Choo there is zero empirical evidence that gold is driven by inflation. There is a major coincidental claim about gold and inflation are correlated bu the claim break down with any long term analysis. Inflation form 1981 to 2000 was rampant yet gold did nothing. If gold did rise with inflation it would be 4-5000 already, it should have been where it is now by 2000 not 2011. I bought a house in Sydney in 1981 for 45k it sold last year for 1.2M ? If gold protects people savings form inflation it does it very poorly. Thats not opinion thats simply fact.
The US has been understating inflation for decades, in the current system if your house price triples its called investment growth, if your bread and milk goes up its called inflation. Housing the greatest component of your expenses on the household balance sheet is not even measured. Similarly the Shadow stats site measures inflation as it was measured between the 1970s to the early 1980s.
The assumption is those inflation figures we correct. while they make interesting reading the Shadow stats figures simply represent as different era of Fed propaganda. Again they ignore house prices and mortgage payments. This is why in a era of rampant asset inflation our CPI has stayed relatively benign and our the portion of our income thats allocated to housing has risen from 14% to 45% in many areas
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