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Is the return of Israel in the 20th century truly a work of God, or is it a result of a cosmic chess move to deceive the elect by the adversary?

Showing posts with label purchasing power. Show all posts
Showing posts with label purchasing power. Show all posts

Thursday, November 24, 2016

Dollar strength leads to more purchasing power as Thanksgiving dinner costs for 2017 go down

It's Thanksgiving once again and that time of the year again where many things kick into motion for the American consumer.

Beginning with gasoline prices climbing a bit for areas around the country that switch over to winter blends, the season culminates with the arrival of snowbirds down South from Canada and the Northern U.S. locations and of course, the home stretch for retailers during the Christmas holiday shopping season.

But the main course for this period is as always Thanksgiving, and the coming together of families along with the cooking and baking of the traditional dinner.

Each year economists try to put together a cost analysis for the average dinner and more often than not, the price rises around 3-5% from the year before.  But with the dollar suddenly strengthening to levels not seen in the past 13 years, that additional purchasing power has done something not seen in quite some time...

A decline in cost for this year's Thanksgiving meal.

According to the American Farm Bureau Federation's (AFBF) annual informal price survey, the average meal for 10 people will be $49.87--  a 24-cent drop from last year’s average of $50.11. 
The survey’s shopping list includes enough turkey, bread stuffing, sweet potatoes, rolls (with butter, of course), peas, cranberries, a vegetable tray, pumpkin pie with whipped cream, coffee and milk for 10 eaters. The AFBF has been commissioning this study for 31 years. 
Foods showing the largest reductions this year were pumpkin pie mix, milk and a veggie tray comprised of celery and carrots. A 30-ounce can of pumpkin pie mix was $3.13, a gallon of milk was $3.17 and a one-pound veggie tray of celery and carrots was just 73-cents. 
A group of miscellaneous items including coffee and ingredients need to prepare the meal (butter, evaporated milk, onions, eggs, sugar and flour) came in at $2.81. 
The headliner - a 16-pound turkey - averaged a total of $22.74 (about $1.42 per pound). That’s a decrease of 2 cents per pound, or an overall 30 cents per whole turkey, compared to last year. - Fox News

Monday, November 14, 2016

The dollar vs. gold dichotomy: As dollar strengthens it opens door for greater gold buying

As we have mentioned many times before here at The Daily Economist, you should not value gold simply in its relation to the dollar.  In fact, all one has to do is look at countries like Venezuela and now India to know that when a nation's currency loses confidence or value, gold soars to all-time highs in relation to their money.

Of course we in the U.S. quite often are only interested in what happens to things in relation to the dollar, and in many cases rightly so since it still holds the position as the global reserve currency.  But that in itself should not be a deterrent since the recent strength in the dollar has created an incredible buying opportunity for physical gold.

5 Day dollar chart:


One Week Gold Chart:


As you can see in the above charts, in the same period that the dollar climbed 400 bps to over 100 on the index, gold fell to $1216 and its lowest point vs. the dollar in some months.

But here is the catch many gold bugs fail to realize... when the dollar strengthens it means that your purchasing power in that currency is much greater, so you inevitably get more 'bang for your buck'.  It is only when the dollar is collapsing and gold prices are also falling that purchasing gold becomes a losing proposition.

A stronger dollar is bad news for foreign markets as seen by the historic drop in the Chinese Yuan as well as in the Euro and Yen.  And it also means that investors and traders there will be looking towards gold as a safe haven to protect against the devaluing of their currency, which will lead to even greater shortages in gold than we already have today.

Wednesday, August 10, 2016

Gold has never been cheaper in relation to the dollar in the history of the U.S.

When you measure gold versus any currency the thing you must always do is compare it to purchasing power rather than the 'price'.  For example, the price of gold in relation to the Euro and Yen is currently right near their all-time highs but the price in relation to the dollar is still 35% below that level.

Additionally, and since we live in an era where all currencies are fiat and backed by nothing, one must expand upon this 'purchasing power' balance scale and look at the price in relation to different periods of the currency.  This is because over time the currency will intrinsically become devalued, and you can find a relationship between the price from say 70-100 years ago, and the price relation today.

On Aug. 9 Bill Holter discovered a chart that compared the price of gold in dollars through a historic outlay that goes back to 1913 when the Federal Reserve was founded, and when a central bank began controlling the nation's money.  And what you see in that chart is astounding as the devaluation of the dollar, and increase to the money supply has become so great, that gold in dollars are now cheaper than at anytime in America's history.

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Let’s start by deconstructing this down to what it really means. First, I must confess I do not know whether this chart is comparing the “priced” amount of U.S. gold to the monetary base or rather the price of gold to the monetary base (because the axis is not labeled). Either way, this chart tells us something VERY important! 
The price of gold relative to the monetary base has never been lower than it is right now other than the at the end of last year. 
Looking at the chart, you can clearly see the “markup” of gold in 1933 from $20.67 to $35. You can also see the run from $35 to $850 during the 1970’s and peaking in 1980. 
You can also see the turn in 2000-2001 when gold traded down to $256 per ounce. These were very important generational turns but we can glean something even more important from this chart. In relation to the monetary base, you can now purchase gold below $20.67, below $35 and below $256 when adjusted for the monetary base outstanding! The monetary base has grown and grown for 100 years, it has exploded in the last 8 years. - Silver Doctors

Monday, August 10, 2015

Australia begins looking at Bitcoin to become equivalent to paper money

As the world has gotten a front and center seat to the decline and collapse of the Greek financial system, one nation is seeking to change the way their economy views money.  And in a move that would test the legitimacy of digital currencies as a recognized medium for trade and commerce, Australia on Aug. 4 is pursuing the option of making Bitcoin on par with theirs and other currencies in both taxation and the purchasing of goods and services.



Read more on this article here...