!PRII Monthly

In Pring's Inflation Index Monthly chart, you can see that the line of scrimmage has been moved back to where we were last summer. The chart also demonstrates that this index relies strongly on the US Dollar index. In the background, you also have gold, which more than likely relies on interest rates declines.

Are we going to tumble headlong into deflation, since commodities prices are at 'new lows?' Commodities are at price levels a multiple of times higher in the short period since the 1990's across the board. And we've had our opportunity to face deflation once with the NASDAQ bubble, once with the housing/oil price manias - Lehman Brothers bankruptcy,

You have to explain how you can get a surge in commodities prices and a decline in interest rates concommittantly. Better just to throw out notions of deflation and inflation and start anew. I would say a drastic decline in purchasing power is the culprit.

Has the purchasing power of gold declined? Firstly, you would not use a store of value to buy goods. Gold as a store of value, even in its unrefined form, is generally swapped for cash and is a function of money.(meaning a specie with zero interest rate) But if you measure gold against commodities, gold's purchasing power has drastically increased since the decline of oil prices. (Generally net smelter royalties on the refining of doré function as a fixed rate of interest - you could argue that interest rates in swap agreements are usurious, and well above benchmark rates.)

Gold 'buys' more of the stock market since NASDAQ, but essentially has restored its purchasing power to just below that of the 1990's, even though the stock market is at historical highs.

http://schrts.co/VIGlSA

$TSX:$Gold Monthly

The stock bubble started in '81, gold's purchasing power has yet to reach those levels of purchasing power it once held so many years ago. In the aftermath of gold's ascent mining companies will have to deal with running a business.

http://schrts.co/1HAkRk

https://smaulgld.com/gold-vs-dow/

-F6