Gold has been a universal reference point for global trade throughout history

November 18, 2010 – The surprising resiliency of the dollar and the resurgence of the stock market have thrown a curveball to people considering gold coin investments. On closer look, however, there is plainly something peculiar going on.

The price of gold – and of commodities in general – has been moving in direct relationship to stocks since September. Economics 101, however, tells us that the movements should oppose each other. And what economic good news drove the stock market to its current level? Why did a global selloff of stocks spread to commodities while faith in a questionable dollar remained unshaken?

Gold has been a universal reference point for global trade throughout history, and there is no question that it remains so today. Relative to actual economic conditions, gold has been performing much as we would expect it to. That being the case, we can conclude that the stock and currency exchanges have somehow gotten out of synch with reality.

That is not so difficult an idea to accept. Nations at every stage of the economic cycle with economies at disparate levels of development collide in the global markets. The result is an extraordinarily complex system that borders on total randomness. The worlds best minds have be struggling to bring order to the chaos since the 1997 crisis in Asia with paltry success.

It is highly doubtful that we will ever be able to make reliable forecasts in the global market under conditions like we have now. That would take synchronization among all of the national economies that make up the whole. In the meantime, we can continue to rely on gold coin investments to carry us steadily forward through the turmoil.

Kevin Johnson

Senior Staff Writer – GoldCoin.net