Numbers might not lie, but there is a tendency to view them in the surrounding light. What does that mean? It means that your view and my view of the numbers are dependent upon the world that we view them from. An example, totally unrelated: I remember early in the 2nd US invasion of Iraq. While US tanks were driving through parts of Baghdad, the Iraqi Minister of Information was holding press conferences claiming that the Iraqi Army was turning back the US attack. In one outdoor interview, a US tank is seen driving in the distant background. Regardless as to whether the “minister” was just knowlingly lying or really believed his side was winning, his perspective wasn’t shared by most of the world. These events became so comical, that even 2 years after his last moments on the air, he lives on in cyberspace: CNN article on Iraqi Minister

This issue of perspective, is the whole point of this article. The price of oil is up to records high, gold is gaing fast, etc. Depending on where you live and what year it is you’ll hear about how fast a price is rising or falling on some commodity. In 2005, the US and the world were obsessed with the rapidily rising price of crude oil. Early in 2006, that role seems to be gold, with the price recently exceeding $550. Most of us see the world and the world economy in terms of our local media, that is americans see the price of gold, oil and currency exchange rates in terms of US dollars and US cost of living. This perspective leaves us all thinking that others in the western industrial countries, say UK, Japan and Germany are living thru the same pricing trends, but because commodity prices are tide to local currency, that sometime isn’t the case.

I’ve researched the price of gold and currency exchange rate ( a once yearly sample in late january) since 2001 and it illustrates my point. Since 2001 Euro based investors have seen a 157% gain in gold, the UK based pound investor only gained 75% for the same period of time. Interestingly, 2/3 of all Gold gains in the UK occured since janaury 2005! What a difference between investors in England vs those in Germany. US Dollar and Yen investors gained 104% during that time, over 35% more than Pound investors but more than 30% less of gain than Euro investors. We’ve used this Gold Price Chart from kitco.com and Currencies from Yahoo Currency