Well, I did finally say to myself some years ago, "If the dollar goes down, what does it go down AGAINST?" and the answer was, "other currencies."
As soon as the worldwide overproduction of all fiat currencies becomes evident, however, gold ought to kick back in for a year or so until the mining companies start overproducing that. If they are smart enough, there might be some collusion to hold back on new projects the way the DeBeers people control diamonds, but since gold is found so many places and recovered in so many different ways, and since it is hardly consumed at all, it's hard for me to imagine it staying at a "permanently high plateau" very far above actual mining costs.
But as you say, as the dollar falls, every advance of gold should be ratcheted ("geared" as the Brits say) by the price of gold in the other currencies.
I still think the biggest bucks from this whole stupid situation might be made in energy. Americans may grouse, but if gasoline was $5.00 a gallon a lot of people would come up with the money and stop drinking Perrier. Maybe they might even consider buying Corollas instead of SUVs. You can get a lot of gas with the $12,000 difference in price, and make it go twice as far. |
