Gold has gone crazy today. Since Midnight gold has gone from $1015/ounce to nearly $1045/ounce. A 3% gain in a matter of hours! This is on the heels of a weakening, plummeting dollar over the last two days. Gold is not the only precious metal mover. Almost all other commodities and metals are up. Although this time period – October thru December – historically sees a large (temporary) rise in Gold prices, as there is much more demand for gold during the holiday season as wives, husbands, friends and family give each other jewelry. However, this run  up in prices is not simply spurred via demand.

We don’t believe the holidays are even playing a role right now (and demand in general is at an all time high WITHOUT the seasonal effects), this run up is due to the public’s general fear over the economy, and the dollar, which as it weakens is causing inflation. We believe the biggest run up on gold prices has to do with inflation (as does the increased prices of stocks).

If you’re looking for more news and information we highly recommend checking out the following articles:

http://blog.puppetgov.com/2009/10/06/gold-price-rises-to-all-time-high/

Analysts said concern about the possibility of higher inflation in the US as its economy recovers was another factor in lowing the price of the dollar, further boosting the appeal of gold.

http://www.financialsense.com/Market/kirby/2009/1005.html

Over the past couple weeks some interesting historical documents relating to the gold market have surfaced. First up is Zero Hedge’s, Exclusive Smoking Gun: The Fed On Gold Manipulationwhich features an official document uncovered by researcher/historian Geoffrey Batt – a June 3, 1975 memorandum from Fed Chairman Arthur Burns to [then] President Gerald Ford.

We’ll be doing a more in depth piece on gold  price manipulation shortly. Have a great day!

The Federal Reserve is on the short list to buy your local foreclosure! In a statement released last week, the Fed stated that they would increase their purchasing of agency mortgage-backed securities from the initially projected $300 billion to $1.25 trillion.

This is great news for the buyers who plan on seeking foreclosure once their option ARMs readjust soon.

Its not great news for taxpayers.

Among the auto industry, banking, and a multitude of stimulus programs, the federal government’s commitment causes the editor of CBS Money Watch to ask, “How does the government turn off the economy’s life support systems without killing the patient? And yet how does it prevent the inflation that will surely result from keeping the spending going too long?”

While we may not know the answers to those questions, one way the average tax payer can sharpen their defenses against the coming inflation is to invest in gold. The nature of gold as a hedge against uncertainty can offer a safe place for money to grow or retain its value when the economic future looks bleak.

Found a great article over at GoldPrice titled: “Trash the U.S. Economy or Trash the US Dollar.” The article quickly and clearly highlights our (the United States) current economic debacle. We are in the midst of crisis, but our policy makers and the Fed (Federal Reserve) are trying to solve this problem by pumping more money into the system (generating more money in order to stave off an even greater downward spiral). Unfortunately, this addition of new capital into the system is only delaying the inevitable and is ultimately just killing the dollar (the more we print, the less its value).

If the US Treasury and the Fed create too many US dollars (that do not represent any new wealth what so ever, just increased US Treasury and Fed debt) to try to fend off (delay) the decent into the Greater Depression, they will trash the US dollar. If they do not do that (stop increasing the debt build up in the system) they will crash the economy. Actually, it is crashing already. They would just allow it to crash faster and not as badly as it would if they try to artificially prop it up (increase the debt in the system). The economy would also recover a lot faster than if they did not interfere. Plus, the US dollar would not be devalued as much.

The article is enlightening and features truly staggering and mind-blowing facts about how much credit/debt has been pumped into the system in less than a year:

The US Treasury/Fed combo [has] spent… over $13 trillion in less than a year. [This has doubled] the US dollar supply in less than a year. Most people need serious protection from this, in the form of gold and silver, but still do not realize it.

A great article, that quickly gets to the core of the dangers of a Fiat Based money system and a good advocate for saving yourself from the declining dollar within a wealth preservation tool like gold and other precious metals.