Friday, May 05, 2006


After reading Billmon's blurb about the recent rising price of gold and what that might indicate, I decided it might be fun to have a little graphical representation of this issue. Below is the price of gold (last 30 days) and the valuation of the US dollar against the Euro (last 30 days). Some other currencies are also shown in their performance over the same time period.

US Dollar v. Euro

US Dollar v. Pound Sterling

US Dollar v. 1 Aus. dollar

US dollar v. Cdn dollar

While gold is traditionally more stable than exchange rates, the fact that the valuations of gold and all these currencies are tracking startlingly similar lines is certainly indicative of a general unease with the posture of the US dollar and the delicacy of its situation right now.

Of course, when idiots in Congress propose hair-brained schemes like $100 rebates to taxpayers -- to be paid for by effectively increasing taxes on oil companies (and others) -- which US consumers are then supposed to send right back to ExxonMobile by dumping that $100 into buying gasoline for their Escalades, you have to know the world financial industry recognises that there really are no adults at the helm of American government. They have, of course, known or suspected this for sometime, though have been loathe to act too seriously on such fears, thinking that, surely, some nominal form of governance in the US would return. World markets may have finally given up that hope.


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