Below is my post dated November 7, 2007. Gold back then broke it's old record price and reached a new one of $833.50.
Well just two years later it is at an all time high of $1110. That is a change of around $277. In other words, a 33% increase over two years or over 16% return a year since 2007.
No sense rehashing what was said in the earlier posting, but I am curious....
how many of you actually bought gold back in 2007?
Today GOLD set a record price of $833.50 an ounce beating a 27-year previous record of $825 an ounce. You may be thinking, wow, gold went up in value. But that is wrong and backwards logic.
If you bought gold around seven years ago when it was $289 an ounce (like someone close to me did) you may be thanking your lucky stars or something. But it is the FALL of the US Dollar that affects us all that we should be worried about.
Let's say I did buy a one-ounce GOLD US-government minted coin, a "$50" Double Eagle back in 2000, for around $285 USD. And some canadian at the exact same time bought a one ounce Canadian-government minted GOLD coin, a Canadian Maple for $426 CAD (canadian dollars).
Okay. So now it's 2007. My gold coin is still worth one ounce of GOLD. The canadian's gold coin is also worth, you guessed it, one ounce of gold. Both values, namely our GOLD, is the exactly the same as it was seven years ago. BUT...
...look at what happened to our currencies! My GOLD coin's "value" as expressed in pieces of paper called U.S. Dollars has changed from 282 pieces of paper (US dollar notes) to 833 pieces of paper. So now we ask, where oh where did the extra 550 pieces of paper come from, and why? This amount of extra paper increased by almost 200% (550 / 282 = 1.95) What happened?
Let's take a look at our canadian friend. His GOLD coin went from 426 pieces of his brand of paper (canadian dollars) to 764 pieces of paper. For him, that's an extra 338 pieces of paper, or an increase of 80% (338 / 426 = 0.79).
So our GOLD coin went up 200% (or two times) in paper and the Canadian's went up 80%. But we still both got, in real value, EXACTLY THE SAME AMOUNT OF GOLD, namely One Ounce.
It's easy to just say, "Oh, GOLD went up in value!". But that really isn't it, is it? I still just have ONE OUNCE OF GOLD; that amount didn't increase, did it?
If you give this some thought you may begin to realize that the our GOLD didn't increase but that the pieces of paper that represents this same amount of GOLD over the years has LOST VALUE. One US dollar of year 2007 is not worth what a US dollar of 2000 was once worth.
In fact, a US Dollar today (2007) is worth EXACTLY 1/3 of what a US Dollar back in 2000 in terms of GOLD. So again the question is, what happened?
If your pieces of paper you call DOLLARs are worth less is it because whomever makes these pieces of paper is screwing things up. Simple as that. We as americans must accept these pieces of paper in our day to day living.
An immediate come-back to this logic is something like "well, i can get more stuff now with my money than i could have gotten back in 2000 dear del..." and you'd be exactly right in many cases. But that is because of the real American economy that constantly innovates and creates wealth and opportunities. And no thanks to those whom control the government money printing presses.
It wasn't so long ago that a good ol' AMERICAN DOLLAR was the standard of the world. In fact, it wasn't all that long that a CANADIAN dollar was worth just 75 cents US.
Wanna guess how much a CANADIAN DOLLAR is worth today right now in terms of the AMERICAN DOLLAR? A canadian tourist exchanging ONE CANADIAN DOLLAR at a Waikiki money desk will get in return... (hold on to your wallet).... $1.10 in US money. WHAT DAAAA????
So how did it go from 75 cents to now $1.10????
I read somewhere that only 15% of Americans have passports. That means only 15% of americans have ever bothered to travel to a foreign land. That is sooooo sad. It is an eye opener when you travel to foreign places as you'll soon find out that THE USA DOLLAR HAS FALLEN IN VALUE...
(...as you get your cafe bill after sipping that wonderful cappuccino overlooking Hadrian's PANTHEON in Rome, no doubt. But what a view!!)
It is a shame what we've allowed to happen in our USA thru costly wars and unrelenting demands by its citizens for more and more social services.
Massive government spending creates equally massive monetary devaluations. A nation's thriving economy can only mask -not cure- it's government's fundamental problems for so long.
It is a sad day when gold reaches an all-time-high; it's not a cause of celebration at all. It means there is something seriously wrong with our money. Gold reaching an all-time-high is a WARNING SIGNAL.
Are you listening? Are you getting the message? What will YOU do?
Do you even CARE you ignorant American? Rather listen to MTV, wear silly fashion trendy clothes and view internet PORN instead?
