[Tikiman]

Originally Posted by Bruze

The value of assets against assets has not really changed, other than from supply and demand and changing technology.

These examples are just rough numbers, but close enough to make the point:

- A thousand years ago you could buy a decent horse with 2 ounces of gold. You still can.

- A hundred years ago you could buy a nice tailored suit with an ounce of gold. You still can.

- Fifty-some years ago you could buy 10 gallons of gasoline with an ounce of silver. You still can.

The dollar is not an asset -- it is a debt instrument; it has no intrinsic value, it's just a promissory note. Our entire monetary system is based on debt.

The more money government spends than it takes in makes each dollar less valuable, so it takes more dollars to buy the same thing. This is inflation. It is not caused by businesses, it is caused by government and those who run it.

Rising prices -- currently -- are a reaction to inflation: "Too much money chasing too few goods." But of course, in true Marxist tradition, politicians will ALWAYS blame rising prices on businesses.

Excellent post and a good illustration of why gold is suddenly over $2,300.