muses of the moment

January 30, 2010

Gold and Silver as currency

Filed under: Dollar Crisis, Fiat Currency, Gold and Silver Investing, Precious metals, The Dollar Crisis — totallygroovygirlfriday @ 5:12 am

Although, most people still think of gold as a “barbaric relic”, in reality, it has been the best performing currency in the last 10 years. We are in the middle of a 20-year bull market for precious metals.

James Turk has a wonderful chart illustrating these facts. Click here.

In addition, the DOW is near where it was in 2000, the lost decade for stocks, while gold averaged a 14.9% return in dollars and silver, a 14.4% return in the same period.

To further illustrate the DOW/Gold point, click here for a chart from, the DOW priced in gold. The DOW has been declining since 2000 in real purchasing power.

“Invest in stocks for the long-term” and “your home is an investment” are false statements now. (As we are in a 26-year decline in real estate value in real terms, per Martin Armstrong.) They worked in the K-wave Autumn cycle through 2000, but they will not work in the K-wave Winter cycle. The Winter cycle is about currency crisis and debt.

You still have time to reposition your investments for the long-term if you have not already done so. James’ charts also help show you the best currencies. But prepare for short-term ups and downs, long-term gain. Notice that the USDollar is in the lower half?

Understand these charts and you understand the impact of floating fiat currencies on your investments.

In times of change, learners inherit the earth, while the learned find themselves beautifully equipped to deal with a world that no longer exists.
–Eric Hoffer – Longshoreman, Philosopher

Side musing: 6 more banks imploded.

Create a free website or blog at