Is gold really still the benchmark for all currencies?
I hope everyone reading this is doing well. Lots of questions to follow, hopefully the sorts of questions other relative newcomers may find useful.
Last year I purchased some gold from this site because it seems a sensible thing to do. However, like many out there, I do not really know what I am doing. Lately, time has been available and I aimed to get a handle on the basics and begin my self-education in finance, lensing the basics through focusing on gold. Specifically, I went through the gold and silver price charts here, stretching back 1 and 10 years: US$, Euro, GBP, JP¥ and HK$. I was working under a couple of assumptions: i) gold maintains its value over time and therefore remains (informally, if not necessarily formally) a true judge of what a nation's money is to be valued at, and ii) the numbers of any currency per se are not so important (like most people I can 'feel' my home currency, but not any other), what is important is the ratios between them.
Therefore, and in no particular order, here are some questions raised by my recent analysis. Here goes:
i) Am I right assuming that gold is a snapshot diagnostic tool with which to judge a nation's economy? This, because gold seems to have something to say about all currencies. T
ii) Gold has little practical use outside of jewellery. This is often said as something against it; but this maybe its USP, in that practical demands might skew its 'pure' price, unlike silver which along with being a precious metal also has industrial applications. Can this be said also of platinum and palladium? (And what is palladium? And why is Goldmoney.com referencing its price?)
iii) Looking at the 10-year charts, the US$ is now 71% of its value against gold, the Euro 58%, the GBP 50%, the JP¥ 70%, and the HK$ 71%. What does this suggest about the individual national economies? What does it also suggest when the ratios over the same period show that the GBP is only 70% and 86% against the US$ and Euro respectively, when everything is referenced against gold?
iv) That Japan and Hong Kong have maintained decent values against gold, whereas the Western world has not so much - what does this suggest?
v) The above ratios sometimes, and sometimes not, say the same thing when lensing the ratios through silver instead of gold. Again, is it wise to take into account silver's industrial applications? How is the silver market different from gold? And how to take this into account when judging a national currency vis-a-vis each the general economies.
vi) Are these types of questions the right way of approaching a foundation for a financial education? How to use this kind of knowledge as a platform when drilling down into various sectors worldwide? (For instance, I wouldn't mind looking into, say, the biotec industries.)
vii) Reading websites like King World News there always seems to be much talk about government interference in the price of gold. While all this apparently makes sense, I could be sceptical and say this is mere 'conspiracy theory' talk. Can anyone elaborate and give a fuller picture on this?
viii) It would be interesting to see charts of gold vs. Bitcoin, oil, and the Saudi and Israeli currencies. Can anyone supply?
A lot here. Thank you for your patience reading through. I look forward to your answers.