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Five weeks ago gold closed in London at a new record
high against the British pound. That result is not surprising. The pound is
generally considered to be the weakest of the world's major currencies, so it
is logical that it would fall first against the strength that gold has been
displaying in recent weeks.
Surprisingly, the next currency to fall was the
Swiss franc. Gold closed three weeks ago at a new record high against what
used to be considered the world's premier 'safe-haven' currency. It no longer
holds that title because the Swiss National Bank has been intervening to keep
the Swiss franc from strengthening against the euro, which has been sinking
because of its well-publicized problems. So the Swiss franc has been falling
along with the euro, which itself has not been immune to gold's strength.
Last week gold set a new record against the euro.
Gold's new record this week is against the US
dollar. Gold closed in London at a new all-time high of $1245.40, and did
even better later in the day by closing in New York at $1257.20. More records
for gold are likely in the weeks ahead because central banks are destroying
the purchasing power of national currencies.
The following charts also illustrate why more
records are likely. Gold's rising price trend is starting to accelerate. Note
the hyperbolic pattern in each of these charts, which is normally a sign -
but of course, not a guarantee - of higher prices.
The similarity of the pattern in the above charts is
striking. Note how the pound chart doesn't look much different from that of
the euro chart or the dollar or franc. As I often say, in a world of floating
currencies that bob up-and-down against each other depending on respective
central bank policies, they are all sinking against gold, which leads to one
last point.
As the sovereign debt crisis deepens and the
debasement of national currencies at the hands of central bankers and
politicians becomes increasingly recognized, more and more people are
starting to understand the true nature of gold. It is not only money, but a
better money than any national currency.
James Turk
GoldMoney.com
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James Turk is the
founder of the Free Gold Money Report and of GoldMoney.com. He is also the
co-author of The Coming Collapse of the Dollar (www.dollarcollapse.com).. Copyright © by James
Turk. All rights reserved.
Copyright © 2008. All rights reserved.
Edited by James Turk
This material is prepared for general circulation and may not have
regard to the particular circumstances or needs of any specific person who
reads it. The information contained in this report has been compiled from
sources believed to be reliable, but no representations or warranty, express
or implied, is made as to its accuracy, completeness or correctness. All
opinions and estimates contained in this report reflect the writer's
judgement as of the date of this report, are subject to change without notice
and are provided in good faith but without legal responsibility.
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