money supply

The quantity theory of money and its accompanying equation of exchange are generally accepted as defining the relationship between money and prices.

According to a recent comment by a well-respected analyst, one of the problems with using gold as money is that the supply of gold could experience large swings due to changes in mine production.

“Whenever destroyers appear among men, they start by destroying money, for money is men’s protection and the base of a moral existence.  Destroyers seize gold and leave to its owners a counterfeit pile of paper.  This kills all objective standards and delivers men into the arbitrary power of an arbitrary setter of values.”   – Atlas … Continue reading

Courtesy of Bruce Pile and Dollar Daze, is this chart, which shows the backing of the monetary base in terms of the Gold held by the US. Note that 100% would mean that the money supply is 100% backed by the price of gold (at that time). The two bull markets in Gold peaked at … Continue reading

The Greeks are learning the tough consequences of worshiping a false god. For years they sought the blessing of Keynesianism, only now to find it comes with a price…..

GOLD THOUGHTS by Ned W. Schmidt, CFA, CEBS Schmidt Management Company The calendar date is now sufficiently far enough in the future from the injection of massive amounts of liquidity by the world’s central banks in 2008 that if inflation was to be a consequence of that action, it would be readily evident. However, as … Continue reading

But for the purposes of this discussion, we are talking about inflation in the real economy, not the paper economy. The link can be very tenuous at times, but the real economy…..

In relative terms, Gold is still quite undervalued compared to the 1980 peak.