Saturday, December 19, 2009

Pound Drops 99%

The US double eagle coin had .9675 ounces of gold, thus the dollar was .048375 ounces of gold. The British sovereign coin had .2354 ounces, the pound's dollar value. .2354 / .048375 = $4.866. The current dollar price of pounds is $1.6487. The pound fell 66.12% against the dollar since 1792. On 5 December 2009 the pound "price" price of gold was 704.45, or .00142 ounces per pound, therefore today's gold pound is .00603 1792's pound, down (1 - .00603) or 99.4%. That's a bear market. Pounds, dollars, gold, it all "arbitrages" out.


Anonymous said...

Interesting math... well done...

But so what?

Isn't it all just conjured up on some spreadsheets and general ledger systems here and there?

The "electronic confidence game"...

Will everyone stay confident?

Independent Accountant said...

The point is: all paper currencies lose value over the long run.