Comments on: Commodities send coded clues on inflation

By: Mike

Mike — Tue, 07 Apr 2009 19:30:51 +0000

The difference between oil and gold makes all the sense in the world. As the markets crash, there will be a decreased need for oil, because investment in industry will decline. As industry declines so does oil. However, there will be sharp rises in inflation. As the currencies all lose their value, Gold will keep its value. Gold is valuable because it is rare and easily traded. Oil is valuable because it is useful. Oil is becoming less useful and gold is becoming more rare. Makes sense that oil’s price will decline and gold’s will rise.

By: Narmadha

Narmadha — Sun, 08 Mar 2009 06:28:06 +0000

At least in the US, the baubles and nice goodies appear in the US budget. In China and Russia, they are hidden until some newly rich former shoe-lace salesman builds a castle in Caucasus, or Inner Mongolia.

Transparent flows of money are what a stable currency requires, even during times of stress. No other currency is as large or transparent as the US dollar.

By: Brian Bigelow

Brian Bigelow — Sat, 28 Feb 2009 21:34:02 +0000

Yes, inflation is going to be a problem during the next, especially with the way the government is giving away money. Right now though, gold I think is in a bubble. Eventually, the bubble will pop.

By: Rob

Rob — Wed, 25 Feb 2009 09:21:36 +0000

I’m not sure about the US dollar being a dead currency, as some posters have suggested.

No other currency is capable of taking over, either for goodwill or solvency issues. China would burn through its foreign reserves quickly if it tried to backstop the world economy. And Russia?!? PLEASE!! Russia is a 2nd rate economy riding on a wave of late 20th Century enthusiasm. Russia has neither the economic strength nor management knowledge required to act as a currency safe haven. And there is the small matter of corrupt government in both China and Russia.

Transparent flows of money are what a stable currency requires, even during times of stress. No other currency is as large or transparent as the US dollar.

By: Cindy

Cindy — Tue, 24 Feb 2009 16:40:52 +0000

Very insightful Dan,

“Personally I don’t consider gold a worthwhile metal either from a commercial standpoint or aesthetically. But demand from India is coming on line, and my understanding is that they love gold. Oil has never been comparable to gold since the value of oil is largely determined by its usefulness. Not only are there alternatives to oil, but overtime with technological improvements our demand for it tends to decline. Also some of us are turning away from plastics and polyester. Oil is really a relic of the disco era with its heydeys in the production of really tacky dancing outfits. Probably at this point the chemical bonds are starting to break down and resulting in peculiar carbon molecules leading to the feminization of male children.”

When people wake up and realize the global significance,
of the cancer industrialization has brought to the planet…they will know precisely how to solve the problem. Or will we? We are prisoners of our own device, without “our” water and land.

By: Dominick Chirichella

Dominick Chirichella — Tue, 24 Feb 2009 15:31:21 +0000

Good article. Note that the peaks of the Oil/gold ratio have mostly occurred during period of time whenoil prices collpased…1986/1987, 1998 and today.

By: Don

Don — Tue, 24 Feb 2009 12:52:36 +0000

Personally I don’t consider gold a worthwhile metal either from a commercial standpoint or aesthetically. But demand from India is coming on line, and my understanding is that they love gold. Oil has never been comparable to gold since the value of oil is largely determined by its usefulness. Not only are there alternatives to oil, but overtime with technological improvements our demand for it tends to decline. Also some of us are turning away from plastics and polyester. Oil is really a relic of the disco era with its heydeys in the production of really tacky dancing outfits. Probably at this point the chemical bonds are starting to break down and resulting in peculiar carbon molecules leading to the feminization of male children.

By: dv

dv — Tue, 24 Feb 2009 12:51:10 +0000

We have beebn hearing that US Dollar is ugly, but still better than other currencies. We have heard the first salvos of rating agency wars – Mr. Baffet’s Moody’s downgrading European banks and Paris-based Fitch doing the same on US firms. We have heard crude forecasts from US that the price will go down to 20. The Euro/$ is still in the 1.25 to 1.35 corridor, Brent has been trading above 40 (probably because Shell and BP will lose money even at that price) and Hillary calling upon Chinese to keep buying UD Treasuries (on which they are likely to lose handsomely, if yields go up). Europe and Japan have been certainly struggling, but big chunks of US economy have effectively already collapsed. US government claims that industrial contraction is not as severe as elsewhere; it very well may be, but data available shows that US well ahead of the rest of the world in terms of reductions in steel and car output. What all this seems to amount to is an information war to prop up Dollar as the “safest” investment instrument. But with gold still rising, apparently not everyone is convinced.

By: Not Disclosed

Not Disclosed — Tue, 24 Feb 2009 06:42:19 +0000

I think that money is over-rated. Why should we be so entirely wrapped up in the value of a physical object that we really don’t need in order to live. Money is only as important as WE make it. Surely, there must be some other way we can make our society work. And I don’t mean communism, socialism and all that garbage. There is always the Barter System and Agrarianism and if kept simple there may be a whole host of other possibilities. I’m sure all the power mongering money grubbers have something negative to say about that, but from where I’m standing these sure look reasonable.

By: Manish

Manish — Tue, 24 Feb 2009 00:17:39 +0000

Are we getting into the medieval period,where god was considered as the barter currency? If that be so, then what will be the fate of huge dollar reserves held by some asian countries ?

In India, people generally buy gold for future investment, is it hold true for the rest of the world ?