Zeev's Turnips Patch-No Politics (ZEEV)

[lee kramer]

Back to our story: Over the decade of the '70's, so much money [counterfeit money...yes, our government was engaged in massive counterfeiting] was introduced into the economy that prices began to rise, the purchasing power of the dollar continued to fall and the dollar was allowed to "float" [prior to this float scheme, the dollar was kept within a rather tight "band." Dollars sloshed from country to country...to nations that swapped dollars for gold. Gold went to $200/ ounce...400, 500...and in Dec. '79 to $875/ounce. Silver topped out at $50. The Hunt Brothers were blamed for cornering the silver market. This was nonsense, but someone, the government insisted, had to shoulder the blame.

The declining purchasing power of the dollar led to a bit of a rise in interest rates; 21%, if you believe the government numbers. I think it was a bit higher.

Conclusion: Yes, our government is introducing more funny money into the economy, to try to get the economy moving again. It isn't working. It's like "pushing on a string." It may result in higher prices later, [we're having the inflation now...rising prices are the RESULT of prior inflating, not the cause.]

So gold will likely rise, [it already has]...but a parabolic move up? I doubt it. I see gold in an uptrend, but also a trading range. 'Course, I could be wrong about this. But I suspect the probability is pretty good that I may be correct. We shall see.