When the US went off the gold standard in 1971, all currencies essentially became fiat monies, with their value derived from the governments that issue them rather than from commodities. This was the birth of instability of floating currencies. This is why gold is powerful.Gold isn't about getting you rich, gold is about preserving value and purchasing power -- avoiding what makes you poor.
In today's highly volatile capital markets, investors who can't stomach the fluctuations have hunkered down in good old Guaranteed Investment Certificates (GICs) and other traditionally categorized 'low-risk' investments. Although it only pays a modest rate of return, you can always count on your money being there when you need it. Or can you?
Spending one's way to growth is nothing new. What is new, and what is a first for almost any developed country is that Canada will be using both monetary and fiscal policy as a way to get the economy growing again at the expense of a balanced budget. For the economy as a whole, it is unequivocally good news.
Price movements have grabbed the headlines in recent weeks. Commodity prices are falling, and as always, there are various arguments about the reasons this time. The implications are serious, so the debates are warranted. But the more pressing issue is recent movement in the general price level. Overall price growth has weakened lately, and there is renewed worry about disinflation and deflation (the dreaded Ds). Five years beyond the crisis, and we are still worried about this? What's going on?