Gold Strikes Record Levels in Most Currencies

With all equities markets deep in the red, MSM and bloggers have missed out on this easy scoop for several weeks: Gold currently strikes new all-time highs in most currencies. This sensational news, omitted in all those media that are normally quick to recommend this or that paper 'asset', which in the end is always only somebody else's obligation, can be revealed at this blog exclusively, a Google news search shows. ;-)

Gold traded for more than €771 and GBP 682 for the first time in history. The strong rise in the price of gold to new historic records in most countries except the USA is a logical reaction to the credit and solvency crisis that engulfs the globe as investors, nervous about a total market fallout, flee all paper promises and seek a truly safe haven.

Gold has never lost its value in more than 3,500 years, whereas no fiat currency survived longer than a human's lifespan so far. Check out its resistance against inflation here.

click to enlarge

GRAPH: Gold priced in Euro has been on a tear since late November. It also outpaced all other asset classes. Chart courtesy of Stockcharts.com

I have been recommending investments in gold and mining shares since 2005. Licking my wounds from last year's biggest and longest decline in this equity sector in 80 years, I will at least have a story to tell to my grandchildren.

But the fundamental outlook has only worsened in the past 4 years. Having correctly called for a sharp economic downturn in the USA since 2005, I nevertheless failed to recognize the dramatic situation in the Eurozone and the recent hard landing of China. This worsening global situation only underscores the value of holding the only asset that is not someone else's obligation. The Euro is as doomed as are Federal Reserve Notes and nobody outside the UK cares about Sterling anymore.

We are about to witness the era of busted major fiat currencies that will go out the same way as did all unbacked fiat curencies in the past 1,000 years.

The Chinese tried it in the 11th century and it ended in a revolt. The same happened in France in the 18th century where it gave birth to the Republic. The decline of the Austro-Hungarian empire in WWI came on the heels of hyper-inflation and Germany's fate could have taken another turn in the 1920s, if it were not for the hyper-inflation that paved the way for Adolf Hitler.

Unfortunately, we could very well end up as happened in past crises, with everyone a millionaire beggar.

Comments

[silverwood]

Today Gold made new all times highs in the following major currencies;
Australian dollar
Brazilian real
British pound
Canadian dollar
Euro
Indian rupee
South African rand
Swiss franc

Gold is trading around $50 lower than the all time high in USD and when market discovers there is no safehaven in the USD, gold will make all times highs here as well.

2009 Feb 17 02:30 PM

[Stepbear7]

FOLLOW THE NATION’S CREED
The U.S. Constitution- ALL OF IT


Get back to this country's founding creed and do what it states in the U. S. Constitution.
Get Central Bankers out of the counterfeiting business with the Treasury Department and start following and doing what the U.S. Constitution and Article 1 Section 8 Clause 5 instructs should be done.
Use the Gold Standard and get rid of Federal Reserve Notes and start having the U.S Government Treasury print United States Notes backed by gold and or silver reserves only producing allotments as needed to balance goods and services.

Abolish the Federal Reserve Act of 1913,Fractional Reserve Banking, the IRS, Ben Bernanke and the entire Federal Reserve System.

Use the $900 Billion dollars on paying off the mortgages of defaulted loans of American homeowners so they can be bailed out just as the large banks and large corporations.
It's not all the American homeowner's fault because the BIG DOGS at the top of the food chain got greedy like the good folks at Enron and all the Bernard Madoffs out there who have no remorse for ripping people off.
Let the huge banks liquidate into bankruptcy and start from scratch.
Prosecute the frauders and incarcerate them.
They (frauders) should not be exempt from having justice served them because they hold power center positions.
The Tom Daschles of the world have to follow the laws of the land just as
regular and common men and women of this great nation we live in called United States of America.
Oh well anyway...... Keep praying for America and budget your soon to be extinct Federal Reserve Notes.
Stephen
Garland, Tx





On Feb 17 02:30 PM silverwood wrote:

> Today Gold made new all times highs in the following major currencies;
>
> Australian dollar
> Brazilian real
> British pound
> Canadian dollar
> Euro
> Indian rupee
> South African rand
> Swiss franc
>
> Gold is trading around $50 lower than the all time high in USD and
> when market discovers there is no safehaven in the USD, gold will
> make all times highs here as well.

2009 Feb 17 04:19 PM

[Dave Wrixon]

Yes, but probably tumble against an all conquering Euro!


On Feb 17 02:30 PM silverwood wrote:

> Today Gold made new all times highs in the following major currencies;

>
> Australian dollar
> Brazilian real
> British pound
> Canadian dollar
> Euro
> Indian rupee
> South African rand
> Swiss franc
>
> Gold is trading around $50 lower than the all time high in USD and
> when market discovers there is no safehaven in the USD, gold will
> make all times highs here as well.

2009 Feb 17 05:25 PM

[doubleguns]

A new high against the dollar is not going to be that great of a feat. I think we will see it well over $1,200.00 soon. This is because all of the currencies are falling fast including the dollar. We have a parachute on and just happen to be falling the slowest.

Once the demand for treasuries goes (our parachute) we will pass most of the other falling currencies up and be one of the first at ground zero.

2009 Feb 17 05:43 PM

[Conan the Barbarian]

Do you actually believe there is more buying power amongst Central Banks for Gold VS the USD.

They do not have the luxury of being able to buy Gold in quantity. If they did pursue it, Gold would be way above $2,000. There just isn't that much gold around.

There are 3 currencies worth holding, well maybe only 2 now, USD and RMB.

The Yen Must go down. GDP can't stand the appreciation.

RMB Appreciation will be fought Tooth and Nail by the Chinese.

The USD will receive continued support until it is finally realized that it is not a Safe Haven, But that is at least 96, IMHO

2009 Feb 17 06:24 PM

[yellowhoard]

You know, if you're not confused, you don't know what's going on.

2009 Feb 17 10:25 PM

[mr freddo]

Here is what we can expect in the months ahead:

1. Dow 5000.
2. Gold 2000.
3. Bank Holiday.
4. Cash only and barter in the US for a month.
5. Civil unrest, food riots, shortages.
6. Schools close.
7. Dow 2000.
8. Gold 5000.
9. Inflation rate of 20%.
10. Unemployment rate of 20%.
11. $4 trillion deficit in 2009.
12. 12% interest rates on 30 year bond.

Fasten your seatbelts folks. Buy GDX, GLD, SLV, TBT, food, cash, wine, liquor, gold coins, silver coins, land, vegetable seeds, solar lighting, fuel, medical supplies, warm clothes, chocolate and start planting a garden.

2009 Feb 18 12:21 AM

[Conan the Barbarian]

YH: Now that I know what to look for, I can really appreciate your sense of humor.

My only lament is that I am not as glib.

Maybe I should have a couple of drinks before commenting.

2009 Feb 18 12:58 AM

[Moon Kil Woong]

Mr Freddo. I suspect the first place for closed schools will be California. Their State budget nightmare is probably conservative at a $42 billion shortfall and next year will be even worse. If you think the Fed mismanages the budget look at California run by conflicting ballot measures and the longest constitution in the world. Anyway, California may miss its emergency budget adding to the uncertainty of the market and throwing their bond prices into disarray.

As for gold, I think many overseas investors are running to any safe haven they can find, primarily the US dollar and gold. Since there is more US dollars than gold the effect seems to be impacting gold heavier (haha pun).

I don't see the spike being caused by US citizens trying to cash out their money and buy gold yet.

2009 Feb 18 01:24 AM

[Dan Walker]

Every time I see these type comments, the dow bounces back. No, I do not think this time it is anything more than a retrace, and I most certainly do not disagree with any of the gold fans; in fact, I have a bit more than a troy pound stashed. I simply think you guys are early to the party. This will be a long hard charge down the hill, and we are just coming up the second crest. You will be handsomely rewarded next year. If you do get rewarded before then we are much further up the big muddy than anyone wants to think. The central banks have the supply and the moneyed interests to insure that it does not happen this year. When the moneyed interests run out of cash next year is when you will see the fireworks as well as the attendant rewards.

2009 Feb 18 08:54 AM

[yellowhoard]

You need to take off those rose colored glasses and smell the manure. Sir, you are far too optimistic!


On Feb 18 12:21 AM mr freddo wrote:

> Here is what we can expect in the months ahead:
>
> 1. Dow 5000.
> 2. Gold 2000.
> 3. Bank Holiday.
> 4. Cash only and barter in the US for a month.
> 5. Civil unrest, food riots, shortages.
> 6. Schools close.
> 7. Dow 2000.
> 8. Gold 5000.
> 9. Inflation rate of 20%.
> 10. Unemployment rate of 20%.
> 11. $4 trillion deficit in 2009.
> 12. 12% interest rates on 30 year bond.
>
> Fasten your seatbelts folks. Buy GDX, GLD, SLV, TBT, food, cash,
> wine, liquor, gold coins, silver coins, land, vegetable seeds, solar
> lighting, fuel, medical supplies, warm clothes, chocolate and start
> planting a garden.

2009 Feb 18 10:08 AM

[yellowhoard]

I don't even begin to read this site until I've had three!


On Feb 18 12:58 AM paultaut wrote:

> YH: Now that I know what to look for, I can really appreciate your
> sense of humor.
>
> My only lament is that I am not as glib.
>
> Maybe I should have a couple of drinks before commenting.

2009 Feb 18 10:11 AM

[Conan the Barbarian]

YH: If 7000 holds on the Dow and 2500 on the transports, I believe a Massive rally to 12,000 will be possible.

At that point, I would be out of everything other than multi-colored Gems and physical Gold, I might be willing to hold SDS but would be afraid of the Markets closing and never reopening. I look for sub-2000 before 2014 ends.

I can't drink more than one really, Alcohol and Diabetes do not go hand in hand very well.

But drink up, take one for me.

2009 Feb 18 12:21 PM

[Mayascribe]

The lower the DOW and S & P go, the more I see references to drinking here on SA. This makes sense! What doesn't is that my Diageo (Johnny Walker) stock isn't going up faster than my gold stocks!

2009 Feb 18 05:24 PM

[Conan the Barbarian]

Maya: that's the difference, you are going with the premium brand, the least likely to be bought in tough times.

If Only Ripple were still available.

2009 Feb 19 12:19 AM