12/29/2009 From Taipei Taiwan

Richard Graves
A fresh message from my friend John from Taipei-Taiwan: 12/29/2009. We’re approaching one tenth of the way through this new century and already the world is getting a taste of things to come...

The world’s temporary reserve currency, the US dollar, has shed roughly one third of its purchasing power against a basket of major paper competitors this decade. Gold, having begun the millennium in the dumps, has roughly quadrupled against the greenback over that same period. And stocks, after peaking back in 2007, are down about 7% for the same period....The important message here is "temporary reserve currency". Fact: All paper currency has failed through out history. Look for China and Russia to issue a new gold backed currency in the next 2-4 years, which will spell the doom of the Federal Reserve Note!

Silver Vs. Gold

WHAT'S THE CURRENT GOLD/SILVER RATIO?
Silver - With the gold: silver ratio at 65 ($1117/$17.10/oz), silver remains a compelling buy at these levels and will likely be the surprise outperformer in 2010 as it was in 2009 (up by more than 51% YTD as per table). Silver’s industrial uses should mean that the gold/silver ratio will likely gradually regress to the average in the last 100 hundred years which is close to 40:1. If the tiny silver market was to see real funds enter it than the ration could return closer to the historical average of 15:1 as it did as recently as 1980. Silver remains less than half of its nominal record price in 1980 and very undervalued from a historical basis.