Bugos & Wiegand

Ed Bugos:

"If you're going to inflate the hell out of your money supply and fix your currency on the foreign exchange markets, as China does, the importation of commodities or other goods suddenly becomes a very profitable enterprise because it allows the inflating country to buy commodities on the world market with currency that is overvalued by virtue of its peg to a less inflationary currency, and then sell them domestically (i.e. in China) for higher prices in the local overly inflated currency.

China isn't the only country guilty of such an exploitive policy, but what I want to stress is that this commodity boom is chiefly a monetary phenomenon. ...In China's case, it is also stoked by an interventionist mentality. The extra demand on the world's raw materials arising from the building of a capitalistic "infrastructure" in China, or Russia, or India, would be more incidental were it not for the inflationary and interventionist propensities of those countries. Yes, this means that if China didn't inflate and the state didn't step up its strategic accumulation of commodities plan, the commodity boom wouldn't be as strong as it is. All the talk about real economic growth, whether here or overseas, as being the cause of the commodity boom through the wealth effect or the concept of aggregate demand is absolutely erroneous." (Slightly re-worded)

Roger Wiegand:

"The dilution of currencies, specifically the U.S. Dollar, along with those of other western nations is providing buying pressures for gold as an anti-inflationary safety valve. Gold is becoming a currency unto itself. In the modern era, currencies would ebb and flow with one or a few selling while being offset by rallies in others. Now, however, the major currencies including Yen, Dollar, Euro, Swiss, and Pound are all in a dilutive, over-printed state. At this date, some appear better than others. However, eventually, real buying power will decline in these premium currencies as values match and mismatch among the group. Central banks are the great monetary adjusters as they raise rates, and all nations strain to compete with cheaper money. These currency problems have the potential to be, shall we say, history making in their performance."