Im sure this question has been pressed in the past, but now that the AUD is ABOVE parity with the USD what does that mean for good ol' silver in our neck of the woods? how does this interesting phenomenon effect us and what does it mean for our stack? "Mitch"
AUD strengthens against USD 1. Aussies dont get full value of Ag price rises; 2. Aussies are a little more protected if Ag prices fall. However, if Ag prices continue to rise, you'd think the USD will continue to weaken as the weak USD is a reason precious metals are doing well. If the USD begins to improve, raising possibility Ag prices fall, but so would the AUD/USD ratio thereby resulting in an increase in AUD terms for holders of precious metals. On the whole, the weakening USD results in more positives than negatives for stackers in AUD terms.
Along the same lines, does anyone ever see the day that Gold/Silver is NOT denominated in USD? e.g. If the USD keeps devaluing, what's stopping Gold/Silver from being denominated in Yuan/Euro/AUD, etc? Why was Gold/Silver denominated in USD in the first place? Zargor
It's time to decouple from the US dollar. It is finished, the US economy is in worse shape than Ireland or Greece or even Iceland.
I expect that you will see a change to all currencies being denominated in gold. Because originally the USD was priced in gold.
Best at this point in time to think of silver as just another currency. The exchange rate from silver to any other currency fluctuates. It's priced in USD, but only for convenience. I have a suspicion that the $500USD silver will actually happen. But on the way, the AUD will end up buying 10 USD. I am tending to think the future high price will be diminished through inflation, and that we will see how silver and gold really are mainly a store of relative value. On a side note I think over time that the USD will significantly de value and it will become normal for the AUD will buy multiples of the USD However every time I talk of this, the consistent unshakable belief is that the USD will never, could never fail. They cannot see that perhaps there has been a shift from what was then to what was now. This seems to be a pretty solid mainstream belief. On this basis, before the end game plays out, there still could be a run to the USD in the belief of safety and a significant drop in the AUD based on our being a commodities exporter. As a result we might see the AUD price of silver skyrocket for a bit based on exchange rates. This could also swing back just as hard when the real weakness of the USD becomes apparent. A brave speculator could make some nice money, if they called it right.
Yes. I use this calculator to (partially) remove the USD from the equation: http://www.xe.com/ucc/convert.cgi?Amount=1&From=XAU&To=XDR Balanced against a basket of currencies, you get to see what gold is trading at without the price being skewed by rises and falls in the USD.
That's an awesome link Big A.D. I'd never considered tracking gold in XDR. That could be a good way to track cycles as well across asset classes.
I'll have to update this at some stage but I found charting a set of currencies against XAU to be a good way of visualising changes over time. Might try SDR in there and see what it looks like on the next one. Unfortunately I still haven't found a way to produce this easily. P.S Yes, I know the numbers can't be read at this scale. The chart shows Euro, Yen, USD, AUD over the year up to September 2010.
Perhaps a pertinent figure - does anyone know if our 4 banks overseas borrowings are denominated in USD?
Xe.com generates this 5 year chart in XDR->XAU: http://www.xe.com/currencycharts/?from=XDR&to=XAU&view=5Y Obviously the price of gold has gone up in the last 5 years in whatever currency you pick, but I tend to look at the 30 day chart to get some perspective on the current price.
I'm not sure if this is right or not because i don't know a lot about economics... but i see china's grab for PM's might be a strategy for to become the next reserve currency. If i'm way off base then please correct me
