Re: "That's an interesting long term dollar chart... then how come gold has more than quadrupled against the dollar in the same number of years?"
This chart (as I believe I wrote) is of the "dollar index" which is a weighted index of the US Dollar vs. the other major world currencies (EUR, JPY, GBP, CAD, CHF and SEK).
It is *not* a measure of the currency vs. commodities like gold.
This chart clearly shows that this most recent decline in the Dollar is just a 'blip' on the chart, merely (so far anyway...) just a TAKING BACK of the artificial and temporary fear-inspired Global dollar rally from last Fall.
All that has happened is that, (now that fear is receding and the markets are recovering), we are heading back towards the *exact same value* for the Dollar that we had already PRIOR to the Global financial panic... but we are *still not even there yet*!
The Dollar is currently STILL higher valued then it was in the months before the panic hit.
(I expect, of course, that 'reversion to the mean' will cause the dollar to eventually resume it very-long-term slow and steady rate of gradual decline, consistent with it's average decline rate over the past 30 years or so, but we may be in for a bit of a rally over the next couple of months....)
NOTE PLEASE, if you will, the *truly large* declines in the Dollar from 1985 to 1988 in the second Reagan term (mostly just coming back off an artificial interest-rate-driven spike in his first term), and the equally massive (but much longer-lived) Dollar decline that happened in *both* terms of the second Bush Presidency - roughly from 2002 through late 2008 (until the 'rush to safety' of the global financial panic last Fall).
The Bush II depreciation of the Dollar appears much more SERIOUS then what happened in Reagan's second term.
Reagan's appears to mostly be a 'taking back' of an artificial spike... while Bush's depreciation has been much longer, and appears to have perhaps even taken us under the Dollar's long-term trend line.
Re: "then how come gold has more than quadrupled against the dollar in the same number of years?"
Interesting question. I know that gold has been one of the weakest performers over the most recent 20 years or so, (& still below it's highs from the early 'eighties), although the earlier still nineteen 'seventies were a jewel era for most all commodities, because of the stagflation (caused by twin oil shocks book-ending the decade, and Vietnam War costs, and the rise of foreign trade competitors, and generally weak or inept Federal Reserve administration during that decade...) but, this chart goes ALL THE WAY BACK to the START of 1972.
Isn't 1972 the year that Nixon revoked the Dollar's exchange-ability into gold???????????
Thus allowing the price of Gold to rise from it's 'peg' price of $35, for the first time since the Great Depression?
If you are saying that gold has 'quadrupled' over that period ('72 to today) wouldn't that only be because of the huge spike in 1972, and then the continued rise through the balance of the 'seventies?
'Cause the LAST twenty years hasn't been nearly so good for gold.... |
