Don't Think Gold Prices Are Going Up? Part 2
Don't Cry For Me Argentina
This is a continuation of a short segment written back about a week ago on how gold stacks up in currencies outside of the US dollar. Being as we always get a US dollar price on gold and that price seems to be stuck in the $1,200 -$1,300 range for the past 3-4 years we seem to get the feeling that the gold price hasn't done anything but moved sideways at best. But taking a look at other currencies we can see just how fast gold can accelerate in price when things go wrong.
The chart below is a 10 year chart of the Argentine Peso. As you can see the price of gold has gone up 1000's of percentage points over that period of time. This is due to the Peso being more and more devalued or in other words, becoming worthless. Of course there is always the argument that a person could have just bought US dollars and would have ended up the same as had they bought gold. The only difference is that gold long term will outshine ALL currencies.
The above the chart just goes to show how bad things can get and just how quick these bad things can happen with a countries currency. In the chart below you can see and exploded view of just how rampant things can get. Below is a 6 month chart of gold in the Argentine Peso. Even if you would have bought gold or silver around Christmas time, look how you have perserved your wealth due to inflation and devaluation of your currency. Argentina imports just went up 100% since that time. Your bank account has lost half it's value. Imagine saving up for a down payment on a home. One look at that chart and the only thing it is going to tell you is that you'll just have to keep working a whole lot longer.
In the last article I wrote I have posted charts of the Canadian dollar in gold terms, the Australian dollar
and the Brazilian Real and also South African Rand. All of these countries are seeing new highs or very close to the old highs of 2011 in gold prices. This is also known as the wealth transfer of where people have seen their currency wealth get transferred to those who own gold.
Yes Argentinians may say, "Don't cry for me Argentina," but I imagine some are just crying for Argentina instead.