Mick, I like to use this comparison to show that gold does have true value vs. the dollar.
3 years ago, Oil was $25/barrel, now oil is $57+. That's an increase of 128%. Consumer are paying 128% more for crude oil!
3 years ago, it cost .085 ounces of $GOLD to buy a barrel of light crude, now it costs .134 ounces of $GOLD to buy a barrel. That's an increase of 58%, not nearly as much as the increase with the paper dollar.
Even from the 3-year charted-low in oil/$GOLD, which was .0693 ounces of $GOLD to buy a barrel (late September 2003) to the 3-year charted high of .136 ounces to buy a barrel, that's an increase of 96% and in no way comes close to the fledging oil/usd over the past 3 years.
Now surely, consumers would be feeling the oil squeeze if either gold or the paper dollar was the currency, but I have a feeling that it would not be nearly as painful... with an established $GOLD currency. The only problem is the world needs cooperation to get this done. Right now middle-eastern countries are going forward with their proposed $GOLD currency, let's hope it survives, it would be a big stride in the right direction!
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