Gold is up nearly $100 an ounce since the beginning of the month. The dollar is falling, because the government is printing dollars like they are going out of style, and if China is to be believed, they are. Gold was just about at $1275 an ounce in January, and it is now running over $1572.
People keep blaming the oil companies for the high price of gasoline, but everything is getting more expensive because the dollar is tanking. Granted, the Euro is falling at a higher rate than the dollar, but that only means that we suck a little less than they do.
Oil is up, food prices are up, gold is up. Are prices getting higher? No. As Einstein proved, it is all relative. As the dollar weakens, it is worth less. When you are standing there with a pocket full of dollars, it appears as though prices are climbing. When you are standing there with a warehouse full of oil, gold, or food, the value of everything appears steady. That is, 12 barrels of oil is worth about the same as 1 ounce of gold.
Don’t blame business for rising prices, blame the government for falling currency. Every time they create money, the money that is already in circulation is worth that much less (supply and demand, anyone?). So every time money is printed, the powers that be have just stolen value from you by making that money worth less.
If you have a lot of assets valued in dollars, like savings and other bank accounts, this is bad for you. If you have a lot of dollar denominated debt, this is good for you, as your debts can be paid more easily by selling physical items for more dollars than you paid for them, and paying off debt. The largest debtor in the world is the US Government. They stand to gain the most from a devalued dollar. I can remember reading about the inevitable devaluing of the dollar as far back as 1990, when daddy Bush was President. People told me I was one of those conspiracy survivalist nutjobs.
It doesn’t look nearly as nutty from 2011. Things are going to get worse. Much worse. Bread lines worse. and when people begin going hungry, they become restless. Restless people are hard to keep in line. Then comes the inevitable government crackdown, as the powers that be fight to regain control as people scream for someone to step in and make things right. This is how dictatorships are made: by popular demand.