The dollar continues to plunge verses not only hard assets, but other fiat currencies as well. This morning's economic indicators didn't help at all, unemployment claims surged to 429,000, economists were expecting claims to fall to 395,000. GDP also came in at 1.8% pace in the first quarter, a drop from a 3.1% pace in late 2010. Gold, as we write this has surged to a new ALL TIME HIGH of $1,538.51 and silver has recaptured all of its losses from earlier this week, silver is now at $49.50. The dollar index is at 73.07.
Here is a one year chart of the dollar index, sometimes pictures speak louder than words, or in this case, a chart of our fiat currency vs. other fiat currencies.
Understanding The Gold & Silver Correction
FutureMoneyTrends.com believes that the best way to understand what is happening with metals is understanding the correction. With the COMEX, silver shortage, ETF's, and the amount of currency in the system, it is important to understand that when the precious metals go up in fiat dollars, that is the correction. With less that 1% of global financial assets in gold, any move up in price is gold correcting to its real value. Historically gold, in a modern society, has been around 20% of global financial assets. So, as you can see with it currently being less than 1%, the imbalance is the gold price being too low. Imagine what will happen if pension funds and other investors just move a small portion of their portfolios to gold, even seeing gold rise to 5% of global financial assets could put it at $8,750 per ounce!
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