Congress Behind Latest Increases in Gas and Oil

Chris Mehl of the Wilderness Society was ecstatic, Kohlman Co., an Oil & Gas development firm, agreed to cede it's oil and gas leases on 33,411 acres along the "Front" to Trout Unlimited, a conservation group. So far the group has racked up 40,074 Acres from companies giving up their leases on the land. 4 companies have agreed to give up their leases on the land since Congress passed a law giving tax credits to companies who give up their leases on 400,000 acres of Federal lands along the Front.

The bill, passed by congress in 2006, expanded the 1997 decision to remove 365,000 acres of Federal land from Oil & Gas leases along the Front. The Front is the area where the Northern Rockies and the Great Plains meet from Montana Hwy. 200 to Glacier National Park in the North.

Chris Hunt, of Trout Unlimited, said the Badger ­Two Medicine area is home to the state fish, as well as grizzly bears that move back and forth between the plains and moun­tains.

“This is a treasured place for hunters and anglers,” Hunt said.

"Bob", A commenter on the Great Falls Tribune Website said, "May do some good for the trout, paid guides, people with the money to go on these wilderness trips and foreign governments that sell us their oil and gas and then kill us with our own money. But chock up another loss for the working class. These development companies are under such strict reclamation regulations and I've seen these newer developments myself in other states and they look fine. All that's left is a small fenced area with a pipe sticking out of the ground in most cases and a nice well maintained road." Roads that can be dismantled later after the well is exhausted.

Indeed, the industry is being blocked at every turn, in California, New Mexico, Utah, everywhere you look there are new roadblocks, new restrictions and more and more regulations being placed on the industry making it more difficult to find and extract the energy that America needs.

While Americans certainly wish to preserve their pristine places is such action really warranted?

With Gas prices hovering at well over $3.00 a Gallon and pricing experts saying that Gas should hit $4.00 a gallon very soon, and possibly much higher in the future, is Congress doing something, Anything to get a handle on this?

With the Technology that we have today, from zero noise drilling platforms, to Horizontal Drilling techniques, the actual footprint of oil drilling equipment is getting smaller and smaller. Even in the hotly contested area of ANWR, a report issued on March of 2003 on the North Slope, showed that Caribou populations in the area were through the roof, despite 30 years of drilling. The report showed that the environmental impact in the area was incredibly small. Less than 1% of the total area was affected.

According to BP, a 20 Acre well pad in 1970 could access about 502 acres of land, meaning you had to dot the landscape with Pads to get to the oil. With today's techniques, a pad of 5 to 6 Acres can access oil on about 32,000 acres of land. Clearly, with new technology, we no longer need to dot the entire landscape with drilling pads, which of course means a lot less access roads need to be built. Additionally, frozen areas like ANWAR, new Exploration techniques are leaving nary a trace of a footprint. Solid Ice Bases and Ice Roads are being implemented that simply melt out of existence in the Summer. Leaving a single capped well head as the only evidence that humans were there.

We need to ask congress, why with rising Food and Gas prices, are they, instead of urging the Oil companies to develop more oil, they instead are doing everything they can to make more and more lands not accessible to Drilling.

Instead, congress recently passed a huge tax increase (HR 5351) on the Oil and Gas industry that discourages the very investments on technology that have made the industry much cleaner. While it might feel good to "Stick it to them", if anything this will lead to even higher prices, as the industry attempts to compensate for higher costs of doing business.

These tax increases will have the effect of telling the industry to just buy the oil from overseas and resell here at the Gas Stations, since Capital Investments will no longer be tax deductible for them, like it is for every industry in the U.S. This coupled with the closure of more and more areas to drilling, will only have the future effect of making oil even more scarce, and the more scarce things get, the more expensive things get. It's a basic law of supply and demand.

But congress isn't done raising your Gas prices, not by a long shot, a proposed Bill S. 1419, includes provisions for the Oil industry to subsidize Ethanol. A move that could double the price of Gas by 2016, even without any additional increases in Oil. And if that's not enough, congress is also considering 29 Billion in new taxes on the Oil industry to subsidize Wind and Solar Power, a move that will surely increase the price of gas even more. If all of these provisions are passed, we could easily be paying $10-$15.00 a Gallon within the next 10 years.

When the Oil Embargo of 73 happened, it had devastating effects on our economy. We ended up with the tripled gas prices, long lines to purchase gas, gas rationing, double digit inflation, double digit unemployment, 21% Interest rates to buy cars, more people were unemployed since at any time since the Great Depression. Back then we only imported 35% of our oil. Today we import 53%! More and more of our money is ending up in the hands of enemies like Hugo Chavez of Venezuela and the Middle East, who have a penchant for funding Islamic Extremist of the sort that would rather see us dead. What happens to us now if there's a future disruption of supply?

The results are clear. With the artificial caps on production, and less and less supply every year, the prices of oil will continue to skyrocket. We're starting to see the huge problems that Green Fuels deliver, so that's not a real alternative. It turns out that the debate on Global Warming, really isn't over, so we shouldn't just stop producing oil, and destroy our economy for something that might be a mistake. It's nice to dream of some day when we will have cheap and plentiful clean power from some new mystical invention in the future, but right now our economy runs on Oil. And it's running out of Gas. We need to tell congress to be part of the Solution and not part of the Problem.

Global Warming Panic Causing Hunger and Rioting

U.S. Policy on Oil production is hitting the poorest of the poor, those who make less than $2.00 a day, the hardest. Mostly because of environmental concerns, especially over Global Warming, The United States has been steadily increasing regulations of it's oil production, to the point to where there are no new production projects coming online in the United States. The U.S. is now producing less oil than we have in almost 60 years, even though we have some of the worlds largest reserves. This in turn has created an artificial shortage of Oil which has seen Spot prices jump to all time high's of over $110.00 a barrel. At first, the higher gas prices started to cause food to go up in price mostly because of transport, but that was nothing, now with the "Biofuel" craze, food prices are rocketing up faster than most in the third world can handle, up to a threefold increase since 2005 on some commodities. Corn especially has been getting a lot of attention on being turned into Ethanol for Gas production, but is it really wise for us to use the planet's food supply to drive our cars with? Especially when there's plenty of oil available off the Coast of Florida and in Alaska?

Many people don't even realize that Corn is used in making everything from beer to bubblegum and while here in the U.S. the higher prices are more of an inconvenience, in Third World nations, it can be the difference on whether you eat or not. To make matters worse, corn is expected to go even higher, because farmers are planting more Wheat & Soybeans this year, due to better profitability. In addition, we've gone from 50 ethanol plants in 1999 to 134 today! The Renewable Fuels Association has estimated that up to 1/3rd of the nations Corn production could soon be swallowed up by the Ethanol producers.

Prices are not just accelerating on Corn, Wheat & Soybeans; dairy farmers, meat producers, chicken farmers and others who rely on corn feed for their livestock are having to increase prices to compensate for Corn's skyrocketing costs, adding even more upward pressure on the nations food supply. Could this be the spark that drives a 70's style runaway inflation?

The Dirty secret about Corn though, is that it takes massive amounts of water and Nitrogen fertilizers to grow. Additionally, mountains of pesticides need to be added to keep the bugs from devouring it. Since Nitrogen is derived from Natural Gas, and pesticides come from Petroleum, as corn production increases, we can expect to see much higher costs of heating our homes and even higher prices for oil.

Now the fallout, In Haiti, the government almost endured a coup d'etat over last week's food riots on April 5th & 7th where at least 3 people were killed. Prime Minister Jacques Edouard has been ousted, leaving his appointee's merely passengers on a bus going nowhere until a new head of state can be ushered in.

In Mexico 75,000 people came out to protest against rising Tortilla prices, if people think the border situation is bad now, wait until poor Mexicans can't afford their Tortillas. We'll see even more border crossings as people who are starving don't care about things like immigration laws.

From Bangladesh to Egypt to Latin America and Africa, food riots are breaking out all around the world, while the U.S. has committed to a 200 Million dollar emergency aid program, the U.N.'s World Food program needs at least 500 Million just to meet emergency needs. We've yet to see if other nations around the world will step up to fill the gaps.

If the debate is over, then we need to start a new debate, because the policy changes we're implementing seem to be doing more damage to the Economy and the rest of the world, than any actual Global Warming. The worst part is, that the planet has actually stopped warming several years ago! While the debate continues as to wether this is proof that Global Warming was overblown, or if this is temporary, it seems that the 'cure' is worse than the disease.

Obama Loses 10-Point Advantage Over McCain

Republican Sen. John McCain has erased Sen. Barack Obama's 10-point advantage in a head-to-head matchup, leaving him essentially tied with both Democratic candidates in an Associated Press-Ipsos national poll released Thursday.Further evidence that the story I wrote about previously is true. Obama cannot and will not win this election. He's hoping that the whole Wright thing will just go away, but it's an issue that won't go away, because the American public doesn't want someone in the White House that thinks they're a bunch of evil racists.

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Why Obama Can't and Won't Win

If anyone were to take a look at the news coverage of the 2000 Elections, everyone was in agreement, Gore would win. To everyone's amazement, or at least anyone along either coastline of the U.S., Bush won the White House. Of course, there were the calls that Bush "stole" the election and all of that noise, or that Ralph Nader cost Gore the election, but wasn't Gore supposed to win by a wide margin, wasn't he supposed to win with a Reagan Style landslide? It didn't happen that way mostly because of the "Red States" along America's Beltway. Regions of the U.S. mostly ignored by your average Pundit and News Anchor, all voted for Bush. Keep in mind that the only states that voted for Gore, were most of the northern Midwest, the West Coast and except for New Hampshire, the Northeast, only 18 states and DC! Everyone else, 32 States, voted for Bush.

Fast forward to 2004, and again. No way that the "Moron" Bush could win. He's up against the "Intellectual" John Kerry, a man who's "Infinitely Smarter than Bush", polls were showing that Kerry was leading 47% to 44%, only 44% felt that the country was going in the right direction, 43% said that Bush should be re-elected and 51% wanted someone new. So what happened, again the Democrats lost.

So now here we are, 2008 and it's time for a new Election. Again, CNN and the rest of the Left Leaning Media are proclaiming that a Democrat will win, most likely Obama, since Obama leads and has most of the votes he needs to win. Unless of course Clinton can figure out a way to "steal" the election, at which point this article would be moot. But I don't think that's going to happen. The outrage in the democrat party, especially amongst the Blacks would be unbelievably intense. Obama will be the Democratic Candidate led to defeat at the hands of McCain. Why? It's simple, if my domain name hasn't hit you yet, NoSocialism.com.

When Americans are polled about whether they like the direction of the Administration, they're not given the choice to say specifically what it is that they don't like. The Pollsters assume that American's are dissatisfied with the same things that they themselves are dissatisfied with, but especially in the Heartland of America, nothing is further from the truth. So let me give you a clue as to what it is that Americans in the heartland worry about. Between the years of 2001 through 2005, Inflation went up by 12%, an average of around 3% a year. As for the Government, let's take a look at some numbers from the OMB:

• Science, Space & Technology; up 21%
• Department of Transportation; up 24%
• Unemployment Benefits; 26%
• General Government Spending; 32%
• Social Security & Related Programs; 39%
• Health Care Spending; 42%
• Community Programs; 71%
• Housing & Commerce; 86%
• International Affairs; 94%
• Education Department; 99%

This is a "Government Gone Wild" and it's only gotten worse since 2005. Social Security and related programs last year alone almost matched the increases between 2001 through 2005! I didn't even include increases in Military spending, because obviously with the war going on, it's a necessary expense and the only thing of this list here that is a constitutional requirement. These are the things that the Heartland is worried about, so what is Obama's response to this, absolutely nothing. He wants to increase spending not decrease it. He wants expanded government, not a government that's more limited. John McCain has a huge advantage here since, according to Pig Book, Hillary Clinton has inserted 281 individual projects totaling 296.2 Million bucks! Big Spender Obama wasn't quite as lavish, inserting 53 pet projects totaling over 97 Million a huge amount for a Jr. Senator. John McCain should be given a Medal for keeping his hands out of the cookie jar, he's the only one of the candidates with no pet projects and 1 out of only 4 senators with no pork barrel spending.

Spending is not the only reason why Obama will lose, but I think it highlights the differences between Obama and McCain and why Americans will choose a more responsible legislator, over someone who simply talks a good game. The biggest mistake that Democrats make is that they think they can win by Lying, by playing games, by grandstanding and other dishonest tactics. These things might work in NY, they might work in Chicago, they might work in San Fransisco, but they sure as heck don't work in America's Heartland where American's don't listen to CNN and MSNBC as if it were God's Gospel truth. In the 2000 election, did Gore really think that we didn't take "Fair Trade" to mean protectionism? Did he really think that voters didn't realize how expensive his Health care reforms would be? Did he think that Americans wanted to grant our sovereignty to World Governments via the Kyoto protocol? When it was Kerry's turn, again the lying. Did he really think we'd buy the "I voted for it before I voted against it"? How stupid did he think we were. Did he really think we wouldn't look at all the video's where he kept saying over and over that we needed to invade Iraq, but when the election came around, he disavowed everything he said. Did he really think we wouldn't look into it.

And now we have Obama. While not as easy to beat as Clinton, let's face it every time she opens her mouth, it's to expand government even more, but does Obama really think that people will believe that he didn't know what his pastor has been saying for the past 20 years? Does he think that we're so dimwitted that we don't know that all of these government programs he's proposing will have to be paid for out of our own pockets? As the Heartland continues to prosper with ever increasing exports to China and India of food and heavy manufacturing equipment, does he think that his protectionist rhetoric will sit well with them?

The Heartland of America believes in Life, Liberty and the pursuit of Happiness. Obama believes in Abortion, Regulation and as Rush Limbaugh often says, "When was the last time you saw a happy Liberal... They're always complaining about how bad things are, even in Boom times!"

The Heartland of America believes in "Pull yourself up from the bootstraps". They believe in Patriotism. They believe in smaller government. They believe in equality. They believe that America is the GREATEST country in the world, and Obama doesn't believe any of these things. From Michelle's comments about this being the first time she's proud of America, to Obama's book outlining how he used to count the Marxist professors as friends to Obama's minister speaking of "Evil America" and the US of KKK A. These are things that don't sit well with Middle America, and unlike the major coastal cities, Middle America doesn't let CNN and MSNBC tell them How to vote.

Obama won't lose because America is Racist, on my street alone, (and I live in a fairly wealthy subdivision) at least 4 of my neighbors are biracial couples, and that's only counting the Marriages between Black's and Whites, it doesn't include the Asian / White couples, Asian /Hispanic couple, Jewish /Hispanic couples, so on and so forth. Keep in mind that my street is only 2 blocks long. I would go as far as to say that anywhere from a third to half of all my neighbors are of mixed backgrounds, this is no longer a big deal in America. By and large people no longer have the racist attitudes that their parents or grandparents had. I live in South Florida, and so we may be a bit more of a melting pot than the rest of the country, but I've been around enough to realize that most of the rest of America is just as tolerant as we are here.

No, the only reason that Obama will lose is because of his Socialist and Marxist policies that are totally at odds with core American Values. The sooner the Democrats realize this, the sooner they can put down their hateful name calling, their villainization of America, the villainization of the President and the Republican Party. Then and only then can the Democrats actually work together with us to build a stronger America that all Citizens will be proud to call home.

Protesters try to douse Olympic Flame in London

LONDON, England (CNN) -- Protesters angry over China's human rights record and its recent actions in Tibet scuffled with police and made attempts to grab the Olympic torch and douse it with a fire extinguisher on Sunday.

Reema Desai of Orlando, Florida, captured this image of the protests at the torch relay.

Here in the United States of America, we should be outraged. We stand for Life, Liberty and the pursuit of Happiness, and yet we are the primary source of income for China. We are the ones that are putting the guns, hardware and technology into the hands of the Chinese to continue their repressive rule. Yes, it would hurt our economy to impose sanctions on the Chinese, but how else would they learn? The worst part is, the world community has even given them the Olympics!

After Tienanmen Square, we should have imposed sanctions until basic human rights issues had been resolved. Back then it would have been a relatively painless exercise, because we didn't rely on China for all that much in terms of Goods and Services. Now however with China importing almost a Trillion a year, and exporting over 1.2 Trillion a year, of which almost 233 Billion of that trade hitting U.S. Shore's the economic impact of an embargo today would be near catastrophic. Since Europe's Bi-Lateral trade with China exceeds 300 Billion, they're even more defendant on the cheap goods they provide, so of course, they won't do anything about it either. Unfortunately, this is one of those situations where only time will tell what the impact of our inaction becomes. Given China's 5000 year history of subduing their enemies, I don't think the outcome will be a good one.

Some Superdelegates More Super Than Rest

These prominent Democrats can name additional super delegates, giving them control over multiple convention votes, and that could be the difference in a race that may not be decided until the August convention.It just goes to show you the complete disdain that the Democrats have for their own voters, in that they don't trust them to make "proper" decisions. They basically rigged the system to where they could change the outcome of any race to suit their own needs.

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World Bank accused of climate change "hijack"

The above video was released a while ago, well today, it's starting to show that it's all true. The following story shows how Developing countries and environmental groups accused the World Bank on Friday of trying to seize control of the billions of dollars of aid that will be used to tackle climate change in the next four decades.

It just goes to show you what these people were REALLY all about, it was about getting the cash in their pockets and nothing more.

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Clinton, Obama take on Big Oil

"The Democratic presidential candidates are criss-crossing Pennsylvania this week, dropping in at gas stations and truck stops to convince voters they've got the best plan to tackle soaring gas prices and Big Oil profits."So the plan again is to change the tax code so that Oil companies can't take the same tax breaks on investments that every other company in the U.S. is entitled to. Exactly HOW does this lower prices? It just goes to show that neither one of these candidates understands things like BASIC economics, how can we trust either one of them to lead the U.S. when they don't understand that increaasing taxes on the Energy industry will only lead to HIGHER prices not lower prices.The only way that we will see lower prices is if we start drilling for more of our own oil right here in the United States, and increase the numbeer of Refineries here in the U.S. That is the ONLY way that it will happen in the near term. As for the future, who knows if we'll come up with viable alternatives, but unless we increase supply the prices will only get higher.

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Obama is the change that America has tried to hide

"If Obama were in any sense mediocre, he would be forgotten by now. He is, in fact, a remarkable human being, not perfect but humanly stunning, like King was and like Mandela is. He is the change America has been trying desperately and for centuries to hide, ignore, kill." ....

So now English newspapers are trying to tell us how to vote. Of course, I'm sure many of them would like to see the U.S. descend into the Socialist Economies that they have over there in Europe. What American DOESN'T need is more Socialism, more big government, more Government controls and regulations and more of the same of what they have in Europe. What I find amazing about Europe is that these guys have been around for thousands of years, and yet here comes America and in just a few hundred years becomes the pre-eminate Super Power of the world. We have an economy that is unmatched by any other country in the world, our populace enjoys a level of weath and comfort unmatched anywhere in the world, we drive the biggest cars, live in the biggest homes, have the most disposable income and live the most lavish lifestyles, yet the Europeans want us to be more like them, instead of them being more like us. Strange yet true, this is the world we live in.

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Is Gold Expensive at $791 an Ounce? Why Gold Will Continue to Soar Much Higher

Is Gold Expensive at $791 an Ounce? Why Gold Will Continue to Soar Much Higher. By J.S. Kim.

November 2nd, 2007

I’m not really sure how all the “Gold at 27-year high” headlines came to be, but my own calculations tell me that gold would have to break at least $2,400 an ounce to break its supposed 27-year high. When discussing the purchase of a 7-series BMW that sells for a MSRP of $90,000 today, no one ever looks at its sales price from 5-years ago at $35,000 and exclaims “BMWs are trading at a 5-year high!” That would be ludicrous. One would have to factor in the effects of inflation and the decreased purchasing power of the dollar before being able to make a reasonable assessment of how expensive BMWs really are today.

At today’s prices of over $790 an ounce, gold is still cheap. If we experience a correction any time soon, and gold breaks back down to the $720 level again before continuing higher, it will just be really cheap. Here’s why.Anyone that’s ever studied the formula that is used to calculate the Consumer Price Index(CPI) in the U.S. knows that the formula has been greatly tinkered with over the years to produce absurdly low inflation numbers that are merely an artificially manufactured number that probably fits some pre-determined number the government would like to report. This pre-determined inflation statistic is needed to maintain consumer confidence in the economy and to keep the hot air flowing that is necessary to keep the U.S. stock market bubble rising.

One of the most closely watched indexes to gauge U.S. economic conditions is the core Consumer Price Index (CPI), which is viewed as THE measure of inflation in the U.S. economy. However, the core CPI just happens to exclude food and energy prices. The government excludes these factors because they claim, these sectors have a history of being extremely volatile. Thus, they feel that their inclusion would skew real inflation rates. This is the dumbest, most deceptive piece of junk that I’ve ever heard. Skew them? No, their inclusion would just tell you what real inflation is. The government concludes that fantasyland numbers are skewed and that real numbers should not be disclosed to the public for fear that real inflation numbers, if reported, will kill stock market rallies. As Morpheus tells Neo in the Matrix, “You take the blue pill and the story ends. You wake in your bed and believe whatever you want to believe.” The government is serving up blue pills left and right in most of their key economic statistics and reports, and the public gladly ingests.

When crude oil remains above $80 a barrel for months on end, and citizens necessarily have to spend USD $80 a week on gas alone, this affects the amount of money they can save. When higher oil prices cause higher transportation prices and thus higher food and higher EVERYTHING prices, then every citizen necessarily spends more money every month on the normal basket of goods they buy. Core CPI represent true inflation rates for all citizens that don’t have to eat and don’t use heat and don’t drive a car. When you can find such a planet, then I’ll concede that the government’s core CPI statistics are accurate. When energy prices are high and the purchasing power of the dollar is being diminished, the CPI inflation index can understate true inflation by 100% to 200%.

The U.S. Federal Reserve’s unstated goal has been for years, to keep inflation rate at 3% a year or less. It is ironic that many times, the exclusion of energy prices and food prices from the core inflation index allows them to “accomplish” this. When inflation, as reported by the CPI, is stated as “under control”, the thundering sheep herd rejoices, plunges money into U.S. stocks, and amazingly, often European and Asian markets follow, also rising on this news in the short term. However, given this target, I’ll explain how I concluded that the price of gold today, in inflation-adjusted dollars, has to reach a minimum figure of $2,400 in today’s dollars to surpass its 27-year high of gold on September 21, 1980.

In the chart below, I have plotted two series of prices. The light blue series shows the high price of gold in 1980 of $850 an ounce, the average annual price every year thereafter, and the Nov. 1, 2007 price of $791 an ounce in non-inflation adjusted dollars. The red series merely demonstrates the 1980 high price of $850 an ounce in inflation-adjusted dollars every year thereafter.

To calculate the inflation-adjusted $850 an ounce price as equivalent to $2,400 in today’s dollars, here are the assumptions I made. With $850 an ounce as my base price in 1980, for the sake of simplicity, I added an average 3% annual inflation rate to this price every year from 1980 to 1997.

I didn’t bother to chart the exact government released figures for inflation every year because we know that they are a total farce anyways and would be a waste of time. If you wonder why I used the higher end of the U.S. Federal Reserve’s “unofficial” annual inflation target of 3%, this is because most years between 1980 and 1997, it was most likely significantly higher, so as a conservative measure, I accepted the Fed’s annual target rate as the “real” inflation rate. From 1998 to 2007, however, I used a “real” annual inflation rate of 5.5% and here is my rationale for doing so.

The formula for determining the CPI in the United States was further tinkered with under President Clinton’s reign. The are many variations of CPI that are calculated, some that include the price of food, some without, but all have been tinkered with in one way or another to minimize the numbers. In fact, often the CPI index that shows the lowest rates of inflation is the one that is officially reported.

To begin, there is the ludicrous substitution factor in which a cheaper good is substituted for an increasingly expensive good in the basket of goods that determines the CPI index. For example, if the cost of beef is rising but chicken prices remain constant, the government assumes beef eaters will not eat beef and substitute a cheaper food in its place like chicken. For those carnivores that love beef, they will continue to eat beef and pay a premium to eat beef. That’s inflation and it’s real though this inflation component is actively removed from the CPI index every month. Secondly, the government is constantly adjusting and tinkering with the components of the CPI index without actually reporting on what specific adjustments they are making. However, you can be certain that whatever adjustments they make are not increasing inflation numbers but lowering them. The opacity of this action is probably worth at least another 0.25% to 0.50% being added to the official inflation numbers. Finally, the basket of goods that determines the CPI index at one time was equally weighted. That meant that if the CPI index contained 100 items, each item received a 1% weight. Not anymore. Now, the CPI index is manipulated by a weighting system that most heavily weights the goods that have dropped the most in price while least heavily weighting the goods that have increased the most in price. For example, if in January, the cost of beef is cheap it might receive a weighting of 3% in the basket of goods. In February if the cost of beef soars, then it may altogether be dropped from the basket of goods or perhaps it the weighting may be reduced to 1%. Because every single change in the calculation of the core CPI index over the years has been designed to minimize inflation, I’ve added another 2.5% to the target rate of 3% as a conservative addition for the last decade. That is how I arrived at an inflation rate of 5.5% for the last decade.

Using the above calculations, I’ve concluded that if gold were to reach its 1980 heights, it must reach $2,400 an ounce. Several years back, once gold broke the $500 an ounce barrier, almost everyone was saying it was way too expensive to purchase. When it soared higher and then broke back down to the $570 level, I was saying how cheap gold was. Hopefully we’ll get a correction soon to allow us to purchase more at even better bargain-basement prices, but just like back then, I firmly believe that a time will come when people will reminisce with amazement at how cheap gold was at $790 an ounce.

Rich Dad's Advisors: Guide to Investing In Gold and Silver: Protect Your Financial Future