Monetary Base Reveals The Future of Gold

Gold is a financial thermometer.  It measures monetary responsibility.  Money/currency is simply a measure of the wealth of a country.  When too much money is printed, it becomes an inaccurate measure of wealth, therefore the prices of the wealth that the paper money is supposed to represent have to be adjusted.  That is the purpose of gold.  When a country prints money in excess of the true wealth that the country produces, then gold adjusts upwards in price to account for the discrepancy.

Below is a chart of the US money supply.  Notice that it has almost tripled in the last three years. 

Click chart to enlarge

Unless our economy miraculously begins to produce triple its current output, then you can look for gold and other natural resources to increase in price to account for the difference. 

How much of an increase?

Gold should level out around $2,800/ounce assuming da boyz in DC curtain their overspending, but, seeing how that is highly unlikely, I feel $2,800 gold is already baked into the cake.  Any further monetary shenanigans ensure that gold will eventually settle much higher than this level.

Enjoy the ride!