The Gold Barometer
excerpt from The Delaire Report, August 02, 2011
As I have alluded to dozens of times, the price of gold is like a barometer and reflects the condition of the global monetary system. As the reserve currencies decline in value and as the overall “health” of these fiat currencies worsens, the higher the price of gold. And, while there are a myriad of other factors influencing the price of gold, for now this is the main driving force.

When we compare the state of these currencies a year ago to now it can easily be seen that the overall global condition has deteriorated substantially. A year ago the price of the yellow metal was $1200 an ounce; today it is above $1600. It has increased in value over the last 12 months by 33%! A year ago, the condition with these paper currencies was not as dire as it is now. This leads me to conclude that in a years’ time, conditions are likely to be worse than what they are now. And, if I am correct then we will see a higher gold price.