On the day gold hits an all time high and with 3 months to go before the Fed ends its latest attempt to help the economy, let’s look at the rise in the asset class the Fed admits they are trying to goose, stocks, and compare with the two asset classes they say they have nothing to do with, commodities and currencies. Since Bernanke gave his Jackson Hole speech, the S&P 500 is up 25% but in gold, commodity and other currency terms, the gains look not as good. In gold terms, stocks are up just 6.6%, in oil they are down 13.6%, in CRB terms they are down 8%, in Euro’s they are up 11.8%, in CAD up by 15%, in AUD up by 8.5%, in CHF up by 10.5% and in yen up by 19.5%. I make this analysis to point out the nominal world the Fed is trying to jump start to deal with too much leverage in our economy where in reality, REAL gains are the only thing that helps a country’s standard of living.

Category: Gold & Precious Metals, MacroNotes

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

4 Responses to “Gold touches record high, nominal vs real gains”

  1. Outta Here says:

    Sorry to nitpick, but the gains in housing from ’98-’07 were real enough, and so were the tech bubble’s. What helps a country’s standard of living is its productive output, not asset prices.

    Key to point out here too that there is a very strong inverse correlation since 2008 between the dollar and stocks, oil, metals, EUR, CAD, and AUD. Indicates a carry trade, and when fear hits people scramble for dollars to put up margin.

  2. Truthsayer says:

    Funny thing about Gold…everyone has to have it and dealers spend tons of money marketing it…but when the collapse comes and it will come one day…no dealer will be opening his/her door to buy it back. When prices come crashing down…the dealer is the last resort….they will walk away and close their business faster than Obama lies.

  3. macrotrader603 says:

    the ones who are the most opinionated usually go broke in the markets because they can not separate their opinions from their trading decisions…

  4. Data Room says:

    The %age figures you have provided are amazing and need consideration. I think Gold prices will not come down for a long time until or unless global stock markets are able to attract global investors. Due to the disastrous results of stock markets investors have started investing in Gold which is the main reason of Gold prices touching to Sky..