We have kept an eye on inflation and its effect on precious metals. Inflation is like the Dark-Side of the Economy, it is evil and should be avoided, unless… You guessed it, you own physical gold or silver in quantity to insure against losing your total net worth.
China, the US, the UK, among other countries throughout the globe use a weighted price index to determine inflation. In layman’s terms , they take usually food & energy (think gasoline) then only count a fraction of the increase compared to housing or durable goods increases (think computers or tires). It causes those depending on cost of living increases or on fixed incomes lose ground with fiat currencies.
These adjusted (erroneous) numbers on inflation hit the streets this week from all over the globe. While many reports are artificially low, the increases still sent the prices on precious metals soaring, i.e. gold is up 2% to $1383.06. For the truth on inflation CNBC hit the mark with the article: Except for Everything Going Up, Inflation is No Worry