Last December we wrote in “They Are All Sinking” about how our present monetary system is a dollar based system and how it has evolved. We also noted how all the major so called hard currencies, along with the dollar, had been losing value against gold since 2001. In part II we will be giving an update on how the major fiat currencies are faring against gold at the present time.

We recommend readers go over to part I in order to get a better idea of how our fiat monetary system has evolved.

We feel that there is a great deal been made of the demise of the dollar while there is, on the other hand, a great deal been made of the $2 pound sterling and the $1.36 euro. Focusing on dollar weakness alone is, in our opinion, a mistake because in the end of the day all the major fiat currencies are being inflated and as a result losing purchasing power versus real goods, services and assets. As gold has been the currency with the best track record over the last few thousand years and as a result has maitained purchasing power we find it appropriate to compare government imposed currencies with the yellow metal.

Our latest calculations show that the dollar, the euro, the British pound, the Swiss franc and the Japanese yen have continued to lose value against gold. Since we last wrote the dollar price of gold has gone from $618 to $684 today which is a gain of 10.68% for gold, against the euro gold has gone up from eur472 to eur502 today for a gain of 6.35%, versus the British pound gold is up to £342 from £316 for a gain of 8.23%, the Swiss franc has lost 9.15% as gold has risen from chf754 to chf823 and lastly against the yen we have seen gold rally from yen73′000 to a present price of yen81′100 or a debasement of 11.09% for the Japanese currency.

As can be seen talk of death of the dollar is only partly true. We feel that it is more appropriate to talk of the demise of the fiat monetary system and with it the death of all the currencies that make up the system.

By Mario Innecco
ForSoundMoney.com

At ForSoundMoney we stand for a hard currency. We believe in a monetary system based on commodity money and a free-market banking system where central banks are non-existant.

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