Brad Zigler

The First (and Possibly Last) Euro Decade

Because, unlike hamburgers or white goods, that commodity is money,

The dollar inflation rate cited at the top of the Hard Assets Investor daily blogs (see, for example, www.hardassetsinvestor... ) is derived by comparing the pricing of the dollar and the euro in gold, a universally accepted standard. It is thus a measure of MONETARY inflation, not an insular measure of price inflation.

On Jan 09 11:35 AM Chris B wrote:

> "Over its 10-year life span, the euro inflated, in terms of its gold
> purchasing power, at a 9.8% annual rate"
>
> Who measures inflation in terms of exactly one highly volatile commodity?
> That's not inflation, it's called "price." Would you say there was
> an inflation rate for oil, for real estate, or for one-hour massages?
> Of course not.

The First (and Possibly Last) Euro Decade

Perhaps you could be more explicit.

Where are the numbers that support your contention of "fault"?

Is the ratio of gold held by the US as a reserve asset problematic?

The numbers are what they are.

What have evidence have you to substantiae different values?

Your umbrage may be, in fact, misplaced. Keep in mind that the figures in the table reflect proportion of central bank allocations to gold, not the degree to which the currencies are "backed" by metal.

If you pay attention to the chart comparing euro zone monetary inflation with that of the dollar, I believe you'll see evidence of the US's recent profligate ways. The trend, however, is now tipping toward inflation in the euro zone.


On Jan 07 06:49 PM Reinko wrote:

> Not often such a dumb article was published around here.
>
> So many actual faults in it and it still gets published?
>
> Just look in the gold reserve positions in the table as publised
> above:
>
> USA with a 300+ million population,
> The Netherlands with only a 16+ million population
>
> and we are to believed that gold reserves stand at:
>
> USA = 76.5 % of reserves &
> My country = 57.8 % of reserves...
>
> In my country these reserves are not borrowed out, in the USA it
> is different.
>
> Lets leave it with that....
>
> Ok ok one more blast against this kind of stupidity:
>
> In the USA the reserves of the FDIC are only Treasuries, all the
> money paid by the banks is gone by now. All their insurance money
> is replaced by US Treasuries. And every bank saved is only via tax
> payer money, or as lately money press fun from Ben Bernanke.
>
> Here in the Dutch landscape we are not that stupid, here when we
> talk about reserves we talk about reserves.
>
> That is saved money....
>
> In the USA the only saved money is belly fat and on the bank accounts
> only debt is found.

The First (and Possibly Last) Euro Decade

The euro is indeed a reserve currency, along with the US dollar, the British pound, the Japanese yen and the Swiss franc.It essentially supplanted the deutschemark's position in 1999.

Central banks hold diversified positions as a manifestation of their risk management policies.

I suggest you look at IMF statistics to get a better sense of current central bank reserve positions.

On Jan 07 05:39 PM Randy_H wrote:

> The EUR is not a reserve currency. It may become one (though I rather
> doubt it), but it is not, by definition, a global reserve yet. Nor
> does the ECB enjoy anywhere near the seigniorage privileges of the
> Fed.
>
> By the way: (a) all currencies are "fiat", even commodity backed
> currencies. Money is only money because you can reasonably expect
> everyone else to have confidence in it. From Antiquity forward, metal-backed
> currencies regularly lost confidence even when there existed ample
> reserves. (b) There was plenty of inflation under gold-based systems.
> In fact, the largest bubbles as a portion of the total economy occurred
> under gold-backed currencies of the Imperial era.
>
> Do goldbugs actually study history, or just the cartoon version of
> the television version of the Cliffs notes of history?