decoupling of gold vs dollar (introduction)

@ all,

it may not be of intrest for anyone of the Australian-GIP-Family, but I´m now going to start with "my" Gold-story as announced recently, anyway.

As for every story, there will be a short "Introduction" -that is for today, titled: Evidence for decoupling of Gold vs USD.

The entire story may consist of four chapters:
1) general related observations
2) very special observations (relevant?)
3) implications of the decoupling - future of Gold price
4) any meaning of the story for GIP??

Chapters 1 to 4 will be presented by chance, that is not in a daily or an other orderly manner.


Introduction

Since long time it is known that price of Gold and of USD are negatively correlated (with an astonishing factor of 0,96) - but only until mid of 2005. Since that time, things have dramatically changed (and I happend to observe this right from the very beginning). As a result of this change, Gold, up to now, did increase considerably, but the Dollar did not decrease it`s value (e. g. against the Euro) with the same percentage, as would have been expected with respect to the "old" negative correlation. This so called decoupling (still ongoing since 2005) can be observed by anyone: construct a normalized chart Gold vs Dollar, showing the percentage of the increase of Gold in contrast to the less (percentage) devaluation of the dollar.

As will be explained, if this decoupling would not have been introduced, the financial system would have been broken, if the USD would have decreased with the same percentage of the increase of Gold.

transmeta