The Currency Juggle: A Game Played With Falling Knives

The dollar, according to media reports, is gaining strength.

If that is true, how come the price of an ounce of gold has risen past $1,220 -- up a bit more than $12 in the past day, more than $44 in the past 30 days, and more than $239 in the past year?

The press reports about the dollar are based on its rise against the Euro and most, though not all other currencies. The economic mess that Europe is in and that the U.S. is just approaching is behind the plunge in the Euro's value.

The dollar clearly is not strengthening again gold or anything tangible.

What we very well may be seeing is an increasingly widespread and accelerating loss of faith and trust in all paper currencies, fiat money with nothing behind it except -- and this is a knee slapper -- the full faith and credit of the issuing government.

The hard but increasingly obvious fact is that neither the American nor any European government is faithful to anything or anyone. None of them -- except perhaps the  Swiss and the Austrians -- is worthy of credit and they all are totally lacking in credibility as well as competence.  The international monetary system has become a juggling act performed with knives. All the knives are falling. Some are just sharper and falling faster than others.