The S&P 500 in gold terms ahead of tomorrow’s FOMC statement
By Peter Boockvar - November 3rd, 2009, 11:42AM
With gold rallying to a fresh all time high today, let’s again put the performance this year in the S&P 500 in gold (real money, non fiat) terms ahead of tomorrow’s FOMC statement where we’ll hear whether they hint at any change in the level of their extraordinary accommodation. In gold, the S&P 500 is down 6% year-to-date as the S&P 500 only buys .96 ounces of gold, down from 1.02 on Dec 31st 2008. Since Feb ‘98 when the S&P’s first crossed the 1038 level, the S&P 500 is down 72% in gold terms.
November 3rd, 2009 at 12:21 pm
that’s awesome… How long till one world currency?
November 3rd, 2009 at 1:28 pm
I’ll say the same thing I said on Kedrosky’s blog:
If I were king for a day, I would mandate that all current discussion of the dollar’s decline must include graphs back to mid 2007.
November 3rd, 2009 at 2:30 pm
So, BR, does this count as that breakout over $1050/oz you were looking for?
November 4th, 2009 at 1:11 pm
What makes gold “real” money, as opposed to dollars and all other currencies? Gold is merely a metal, having minimal utility, less useful than lead, silver, copper, aluminum, sulphur or clean water.
No person or nation guarantees its value, which is based solely on the “greater fool” theory (If I buy it I can sell it to a greater fool). By comparison, the value of the dollar is based on the full faith and credit of the United States, a far stronger collateral.
Look at a historical graph of gold prices ( http://rodgermmitchell.wordpress.com/2009/10/28/fools-gold/), and you will see the classic “bubble.” Just as with the tulip bulb bubble, some day someone will wake up and say, “Hey, this stuff really is worthless,” or there will be a huge gold find undersea or in the antarctic. Then the gold bugs will suffer the same consequences as in the early 1980’s.
Rodger Malcolm Mitchell