GOLD: $1286.50 UP $13.45
Silver: $17.06 UP 11 cent(s)
Closing access prices:
SHANGHAI GOLD FIX: FIRST FIX 10 15 PM EST (2:15 SHANGHAI LOCAL TIME)
SECOND FIX: 2:15 AM EST (6:15 SHANGHAI LOCAL TIME)
SHANGHAI FIRST GOLD FIX: $1291.94 DOLLARS PER OZ
NY PRICE OF GOLD AT EXACT SAME TIME: $1288.50
PREMIUM FIRST FIX: $3.44
SECOND SHANGHAI GOLD FIX: $1291.49
NY GOLD PRICE AT THE EXACT SAME TIME: $1287.15
Premium of Shanghai 2nd fix/NY:$4.34
LONDON FIRST GOLD FIX: 5:30 am est $1285.90
NY PRICING AT THE EXACT SAME TIME: $1286.15
LONDON SECOND GOLD FIX 10 AM: $1285.15
NY PRICING AT THE EXACT SAME TIME. $1285.95
For comex gold:
NOTICES FILINGS TODAY FOR APRIL CONTRACT MONTH: 2 NOTICE(S) FOR 200 OZ.
TOTAL NOTICES SO FAR: 4581 FOR 458,100 OZ (14.248 TONNES)
85 NOTICES FILED TODAY FOR
Total number of notices filed so far this month: 1000 for 5,000,000 oz
Today for the 6th consecutive day we had a raid on both gold and silver and again forces loyal to gold and silver rebuffed their attempts to discredit our precious metals. I am witnessing banker capitulation in silver which seems to be their Achilles heal. The difference between gold and silver is simple: there are always enough above ground gold to borrow against (central bank gold) but physical silver has already been spent in all of the extremely useful advances it has made in pharmaceuticals, photo-voltaic cells etc. The boys are having great difficulty borrowing against a declining inventory.
Let us have a look at the data for today
In silver, the total open interest SURPRISINGLY ROSE BY ONLY 292 contracts from 187,955 UP TO 188,247 DESPITE THE HUGE RISE IN THE PRICE THAT SILVER UNDERTOOK WITH YESTERDAY’S TRADING (UP 25 CENT(S) . THE BANKERS PROVIDED THE SHORT PAPER TO INITIATE ANOTHER RAID YESTERDAY (5TH CONSECUTIVE DAY OF TORMENT). THAT FAILED IMMEDIATELY AS SILVER STARTED TO ADVANCE IN PRICE. NEWBIE SPEC LONGS REALIZING ANOTHER FAILED RAID, JUMPED ONTO THE BANDWAGON WITH PURCHASES. HOWEVER THE COMMERCIALS WERE STILL LOATHE TO SUPPLY THE SHORT CONTRACTS. THUS A HUGE ADVANCE IN PRICE WITH A TINY GAIN IN OI.
In ounces, the OI is still represented by just UNDER 1 BILLION oz i.e. 0.941 BILLION TO BE EXACT or 134% of annual global silver production (ex Russia & ex China).
FOR THE NEW FRONT MAY MONTH/ THEY FILED: 85 NOTICE(S) FOR 425,000 OZ OF SILVER
In gold, the open interest ROSE by A CONSIDERABLE 4,484 WITH THE SMALL RISE in price of gold ($3.85 GAIN YESTERDAY.) Most of gold’s gains came after the comex closed and we will see the resultant OI of those gains in tomorrow’s reading. The new OI for the gold complex rests at 482,405. A raid was called upon yesterday by the bankers and it failed. The bankers initiated the raid with short paper but newbie longs entered the arena with the lower price following silver’s lead. Thus the bankers were not successful in covering their shorts but they did supply the necessary paper to our newbie spec longs. The result: increase in open interest with a higher price for gold.
we had: 2 notice(s) filed upon for 200 oz of gold.
With respect to our two criminal funds, the GLD and the SLV:
Today, a big change late last night in gold inventory: a deposit of 4.43 tonnes
Inventory rests tonight: 795.44 tonnes
IN THE LAST 24 TRADING DAYS: GLD SHEDS 41.53 TONNES YET GOLD IS HIGHER BY $53.45 .
Today: THIS LOOKS SINISTER
WE HAD A HUGE CHANGES IN SILVER INVENTORY TONIGHT: A WITHDRAWAL OF 1.418 MILLION OZ (WITH SILVER UP?)
INVENTORY RESTS AT 334.407 MILLION OZ
First, here is an outline of what will be discussed tonight:
1. Today, we had the open interest in silver RISE BY ONLY 292 contracts from 187,955 UP TO 188,247 (AND now A LITTLE CLOSER TO THE NEW COMEX RECORD SET ON FRIDAY/APRIL 21/2017 AT 234,787) DESPITE THE HUGE RISE IN SILVER PRICE (25 CENTS). THE INITIAL RAID WEDNESDAY MORNING WAS REBUFFED IMMEDIATELY BY A HUGE INFLUX OF NEWBIE LONGS ENTERING THE SILVER COMEX CASINO. THE BANKERS HAD A HARD TIME COVERING DUE TO THAT RISE IN PRICE AS YOU CAN VISUALIZE BANKER CAPITULATION. NEWBIE LONGS ENTERED ONCE THEY SAW THE FAILED RAID, WITH THE SUPPLY COMING FROM OLD SPECS EXITING FOR A PROFIT. RESULT: HIGHER PRICE WITH A TINY OI GAIN.
2.a) The Shanghai and London gold fix report
2 b) Gold/silver trading overnight Europe, Goldcore
and in NY: Bloomberg
3. ASIAN AFFAIRS
i)Late WEDNESDAY night/THURSDAY morning: Shanghai closed UP 21.98 POINTS OR 0.68% / /Hang Sang CLOSED DOWN 64.85 POINTS OR 0.24% The Nikkei closed DOWN 26.65 POINTS OR 0.41%/Australia’s all ordinaires CLOSED DOWN 0.06%/Chinese yuan (ONSHORE) closed UP at 6.6766/Oil DOWN to 46.66 dollars per barrel for WTI and 50.13 for Brent. Stocks in Europe OPENED DEEPLY IN THE GREEN , Offshore yuan trades 6.6855 yuan to the dollar vs 6.6766 for onshore yuan. NOW THE OFFSHORE IS WEAKER TO THE ONSHORE YUAN/ ONSHORE YUAN STRONGER (TO THE DOLLAR) AND THE OFFSHORE YUAN IS STRONG TO THE DOLLAR AND THIS IS COUPLED WITH THE SLIGHTLY STRONGER DOLLAR. CHINA IS HAPPY TODAY
3a)THAILAND/SOUTH KOREA/NORTH KOREA
b) REPORT ON JAPAN
c) REPORT ON CHINA
A very important commentary today as zero hedge remarks on the analysis of Charlene Chu formerly of Fitch who has made a career out of figuring out the true debt of China and then its non performing loans. Her figure of $35 trillion is now well received by all pundits. Her figure of 7.6 trillion of non performing loans is scaring the living daylights out of Wall Street executives
( zero hedge/Charlene Chu/Hong Kong)
4. EUROPEAN AFFAIRS
ii)Spain is becoming the second largest destination by sea after Greece for our Migrants
( Kern/Gatestone Institute)
iii)Massive crash in Barcelona after a van plows into a crowd at the Rambla (City centre)
( zero hedge)
5. RUSSIAN AND MIDDLE EASTERN AFFAIRS
6 .GLOBAL ISSUES
Despite the media proclaiming global growth, the total global negative yielding debt has now surged to its highest level in almost a year
( zero hedge)
7. OIL ISSUES
8. EMERGING MARKET
The faster they get this buffoon out of there, the better. Average Venezuelans are suffering drastic weight loss due to lack of food. Remember, this nation has the world’s highest oil reserves in the ground
9. PHYSICAL MARKETS
ii)John Embry comments that the social fabric in the USA is breaking down and it is these people who are least interested in gold
This is interesting: Assange in a 3 hour meeting with a Californian Congressman offered to prove that the Russians were not his source for the Democrat email hacking. He wants a seat at the White House Press briefing and of course an absolute pardon
(courtesy zero hedge)
10. USA Stories
( Hussman/zero hedge)
ii)Oh oH! this is a good indicator for problems in the uSA economy: WalMart’s free cash flow falls and fails to cover its dividends and buybacks. WalMart stock drops due to its guidance of lower earnings
iii)Soft data Philly Fed index slides to its weakest level since the Trump election with employment the killer
( Philly Index/zero hedge)
iv)USA industrial production rose by only .2% month/month in July missing expectations. Last month’s data: .4% month/month and this is showing an economy that is slowing down. Industrial production numbers are hard data
( zero hedge/Industrial production)
v)A new study shows what we have been telling you: higher minimum wages are bringing job losses. The hardesthit: females and minority workers
vi)This is a strange one!! The FBI now reopens a Freedom of Information case on the Lynch Clinton Tarmac meeting after they got caught in a huge lie
( zero hedge)
vii)Bannon breaks his silence and gives his opinion on China, North Korea and what is happening internally . Correctly he admits that the USA is in an economic war with China and they must try and curtail their advances.
a must read..
( zero hedge)
viii)This is deadly and not good for Trump: Senator Corker, who is probably the wealthiest of all the senators has now called for a “radical change’ in the White House
Let us head over to the comex:
The total gold comex open interest ROSE BY A HUGE 4,484 CONTRACTS UP to an OI level of 482,405 WITH THE RISE IN THE PRICE OF GOLD ($3.85 with TUESDAY’S trading). NEWBIE LONGS ENTERED THE ARENA ESPECIALLY TACKLING THE LOWER PRICE DUE TO ANOTHER RAID IN YESTERDAY’S TRADING. THE BANKERS CONTINUE TO SUPPLY THE SHORT PAPER. THE HIGH OPEN INTEREST IN THE GOLD COMPLEX WAS FODDER FOR OUR CROOKS AS THEY TRIED AGAIN TO SHAKE MANY OF THE GOLD LEAVES FROM THE GOLD TREE. TODAY ANOTHER SMALL RAID (FLASH CRASH) FAILED MISERABLY. YESTERDAY MOST OF THE GOLD PRICE GAINS CAME AFTER THE COMEX CLOSED SO WE WILL SEE ELEVATED OI IN GOLD IN TOMORROW’S READING.
We are now in the contract month of August and it is the 3rd best of the delivery months after December and June.
The active August contract LOST 71 contract(s) to stand at 899 contracts. We had 32 notices filed on YESTERDAY so we LOST 39 contracts or an additional 3900 oz will NOT stand at the comex and 39 EFP’s were issued which entitles the long holder to a fiat bonus plus a futures contract and most probably that would be a London based forward.
The non active September contract month saw it’s OI GAIN 1 contract UP to 1383.
The next active contract month is Oct and here we saw a LOSS of 137 contracts DOWN to 49,553.
The very big active December contract month saw it’s OI GAIN 4515 contracts UP to 376,411.
We had 2 notice(s) filed upon today for 200 oz
For those keeping score: in the upcoming front delivery month of August:
LAST YEAR WE HAD A MONSTROUS 44.7 TONNES OF GOLD INITIALLY. BY THE CONCLUSION OF THE AUGUST CONTRACT MONTH 44.358 TONNES STOOD FOR DELIVERY.
We are now in the next big non active silver contract month of August and here the OI ROSE 9 contracts UP TO 94. We had 15 notice(s) filed yesterday. Thus we GAINED ANOTHER 24 contract(s) or an additional 120,000 oz will stand for delivery in this non active month of August and AGAIN zero EFP’s were issued for the August contract month. Please note that in gold we continually see EFP’s issued but not in silver!!
The next active contract month is September (and the last active month until December) saw it’s OI fall by 2,965 contacts down to 95,493. The next non active contract month for silver after September is October and here the OI gained 114 contacts up TO 229. After October, the big active contract month is December and here the OI GAINED by 3014 contracts UP to 80,901 contracts.
We had 85 notice(s) filed for 425,000 oz for the AUGUST 2017 contract
VOLUMES: for the gold comex
YESTERDAY’S confirmed volume was 278,381 which is excellent
volumes on gold are STILL HIGHER THAN NORMAL!
|Withdrawals from Dealers Inventory in oz||nil|
|Withdrawals from Customer Inventory in oz||
|Deposits to the Dealer Inventory in oz||oz|
|Deposits to the Customer Inventory, in oz||
|No of oz served (contracts) today||
|No of oz to be served (notices)||
|Total monthly oz gold served (contracts) so far this month||
|Total accumulative withdrawals of gold from the Dealers inventory this month||NIL oz|
|Total accumulative withdrawal of gold from the Customer inventory this month||26,778.6 oz|
Today, 0 notice(s) were issued from JPMorgan dealer account and 0 notices were issued from their client or customer account. The total of all issuance by all participants equates to 2 contract(s) of which 0 notices were stopped (received) by j.P. Morgan dealer and 0 notice(s) was (were) stopped/ Received) by j.P.Morgan customer account.
|Withdrawals from Dealers Inventory||nil|
|Withdrawals from Customer Inventory||
|Deposits to the Dealer Inventory||
|Deposits to the Customer Inventory||
|No of oz served today (contracts)||
|No of oz to be served (notices)||
( 45,000 oz)
|Total monthly oz silver served (contracts)||1000 contracts (5,000,000 oz)|
|Total accumulative withdrawal of silver from the Dealers inventory this month||NIL oz|
|Total accumulative withdrawal of silver from the Customer inventory this month||2,585,984.9 oz|
NPV for Sprott and Central Fund of Canada
Sprott’s hostile 3.1 billion bid to take over Central Fund of Canada
Sprott makes hostile $3.1 billion bid for Central Fund of Canada
Submitted by cpowell on Thu, 2017-03-09 01:19. Section: Daily Dispatches
From the Canadian Press
via Canadian Broadcasting Corp. News, Toronto
Wednesday, March 8, 2017
Toronto-based Sprott Inc. said Wednesday it’s making an all-share hostile takeover bid worth $3.1 billion US for rival bullion holder Central Fund of Canada Ltd.
The money-management firm has filed an application with the Court of Queen’s Bench of Alberta seeking to allow shareholders of Calgary-based Central Fund to swap their shares for ones in a newly-formed trust that would be substantially similar to Sprott’s existing precious metal holding entities.
The company is going through the courts after its efforts to strike a friendly deal were rebuffed by the Spicer family that controls Central Fund, said Sprott spokesman Glen Williams.
“They weren’t interested in having those discussions,” Williams said.
Sprott is using the courts to try to give holders of the 252 million non-voting class A shares a say in takeover bids, which Central Fund explicitly states they have no right to participate in. That voting right is reserved for the 40,000 common shares outstanding, which the family of J.C. Stefan Spicer, chairman and CEO of Central Fund, control.
If successful through the courts, Sprott would then need the support of two-thirds of shareholder votes to close the takeover deal, but there’s no guarantee they will make it that far.
“It is unusual to go this route,” said Williams. “There’s no specific precedent where this has worked.”
Sprott did have success last year in taking over Central GoldTrust, a similar fund that was controlled by the Spicer family, after securing support from more than 96 percent of shareholder votes cast.
The firm says Central Fund’s shares are trading at a discount to net asset value and a takeover by Sprott could unlock US$304 million in shareholder value.
Central Fund did not have any immediate comment on the unsolicited offer. Williams said Sprott had not yet heard from Central Fund on the proposal but that some shareholders had already contacted them to voice their support.
Sprott’s existing precious metal holding companies are designed to allow investors to own gold and other metals without having to worry about taking care of the physical bullion.
And now the Gold inventory at the GLD
August 17/late last night, a deposit of 4.43 tonnes of gold at the GLD/inventory rests at 795.44 tonnes/the bleeding of gold has stopped.
August 16/no change in gold inventory at the GLD. Inventory rests at 791.01 tonnes
August 15/no change in gold inventory at the GLD/inventory rests at 791.01 tonnes
August 14/this is good!!: a gain of 4.14 tonnes of gold into the GLD inventory/the removal of GLD gone to the east has now stopped probably because there is no physical to send/inventory rests at 791.01 tonnes
August 11/no change in gold inventory/Inventory rests at 786.87 tonnes
August 7/no changes in gold inventory at the GLD/Inventory rests at 787.14 tonnes
AUGUST 4/ANOTHER LOSS OF 4.48 TONNES OF GOLD FROM GLD INVENTORY/INVENTORY RESTS AT 787.14 TONNES.THIS IS A HUGE CRIME SCENE!!
August 3/no change in gold inventory at the GLD/Inventory rests at 791.88 tonnes
August 2/NO CHANGES IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 791.88 TONNES
Aug 1/NO CHANGE IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 791.88 TONNES
July 31/NO CHANGES AT THE GLD/INVENTORY RESTS AT 791.88 TONNES
July 28/ANOTHER MASSIVE WITHDRAWAL OF 3.54 TONNES OF GOLD WITH GOLD UP $9.15/INVENTORY RESTS AT 791.88 TONNES
July 27/LATE LAST NIGHT, A HUGE WITHDRAWAL OF 5.03 TONNES WITH GOLD UP $10.45 ON THE DAY/INVENTORY RESTS AT 795.42 TONNES
July 26/NO CHANGE IN GLD INVENTORY WITH GOLD DOWN $2.55/INVENTORY RESTS AT 800.45 TONNES
July 25/A MASSIVE 9.17 TONNES OF GOLD WITHDRAWN FROM THE GLD/INVENTORY RESTS AT 800.45 TONNES
July 24/A massive 9.62 tonnes withdrawal and yet the price remains constant (down only 25 cents)..inventory drops to 809.62 tonnes
July 21/with gold up $8.75 again, we had no changes in gold inventory at the GLD/inventory rests at 816.13 tonnes
July 20/WITH GOLD UP AGAIN TODAY ($3.50) WE HAD NO CHANGES IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 816.13 TONNES
jULY 19/STRANGE!! AGAIN WITH GOLD UP $0.50 WE HAD ANOTHER HUGE 5.32 TONNES WITHDRAWAL FROM THE GLD/INVENTORY RESTS AT 816.13 TONNES THIS GOLD IS HEADING TO SHANGHAI
July 18/STRANGE AGAIN/WITH GOLD UP $7.50 WE HAD ANOTHER HUGE 5.62 TONNES WITHDRAWAL FROM THE GLD/INVENTORY RESTS AT 821.45 TONNES
July 17/strange again! with gold up $4.20 we had another huge withdrawal of 1.77 tonnes/inventory rests at 827.07 tonnes
Now the SLV Inventory
August 17/A WITHDRAWAL OF 1.418 MILLION OZ LEAVES THE VAULTS OF THE SLV (WITH SILVER UP 25 CENTS YESTERDAY?)/INVENTORY RESTS AT 334.407 MILLION OZ
August 16/no change in silver inventory at the SLV/Inventory rests at 335.825 million oz/
August 15/no change in silver inventory at the SLV/Inventory rests at 335.825 million oz.
August 14./no change in silver inventory/inventory rests at 335.825 million/
August 11/no change in silver inventory tonight. However we lost 3,781 million oz from Tuesday through Thursday. Inventory rests at 335.825 million oz/
August 7/no change in silver inventory at the SLV/Inventory rests at 339.606 million oz
AUGUST 4/A WITHDRAWAL OF 945,000 OZ/INVENTORY RESTS AT 339.606 MILLION OZ
August 3/A WITHDRAWAL OF 1,181,000 OZ FROM THE SLV/INVENTOR RESTS AT 340.551 MILLION OZ/
August 2/NO CHANGES IN SILVER INVENTORY AT THE SLV
INVENTORY RESTS AT 341.732 MILLION OZ/
August 1/A HUGE WITHDRAWAL OF 945,000 OZ/INVENTORY RESTS AT 341.732 MILLION OZ/
July 31/no change in silver inventory at the SLV/inventory rests at 342.677 million oz
July 28/ A HUGE WITHDRAWAL OF 1.15 MILLION OZ OF SILVER LEAVES THE SLV DESPITE SILVER BEING UP 11 CENTS TODAY/INVENTORY RESTS AT 342.677 MILLION OZ
July 27/NO CHANGE IN SILVER INVENTORY/INVENTORY RESTS AT 343.812 MILLION OZ WITH SILVER UP 13 CENTS TODAY.
July 26/NO CHANGE IN SILVER INVENTORY/INVENTORY RESTS AT 343.812 MILLION OZ
July 25/A MASSIVE 3.309 MILLION OZ OF INVENTORY WITHDRAWN FROM THE SLV DESPITE SILVER’S 10 CENT RISE TODAY.
July 24/no change in silver inventory despite its 4 cent drop/inventory remains at 347.121 million oz
July 21/STRANGE! WITH SILVER UP AGAIN TODAY (11 CENTS), NO CHANGE IN SILVER INVENTORY AT THE SLV/inventory 347.121 million oz/
July 20/STRANGE! WITH SILVER UP AGAIN TODAY, THE SLV INVENTORY LOWERS BY 945,000 OZ/INVENTORY RESTS AT 347.121 MILLION OZ/
July 19/NO CHANGE IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 348.066 MILLION OZ
July 18/a huge 946,000 oz withdrawal from the SLV despite silver’s 16 cent gain!
Inventory rests at 348.066 million oz
July 17/no change in silver inventory at the SLV/Inventory rests at 349.012 million oz
Indicative gold forward offer rate for a 6 month duration+ 1.31%
Major gold/silver trading/commentaries for THURSDAY
Must See Charts – Gold Hedges USD Devaluation, Rise in Oil, Food and Cost of Living Since Nixon Ended Gold Standard
– Gold hedges massive ongoing devaluation of U.S. Dollar
– 46th anniversary of ‘Tricky Dicky’ ending Gold Standard (see video)
– Savings destroyed by currency creation and now negative interest rates
– Long-term inflation figures show gold a hedge against rising cost of fuel, food and cost of living
– $20 food and beverages basket of 1971 cost $120.17 in 2017
– Household items increased by average of 2000% and oil by 5,373% since 1913
– Gold gained 5,669% since 1913; by nearly 3,000% since 1971
– Dollar has been reserve currency of world in the period and most other currencies have seen greater devaluation
– Evidence of gold’s role as inflation and currency devaluation hedge
Editor: Mark O’Byrne
You don’t need ‘Tricky Trump’ to devalue the dollar, it’s been doing that since 1913 and ‘Tricky Dicky’ in 1971
In 2015 President Donald Trump made headlines when he told a town hall event in Atkinson, New Hampshire about how his father had once given him a ‘small loan of a million dollars.’
Outcry swept around the media who asked how much the future President was really in touch with the common voter.
Whilst Trump’s reference to ‘small’ was in relation to the (apparent) size of the empire he subsequently built he may as well have been referring to the value of a million dollars now and how small it is compared to in 1975 when he was lent the money.
$1 million dollars was a lot of currency in 1975. Today it will barely buy you a nice house in a nice city.
Using today’s CPI data Trump Sr’s $1 million loan would today be equivalent to $4.4 million. The purchasing power of a 1975 US dollar has fallen by over 400%. It has fallen a lot more since 1971.
In this week 46 years ago on August 15 1971, President Nixon announced the U.S. Dollar would completely cut ties with sound money gold (see video below).
Without gold backing and gold as a monetary anchor, we can now see just how much the purchasing power of the consumer dollar has declined since 1971.
You can see an even better example of the dollar’s collapse in purchasing power when measured in gold ounces (see charts above).
Prices climb by over 2000% since 1913 and creation of the Fed
‘[Since 1913] the general public and policymakers have focused almost constantly on inflation; they have feared it, bemoaned it, sought it, and even tried to whip it.’ Bureau of Labour Statistics.
In 1970, after many decades of dollar devaluation, Herbert W. Armstrong quoted the Labor Department’s figures for how much $5 would have purchased in 1913:
“15 pounds of potatoes, 10 pounds of flour, 5 pounds of sugar, 5 pounds of chuck roast, 3 pounds of round steak, 3 pounds of rice, 2 pounds each of cheese and bacon, and a pound each of butter and coffee; that money would also get you two loaves of bread, 4 quarts of milk and a dozen eggs. This would leave you with 2 cents for candy.”
What changed in 1913? The US adopted the Federal Reserve Banking System and the journey towards dismantling the gold standard and currency debasement began.
In the same year the United States government started tracking prices. This was thanks to President William Howard Taft who signed a bill promoting the Department of Labor to a Cabinet-level Department. Following this move the Consumer Price Index (CPI) was created in 1921 and backdated to 1913.
Many things have changed since 1913, the most obvious is that the US Dollar is no longer backed by gold and that inflation has been slowly destroying wealth. Despite government efforts to track prices, little has been done about the impact of inflation and our loss of purchasing power.
This is best illustrated not just with gold but through day-to-day items that we can all relate to. Below it is clear to see that since before the beginning of the World War I prices of everyday items have climbed by over 2,000%, on average.
We can also appreciate how much the U.S. Dollar has depreciated in value when we consider that a $100 bill at the end of the First World War has the equivalent purchasing power of $1,196, today.
This is in significant contrast to the price and purchasing power of store of value gold.
We often talk about the role of gold during times of war and upheaval. This seems particularly relevant today as Trump and North Korea engage in saber-rattling.
The table above shows just how important gold was during war time for the millions of people who were uprooted in the run up to and in 1914 and found themselves refugees, without a country to call home and in need of a borderless currency which would serve them wherever they found themselves.
The children or grandchildren of those who escaped with gold would own as asset which has protected and grown their wealth and is today worth over 5,000% more than it was in 1913.
CPI measure, questionable but available
When we complain that food and other household items are becoming more expensive what we are usually experiencing is the devaluation in the US dollar and impact on inflation.
To give you an idea of how much the dollar has fallen in value since the removal of the gold standard in 1971, the purchasing power of $100 then would be equivalent to $616.65 today.
By comparison, $100 worth of gold in 1971 is now worth nearly $3,700.
Today the CPI is the fiat-centric world’s way of tracking consumer prices and, therefore, inflation. We rarely hear about the depreciation of our currencies, instead we are bamboozled with odd figures which rarely translate into our every day life.
Despite this, we are still able to use CPI as real evidence of the rising cost of living over time. This is particularly interesting when you look at the change in food prices using 1971 as a base year.
We use 1971 as since then the US currency has not been tied to or associated with gold. In the period since then we have seen a slow but damaging impact on the value of people’s wealth and the purchasing power of their earnings.
As with our piece on British food prices, British inflation and rising cost of living, we would have preferred to have used actual price information in order to look at the depreciation of the U.S. Dollar. Unfortunately individual price information isn’t readily available for the periods of most interest.
Below you can see how much the CPI numbers have increased for items which are considered key in an household’s food basket. When you consider 1971 = 100 as the base year and price, you can see the dramatic changes in prices.