Listen to Peter Schiff spell it out in simple terms that can't be denied. Commodities are shooting through the roof. Look at the price of gas over the last few weeks, look at the dollar's sharp declines recently. Since last summer, the dollar had risen dramatically and now it has fallen sharply over the last month, losing nearly 10% of it's value in that period of time US Dollar vs Euro Chart. Look at the price of Silver (Chart). Since January the price of silver has risen from $11 per ounce to a close of $15.79 on Friday. That is a 43.5% gain in 5 months. That coincides with the price of gas we are seeing at the pump, which will soon be back to $3/gallon. That is going to put a serious crimp into any Economic Recovery Plans.
All of this points to the fact that inflation and volatility are here. Now is where the rubber will meet the road and the Federal Government over the next few months will have to make some tough choices. They have two choices:
1) Pull the plug out from underneath the printing press - monopoly money machine. Get the dollar to comeback to reality and the housing market and auto sectors continue their deterioration. -Or-
2) Keep printing the Monopoly money like they have been doing and watch inflation take off, which will further reduce the value of our wages and further erode the purchasing power and the retail sector. Either way interest rates are going to have to rise. Option 1 is the Common Sense solution and the better solution over the long haul. Look at the increase in the money supply over the last 8 months (shown in this graph).
Now I present Mr. Schiff's Vlog from 5/29/2009:
