Wednesday, October 13, 2010

Hey! Dummies! You in front of the TV camera.

Hey! Dummies! You in front of the TV camera, Gold reaching new highs is not a good thing!
Silver, maybe. It may be if it is reclosing the historical 16:1 ratio to gold.

BUT, gold reaching a new high means the dollar is reaching a new low.

Last year, at this time, I wrote a blog about gold breaking $1000 an ounce. Then, as now, I found this to be a worrisome thing. As I write this 54 weeks later, Gold has a bid price of $1372.33 and an ask price of $1372.88¹. This means that in the last year gold has risen 37.23%! In one year! Or more correctly, the dollar has fallen 27.15% against gold. Again, it isn't the gold that is changing. An ounce of gold is always worth ... an ounce of gold.

¹The day's high was $1374.05.

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