|The price of protection|
I know what you are thinking because I am thinking it, too. We want to know, "What about the actual data? We ask because we have been listening to [Federal Reserve chairman] Ben Bernanke and all the rest of those neo-Keynesian, government lackey morons summarizing their data, and they say everything is going along just fine, and that everything is wonderful, so now we are paranoid and suspicious now that we know that we are being lied to at Every Freaking Turn (EFT)."
Perhaps anticipating our question, they write, "Looking at the data, from January 1971 to December 2008, the US money supply increased 16.8 times; this was accompanied by an 81.1% drop in purchasing power of the dollar, as implied by the governmentally-reported CPI."
And how did this affect gold? I'm glad you asked, because I have been pounding the table like a demented village idiot for years that you should be buying gold, and so people want to know "Is the opinion of The Ridiculous Mogambo (TRM) as stupid as he sounds about this money inflation thing?'
My answer is, "No, not in the case of gold, but yes for most everything else I say" while their answer is, "For the same period and using the same CPI statistics, the purchasing power of gold has actually increased four times. The price of gold is up from about $38 to about $822, which corresponds to an increase in its price of almost 22 times, while the CPI is up from about 40 to 210, or about five times. Thus, for the period, the price of gold has increased about 22 times, while the price level has increased about five times, resulting in an increase in the purchasing power of gold of about four times; the exact increase is 310%, which corresponds to purchasing power of a little over four times" at the same exact time as "the purchasing power of major currencies is down five to 10 times." Wow!