Inflation, Gold and Budget Deficits

It seems, of late, everyone is talking about inflation.Some say it's coming, others say it's here and yet others say it's about to go hyper.To all of this I simply say YES!It's here, more is coming and its about to come at us in hyperspeed.And for those who believe inflation and gold go hand in hand, here's what I think is proof that gold prices could go ballistic.See if you agree.

First, let's ask, what would have to happen in order to stop inflation in its tracks.It kind of comes down to just two things.Stop spending money so we can stop printing money.But to do this we may have to cut off our nose to spite our face.Sorry!Old saying but it fits.

To stop spending means no more stimulus, less entitlements, repeal health care, fire census workers, reduce social security benefits, Medicare, Medicaid, disarm our military, quit bailing out accused frauds, stop subsidizing illegal aliens, stop flying around the world in Air Force One on multi-million dollar shopping trips and dates paid for with taxpayer dollars and blah! blah! blah!

Let's face it.It's all about spending.If we can't reduce it we need to keep printing money. [Note: Don't even think that there's enough rich people money to tax us out of this mess - that's another topic for another day]

So what does our President propose?He wants to cut $100 million out of our $1.6 trillion (give or take) annual deficit.Now, once you know how little of the deficit that is, you cannot even imagine how hopeless is the prospect of spending less to stop inflation.Keep in mind that another deficit equal to this year is already planned for next and for years to follow until our national debt exceeds $20 trillion within this decade.

Once you get this it's easy to see how brokerages are saying buy gold, why central banks are buying gold and why worldwide gold demand is skyrocketing.Hyperinflation is coming and its a friend to higher gold prices.

Let me put $100 million in perspective with our deficit and then let me help you visualize it with a brilliant illustration by some college kid.Reducing our budget deficit by $100 million dollars a year is like getting a one penny raise.Try and retire on that windfall.Watch this and you'll see what I mean.

I think if everyone saw this, gold prices would immediately jump off the gold charts.Inflation is all but a foregone conclusion and gold is your inflation hedge.