Inflation is here.

If you listen to the airheads that appear on TV networks (ABC,NBC,CBS,MSNBC and the Clinton News Network), the economy is doing better and inflation is under control. We know that these people lie, but how? First, the Consumer Price Index (CPI) does not include energy prices and food costs. The true measure of prices is measured by another index; the actual buying power of the US Dollar. Actual buying power of the dollar has been decreasing (so the index of prices has been rising), while the value of the dollar has been decreasing. These are documented in the first two graphs. [I apologize for not being able to move the graphs, but Blogger has been "improved" and it no longer moves graphs or allows text to be imported.] The 2.5% rise in GNP is also deceptive. You see, the GNP includes the Nation's output AND GOVERNMENT SPENDING. There is little to no rise in output, the 2.5% growth in the GNP is due to increased government spending.

The loss of the value of the dollar is also reflected in the rise of the value of gold. Gold is the money of the free market, while the dollar is the money of the government, now in the control of Obama Socialists and radicals. The US govt has created $11T credit for guaranteeing various financial entities and doubled the monetary base. Inflation (in the CPI) is guaranteed. Inflation in real terms is already under way.

Gold bull markets have 3 phases: 1. currency devaluation; 2. the investment phase and 3. the mania stage. We are into phase two and the anti-gold cabal is less able to manipulate gold prices down. But, we are also beginning to see signs of phase three as mints have stopped minting gold coins (gold shortage) and central banks are beginning to hoard gold. How high will gold go? In a previous post I have shown you the inverse head and shoulder formation that predicted a rise of $300/oz at that point. We are almost to that point, but some experts I read predict a gold price of #1300/oz by year's end. How about the top of the gold price? That is a bit more difficult. The last serious gold bull market took the price of gold to almost $2,000/oz. Using that slope for the current bull market would yield a calculated price of over $5,000/oz. If the world finds out that the US govt no longer controls the alleged stockpile of $300B worth of bouillon, that alone will double gold price.

In the meantime, expect the Obama shills to pull all kinds of stunts to try to keep down gold prices. One of these stunts is the manipulation of gold price via flooding the market with paper gold (promissory notes to deliver gold). That is dangerous for the regime, as people can demand delivery. Another stunt is to create rumors that would keep gold prices down. Such as the rumor that Chinese banks are insolvent. (Not true, Chinese bank deposits are increasing faster than banks are making loans). How about the suggestion that what we are experiencing is a bubble in gold prices? Nice touch, but no cigar. The total asset value of the US is 145T and the total value of the gold bouillons is $5.7T (153,000 tons). Of that $3.6T is traded as commodity (96,200 tons), $1.1T is owned by central banks (26,700 tons) and $1.0T is in private hands (24,199 tons). A bubble? Hardly.