(Article changed on February 2, 2013 at 00:04)
(Article changed on February 2, 2013 at 00:00)
Is the recovery really here or is this more of the same smoke and mirrors?
I don't have such an optimistic opinion of the recent bounce-back in
the economy. What I'm seeing is another bout of inflation that I'm
thinking will suck the life out of any recent gains the economy has
made.
About a year and a half back I've been thinking I saw
inflation rise to a level that brought all honest occupations to a halt
or just barely getting by. Not only was the value of the dollar at an
all-time
low, commodities had reached all-time highs in comparison. The
counterfeiting
had broken the back of the economy. Silver was at $40.00 an ounce.
I think that was the breaking point.
Since then I suspect that so many of us had trouble that many
had to default on loans such as housing. I'm thinking that in turn withdrew a
lot of currency out of the system and the value of the dollar started making a
comeback. As commodity prices fell it made it possible for more and more people to
hire others back to work. As silver fell more and more people were getting back
on the road and back to work. The morning commute increased from its low.
Now inflation is once again rising. I think the rise will
choke the little gains we made.
Many are getting excited about the price of stocks coming
back up. I think we've been fooled for decades that this is a good thing or a
good indicator. The news tells us one thing all the while our eyes are telling
us another.
~This first chart is Robert Sahr's chart showing the value
of the dollar based on the Consumer Price Index. The little bumps at earlier
times of war is when we introduced fiat money into the system to finance them.
Dollar Value based on CPI by Robert Sahr
(For better view click here.^)
~This next chart is the Dow Jones Industrial average. For the sake of argument let's say it is based on the average of 100 stocks. If you divide the numbers over on the side by 100 that should give you the average of 1 stock.
Notice how now the $5.00 baseline in Robert Sahr's chart
lines up with the $5.00 on the DOW chart? Notice how the peak on the Sahr chart
of $130.00 matches the $130.00 on the DOW chart roughly so?
1 or 100, the proportions are still the same.
That means whenever they fire up the fake-money presses and double the money supply it then takes twice as many to equal what a dollar once did.
It also means that buying stocks is a good way for your savings to keep up with inflation until you figure out that some of the very people that are fueling the inflation are cutting themselves in on your stuff with capital-gains taxes. They are capital-gains taxes on the illusion of a gain!
Dow Industrial Average by Carson Dugal
(For better view click here.^)
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