Friday, April 22, 2016

Dollar - Gold Valuation Update
From GoldMoney
Alasdair Macleod updates on the Fiat Money Quantity (FMQ) indicator, which continues to rise at an accelerated pace .. "In March, gold measured in 1934 dollars, and adjusted for above-ground gold stocks at that time, was the equivalent of $12.93. In other words, despite the increased risk of a collapse in the dollar’s purchasing power, in real terms gold is priced at about one third of the level President Roosevelt set in 1934. Therefore, on any monetary measure, gold is extremely cheap, and is back at the levels set in July 1976, and in 1999-2002. This sort of historical perspective is useful, putting the first quarter rise in the gold price of only 20% in context. We should also note that China appears to be wresting control of the gold market from the U.S. and London, since it now controls the physical market. Furthermore, by pricing physical gold in yuan at a twice-daily fix, China will be able to direct physical flows through Shanghai, instead of dealing in London and New York. Perhaps, by moving pricing away from a dollar monopoly, gold’s enduring undervaluation is about to come to an end."
LINK HERE to the analysis

1 comment:

Anonymous said...

William Engdhal-Why are Russia and China Buying Gold? Tons of It!