Gold vs. Dollar vs. Euro
Amidst the greatest printing-of-money-frenzy the U.S. has ever seen, news comes oozing through our favorite media of how strong the dollar is. In response to that notion, I recall one analyst's perspective, if the dollar was in a pageant it would have to be an ugly pageant where the least ugly was the winner."Pick me, Pick me," cries the dollar, as if pleading will prevent its fall from grace to the second least ugly or even third least ugly of all the world's major currencies.
Mind you, our budget deficits are now scheduled to run in excess of a trillion dollars a year from now until eternity, practically.So, how does the dollar get stronger in the face of its forthcoming mass production?And should this spell the end of the gold bull market as some of the talking heads must ask of a variety of experts?
Let's take a step back here and revisit a few points in time over the last decade to see if we can get a better picture of where the dollar may be headed.Now mind you, no one has a crystal ball - certainly not me - but neither do all the experts, of which half oppose the other half's position.
In November of 2004 both gold and the Euro were three year's into a rally that brought the Euro to $1.33 from a decade low of $.87 and gold to $450 from its low of $270.By November 2006, after another 10 month rally, the Euro was $1.32 and gold was $644.By June of 2007, the Euro rose slightly to $1.35, Gold hit $670 and neither seemed stopable.Then in April of 2009, after enjoying some time of Dollar beating, the Euro fell to (you guessed it) $1.32 right back to levels of 5 years prior.And what was Gold? - $925 an ounce.
That brings us to today.And once again after now having its butt kicked by the dollar, for the last 4 or 5 months anyway, the Euro fell to $1.32 and gold closed the day near $1090 an ounce.If this is the story a strong, then weak, then strong again dollar has told over the last 6 years, then the story we hear over the next 6 years should bring us somehwere north of $2000 gold.And when you think about it, we've only just begun to read the chapter on printing massive amounts of dollars and debt. Which, in my opinion has to lead us to the chapter on hyperinflation and gold as an inflation hedge - still!
Rapidly accelerating re-cognition/re-establishment of a De Facto Private Gold Bullion StandardTHE GOLDEN RONIN: proprietary algorithmic [intelligent (strong AI), complex, evolutionary or ICE algorithms] gold forecasting and trading model which currently predicts that gold bullion will be trading/valued at more than $2150 +/- $150 per ounce by 01/20/13.