Last Updated: Nov 19th, 2009 - 11:07:39 Newsletters : 2006 Newsletters : 15 September 2006 Thought for the Day There is no subtler, no surer means of overturning the existing basis of society than to debauch the currency. The process engages all the hidden forces of economic law on the side of destruction, and does it in a manner which not one man in a million can diagnose. John Maynard Keynes Sep 15, 2006, 16:32 Newsletters : 2006 Newsletters : 15 September 2006 Gold, In a Nutshell It is generally accepted that, as Milton Friedman put it, "inflation is always and everywhere a monetary phenomenon". That is the government prints more money (or issues credit) which it spends. You would be amazed how much. All the time we get diluted comments and carefully filtered information saying inflation is 3.2% or 1.9%. This is the rise in price of a carefully selected group of goodies and is called the CPI. However if you have a look at how much more money the government prints each month you will see figures more like 8% or 10%. So I found all the figures for every month from Jan 1981 and I know how much more money was pushed into our economy compared with the same month the previous year. From Jan 1982 to December 2005 gives me 288 months and for 128 of them our money supply (M1) had been inflated by more than 10%. That is, 44% of the time the government is inflating the money by more than 10%. And often a lot more! 30 times they printed more than 20% more. Once over 36%! Some of this money balances the growth in our GDP which is fair enough but with GDP growing only 1.2% over this period you can see where our inflation comes from and how serious it is. The official figure for inflation is the CPI which is usually 2% or 3% or 4% but at one period up to 20% (and this includes rent rather than house price inflation) so real inflation is much much more. Now we know why the average citizen, who has the opportunity, spends so much time buying property as a hedge against our government's destruction of the dollar. Self protection. The attached article is an interesting look at this phenomenon and some thoughts on asset protection. Governments like to print money as it is the easiest form of taxation yet invented. Nobody notices and every year the value of the dollar reduces by 10 or more percent. Theft on a grand scale. All Western governments are doing it. This is why we are having house price inflation in the Western world at the moment. Have a read of this article by The Mogambo Guru aka Richard Daughty. Editor’s Note: Richard Daughty is general partner and COO for Smith Consultant Group, serving the financial and medical communities, and the editor of The Mogambo Guru economic newsletter - an avocational exercise to heap disrespect on those who desperately deserve it. Sep 12, 2006, 13:12 Newsletters : 2006 Newsletters : 15 September 2006 Professor Stiglitz and the Minimum Wage Two things are infinite: the universe and human stupidity; and I'm not sure about the the universe. Albert Einstein. Sep 5, 2006, 11:04