Post by unlawflcombatnt on May 4, 2006 16:32:50 GMT -6
I think I found a reasonable way to determine dollar devaluation based on the 6-currency change in Gold prices vs. the change in price in USDs. (On verifying this, the change in Euro vs. USD is exactly the same as the % change in gold prices between the 2 currencies over any given time period.) I used the following currencies: Euro, Swiss franc (CHF), British pounds (GBP), Japanese yen (JPY), Canadian currency (CAD), and Australian currency (AUD).
I weighted the contributions by the relative GDPs, which should represent the relative transaction values of each currency. The Euro GDP needed some modification. From the CIA site, the Euro GDP was $13.3 trillion. However, 3 European Union countries don't use the Euro (United Kingdom, Sweden, and Denmark.) So their GDPs were subtracted from the $13 trillion to give a total Euro GDP of $10.5 trillion. (subtracted was the U.K.'s $2.2 trillion, Sweden's $0.35 trillion, and Denmark's $0.25 trillion.)
The GDPs used were as follows:
1. Europ--$10.5 trillion
2. Swiss---$0.367 trillion
3. UKing---$2.2 trillion
4. Japan---$4.8 trillion
5. Canad--$1.0 trillion
6. Austrl---$0.63 trillion
The total GDP of the 6 currencies used was $19.5 trillion. So the % difference in USD gold price and other currency price is multiplied times the other countries GDP divided by $19.5 trillion. For example, for Euros, the 60d difference between USD gold price and Euro gold price is 5.6%. That 5.6% is multiplied time the Euro GDP ($10.5 trillion) and divided by the total GDP ($19.5 trillion.) This comes out to 3. This 3 is added to the totals derived from the same method of the other 5 countries. For example, Switzerland's difference from the USD gold price was 5.8%. Swiss GDP was $0.367 trillion. Dividing that GDP by $19.5 trillion = 0.019. Taking 0.019 times 5.8 = 0.11. So 0.11 is added to the total. When this is done with all 6 currencies, the sum is 4.7. Therefore, the average dollar devaluation over the last 60 days was 4.7% measured in these 6 currencies.
Below is a simplified copy of the 6-currency difference in gold prices compared with U.S. dollars.
Below are the links to the 60d change in gold prices
Euro: www.kitconet.com/charts/metals/gold/2a-euro-us-60d-Large.gif
Swiss. www.kitconet.com/charts/metals/gold/2a-chf-us-60d-Large.gif
U.K. www.kitconet.com/charts/metals/gold/2a-gbp-us-60d-Large.gif
Japan www.kitconet.com/charts/metals/gold/2a-jpy-us-60d-Large.gif
Canada www.kitconet.com/charts/metals/gold/2a-cad-us-60d-Large.gif
Australia www.kitconet.com/charts/metals/gold/2a-aud-us-60d-Large.gif
The following is the link to the CIA site that has the individual country GDPs.
www.cia.gov/cia/publications/factbook/geos/as.html
I weighted the contributions by the relative GDPs, which should represent the relative transaction values of each currency. The Euro GDP needed some modification. From the CIA site, the Euro GDP was $13.3 trillion. However, 3 European Union countries don't use the Euro (United Kingdom, Sweden, and Denmark.) So their GDPs were subtracted from the $13 trillion to give a total Euro GDP of $10.5 trillion. (subtracted was the U.K.'s $2.2 trillion, Sweden's $0.35 trillion, and Denmark's $0.25 trillion.)
The GDPs used were as follows:
1. Europ--$10.5 trillion
2. Swiss---$0.367 trillion
3. UKing---$2.2 trillion
4. Japan---$4.8 trillion
5. Canad--$1.0 trillion
6. Austrl---$0.63 trillion
The total GDP of the 6 currencies used was $19.5 trillion. So the % difference in USD gold price and other currency price is multiplied times the other countries GDP divided by $19.5 trillion. For example, for Euros, the 60d difference between USD gold price and Euro gold price is 5.6%. That 5.6% is multiplied time the Euro GDP ($10.5 trillion) and divided by the total GDP ($19.5 trillion.) This comes out to 3. This 3 is added to the totals derived from the same method of the other 5 countries. For example, Switzerland's difference from the USD gold price was 5.8%. Swiss GDP was $0.367 trillion. Dividing that GDP by $19.5 trillion = 0.019. Taking 0.019 times 5.8 = 0.11. So 0.11 is added to the total. When this is done with all 6 currencies, the sum is 4.7. Therefore, the average dollar devaluation over the last 60 days was 4.7% measured in these 6 currencies.
Below is a simplified copy of the 6-currency difference in gold prices compared with U.S. dollars.
Below are the links to the 60d change in gold prices
Euro: www.kitconet.com/charts/metals/gold/2a-euro-us-60d-Large.gif
Swiss. www.kitconet.com/charts/metals/gold/2a-chf-us-60d-Large.gif
U.K. www.kitconet.com/charts/metals/gold/2a-gbp-us-60d-Large.gif
Japan www.kitconet.com/charts/metals/gold/2a-jpy-us-60d-Large.gif
Canada www.kitconet.com/charts/metals/gold/2a-cad-us-60d-Large.gif
Australia www.kitconet.com/charts/metals/gold/2a-aud-us-60d-Large.gif
The following is the link to the CIA site that has the individual country GDPs.
www.cia.gov/cia/publications/factbook/geos/as.html