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John Williams - Gold, Silver, Economy & Inflation

The mainstream media has been bombarding people with conflicting reports about what is supposedly taking place in the economy and inflation, so KWN wanted to let its readers know what is really happening. For that we turned to John Williams, of Shadowstats, who summed up the economic and inflation situation beautifully in his latest commentary. He also related inflation data to future possibilities with regards to gold and silver pricing: “Although the Bureau of Economic Analysis (BEA) reports that general business activity in the United States has recovered its pre-recession levels, no major independent economic series confirms that circumstance. Only the BEA’s overstated and heavily-politicized gross domestic product (GDP) measure makes that claim.”

John Williams continues:

“December readings on real (inflation-adjusted) retail sales, production and housing all showed patterns of slowing growth or contractions, either month-to-month or year-to-year, with levels below pre-recession highs. Further, as regularly discussed, underlying consumer liquidity conditions remain so constrained as to prevent any usual or sustainable growth in the broad economy in the near-term...

Alternate Consumer Inflation Measures:

Adjusted to pre-Clinton (1990) methodology, annual CPI inflation was roughly 6.3% in December 2011, versus 6.7% in November 2011, but up from 4.8% in December 2010. The SGS-Alternate Consumer Inflation Measure, which reverses gimmicked changes to official CPI reporting methodologies back to 1980, eased to about 10.6% (10.57% for those using the extra digit) in December 2011, from about 11.0% in November 2011, and up from 8.9% in December 2010. Annual average inflation here was 10.7% in 2011 versus 8.9% in 2010.

...Despite the September 5, 2011 historic-high gold price of $1,895.00 per troy ounce, and despite the multi-decade-high silver price of $48.70 per troy ounce, gold and silver prices have yet to re-hit their 1980 historic levels, adjusted for inflation. The earlier all-time high of $850.00, would be $2,466 per troy ounce, based on December 2011 CPI-U-adjusted dollars, $8,783 per troy ounce based on SGS-Alternate-CPI-adjusted dollars.

In like manner, the all-time high price for silver in January 1980 of $49.45 per troy ounce still has not been hit since 1980, including in terms of inflation-adjusted dollars. Based on December 2011 CPI-U inflation, the 1980 silver price peak would be $144 per troy ounce and would be $511 per troy ounce in terms of SGS-Alternate-CPI-adjusted dollars.

...The general outlooks on the economy, inflation, financial markets and systemic stability remain unaltered. Risks remain strong for a near-term break or sell-off in the U.S. dollar.”

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Eric King

KingWorldNews.com

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