The path is fairly clear in terms of what we can expect as citizens and as investors. The economic environment grows more disturbing each month here in America and in many places around the globe. The response has been and continues to be to fight natural market forces via a larger and more powerful government as well as by the printing of fiat currencies both domestically and internationally. As we continue to say, inflation is a must and is inevitable.
Stocks have been rising in September due to the increased certainty of more quantitative easing programs by the Federal Reserve. This is an intended byproduct of their inflationary policies – nominal asset increases are intentional results of these policies. Alan Greenspan has made it clear that higher stock prices make people feel wealthier and can help them spend and boost the economy. The problem is that people are still bailing out of the stock market at a record pace.
The other problem is that when priced in gold, stocks are not really moving higher, because gold is moving higher at a faster rate than stocks. This is what we can expect more of. Higher stock prices nominally, but lower stock prices when priced in the non-manipulated form of pricing, gold. Assets will continue to lose value when priced in gold – this means stocks, houses, cars, etc.
The Fed can create the illusion of prosperity, but cannot ever create real prosperity. Printing money never leads to prosperity.
Make sure you’re prepared to keep your purchasing power and wealth in safe assets such as precious metals.
Economy, Federal Reserve, Gold, Markets