As Inflation Soars, Take the Gold Pill

Congrats, fellow gold bugs–our precious metal has finally broken its trading range! This despite all the fear mongering of an ECB rate increase that would end an easy monetary policy. Previously, gold had been capped between 1440-1450, but with today’s move, we have officially broken out. The break higher in gold signals that inflation shows no sign of stopping, thanks to Banana Ben and his criminal accomplices on the FOMC. This, of course, means disaster for the American public as the cost of living surges yet higher while their wages stagnate. It is all part of the Fed’s PLAN to inflate the money supply and force asset prices higher. In many respects, it is nothing more than class warfare being waged against the middle and lower classes. The rich, for example, watch as their assets rise in value, while their cost of living edges up slightly.

To more clearly elucidate the point, let’s take two people: Warren Buffet representing the American oligarchs and John Doe as the American public. Warren Buffet, according to Forbes. has a fortune of around $50 billion. John Doe has almost nothing in savings or investment. Doe lives paycheck to paycheck and makes 50K a year. Let’s further assume inflation of 7% a year (this more likely the real inflation rate). Who benefits from this situation? Warren Buffet does incredibly well. His fortune (almost all in stocks and other financial assets) goes up about 7% to keep pace with inflation. His fortune increases by $3.5 billion. While no one knows exactly what Buffett spends annually on his lifestyle, let’s just say that he spends $5 million a year to live comfortably. Because of inflation, this number increases to 5.3 million. So due to inflation, Warren Buffet makes $3.499 billion from the Fed’s plan to inflate the currency.

Now let’s take a look at how John Doe, the average American, does compared to the financial robber barons. John Doe has few to no investments, so he does not profit from a rising stock market. Unfortunately for John Doe, his cost of living surges while his wages stay the same or decline adjusted for inflation. His 50K salary no longer buys the same amount of food, gas, etc. Thanks to inflation, John now needs $53,500 of income to maintain his current lifestyle. John has two choices: he can either lower his standard of living by eating synthetic meat like Krab and Spam, or John can borrow money on his credit card at 24% interest. Either way, John Doe loses as the Federal Reserve transfers his wealth directly to the financial robber baron class. The really sad part is that John Doe does not quite understand the mechanics surrounding inflation. He is told by the Ministry of Truth (mass media) that there is no inflation, and that, after all, a little inflation is good for the economy anyway. We must have perpetual inflation, or we will have a depression. So what is left for John Doe and the millions of Americans just like him? A lifestyle resembling that of a third world country, where the middle class is trapped in debt and poverty that they can never repay.

Warren Buffet said it best when he remarked “There’s class warfare, all right, but it’s my class, the rich class, that’s making war, and we’re winning.” Good old Warren. He at least has the honesty of telling you that he is robbing you blind. And if you don’t like it, Warren refers you to his partner, Charlie Munger’s statement regarding the unjustness of bank bailouts by saying “Suck it up and cope!”

About the only thing average Americans can do at this point is to protect themselves from inflation through gold and other hard assets. This is very hard for people living on fixed incomes or from paycheck to paycheck. And don’t expect Congress to help you. Both parties are owned and paid for by the same globalist banks destroying this country. That is why no bank CEO is in prison for the 2008-2009 financial crisis. The oligarchs are above the law while average citizens get the book thrown at them for the slightest offence. But don’t worry Barry Obama  or the generic Republican candidate will save you. After all, they will again promise you more change, and the American public will sheepishly vote for them again.   Alexis de Tocqueville once said “In a Democracy, the people get the government they deserve.”

Forget taking the blue pill or the red pill a la The Matrix. The American public needs to take the gold pill to restore the Republic and save themselves.

About Nathaniel Crawford 21 Articles

Nathaniel Crawford is a research analyst at an asset management firm in Los Angeles; He has a degree in History from Occidental College and enjoy trading stocks, options, and bonds.

Visit: Black Swan Insights

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