In a Hyper-inflation Scenario, What Would the Value of Gold Be?

Letter from the women of Cologne, Germany addressed to the ‘Women of the British Empire’ November 12, 1914 ‘During the times of passive resistance we existed, not by industry, but through the paper money doles sent from unoccupied country. Now these have ceased and we face starvation. Industry cannot recover, and there are millions, literally out of work…tens of thousands of our leading citizens have been banished or imprisoned…our newspapers have been suppressed…armed hordes of adventurers have now been let loose on our disarmed and helpless population in the name of separatism and Republicanism… Winter is before us, and we have no coal.’
What will it take for hyper-inflation to occur? Why hasn’t it already occurred? and What would the real value of gold be in this scenario?
Americans today have never experienced the severe inflation that German citizens experienced after World War 1, but as we are bombarded with images of hip-hop artists throwing up limitless amounts of paper bills ‘in da club’ and the Federal Reserve printing trillions of dollars in financial stimulus money, known academically as Quantitative Easy, one gets the sense that there may soon come a time where we too are sweeping paper bills into the fireplace to heat our homes. Currently, there are 47 million Americans on food-stamps and 91 million people not in the labor force. These numbers are similar to the economic stagnation experience in the late 70’s when inflation was running consistently over 10%, but today we have difficulty reaching the Fed target of 2%. So what is going on?
Well, truth is, if we were to calculate inflation the way we did in 1980, then the inflation rate would actually be 10%. So inflation is running much higher than what is officially being reported.
The Fed is under-reporting inflation because they do not want to be politically responsible for causing the economic disparity and income inequality between the 1% and the 99%. This is being commented on and reported widely, but for the most part the fingers are not being pointed at the Fed so their plan is working.
So with inflation at 10% why isn’t the price of gold skyrocketing?
Turns out inflation numbers aren’t the only thing the Fed is manipulating. Even the price of gold is being manipulated.

This post was published at The Burning Platform on 22nd September 2014.