Brace yourself for the next bubble with gold bullion.
February 09, 2011 – The Fed is pumping up another bubble but if you have gold bullion investments you can ride it out unscathed.
This time around it’s not housing or credit or anything complicated - it’s the most basic of human needs – food. According to data from the Food and Agriculture Organization of the United Nations we are in an unprecedented period of price escalation, an increase of 87% that not coincidentally began precisely when the Fed announced its stimulus plan. Bernanke, naturally, denies that his monetary policy has played any part in the looming global crisis. Instead, he points the finger at his favorite scapegoat, the emerging Asian economies.
Lets get back to basics – supply and demand. The Fed has inflated the supply of dollars by some 1.5 trillion while global demand for food has risen only marginally. At the same time there has been no dramatic change in the growth of emerging economies. The former chair of Princeton’s economic department should draw some logical conclusion from that, but he believes that food and energy prices have nothing to do with real inflation.
I think it is highly unlikely that someone of Bernanke’s education and intelligence could actually believe the things he says, and that makes his intentions all the more sinister. Wall Street is booming thanks to him, while the average Joe struggles to put meat on the table.
The Wall Street Journal says that “in 2010, total compensation and benefits at publicly traded Wall Street banks and securities firms hit a record of $135 billion,” up 5.7% from 2009, and they attribute the stock market performance to the trillions Bernanke has pumped into the economy.
In terms of the price of gold, however, food and energy have held constant while the dollar has tanked. When such transitory wealth has evaporated, gold bullion investments will prove their worth.
