Inflation Fueling Gold's Rise

Dow Theory Letters
"It is estimated that M-3 is growing today at a rate of around 15-16%. Meanwhile, GDP in the US is growing, at best, at a rate of maybe 2%. Subtract the 2% from the M-3 growth of say 15%, and the true rate of inflation in the US is running at 13%. Of course, this is the reason why Alan Greenspan ordered the M-3 statistics to be discontinued. The Fed’s excuse was that it was too difficult and expensive to come up with the M-3 statistics. The Fed today makes up its own inflation figures. If the true rate of inflation was announced, there’d be a march on Washington, or more specifically on the Federal Reserve.

So true inflation is running wild. It amounts to a hidden tax on every US citizen. Today it requires an increasing amount of fiat money to produce less and less in the way of GDP. What’s happening today, I believe, is that in the face of a declining economy, the forces of monetary inflation are so powerful that they have been countering the slump in the economy." (2/25/08)

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