Gabe Menezes wrote: > The Swiss Franc and Japanese Yen have appreciated a lot vs the USD > - is it time for Cad to also go below parity?
Gabe, I got my first lesson on the nature of fiat currencies in a chemistry class, in Form III. At the time, a twenty cent coin in Tanzania was the same shape and almost the same size as a one shilling coin. Both coins had the face of Nyerere on one side and the only thing that made them different was that the twenty cent coin was brass in colour while the one shilling coin was silver coloured. Well, in order to make the subject more interesting, one day our chemistry teacher showed us that by dipping the twenty cent coin into a solution, it suddenly became silver in colour. The following week, during the recess rush, students were slipping silver coloured 20 cent coins to the peanut vendors and receiving a shillings worth of peanuts. This week gold hit an all time high. This means that the fiat currency of the country you live in hit an all time low. When gold hit $400 an ounce a few years ago, I wrote extensively that it would hit $1,650 an ounce. No one else here seemed interested in paying 20 cents for one dollars worth of gold. I have been giving pointers, on another forum, to those interested in gold exploration companies operating Tanzania. There currently is a scramble for the mineral wealth of Tanzania and fortunes are being made. Even though, there have been only a handful of Tanzanians who were interested in paying 20 cents for a dollars worth of assets. Earlier this year, out of the blue, some one on that forum, a fellow Tanzanian Goan, sent me a pointer that allowed me to pay 10 cents for assets that are now worth a dollar. My ten years of posting on that forum finally paid off...... As India starts opening its mineral wealth via the stock markets, fortunes are to be made there too. Since I am sure that there are mining professionals here, I have always wanted to start a regular post on this and closely related subjects. Albert's posts headed, "God and you" are my inspiration as I have often felt that the good folks here would be as receptive to a thread titled titled, "Gold and you." :-) Then the subject of "God sandwiches" came up which is inspirational too as "Gold sandwich" is the Kiswahili translation for a nugget. Returning to your subject matter of fiat currencies, every country that has been to war has seen the value of its currency depreciate, regardless if it is the victor or not. I mentioned this here when the US invaded Iraq. The US had no money to finance the war so it started printing more of its currency. More dollar notes meant that the value of each one was compelled to go down. Anyone who has taken a basic lesson in economics should be able to confirm the same. A few years ago we had to pay CAD $1.60 to get one US dollar. Today we pay CAD $1.03 for that ever so different US dollar. Had I stored my wealth in Canadian dollars, I would be a lot richer than if I had held it in US dollars. The real winner though is the person who stored his wealth in gold. Money is supposed to double every seven years. Gold has gone from $400 to $1,300 an ounce in a few years. I retire when it hits $1,650. Lastly, since man does not live on gold alone, here is my first nugget. “We tell lies when we are afraid … afraid of what we don’t know, afraid of what others will think, afraid of what will be found out about us. But every time we tell a lie, the thing that we fear grows stronger.” – Tad Williams - Mervyn1300Lobo
