Best of the Week
Most Popular
1. 2019 From A Fourth Turning Perspective - James_Quinn
2.Beware the Young Stocks Bear Market! - Zeal_LLC
3.Safe Havens are Surging. What this Means for Stocks 2019 - Troy_Bombardia
4.Most Popular Financial Markets Analysis of 2018 - Trump and BrExit Chaos Dominate - Nadeem_Walayat
5.January 2019 Financial Markets Analysis and Forecasts - Nadeem_Walayat
6.Silver Price Trend Analysis 2019 - Nadeem_Walayat
7.Why 90% of Traders Lose - Nadeem_Walayat
8.What to do With Your Money in a Stocks Bear Market - Stephen_McBride
9.Stock Market What to Expect in the First 3~5 Months of 2019 - Chris_Vermeulen
10.China, Global Economy has Tipped over: The Surging Dollar and the Rallying Yen - FXCOT
Last 7 days
Next Recession: Finding A 48% Yield Amid The Ruins - 22nd Mar 19
Your Future Stock Returns Might Unpleasantly Surprise You - 22nd Mar 19
Fed Acknowledges “Recession Risks”. Run for the Hills! - 22nd Mar 19
Will Bridging Loans Grow in Demand and Usage in 2019? - 22nd Mar 19
Does Fed Know Something Gold Investors Do Not Know? - 21st Mar 19
Gold …Some Confirmations to Watch For - 21st Mar 19
UKIP No Longer About BrExit, Becomes BNP 2.0, Muslim Hate Party - 21st Mar 19
A Message to the Gold Bulls: Relying on the CoT Gives You A False Sense of Security - 20th Mar 19
The Secret to Funding a Green New Deal - 20th Mar 19
Vietnam, Part I: Colonialism and National Liberation - 20th Mar 19
Will the Fed Cut its Interest Rate Forecast, Pushing Gold Higher? - 20th Mar 19
Dow Jones Stock Market Topping Pattern - 20th Mar 19
Gold Stocks Outperform Gold but Not Stocks - 20th Mar 19
Here’s What You’re Not Hearing About the US - China Trade War - 20th Mar 19
US Overdosing on Debt - 19th Mar 19
Looking at the Economic Winter Season Ahead - 19th Mar 19
Will the Stock Market Crash Like 1937? - 19th Mar 19
Stock Market VIX Volaility Analysis - 19th Mar 19
FREE Access to Stock and Finanacial Markets Trading Analysis Worth $1229! - 19th Mar 19
US Stock Markets Price Anomaly Setup Continues - 19th Mar 19
Gold Price Confirmation of the Warning - 18th Mar 19
Split Stock Market Warning - 18th Mar 19
Stock Market Trend Analysis 2019 - Video - 18th Mar 19
Best Precious Metals Investment and Trades for 2019 - 18th Mar 19
Hurdles for Gold Stocks - 18th Mar 19
Pento: Coming QE & Low Rates Will Be ‘Rocket Fuel for Gold’ - 18th Mar 19
"This is for Tommy Robinson" Shouts Knife Wielding White Supremacist Terrorist in London - 18th Mar 19
This Is How You Create the Biggest Credit Bubble in History - 17th Mar 19
Crude Oil Bulls - For Whom the Bell Tolls - 17th Mar 19
Gold Mining Stocks Fundamentals - 17th Mar 19
Why Buy a Land Rover - Range Rover vs Huge Tree Branch Falling on its Roof - 17th Mar 19
UKIP Urged to Change Name to BNP 2.0 So BrExit Party Can Fight a 2nd EU Referendum - 17th Mar 19
Tommy Robinson Looks Set to Become New UKIP Leader - 16th Mar 19
Gold Final Warning: Here Are the Stunning Implications of Plunging Gold Price - 16th Mar 19
Towards the End of a Stocks Bull Market, Short term Timing Becomes Difficult - 16th Mar 19
UKIP Brexit Facebook Groups Reveling in the New Zealand Terror Attacks Blaming Muslim Victims - 16th Mar 19
Gold – US Dollar vs US Dollar Index - 16th Mar 19
Islamophobic Hate Preachers Tommy Robinson and Katie Hopkins have Killed UKIP and Brexit - 16th Mar 19
Countdown to The Precious Metals Gold and Silver Breakout Rally - 15th Mar 19
Shale Oil Splutters: Brent on Track for $70 Target $100 in 2020 - 15th Mar 19
Setting up a Business Just Got Easier - 15th Mar 19
Stock Market Elliott Wave Analysis Trend Forercast - Video - 15th Mar 19
Gold Warning - Here Are the Stunning Implications of Plunging Gold Price - Part 1 - 15th Mar 19
UK Weather SHOCK - Trees Dropping Branches onto Cars in Stormy Winds - Sheffield - 15th Mar 19
Best Time to Trade Forex - 15th Mar 19
Why the Green New Deal Will Send Uranium Price Through the Roof - 14th Mar 19
S&P 500's New Medium-Term High, but Will Stock Market Uptrend Continue? - 14th Mar 19
US Conservatism - 14th Mar 19
Gold in the Age of High-speed Electronic Trading - 14th Mar 19
Britain's Demographic Time Bomb Has Gone Off! - 14th Mar 19
Why Walmart Will Crush Amazon - 14th Mar 19
2019 Economic Predictions - 14th Mar 19
Tax Avoidance Bills Sent to Thousands of Workers - 14th Mar 19

Market Oracle FREE Newsletter

Stock Market Trend Forecast March to September 2019

Fiat Currencies Weight in Gold, The Real Prices of Things

Commodities / Gold and Silver 2011 Jun 17, 2011 - 02:27 PM GMT

By: Casey_Research

Commodities

Best Financial Markets Analysis ArticleCharles Vollum, Casey Research writes: Fiat currencies the world over are being manipulated by central banks, which is distorting asset and commodity prices. Successful investing requires that investors have a good idea of what things cost and what they are really worth – and using the world's oldest and most stable form of money, gold, to compare prices is one way to get that insight.


To that end, below is a sampling of current prices measured in grams or milligrams of gold. Price comparisons are against prices as of June 10.

Currency Watch:

    Change from:  
  Price in Gold Week ago Year ago
USD
20.3 mg
0.7%
-20.4%
CAD
20.8 mg
0.7%
-15.7%
EUR
29.7 mg
1.9%
-3.9%
JPY
0.254 mg
1.7%
-9.4%

The month of May was rough for all the currencies, with the EUR and JPY making new all-time lows on the 24th and 25th, respectively, while the USD made a new all-time low on June 6th. Since then, they have all been struggling to regain the lost ground. Last week, the much-beleaguered euro made the most headway, followed by the JPY. All of the currencies are down significantly from their year-ago levels, but the USD has fared much worse than the others, down 20%.

Bond Watch:

    Change from:  
  Price in Gold Week ago Year ago
1-3 Year (SHY)
1.72 g
0.8%
-19.1%
20+ Year (TLT)
1.98 g
1.5%
-16.4%

U.S. Treasuries have been a terrible investment for at least the last eight years. Since 2002, shares of the ETF SHY have lost 76% of their value, despite an apparent increase of 29% when measured using dollars. The long bond ETF TLT is just as bad, down 70% since 2002, despite a smoke-and-mirrors “gain” of 66% when measured in dollars. While Treasuries ticked up about 1%, following the lead of the USD, they remain down about 19% from a year ago.

Equity Watch:

    Change from:  
  Price in Gold Week ago Year ago
DJIA
243.09 g
0.8%
-6.5%
S&P 500
25.85 g
-1.6%
-6.9%
Nikkei 225
2.42 g
2.0%
-9.6%
HUI
10.34 g
-4.7%
-12.0%

Major stock indices have been falling for the last ten years. The Dow, for instance, hit its all-time high around 1,400 gold grams in 1999. It has since lost over 80% of its value. For the last two years, major indices have been pretty flat after bouncing off their March 2009 lows. As with bonds, nominal prices have risen as currency values have fallen, leaving investors with lost purchasing power and huge tax liabilities.

Commodity Watch:

    Change from:  
  Price in Gold Week ago Year ago
Crude Oil
2.02 g/bbl
-0.2%
4.7%
Silver
0.760 g/oz
7.0%
65.5%
Copper
82.6 mg/lb
0.0%
13.3%
Coffee
53.9 mg/lb
2.1%
54.0%
Cotton
30.5 mg/lb
-6.5%
44.8%

Silver has been strong, not just in dollars but in gold as well. On February 18, it closed convincingly above its long-term resistance level at 0.7 grams of gold. This was followed by a fast run-up to the 1.0-gram level, last seen in the early 1980s, and then a quick drop back to the 0.7 level.

There is a lot of concern about rising commodity prices recently. Although many of these commodities are up strongly in the last year, they are rebounding off deep lows.

Crude oil, for example, finds its long-term support at around 1 gram per barrel (g/bbl), and hit 1.1 g/bbl in February of 2009. Although it has recovered to 2 g/bbl, crude traded at over 4.9 g/bbl as recently as 2008.

Coffee is another example. Trading at under 34 mg/lb in May of 2010, it currently stands at 54 mg/lb yet in 1997 it traded over 230 mg/lb.

Cotton was less than 20 mg/lb in early 2010, and now trades near 30 mg/lb. Cotton's 30-year average price is 53.2 mg/lb (74% higher), and its record high of 250 mg/lb is eight times today's level.

Chart of the Week: Boeing Co.

An article on MarketWatch discussing the Dow Industrial stocks stated that for 2011, Boeing is the best-performing stock in the index. On May 10, it was up 22.5% – a new 52-week high and very near its price three years ago (all in U.S. dollar terms, of course).

The chart above shows the real situation: rather than making a new 52-week high, the stock was down 10.1% from its 52-week high set last July. It was up 14.2% for the year, not 22.5%. And rather than approaching its price of three years ago, it was in fact down 40%. And Boeing was the best-performing stock of the 30 Dow Industrials!

Of course, all this doesn't tell one whether Boeing is a good buy at today's prices; to determine that, one would have to dig deeply into its fundamentals. But it does show that the conventional media, by using dollar prices, give very distorted ideas about how cheap or expensive things really are.

Don't be fooled by bogus government currency shenanigans! Keep track of your investments' true values, using gold.

[It isn’t too late to capitalize on gold. It can offer security, profit potential, and an inflation hedge. BIG GOLD can help you sort through stocks, ETFs, and other ways to invest – and it’s risk-free for three months.]

© 2011 Copyright Casey Research - All Rights Reserved

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.


© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules