember no banks are giving out dollars for gold, only speculators. trends come and go, the fed is here to stay, as long as the military keeps taking their money. they need them for protection of their empire. remember, americas greatest export is the US dollar. one more thing, the rich get richer with inflation, whoever gets their hands on the money first, some NYC banker, gets the most out of it cause he spends it first by paying his maid for cleaning his penthouse by time she pays her bills it gets redistributed down the line and down the line transferred one person at a time the debt from the central bank using inflation, if the next person gets the money a year later inflation has set in and it has less buying power. okay so what about deflation? it doesnt matter, fed still wins through higher interest on the notes they issue. win win for the banksters. one day the dollar will fall but i think it has a fair way to still go before the bottom. so if someone will give you something you really need for money, take it, they will be the last one holding be bag. going back to gold, there is demand for gold, but if you want the most out of gold go to a gold buyer. until stores trade for gold, the dollar will exist. also, if you noticed the fed is putting gold on the $100 bills now? that is to keep the gold people wanting the $100 in exchange for their gold from a buyer so they can go get what they need. what goes up must come down. all things come to an end. the people who get the new money first. think of all the bankers that got all their accounts filled full of dollars when the laws were passed in 1913 and went and bought america and the fed issues the currency system. they were able with the flip of a printer, pay all their debts to their employees and buy anything and anyone that will go for the dollar scam. and best of all by law as a citizen of the government you have to use the private bank notes as legal tender. gold is still good. people will always want it, like the banks did years ago and pawn shops etc. remember if you are in the banking system you are on the dollar mania system. the $1 dollar bill pyramid says it all. it is the central banks and government in the 10% top pyrmaid, in the 90% second pyramid is the big banks, businesses for the rich, then states, small cities, small businesses, rich workers, poor workers. It will all end in the end, nothing lasts forever end this will be remembered as dollar mania. all pyramids collapse because the bottom can hold it up anymore. dont worry though, when the mania ends, the new fed will issue a new currency that will be law and the mania will ensue once again. its all what you perceive.

@Glenn Patton: Just remember that when any country engages in a long period of conflict, they can spend lots of money with no return on the investment. If you look at the graph, you'll see that since US was winning WW2, there was a return on the value of the dollar, and the trade value flatlined. however, when the US engaged in Vietnam, the dollar dropped, because the world was losing faith in the US economy. It rises again, and then falls with the begginning of the post-9.11 conflict in Iraq

Some States already accepting gold coins, silver coins and gold bullion and more to come. http://www.mining.com/arizona-to-be-second-state-in-the-us-to-legally-accept-gold-silver-as-tender-53699/
Even in Europe, Germany.
If gold is worthless, why do governments and central banks own it? If it's good for them it's good for us too.
Are you interested in gold bullion? 999.9 pure fine gold bullion, contact me for more info
e-mail: karatbars_9999@aol.com
Twitter: Karatbars_9999

What occurred in August 2011 that caused the price of Gold and Silver to start plummeting and the Dollar to start skyrocketing. The only thing I could find was that the US Credit Rating was dropped…..but why would that cause the dollar to start going up and Gold to dive? Any ideas or comments?

Good visual of the loss of $ buying power, especially the significant decline after depegging the $ from a gold standard. Now to locate charts of average family income vs gold and/or average family income vs real inflation.

Excellent discussion…keep it updated. There is a point being missed here I think. In the 1970's the world was still a collection of "villages". By end of the '80's both technology and growing populations started the head long rush into a world of one "village".

The problem was an uneven playing field. Half the world with a tremendous standard of living and the other half of the world trying to "just exist". An average worker in the Western world earning the equivalent of 100 people in the non-western world. It didn't take long for Western capitalists to realize that their one dollar was worth $100.00 elsewhere.

However, this stampede for cheap labour was realized as a "catch 22"; as putting Western workers out of a job, would also destroy their markets. Somewhere, somehow I'm almost certain that Western capitalists and quickly growing non-Western alike, realized something had to give…the world needed to move to a level playing field.

This meant, the Western standard of living had to decline…and the non-Western world had to increase their standard of living. Hence, a 30 or 40 year period of manipulating economies and standards of living, until the playing field could level. Take a look around, the world is now almost on the same page technologically. The Western standard of living has deteriorated, the non-Western world has introduced controlled capitalism, and the world is on the verge of 7 billion people fighting for resources.

The world is touting China as the next economic power…the Western world is breaking into Euro group, the America's are building their own network. The forecast is for China and the Pacific rim to be major players within 10 years, equal to or better than the Euro groups or America groups.

Get used to it…it's not doom-and-gloom…it's the beginning of an even-playing field, just as the money people have been guiding it. We Westerner's just have to get used to lower standard of living than our parents.

This is very interesting chart, and many thanks to the person and the team behind this, it's an innovative way to analyse things, new angle to see at objects

My question is how can someone price the Gold on US dollar and at the same time the US dollar is based on Gold, my logic is stuck because there is a mutual reference, unless there should a third stable reference (not moving) than we cannot be sure.

Any input to enlighten me will be much appreciated.

I see these charts and it makes me wonder if people will still use gold for money in 2020-2030.
Tell me if there is any updates.

Jim Rickards has just written that " Only a small fraction of writing on gold is analytically sound. Here's the best piece ever:." Alasdair Macleod; Gold – A Reasonable Correction?

http://seekingalpha.com/article/3979812-gold-reasonable-correction?auth_param=1d6nao:1bl5n6p:c15c550c4b10b246da1dfc73969d2e38&dr=1

well when it comes right down to it NOTHING is safe..collect physical gold ,it can be taken from you by the government.
collect physical property (as in land) it can be taken from you by the government.
Take a raise in pay ,it can be taken by the government ,either by taxation or propagated inflation ,or even deflation.

cash can become fire starter (at least it will keep you warm).
So then what's left????
not much !
shit will happen and they will do as they please (which ,quite often through history ended up in WAR.

don't get me wrong ,I am not trying to instigate one but that is what the US government has done in past practices.

There is only one thing driving the US Stock market higher – and its not a breakout from flat peak doldrums- its SAFETY (BORIS Being the new Freddie Laker – fly me). (Wait until they get a whiff of bot trading by the major banks!
Its all gonna be pump and dump – mostly dump. People cant afford to live much less buy things. The US productivity is in the dumpster and so is GDP – this all spells one thing DEFLATION. Great time for retirees! Just don't get tied to one of the Bankrupt ZIKA places. OR bad water places or places beginning with DETR….t.

WHY DID we switch to fiat money?

Having modest investment in gold bullion, may I point out a few things?
Sorry if some/all are obvious but some people may be unaware…
Also, a question or 2-

1. 'Gold' means ANY form or purity [9 carat jewellery up to 99.99% bullion].
2. BULLION is what the 'gold price' is set at; anything less can be taxed on sale.
3. Bullion coins are not subject to taxation, being 'legal tender' [at present!].
Nor can these be legally confiscated by Gov't or anyone else [at present!].
4. If/when bullion prices explode, one may 'cash out' some bullion for what?
Rapidly depreciating paper notes? Then wait for economic recovery?
5. O/T- or not? What is Bitcoin & how will it affect currency markets?

Hmmmm….no body venturing any thoughts about the bit coin system of value ..?
If dollars can be pinned to nothing …. So can thin air I guess!

It's just sad that the 'transfer of wealth' is robbing the poor.
The rich don't pay any taxes and the poorer class tax dollars don't equal much.
That imbalance will bring down the house.
People are looking for the parachute.

Where is BLACK BLADE that used to comment on the old I MEAN THE OLD not the current USA GOLD Site. He was a geologist that was writing reports on the FREAKERS. The site potentials for fracking, the required proceses ROI feasibility of etc. BUT HE KNEW GOLD. But if I recall correctly COINS CANADIAN, US, SA, are legal tender (Like(40) 1 oz Krugies will get you a decent BMW) or (NON – RADIOACTIVE RICE or water for a week). In The case of the BMW – Pre nuclear you have to pay the taxes on the vehicle. The Krugies don't have to be dollarized-you know what I mean? O HORROR. J.YELLEN just uncofortably moved around in her chair.

It's an orchestrated attack on the US economy perpetrated by the ones whom the people of this country trusted with their lives and voted into office to protect the interests of every citizen of the U.S.A. They have been systematically chipping away at the remnants of the US dollar and stuffing their pockets with the detritus as fast as they can for the better part of a century and if I could figure it out, as a seven year old kid back in 1976, you can be sure they know, and have known, exactly what they're doing. Your politicians have been preying on you, your trust, and your complacency. The middle class is the target. Your pensions, your social security, your investments, and your assets will be scavenged to desolation. Even much of the upper classes won't be safe. They'll just go slower and far less humanely and I guarantee that there will be nothing remotely humane about it. The ultimate goal? Every person on this planet (aside from the few extremely rich) will be conscripted or born into indentured servitude. You will be allotted only the bare minimum of what you need to survive. There will be no provisions for pleasure. There will be no provisions allowed for pleasure or frivolity.

My kids learned in school that back during the great depression, everything was a lot cheaper than it is now. I'm trying to explain to them how inflation works. These charts are super interesting, I wonder what happened around 1970 to make the value of the US dollar decrease so rapidly.

Ok,Ok Stock Market indexes are tanking, California is burning, and Miami is about to become Venice of the Caribbean on the Atlantic ocean side. So the one that we can understand – been there done that -the stock market indexes that means that about $I Trillion of the tax break to corporations pretty much disappeared, no productivity gains or cost savings anywhere in sight. Nice. right for Christmas. I remember I used to get canned round Dec.10 Hmmm consumer spending is in the toilet too. The other two disasters – We been told "get used to it" Hmmmm. I got this strangest of feelings that the only way out – for the government is to SPrint SPrint SPrint. Bet you it will be just fine with the President "YOu got to do what you got to do"

@Glenn Patton:
Actually, I think that people mean that normally, after a war, the dollar drops WAY down in value. Notice the drop after WWI and the Civil War. However, thanks to FDR, WWII had little, if any impact on the dollar's value.

@Heidi Bookenstock: (I think) Great Depression- That's deflation. 6 months ago my necklace cost $10,000 but I will sell it at $5,000 today. Inflation is all the money printing. Ex: 2008 $50,000 in savings account. 2018 $50,000 in savings account but purchasing power is the value of $25,000 2008 or cost of same item is $100,000. Hyperinflation think Germany. Monday morning buy bread $5.00 Monday night $25.00 Wed bread is $500 Fri bread is $5000 Sat burn cash to stay warm and starve. Coming soon currency change: Pre EU, bread is 2 lire. Change currency to euro. bread cost 2 euro. takes 4 lire to get 2 euro. bread cost 4 lire. Post war – 1971 partial Gold Standard. 1971 Nixon took USA off gold standard. In 1913, creation of the federal reserve. The Fed is as federal as FedEx -private organization. Basically, the fed said US government give me your money and I will loan it back to you. I will choose the rate. US govt said ok. Income taxes were invented to pay the interest. Started as voluntary and not mandatory until 1940ish. They had to wait a generation so that the people were properly brain-washed first. The usd is common law currency. Gold and Silver are US legal constitutional tender. Fiat, Paper and Digital, is currency not money, always changes value. Gold/Silver is money because it stores value and it is international money.

@Chris: I hope you followed up on that Chris. If so, you are a rich man now.

I wish the Federal Reserve were owned by the banks, they got stuck with a (6%) preferred stock and no common stock—ownership. The federal gov’t gets all the Fred’s income and appoints all its directors.

Most people forget the gold standard worked in the U. S., because gov’t didn’t run it. The private sector, banks and brokers, did. Back in 1792 Congress set the value of the dollar in gold and silver. It didn’t issue paper money until the Civil War. Banks issued notes, reluctantly, but they had to redeem them for gold coin on demand as defined in law.

The Fed could learn a lot from bank note issue, except it’s not a business trying to survive just an agency to fund government. A huge waste of talent.

The decline of the Dollar in terms of gold starting in 1970 may be the result of declining oil production in the US following the peak of conventional US oil production in 1970. It may also correlate with the end of the gold standard under Nixon in 1971. Not only did the US have to import more oil from abroad in order to satisfy the internal demand, the cost of extracting the remaining crude oil did rise due to geological constraints.

Pricing everything in terms of gold makes only sense if gold is fairly priced. The value of gold is simply a reflection of the universal demand allover the world for this unique metal. This demand partly reflects anxieties of the buyers of gold over the growing financial crisis due to an excessive buildup of debt.

Perhaps a fairer measure of the value of gold is not the market price for gold, but the average cost of mining and refining gold. That cost is significantly lower than the price of gold. I believe the cost of mining and refining gold is less than $1,300 per ounce of gold. That is a discount of at least 20% over the price of gold.

@Robert Happek: it was due to coming off the gold standard. If you continue the gold standard and follow prices, no change.

Yes, but the abandoning of the gold standard in 1971 by Nixon had a reason. And that reason was the deteriorating trade balance which itself was a reflection of the declining conventional oil production in the US. There is no magic in gold. The gold is only a barometer for the pressure in the economy. The force driving the economy was cheap oil production which peaked in 1971 and declined ever since then. Every car needs fuel. If the gas station runs out of fuel, cars will stop driving.

@Robert Happek: Wow, I guess there is even more 'reason' now or did the trade balance improve since ? What would the politician Nixon do today to improve the trade balance but not tell the american voter to stop consuming (cheaper foreign products) ? The following one could be from P. Krugman, 'barometer for the pressure in the economy'. Humans standing around a pressure cooker could have saved me years of memorizing theories and concepts. But this one made my day. Smoothly switching
from a pressure cooker model to comparing the economy to a car! And never there's a human to be seen except the genius that wrote those 3 sentences. Luckily cars not only stop driving without fuel. Also, sometimes drivers change their values and want to walk more. Or they value the needs of their families more than a full gas tank. Humans make economic decisions all the time. Humans are the economy. Humans produce and run the machines that spit out cheap products. And humans need a stable scale by which they can determine which choice improves their situation most. That is/was the 'magic' of the gold standard.