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All Currencies Are Suspect

 February 07, 2010 01:14 PM

A comment on the blog last week got me to wondering. One of our Canadian friends made the comment that he's made nothing off of gold because the Canadian dollar has been strong. I think he was insinuating that the price of gold was only rising in the US and that only because the Fed is destroying the US dollar.

After looking at the preceding chart I have to conclude our Canadian friend is simply a poor trader :-) Actually as we all know gold is a very volatile asset and pretty tough to trade successfully so his mistake was probably that he was trading instead of holding. Even priced in a strong (relatively speaking) Canadian dollar gold is still up 200%.

The next set of charts speak volumes about the global monetary policy.

Every country in the world is printing at a furious rate. No one is innocent.

Recently the Australian and New Zealand central banks are showing a bit more commonsense than most, but it's certainly only a recent occurrence as gold rose 300% before backing off a bit. Besides who knows how long commonsense will last? Probably only until politicians start to feel the heat again.
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