That’s a direct quote from a friend of mine, after she bought a “Big Mac” from McDonalds last week. I have no idea how much a Big Mac costs, either then or now, but I do remember being able to buy a gallon of milk for 99 Cents a few years ago, a McDonald’s hamburger costing 12 cents 45 years ago, and buying my house 30 years ago for $150,000. Why is ‘everything going up?’ ‘Elementary my dear Watson,’ as Sherlock Holmes would say. It’s elementary, if you remember that the dictionary definition of inflation is, “An increase in the money supply.”
Why should the money supply increase rather quickly now, and with it the prices of everything ‘going up?’ Think about it, and you will maybe remember what happened recently. The Chinese Virus. According to the Journal (Wall Street), the prices and money supplies are going up world-wide, and for the same reason. Governments have been printing money, and lots and lots of it, to bail out their economies after the world wide shut-down of businesses, supposedly to keep the virus from spreading. Millions of waitresses, cooks, bartenders, pilots, and every single aspect of industry, slowed or stopped working. People stopped going out to restaurants, flying or driving to places they wanted to go to, or used to go to, but which destinations were shuddered. Incomes and wages suddenly stopped dead, as did tips, tax collections, and sellers of whatever people wanted to buy, be it cars, food, travel, decoration, or even church attendance.
The U.S. government has printed over $5 trillion, and more to come. Remember the $600 a week bail outs or the $1200 for each person checks? The money supply increased that much for every check you cashed.
Consult our technical charts and see that the gold price went up several hundred dollars, almost immediately after the virus took hold and the money printing started, and as far as I can see, shows no sign of going back, any more that I can ever see a gallon of milk go below $3. The dairy farmer’s hay, feed, equipment, fuel, and taxes have all gone up, as have the bottlers of milk, and the costs to distribute it. When I built my first ice cream parlor in Philly, in the late 1960’s, the ice cream wholesaler thought I was nuts, because as he said, “Hell, you can buy a half gallon if ice cream at a grocery store for 99 cents; how can you make ago of it?” I did, but that shows you the price of good ice cream then vs. now. My favorite ice cream now, goes for $5.99 a half gallon.
Gold is gold, ice cream is ice cream, and all consumer products and industrial products remain the same, even though their prices in dollars are going up and will continue to do so, unless the U.S. and other governments world-wide, stop printing un-backed paper money or computer entries to pay their bills, finance the welfare systems, and help those in need, thanks to China. What chance is there of that? About as much chance as the Earth will stop spinning, or the D.C. Swamp becoming honest and cease getting votes by the use of the dollar presses. None, in other words. Never forget, “ALL UNBACKED PAPER CURRENCIES (all of them), EVENTUALLY GO TO ZERO.” All history books, economic books, and world history are the same. All nations failed, because of economic stupidity, and all did the same things: Print money to keep people happy, and at the same time robbing them.
The Federal Reserve, (That’s the outfit that creates money out of thin air, selling it to the U.S. Treasury, and charging them interest), has made it a policy to devaluate your dollars by 2% a year, or 2% inflation. I think it’s more, and government statistics lie in every government in the entire world, believe me. Take a look at the one-year technical charts on our web site (coloradogold.com), and if you had bought gold at about $1500 a year ago, today, you would be $500 richer. Translating that into dollars, in a year, to buy the same things, you would have to pay 30% more dollars for the same stuff, and I’ll bet you didn’t get a 30% raise in the last year, did you? Of did your savings account go up 30% in a year, rather than the less than 1% you got?
It’s easy to look back and say to yourself that you wish you had bought gold at $1500, and maybe think, “I’ll wait till it corrects again, then I’ll buy.” I can’t predict the price of anything or what will happen anywhere, ten minutes from now. All I can guarantee you, is that history doesn’t lie, and all paper monies go to zero eventually. The buck has lost 95% of its value or purchasing power in the last 80 years, and that process will continue, until it will end like all others. Zero. Saving in dollars, yen, rubles, or what have you, will decrease saving’s purchasing power automatically, even though the same dollars are there. They’ll just keep buying less. Governments anywhere, balancing their budgets and stopping the presses, won’t happen. I’m so awfully glad that I have virtually no dollars, and I save in gold and silver, which cannot ever go to zero.
-Don Stott
don@coloradogold.com