So the price of gold has gone through the roof the last couple of weeks. Most people mis-read this move. Nothing has changed in the value of gold - it is an inert metal for which no new use has been discovered. The way to read this move is that the value of the Dollar has gone down. As have every other fiat currency.
To demonstrate this look at the following chart. This shows the price of oil denominated in Dollars (blue line), Euros (red line) and Gold (purple line), from 2001 to 2008. In other words, this is the amount of the currency you would have to trade to get a barrel of oil.
This chart clearly shows that if you are using a fiat currency to buy oil then the price went up 300% to 500%. And yet if you were buying your oil with gold as the currency then the price hardly changed at all. This shows clearly that the value of the commodity has not changed, it is the value of the currencies which have declined. Since the currencies are worth less, it takes more of them to buy the same amount of oil.
This is the secret that the Fed and the Government do not want you to know. They want you to think that the things that you buy are getting more expensive (oil, gold, bread, milk, etc.) and not that the currency that you are paid in is actually worth less. In other words, if you were paid in gold, rather than dollars for your work you would not see an increase at the gas pump.
Think about it.
