Gold’s Climb in Value vs. the U.S. Dollar (2000-Present):
St. Louis FED Adjusted Monetary Base:
The above chart shows the massive increase in U.S. dollar supply. Notice the relatively steady supply starting in 1913, which then started to increase noticeably in the 1980s. However, the monetary supply has skyrocketed since September 2008, which is reflected in the above chart as the nearly straight vertical line peaking to the right.
The more money in circulation, the less each unit is worth. Thus, monetary SUPPLY inflation (the increase in the amount of circulating currency) causes the devaluation of the monetary unit in the marketplace once the markets readjust for the increase in monetary supply. This process then causes price inflation (i.e. rising prices in the stores), which will soon lead to HYPER-inflation within the USA such as was experienced in Weimar Germany back in 1923. -Rich