Americans used to take pride in being world leaders. Yanks, boasting of surfeit in auto production, in per capita barbeque pits and all manner of things, gave ground begrudgingly to competition.
There's one distinction, however, the U.S. seems happy to relinquish: that of prime inflator. Now, I know everybody's talking about deflation, but let's not forget where we've been for the past decade. Barring a relatively short recessionary excursion in 2001, we've been diluting our currency's purchasing power like mad. Amongst issuers of reserve currencies, the U.S. was most profligate. Well, we thought so anyway.
However, the 10-year dilution derby is now being won by the U.K. Monday's gold fix, a record high when tallied in euro and sterling, was a sort of checkered flag. Measure the value of gold-a universal monetary standard-in the world's five reserve currencies and you'll see the British pound has lost ground to bullion to the greatest degree.
Annual Rate of Gold Appreciation Versus Reserve Currencies
(1999-2009)
British Pound | U.S. Dollar |
Euro | Swiss Franc | Japanese Yen |
13.95% | 12.00% | 10.82% | 10.09% | 9.32% |
Clearly, the greatest spread between next-door neighbors in the ordinal sequence is that between sterling and the greenback-nearly 2%. Yup, the U.K.'s running away with it.
Now, I wonder: Will the Kingdom's winner's trophy be gold-plated?
