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Message:: [QUOTE="WingedLiberty, post: 1240018, member: 26030"]Recently Ben Bernanke testified in front of Congress that "Gold was not Money".  I know that there are a number of members of CoinTalk that agree with old Ben, that Gold is just a pretty metal that is overvalued and will soon crash -- and that Silver is massively overvalued and should fall back to $4 to $8 an ounce very soon. I am curious how all of you Gold and Silver "bears" out there reconcile your position with the massive money printing that has been going on since 2008? Below is the Adjusted Monetary Base as tracked by the Federal Reserve Bank of St. Louis [ATTACH]132701.vB[/ATTACH]You can clearly see that since late 2008, the money supply in the U.S. has skyrocketed.   In other words, the Federal Reserve has printed up nearly $2.5 TRILLION in new money out of nothing.   Throughout its history, the U.S. government has never abused its money printing power like it is doing now.  When I see the price of Gold and Silver rocket higher, to me it's just a reflection of MORE and MORE dollars chasing a fixed amount of gold and silver.  You cannot print up more gold and silver.  This is why I always talk about Gold and Silver as "hard money" that keeps it's value and doesn't get chewed up by inflation. [ATTACH]132702.vB[/ATTACH] I mean don't get me wrong here.  Can Gold and Silver drop?  Yes they can, on a temporary basis. However, my opinion is the Fed has been desperately trying every trick in the book to keep Gold and Silver from running.  Why?  Because rocketing gold and silver prices call attention to their uncontrolled money printing and inflationary pressure.  And the Fed wants to keep this under wraps.  The latest trick by the Fed was with all the margin requirement raises that has forced liquidations in the gold and silver markets, especially silver.  However isnt it interesting that even with all that ...  Silver is STILL floating between $35 and $40 an ounce?  Even at $36 an ounce, that's a 400% (or 4x) increase in the price of silver since 2008 when it was trading at $9.  And a nearly 300% increase in the price of gold. This idea of "hard money" really hit home with me when I realized that back in 1964, it took 2 silver dimes (about 20 cents) to buy a gallon of gasoline.  [ATTACH]132712.vB[/ATTACH][ATTACH]132712.vB[/ATTACH] Today, a  silver dime is worth $2.77 and a gallon of gas is in the $3.80 range. So, using current market prices, it takes about 1.5 silver dimes to buy that same gallon of gasoline. Therefore, by 1964 hard-money standards, gasoline is cheaper today than it was in 1964.  You just need to buy it with REAL (silver) dimes, like we used to have in this country. However if you wanted to buy a gallon of gas today with our fiat currency (2011 dimes) that have no backing of anything hard (the govt can just print or mint as much as they want) --  It takes 38 dimes!  So  ....   1.5 Dimes (dated 1964) = 38 Dimes (dated 2011) How telling is that? So those of you that say, there is no inflation, there is no dollar devaluation. It's time to open your eyes.   For those waiting for a crash in gold and silver, don't hold your breath, that won't happen until countries and governments around the world adopt hard money policies, where you can't just turn on the printing presses and print money to solve financial problems. Can gold and silver have a big drop in price in the future? Yes, there are all kinds of ways to manipulate markets.  The U.S. could be forced to start selling it's gold in Fort Knox (who knows), and that could force prices down (temporarily).  I mean, face it, the U.S. is basically bankrupt with 14.2 trillion dollars in debt and another 50 to 60 trillion dollars in unfunded liabilities so selling its assets might be the next course of action. Fun times ahead.[/QUOTE]

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