Monday, May 16, 2016

Gold Is Behaving Like Money Now
"Gold is behaving more like money than a commodity or investment. It is competing with central bank fiat money for asset allocations by global investors. Investors around the world are losing confidence in Chinese yuan, Saudi rials, South African rand, Russian rubles, and a long list of other emerging market currencies. Investor preferences are shifting toward gold. This accounts for gold’s outperformance of the rest of the commodity complex when measured in dollars. What is interesting is that when the price of gold is measured not in dollars but in rubles, yuan, or rials, the percentage price increase in gold increases as currencies decline against the dollar. When you understand that gold is money and competes with other forms of money in a jumble of cross rates with no anchor, you’ll know why the monetary system is going wobbly. It’s important to take off your dollar blinders to see that the dollar is just one form of money. And not necessarily the best for all investors in all circumstances. Gold is a strong competitor in the horse race among various forms of money."
- Bill Bonner
LINK HERE to the essay

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