Gold rallied to a record high Monday as the dollar weakened against rival currencies.Now gosh, why would central banks be diversifying away from the dollar?December gold rose $5.70 to settle at a record $1,101.40 an ounce, after climbing to an all-time trading high of $1,111.70 earlier in the session.
Gold gained 5% last week on speculation that central banks around the world will begin buying more of the precious metal as an alternative to the dollar, which is the traditional global reserve currency.
The dollar fell broadly Monday, with the euro climbing above $1.50, after a report from the International Monetary Fund suggested the U.S. currency could fall further.Right now the only thing keeping out economy going is that the pace of deflation in the real estate market is matching the inflation as the dollar is collapsing. That equilibrium will not last as one or the other will take hold and wreck our economy.The greenback was also under pressure after a weekend meeting of the G-20 failed to address the greenback's ongoing decline.
I'm betting on the inflation, although frankly considering we still have another 15% drop to go in housing, we'll be able to get away with it for another year or two.
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