By Peter Costa

Gold bears are sitting in their glory as gold takes the much anticipated correction. It amuses me how gold has been such a proven asset for over 5000 years and the second it has a correction people start to abandon ship. I am a gold bug and proud to admit it. I cease to believe the illusionary dollar recovery and have no doubt in my mind that inflation is about to rear its ugly head. The problem with most gold investors is that they see gold as an investment rather than an asset. They look at gold and try to turn profit on its volatility not even considering that it is an asset more than anything. Gold is a precious asset and only those who appreciate and understand this are going to benefit from the preternatural climb it is about to have.

I am from the school of truth rather than fiction. The world goes in cycles and history repeats itself. Fiat monetary systems have never worked in the history of the world. What most established countries are on right now is a completely fiat system where the majority of their currency is backed by absolutely nothing and the limits to creating money are nonexistent. All across the globe you can smell the fresh crisp bills coming off the printing press of each and every country as a result of current economic events most especially in the United States. Hereon is where the problem lies for any kind of economic recovery. We can put as many band aids and scotch tape on the holes of this monetary system but sooner or later it will all fall apart. There is a reason that the first monetary system in the United States was backed by gold and silver and had limits to the production of money. The founding fathers of the United States foresaw the faultiness of a fiat monetary system and in the constitution banned this type of practice.

We can have all the fake economic recovery we want but as long as we remain on a paper currency backed by absolutely nothing we are doomed to continue down the path of no return. With no limitations to the production of our money supply over the last year we have devalued the dollar so aggressively that we are forcing our creditors to make an impossible choice, stay with the dollar and see 50% of the intrinsic value wiped out… or abandon the dollar and risk global economic catastrophe. We can force the citizens of the United States to continue using the debased dollar but we cannot force our global neighbors. We are already seeing a loss of confidence in the greenback from India, Russia, China, Sri Lanka and many other countries who have been fleeing to gold in an attempt to ditch their US dollar reserves. As stated by Ji Xiaonan Chairman of the Supervisory Committee “China should increase the amount of gold it holds in reserves to reduce potential losses from a depreciating dollar. We recommend China increase its gold reserves to 6,000 metric tons within three-to-five years and possibly to 10,000 tons in eight to 10 years.” The US dollar has lost 15% of its value last year alone due to the incessant printing of money and has no end in sight. Ben Bernanke said it best in his 2002 speech, “The US Government has a technology, called a printing press, that allows it to produce as many US dollars as it wishes at essentially no cost.” Comments like this paint the reality of things and the truth behind our economic recovery. We may be building consumer confidence in the United States but the global economy is not on the same page. While the magical technology called a printing press is spewing out the greenback we can guarantee gold to continue breaking new record highs. “With China looking to increase its gold reserves to 6000 metric tons in the next 3 years it is safe to say that this purchase alone will guarantee the price of gold to hit $2000.00 an ounce” Ronald Fricke president of Regal Assets stated last week in an interview.

For those who are from the school of truth, now is the perfect time to purchase gold. Prices have had a small correction allowing the true fans of gold to purchase before the holiday season. Gold bugs enjoy this little gift and pick up as much as you can because the yellow metal is about to take off breaking through levels unheard of.