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The rate of gold bullion price increases in the first decade of the 21st century was remarkable and enduring. At the beginning of 2011, we were able to look back and proclaim that gold has risen for ten consecutive years in a row. Historians and commodity experts struggle to identify other commodities that have risen for an entire decade in this manner. Yet, gold finished each successive year higher than the year prior.
Rate of Gold Rising With Cheapening Currencies
The rate of gold has increased not only relative to itself, but also to significant world currencies. While gold has a relatively stable value, the price of gold bounces around when denominated in various fiat currencies.
One event that’s been transpiring since the early 2000’s is intentional currency devaluation. With a global marketplace, countries have sought to devalue their currency against one another. A weaker currency makes for less expensive exports. Cheaper exports can improve the local economy by making consumers of the exports more likely to buy. China, for example, is a huge exporter of manufactured goods, and is well served by lower currency relative to others. These manipulations of paper money only amplify the inherent value of gold, which is resistant to such manipulation. Unavoidably, over time you can more and more cheap currency with the same amount of gold.
Rate of Gold In Light Of The Competitive Currency Devaluation
It’s significant to witness the effect on the rate of gold as various nations manipulated their paper money. Euro nations were once leading the pack, having devalued the Euro and heightened the efficacy of exports for countries like Germany. England wasn’t to be left behind, and once upon a time the British Pound was beaten down to benefit the Brits. This cycle has repeated time and time again. Currency devaluation has been an all-important goal in Scandinavia, Canada, and Australia.
Rate of Gold – Who Can Go Lowest In Currency Limbo?
As you can imagine, the impact on the rate of gold is only amplified as the currency war plays out in extremes. The tactics may change, but the goal is the same. First there is a cut in interest rates. Then the powers that be fire up the printing presses and flood the market with more funny money. All of these moves serve to devalue the currency that’s being manipulated.
As you can predict with even a small dose of foresight, this is an endless game where I seek to one-up you. I may be in the lead today, but then I lose that advantage next quarter. At some level, this short-sighted approach effectively becomes a races to the bottom.
Rate of Gold And The Real Winner In A No-Win Game
While exporters may benefit, and the appearance of improved economy may sound great, the victims of currency devaluation are vast in number. Further, the impact of this greater loss is enormous. See, anyone holding the targeted fiat currency will suffer a de facto loss in value, as purchasing power drops like a rock. As the market is flooded with more and more funny money, the value of the money you already have on hand is necessarily decreased. Relative to other currencies, your given fiat currency is like a veritable yo-yo. It bounces up at times as other nations aggressively devalue their currency through printing or cutting interest rates. Then it simply falls again as your country’s manipulators pummel your own money. It’s not surprising to see so many people push into ETF silver and gold vehicles.
To get ahead in this cat and mouse game, you have to find a way to extract yourself from the funny money manipulation. Here’s a poignant point to bring home this reality. Since about year 2000, gold is up almost five-fold and silver funds have seen a huge recent surge. So, while nations have worked hard to beat the life out of their own fiat currency, harming the people of that country that are inextricably tied to the given monopoly money, gold has risen steadily.
This rate of gold isn’t surprising when gold is appreciated for what it is – real money. Gold was good enough for Jesus. Indeed, the Bible records that the “wise men” brought Jesus gold, frankincense, and myrrh. This is notable, as something of value in the far East was relevant and immediately recognized as inherently valuable when delivered as one of just three chosen gifts for the Son of God. And that same inherent value has only “increased” in recent times, as the same amount of gold have been able to purchase more and more fake money across the first ten years of this new millennium. In this way, gold not only stores value, but the rate of gold also rises relative to these fiat currencies, enriching those with the foresight to hold it.
