whats changed??, page-4

The thing about money printing (QE) is that, sure it makes GOLD go higher, and maybe some GOLD stocks as well, but the crux of the situation is that there are more dollars, (perceived, promised or otherwise), chasing everything. That is why when we hear whispers of another round of QE (money printing) things go up in price. It doesn't mean that all of a sudden your 1 ounce GOLD coin is worth 100 bucks more than yesterday, it means the market is trying to balance all of this new money into the pool and trying to put a price tag on it.

The simplest way to understand inflation and the affects of increasing money supply is this...

You are on an island.
You have 6 dollars.
The only thing on the island is 6 oranges.
How much for an orange?
$1.00

Same island, only 6 oranges but now you have 12 dollars.(thank bailouts, printed money, etc)
How much for an orange now? Well now each orange is worth $2.00

Cheers