Independence Day: Decoupling Gold and Silver for the Dollar
Source: Seeking Alpha, James Conrad (8/27/08)
Yesterday, something interesting happened. Precious metals went up, while the dollar went up. Everyone is amazed. But, the news shouldn't really be surprising, because it is nothing new. Gold and silver have never been tethered to the dollar, or anything other than the principles of supply and demand. When looked at in the long term, they have been rising against a falling dollar, but, also, against a rising euro and pound, for over 8 years now.
All the world’s Central Banks - most notably the Federal Reserve (the Fed), but, also, the European Central Bank [ECB], the Bank of England [BOE], the Bank of China [BOC] and the Bank of Japan [BOJ] - have been heavily printing paper money in the last few years. All have increased their M3 money supplies by staggering percentages (see shadowstats.com). Making matters worse, the central bankers are now accepting mortgage backed paper from their friends at major politically connected banks, as collateral for cash and/or government securities. Problem is, the mortgage backed bonds are suffering high default rates.
There’s no way to avoid the inevitable. No amount of lying will avoid basic truth. Our money is losing its value...
But, can we do something to protect ourselves and our families? During the last 8 years, precious metals have appreciated more than 3 times against the dollar, but have also risen substantially, against every other paper currency in the world, including the euro, pound, franc, crown, drachma, dinar, and rupee. Many tunnel vision analysts tell us that the value of gold and silver is tethered to the dollar’s relative value in terms of other currencies. This is incorrect.