in-fla-tion [in-fley-shuhn]-A persistent increase in the level of consumer prices or a persistent decline in the purchasing power of money, caused by an increase in available currency and credit beyond the proportion of available goods and services. As inflation rises, every dollar will buy a smaller percentage of a good.
If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks...will deprive the people of all property until their children wake-up homeless on the continent their fathers conquered.... The issuing power should be taken from the banks and restored to the people, to whom it properly belongs.
- Thomas Jefferson
Since 1913, when the Federal Reserve was created by Congress, your money has lost 96% of its purchasing power due to inflation. A common misconception today is that prices for goods and services have been going up. The truth of the matter is that prices have remained nearly the same in precious metals terms; it is the value of the dollar that has declined. It simply takes more and more dollars to buy the same products, since the dollar's value has become less and less. Gold and silver were scrapped as a "control" mechanism for our economy, and ever since, we have been circulating a "robust paper" in place of real money. This "robust paper" is now the world's reserve currency in central banks. From 2002 - 2005, the U.S. dollar lost over 40% of its value to the Euro, and had similar losses to other major currencies of the world. Since the dollar is the major reserve currency of the world's central banks, that means those central banks also lost near 50% of their value. When they wake up and realize that only precious metals hold true value, we are in for a correction unlike anything ever seen.
Consider this....For Argentina the year 1989 was catastrophic. Argentine government expenditure reached 35.6 percent of GDP and the fiscal deficit climbed to 7.6 percent of GDP.... inflation rose to over 20,000 percent. Argentina Inflation Read more...
Congress' relentless borrowing and spending for wars and supporting foreign nations has ensured continued federal borrowing and continued increases in money supply- and the result has been a downward spiral for the dollar. Since we have not seen strength in the underlying economic fundamentals in our nation, it tells us that there will be additional burden on the taxpayers should congress decide to raise taxes to help pay down debts. This will further weaken the consumer and harm the economy. The scenario is a Catch-22, and the smart money is already placing their bets.
History records that the money changers have used every form of abuse, intrigue, deceit, and violent means possible to maintain their control over governments by controlling money and its issuance.
- James Madison
If congress has the right under the Constitution to issue paper money, it was given them to use themselves, not to be delegated to individuals or corporations.
- Andrew Jackson
Gold is still a great bargain today, considering its true relationship to the falling U.S. dollar over the last 25 years. Gold's peak in 1980 was $850/oz., but using inflation- adjusted numbers, the same peak would be $2,200/oz. today! Now that gold has broken above $700/oz., we have begun "Phase II" of the bull market in precious metals. At this phase we believe tangibles such as investment-grade gold and silver coins will experience accelerated growth. Strong physical demand from central-bank buying and concerns about inflation are only a few of the major elements now driving this worldwide precious metals rally.
Over these past five years it's been interesting to watch the mainstream financial community slowly begin to back peddle on their anti-gold positions. Why a mere five years ago owning gold was considered stupid by most financial professionals. But who's laughing now about the wisdom of owning gold? Gold's 18% gain in 2005 was more than six times that of the S&P 500.
Oil shocks create higher inflation. Sadly, tens of thousands of investors will watch like a deer in the headlights as their hard-earned savings are devoured by a deadly combination; 1) rising inflation 2) a slowdown in economic growth and 3) a falling U.S. dollar.
Gold will eventually reach $2,000 to $2,500... the secret is that the value... in dollars is the same, because the dollars are slowly becoming worthless. Gold at $2,000 will be no big deal... - Forbes
'The weaker US dollar is clearly underpinning the gold price. We continue to look for a move towards 700-715 usd in the next 1-3 months,' said JP Morgan analyst Michael Jansen.
The Government should create, issue, and circulate all the currency and credits needed to satisfy the spending power of the Government and the buying power of consumers. By the adoption of these principles, the taxpayers will be saved immense sums of interest. Money will cease to be master and become the servant of humanity.
- Abraham Lincoln
(On March 23, 2006, the Board of Governors of the Federal Reserve System ceased publication of the M3 monetary aggregate, stating that " the costs of collecting the data and publishing M3 now appear to outweigh the benefits.")
Robert Kiyosaki-author of
Rich Dad Poor Dad
Robert Kiyosaki, stated "when the purchasing power of Gold is compared to the purchasing power of the Dow, the Dow appears to be cracking" He added "That means the average investor will need to see a 15% annual return on their stocks and mutual funds just to stay ahead of the U.S. Dollar purchasing power erosion that is, just to break even".
Since 2002, the U.S. dollar index has lost 30% while, during this same time period gold has gained more than 200%.
The loss of purchasing power (inflation) can be hedged with physical gold, since gold can not be duplicated or mass produced by any government.
The button below will link you to a government website which features an inflation calculator.
Please note: the inflation calculator is based on government collected data; many prominent economist believe the government data to be on the low end of the spectrum.
"Inflation could be much higher then the reported government figures"
The chart below shows the potential of growth by comparing the 1980 highs and what they would be if adjusted to today's inflation. As you can see, these prices are at a small fraction of what they were in 1980 if adjusted for inflation.
1980 PRICES ADJUSTED TO TODAYS INFLATION