<a href="http://quote.bloomberg.com/apps/news?pid=10000039&refer=columnist_baum&sid=abJD2CVu7kHk">On Nov. 10, 2005, the Federal Reserve Announced that it would stop posting M3 money supply data.</a>
On Nov. 10, 2005, the price of an ounce gold, quoted in U.S. dollars, was <a href="http://www.kitco.com/gold.londonfix05.html">$467.00.</a>
Today, gold traded as high as <a href="http://www.kitco.com">$588.00</a>
Gold, silver, and other commodities (for example....petroleum) are in competition as stores of intrinsic
value, with fiat, paper currencies. Since all paper currencies are supported only by the ability of various
governments to convince those holding their "paper", that it is "worth" "such and such" amount, it is easy for more and more folks to make a risk comparison between this "paper" and hard assets, and gradually, hard assets are winning. The rising inflation trend in the U.S. and in the rest of the world, is demand influenced, but not in the sense of too many dollars chasing too few manufactured goods. Rather, there is an increasing loss of faith in the stability of paper currency. The Fed is increasing interest rates to slow the flight from the dollar into non-paper stores of value, such as gold, and to attract the continuing need for $3 billion in new, daily investment flow into the U.S.
The "smart" money recognized why the Fed will no loneger disclose M3 data, and they are buying more gold.....