Gold Value vs The Mickey Mouse Monopoly Money

If you buy gold in US dollars, you’re in luck, because whether you realize it or not, you have made a killing against almost every other currency in the world. It may be hard to believe with gold about 25% below its all-time US-dollar high, but 72 different countries have seen gold hit an all-time high in their currencies this year. Like in Canada. Live north of the United States border, and this is what your gold chart looks like right now.

Mike Maloney: Gold Value vs The Mickey Mouse Monopoly Money

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Transcript

They say that gold is a store of value and throughout the centuries it has proven this time after time after time just like it is today. Right now gold is selling at all time highs in more than 72 different national currencies. I want to show you this article it's an early draft of an article that is being written by Alex Trujillo of gold silver dot.com. One of the researchers writers at gold silver dot com and it's about how you can buy gold at a 25 percent discount if you're buying it in U.S. dollars because it is ounce per ounce it's 25 percent cheaper for us in the United States than it was in its 2011 high. But for people in 72 different countries if they have dollars instead of their own national currency they're getting an even steeper discount in that because their currency has lost value against the U.S. dollar. And like if you're in Canada Gold is hitting record highs in Canada right now.

If you're in Australia. Gold is way up in Aussie dollars. Now these are not banana republic Mickey Mouse Monopoly money currencies. These are some of the most. These are large stable currencies. These are some of the best most respected fiat currencies if you can respect any fiat currency. Personally I have contempt for all of them. But if you go to one of those Mickey Mouse Monopoly money fiat currencies, what you see here this is the Argentine peso. I don't mean any disrespect to anybody from Argentina but when any country does this to their currency what they're doing is stealing from their own population. They're transferring the purchasing power the wealth of the citizens of that country from the public to the government. Whenever you look at a chart of a price of gold or a price of anything else if you flip it upside down that's the value of that currency measured in gold. And so if you just imagine this upside down right here the Argentine peso is dropping like this. And then just falling off the bottom of the chart right here. That's what's going on that's the value of their currency. And that's the purchasing power of in goods and services. So they have raging inflation right now with prices changing dramatically. But if you look at this the 2000 you know here's 2010. So this is 2011. So the 2011 peak in the gold price.

Gold. Gold is up about ten fold. I believe the Argentine peso since this chart began has dropped more than 93 percent against gold. Now. In U.S. dollars however it's still 25 percent below its all time high. And what's interesting is it just busted out of this zone of resistance it's called. And so now that it's clear that it really hasn't got a hold until you get up to about seventeen hundred dollars there's not a whole lot of headwind for gold. But right now in U.S. dollars gold is pretty much selling at a discount. It really is doing its job of storing value. And the thing is this is a list of all circulating currencies and there's 180 currencies.

But there are only 100. When you exclude all of the currencies that are pegged to another currency it leaves only 130 unique currencies that have their own values against each other. Now this is a ridiculous stupid system with hundred and thirty different floating currencies all bouncing up and down every day every minute in value against each other. It's a it's crazy. One day the entire world if you remember the movie The Matrix and there's this portion in there where Neo wakes up out of his he takes the red pill and he wakes up and he opens this pod that his body is being stored in and looks at reality for the first time there's going to come a day where the entire world sort of wakes up to this fiat currency scam when we all realize how absolutely absurd this whole thing is and that's really when the whole thing starts to fall apart is when everybody starts to see how wealth is being transferred from them all the time I mean prices would not go up if the currency did not go down. All fiat currencies go down in price relative to real goods and services.




About the Author

Jacob Wolinsky
Jacob Wolinsky is the founder of ValueWalk.com, a popular value investing and hedge fund focused investment website. Prior to ValueWalk, Jacob was VP of Business Development at SumZero. Prior to SumZero, Jacob worked as an equity analyst first at a micro-cap focused private equity firm, followed by a stint at a smid cap focused research shop. Jacob lives with his wife and three kids in Passaic NJ. - Email: jacob(at)valuewalk.com - Twitter username: JacobWolinsky - Full Disclosure: I do not purchase any equities to avoid even the appearance of a conflict of interest and because at times I may receive grey areas of insider information. I have a few existing holdings from years ago, but I have sold off most of the equities and now only purchase mutual funds and some ETFs. I also own 2.5 grams of Gold