The Race to Debase 2011

Who am I?

I come in different names, shapes and colours.

People use me as a medium of exchange.

Each year I seem to buy less and less things.

You may recognise some of my names: dollar, pounds, kroner, peso, yen, euro.

Last year for the 11th consecutive year, we all lost purchasing power to a former acquaintance, gold.

We are:

Fiat currencies


- The 75 currencies listed all lost value to gold in 2011, just as they did in 2010 (see here)

Gold in US Dollars (reserve currency) up 10.00%
Gold in Euros up 13.60%
Gold in Australia Dollars up 10.20%

In other words if you had invested US$10,000 in gold one year ago you could buy 7.0 ounces. A year later you can buy 6.4 ounces. In July 1999, US$10,000 could buy 39.5 ounces of gold.

While the evening news will talk about gold prices, its clear that when you measure gold against other goods, whether it be the sharemarket, real estate or cars - gold continues to increase its purchasing power, year in year out. Physical gold continues to easily outpace yearly compulsory Superannuation returns and interest paid for cash in the bank. Who would turn down a 10% annual gain?

Again, it is clear from these numbers that governments worldwide continue to use inflation (money expansion) as a means to destroy your every day purchasing power.

It's time to question the role of central banking and the debt-based, global, monetary system... or we can just accept the same ol' Government spin - "trust us we will look after you".