Gold and Silver

Although, the official inflation rate in the US is nowhere near Zimbabwe’s levels, the easy monetary policies of Mr. Greenspan and lately, Mr. Bernanke are really starting to take a toll on the US currency. Since 2002, the US Dollar has lost its purchasing power against European currencies and even more so against the commodity-producing nations (e.g. Australia). Not suprisingly, the world’s reserve currency has lost the most against real money – gold and silver.
Now the people who did buy gold at a low would rub their hands with glee with the fact that both gold and silver have risen by roughly 400% since the start of the precious metals bull-market (2001-2002). However, the real value of gold and silver have not changed at all (an ounce will still buy the same amount of real stuff like oil) but the reality is that the US Dollar itself has lost a considerable amount of purchasing power over the same period, relative to real money. Now, given what we have witnessed in Washington in the past few months (the creation of more money out of thin air), I have a lot of doubt in my mind that the US establishment cares about the health of its currency.