Silver and gold are not commodities. Silver and gold prices are driven by monetary not economic demand as are commodities such as copper, lumber, tin. Silver and gold rise when inflation is eating up the dollars value. So regardless of economic conditions, inflation will drive silver & gold higher, because people seeing their dollars lose value will seek refuge in silver & gold. Everything of value will not lose its purchasing power, only those items whose value depends on economic demand, and that does not include silver & gold. Some say we are already in a depression that will over time lower most assets value. Now the current administration has shown that it will respond to every crisis by printing more money, which means an inflationary depression will result. The underlying economic condition will be a depression, shrinking economic activity, while the monetary condition will be inflation resulting in rising prices. This means that while asset prices may rise, they will in fact be losing value or purchasing power, unless they rise faster than the dollar falls. The fact is that purchasing power is all that counts. You can see this in the Dow which stood yesterday at 16,367.88, and that appears much higher than its 2000 peak at 11,722. When you corrected for inflation,even using the governments understated numbers, then 11,722 in 2000 equals only 15,982 today or if you turn that around: 2014s 16,367.88 equaled only 12,005 in 2000. So Its clear the Dow has not gained (16,367.88/11,722 = ) 40%, but only (12,005/11,722 =) 2.4% in purchasing power and when adjust for real inflation you can plainly see the Dow is lower in purchasing power than it was in 2000. FORGET NOMINAL GAINS & LOOK ONLY AT PURCHASING POWER GAIN OR LOSS!!!!!!! Inflation does not stimulate the economy, any more than counterfeiting does. Inflation always creates booms that go bust, additionally it disrupts the economy in other ways. Inflation benefits only those near the source of the inflation, meaning Wall Street, and the bureaucrats and politicians who produce inflation while it robs all the rest of us. Duuuuh ya think? You dont need an economics degree to understand this, just a little common sense JMHO
Posted on: Thu, 27 Mar 2014 03:44:17 +0000
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