A Big Commodity Story No One is Telling
Today’s chart features another lesson on our big “two sides to a price” idea…
Regular DailyWealth readers know there are always two sides to a price. On one side, you have the product, service, or asset being measured. On the other side, you have your “measuring unit,” like dollars, Swiss francs, or “real money” (gold). Keeping “two sides to a price” in mind lets you see things others do not. And once you understand this idea, you’re liable to answer questions like, “Did stocks rise today?” with, “Rise relative to what?”
On that note, we counter the mainstream media’s view that raw materials like copper, oil, iron ore, and grain are rising in price. We’ll say, “Sure… raw materials are rising when priced in weak U.S. dollars. But not against the ‘real money’ we’ve been urging you to own for years.” And by “real money,” we mean gold.
Below is a five year chart of the benchmark commodity index (the “CRB“) priced in gold. An uptrend would show commodities rising in value relative to gold. But the big downtrend we have here shows commodities falling in value relative to gold. If you’ve taken our advice to park your wealth in gold, you’re able to buy a lot more fuel, food, and basic materials than you could in 2007.