Gold Should Be Able to Perform, and Express its Value
regardless of whether Oil, for example, is priced in USD, or a basket of currencies, or even gold itself. In a way, you are implying that the dollar derives strength from being the currency with which Oil is priced. I'm familiar with this view. And, through certain periods, it "may" be true that the United States derives a benefit as oil priced in dollars is promotive of a float, globally, in dollars. But I don't think advantages which can accrue to a "country" with its paper currency would be there, for gold, if "oil" were priced in "gold." In fact, if we see the dollar-oil relationship through the perspective of equilibrium, we are now in fact accruing the "disadvantages" of having flooded the same world with dollars that is now seeing declines in oil supply. Suddenly, there appear to be no advantages at all, for dollar holders, that oil is priced in dollars.
Again, gold strength is absolutely and everywhere measured on a relative basis. The time for gold to perform is now. Immediately. Since oil is doing absoultely nothing, nothing at all to "prop up" the dollar, gold should be able to go to work like a buzz saw on the dollar--or any other currency, or commodity it deems fit to compete against.
No, the question of gold's recent performance still lies ahead of us. We're all wondering why.
Lots of answers out there right now. None seem quite right to me.
LP |
