Review of concepts and predictions. Dec 2009.

If you have been reading these posts, you have come along on a journey to understand economic concepts, moves in the financial world and their causes. In this journey, I first unearthed the relationship MxV=QxP, which is the relationship of the money supply (M), money velocity (V), the gross national product (Q) and prices (P). No, I did not discover this, others did. But, I found out that the adoption of the 'mark to market' accounting system on Sep 15, 2008, is what brought V down very sharply and drastically dropped Q. This was a deliberate act to elect the communist Obama and blame the economic catastrophe on George Bush. The ploy worked.

The first year of the Obama regime was devoted to nationalizing the big banks via "rescuing them;" by firs declaring some of their assets worth zero then giving them monopoly money to replenish their reserves. The same thing was done to the insurance industry. GM and Chrysler were "bailed out" then declared bankrupt by puppets installed by the regime. Shareholders and creditors of GM and Chrysler were deprived of their properties. This was nationalization - pure and simple.

So, in a sense, the Obama regime is a continuation of the Roosevelt era and only the nationalization of health care remains to be done to complete the transformation of the US from a Capitalist (economically free) country into a Socialist entity. Once that is done, the regime will turn to make its rule permanent: 1. institutionalize voting fraud by the likes of ACORN, so it can not be voted out of power; 2. bring in millions of illegal aliens who have little or no concept of how Capitalism works and respond to the compesino/Patron relationship; 3. raise taxes to 50% on the average American; 4. disarm the population. The Socialists would also like to censor free expression, so only the regime and its supporters in the Media can be heard.

The hardest thing for an average American to understand is that the economic hardships visited upon us are done on purpose to force us into accepting Socialism. The Socialists (Democrats) want to downsize America's economic and military might and one way of accomplishing this is to reduce the value of the dollar. Another way of doing it is to increase the price of energy.

The process of "rescuing" our economy has already raised the price of gold and is lowering the value of the dollar. At the bottom of this is the expansion of the money supply. I have documented the explosion of the money supply. I have found out that real inflation is shown in the HAI Monetary Inflation Index, which has already risen, whereas the CPI (consumer price index) lags the HAI.

Along the way, I gathered the best predictions re the economy and gold prices. The economy continues to stagnate and the 2.5% rise in GDP is all due to govt spending. On Sep 2, I gave you a prediction of the DOW going to 12,000, mostly due to the effect of increased money supply. I predicted gold to go to $1,300/oz, based on the inverse head and shoulder technical formation and the size of the head. I reiterated these predictions in posts of Sep 11 and Oct 6. This morning's gold price reached $1,2009/oz.

I will make further predictions in Jan 2010, God willing. Gold will continue to rise and so will the DOW. Nothing goes up in a straight line, so there will be drops along the way.

Do not listen to regime shills who want to keep the price of gold down. Expect the 'mark to market' rule to be applied to commercial real estate as the regime will nationalize a lot of that. Keep the faith.