Despite the stock markets lackluster performance over the past few trading sessions, the Dow still trades near all-time highs. For some further perspective into the current rally, today’s chart presents the Dow divided by the price of one ounce of gold. This results in what is referred to as the Dow / gold ratio or the cost of the Dow in ounces of gold. For example, it currently takes 19.2 ounces of gold to “buy the Dow.” This is considerably less that the 44.8 ounces back in the year 1999. When priced in gold, the current stock market rally hasn’t amounted to much. In fact, the longer-term trend is actually down!

Alex’s Notes: I have been searching for a picture of this for a while now.

This is a picture of a US “Silver Certificate”. These are what our money used to be based on, silver and gold.

Why is this important? Is this some kind of nostalgic, old mans wierd collection item?

No, the reason this is important is that the vast majority of Americans do not understand our own money.

Money is simply a form of exchange that we use on a daily basis to expedite the exchange of our services and goods to one another.

What gives money its value, is simply our collective agreement that it has value. If we did not agree it had value, it of course would not be useful as money.

With todays “Fiat Currency”, this is especially true, because the only thing that says our money has value is the government.

Look closely at this certificate. Note that it says “This Certifies That There Is On Deposit, In The Treasury of The United States Of America, One Dollar In Silver Payable On Demand”.

Now why would we have had money that certified that there was something of value on deposit in the US Treasury?

Maybe because generations ago we knew that if there was nothing backing the dollar, then the government could make as much of it as it wanted?

It used to be that we KNEW our dollars had value, because you could walk up to the United States Treasury, and demand the Silver or Gold that backed the money, and the Treasury was required by law to cough up the precious metal in exchange for the Certificate.

This is what our money looks like today:

Notice anything different?

Yes. Now it says “Federal Reserve Note”.

What is a “Note” you say? A “Note” is an instrument of debt, meaning if you have a “Note” from me, it means I owe you something of value, and you can come collect it from me later.

Let me ask you what may seem like a strange question: If you took your “Federal Reserve Note” to the Federal Reserve or the Treasury today, and demanded they pay you what is owed on the note, what do you think would happen?

I will tell you what would happen, they would call the police and have you carted off for being some sort of whacko.

So basically this means the government can print up as much money as it wants, and says ‘Trust Us, This is Valuable!”

Now I ask you, does something seem fishy with this scenario? Or am I just being silly?

Diversify Your Income

– FREE Report “10 Reasons Gold Has Farther to Run”

– FREE Report “10 Reasons Gold Has Farther to Run”

It is amazing to think that the dollar has gone so low. There was a time when the dollar was an honored instrument of financial transaction. Today, the world is divesting itself of dollars as fast as it can, and in some places like China, the dollar has been reduced to the status of the next door neighbors garbage.

This chart shows the drop in purchasing power of the US Dollar since the day we created the Federal Reserve in 1913.

Your dollar now has the purchasing power of a whopping (hold on to your seat) .04 CENTS.

The only solution to this is to stop printing money and reduce the amount of inflation we have, take our licks, and move back to sound money. Of course the Fed cant do that right now, as the only method of combating the slumping economy is ‘injecting liquidity’.

The world is moving back to the discipline of hard money (gold and silver), hopefully the US is not the last to catch on.

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Rank Country Current account balance Date of Information
1 China $179,100,000,000 2006 est.
2 Japan $174,400,000,000 2006 est.
3 Germany $134,800,000,000 2006 est.
4 Russia $105,300,000,000 2006 est.
5 Saudi Arabia $103,800,000,000 2006 est.
6 Norway $63,330,000,000 2006 est.
7 Switzerland $50,440,000,000 2006 est.
8 Netherlands $50,170,000,000 2006 est.
9 Kuwait $40,750,000,000 2006 est.
10 Singapore $35,580,000,000 2006 est.
11 Venezuela $31,820,000,000 2006 est.
12 Sweden $28,610,000,000 2006 est.
13 United Arab Emirates $26,890,000,000 2006 est.
14 Algeria $25,800,000,000 2006 est.
15 Hong Kong $20,900,000,000 2006 est.
16 Canada $20,560,000,000 2006 est.
17 Malaysia $17,860,000,000 2006 est.
18 Libya $14,500,000,000 2006 est.
19 Brazil $13,500,000,000 2006 est.
20 Iran $13,130,000,000 2006 est.
21 Nigeria $12,590,000,000 2006 est.
22 Qatar $12,510,000,000 2006 est.
23 Taiwan $9,700,000,000 2006 est.
24 Finland $8,749,000,000 2006 est.
25 Iraq $8,134,000,000 2006 est.
26 Argentina $8,053,000,000 2006
27 Angola $7,700,000,000 2006 est.
28 Oman $7,097,000,000 2006 est.
29 Belgium $6,925,000,000 2006 est.
30 Austria $5,913,000,000 2006 est.
31 Chile $5,063,000,000 2006 est.
32 Denmark $4,941,000,000 2006 est.
33 Philippines $4,900,000,000 2006 est.
34 Luxembourg $4,630,000,000 2006 est.
35 Trinidad and Tobago $3,259,000,000 2006 est.
36 Azerbaijan $2,737,000,000 2006 est.
37 Egypt $2,697,000,000 2006 est.
38 Korea, South $2,000,000,000 2006 est.
39 Bahrain $1,999,000,000 2006 est.
40 Gabon $1,807,000,000 2006 est.
41 Botswana $1,698,000,000 2006 est.
42 Yemen $1,690,000,000 2006 est.
43 Indonesia $1,636,000,000 2006 est.
44 Peru $1,515,000,000 2006 est.
45 Israel $1,463,000,000 2006 est.
46 Uzbekistan $1,410,000,000 2006 est.
47 Burma $1,247,000,000 2006 est.
48 Congo, Republic of the $1,215,000,000 2006 est.
49 Vietnam $1,029,000,000 2006 est.
50 Ecuador $727,000,000 2006 est.
51 Bolivia $688,000,000 2006 est.
52 Papua New Guinea $661,000,000 2006 est.
53 Namibia $572,000,000 2006 est.
54 Cote d’Ivoire $460,000,000 2006 est.
55 Cameroon $419,000,000 2006 est.
56 Morocco $389,000,000 2006 est.
57 Bangladesh $339,000,000 2006 est.
58 Turkmenistan $321,200,000 2006 est.
59 Equatorial Guinea $175,000,000 2006 est.
60 British Virgin Islands $134,300,000 1999
61 Kazakhstan $133,000,000 2006 est.
62 Cook Islands $26,670,000 2005
63 Palau $15,090,000 FY03/04
64 Tuvalu $2,323,000 1998
65 Samoa -$2,428,000 FY03/04
66 Tonga -$4,321,000 FY04/05
67 Comoros -$17,000,000 2005 est.
68 Kiribati -$19,870,000 2004
69 Swaziland -$23,130,000 2006 est.
70 Sao Tome and Principe -$24,400,000 2006 est.
71 Vanuatu -$28,350,000 2003
72 Micronesia, Federated States of -$34,300,000 FY05 est.
73 Anguilla -$42,870,000 2003 est.
74 Cape Verde -$44,430,000 2006 est.
75 Gambia, The -$54,610,000 2006 est.
76 Burundi -$57,840,000 2006 est.
77 Haiti -$58,720,000 2006 est.
78 Tajikistan -$73,950,000 2006 est.
79 Lesotho -$75,440,000 2006 est.
80 Seychelles -$78,590,000 2006 est.
81 Antigua and Barbuda -$83,400,000 2004
82 Guyana -$84,300,000 2006 est.
83 Rwanda -$104,100,000 2006 est.
84 Honduras -$160,000,000 2006 est.
85 Zambia -$165,400,000 2006 est.
86 Macedonia -$167,000,000 2006 est.
87 Belize -$173,400,000 2006 est.
88 Malawi -$186,000,000 2006 est.
89 Ghana -$219,000,000 2006 est.
90 Armenia -$247,300,000 January-September 2006 est.
91 Togo -$261,900,000 2006 est.
92 Zimbabwe -$264,600,000 2006 est.
93 Kyrgyzstan -$287,300,000 2006 est.
94 Paraguay -$300,000,000 2006 est.
95 Chad -$324,100,000 2006 est.
96 Benin -$342,700,000 2006 est.
97 Guinea -$344,000,000 2006 est.
98 Cambodia -$369,000,000 2006 est.
99 Mexico -$400,100,000 2006 est.
100 Uganda -$423,000,000 2006 est.
101 Eritrea -$440,500,000 2006 est.
102 Mozambique -$444,400,000 2006 est.
103 Fiji -$465,800,000 2006 est.
104 Panama -$467,000,000 2006 est.
105 Madagascar -$504,000,000 2006 est.
106 Laos -$504,200,000 2006 est.
107 Belarus -$511,800,000 2006 est.
108 Syria -$529,000,000 2006 est.
109 Moldova -$561,000,000 2006 est.
110 Uruguay -$600,000,000 2006 est.
111 Burkina Faso -$604,600,000 2006 est.
112 Mauritius -$651,000,000 2006 est.
113 Albania -$679,900,000 2006 est.
114 Georgia -$735,000,000 2006 est.
115 Tunisia -$760,000,000 2006 est.
116 Slovenia -$789,200,000 2006 est.
117 Nicaragua -$883,000,000 2006 est.
118 Senegal -$895,200,000 2006 est.
119 Thailand -$899,400,000 2006 est.
120 Tanzania -$906,000,000 2006 est.
121 Malta -$966,200,000 2006 est.
122 Jamaica -$970,000,000 2006 est.
123 Cyprus -$1,051,000,000 2006 est.
124 El Salvador -$1,059,000,000 2006 est.
125 Sri Lanka -$1,118,000,000 2006 est.
126 Kenya -$1,119,000,000 2006 est.
127 Dominican Republic -$1,124,000,000 2006 est.
128 Costa Rica -$1,176,000,000 2006 est.
129 Cuba -$1,218,000,000 2006 est.
130 Guatemala -$1,533,000,000 2006 est.
131 Bosnia and Herzegovina -$1,730,000,000 2006 est.
132 Estonia -$1,919,000,000 2006 est.
133 Ukraine -$1,933,000,000 2006 est.
134 Colombia -$2,219,000,000 2006 est.
135 Serbia -$2,451,000,000 2005 est.
136 Latvia -$2,538,000,000 2006 est.
137 Lithuania -$2,572,000,000 2006 est.
138 Jordan -$2,834,000,000 2006 est.
139 Croatia -$2,892,000,000 2006 est.
140 Iceland -$2,932,000,000 2006 est.
141 Ethiopia -$3,384,000,000 FY05/06 est.
142 Slovakia -$3,781,000,000 2006 est.
143 Czech Republic -$4,352,000,000 2006 est.
144 Sudan -$4,510,000,000 2006 est.
145 Poland -$4,548,000,000 2006 est.
146 Bulgaria -$5,100,000,000 2006 est.
147 Lebanon -$5,339,000,000 October 2006
148 Pakistan -$5,486,000,000 2006 est.
149 New Zealand -$7,944,000,000 2006 est.
150 Hungary -$8,392,000,000 2006 est.
151 Ireland -$9,450,000,000 2006 est.
152 Romania -$12,450,000,000 2006 est.
153 South Africa -$12,690,000,000 2006 est.
154 Portugal -$16,750,000,000 2006 est.
155 Greece -$21,370,000,000 2006 est.
156 Italy -$23,730,000,000 2006 est.
157 Turkey -$25,990,000,000 2006 est.
158 India -$26,400,000,000 2006 est.
159 France -$38,000,000,000 2006 est.
160 Australia -$41,620,000,000 2006 est.
161 United Kingdom -$57,680,000,000 2006 est.
162 Spain -$98,600,000,000 2006 est.
163 United States -$862,300,000,000 2006 est.

This file was last updated on 19 June, 2007

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