Someone has some splaining to do!

The above chart shows the relative amount of time a worker, earning the average wage, spent to purchase each of the objects listed, comparing 1969 to 2009. If the amount of time was the same, the score would be 1. If it took less time in 2009, the score is less than one. And if it took more time in 2009, the score is greater than one.

As you can see, everything is nearly the same except for gold, which takes 4 times as long as it did in 1969. This suggests that either gold has become rarer, is speculated to a value greater than its true worth, or that all the other prices are way too low. If there is a link between gold and the other commodities, then we should expect gold to fall or the other prices to rise. DocBrain worries that if gold reflects where the market should be, then prices will skyrocket, leading to hyperinflation.

However, it is possible that everything is where it is because of a new reality. It is possible that gold is relatively rarer, as there are more people and less gold to extract from the earth, while other resources can grow with innovation. For example, raise more cows and you have more hamburger. In that case, the traditional link between gold and money would only have meaning for gold, as all the other commodities would just stay where they are.

We then only have to worry about the relative value of currencies, which wll reflect the money supply. As the US has an increasing trade deficit, our money supply will need to increase, leading to a more gradual inflation. Unemployment and social welfare programs will also lead to more handouts and more need for money, so again more inflation.

The actual purchasing power of the dollar vs other currencies where there is less social welfare and more employment will fall over the years until we get our priorities straight. You can take that to the bank.