Oz. of Au for a K

Gold reached $1,000 an ounce today, which is bad news for those of us looking at wedding rings (although platinum is looking nicer and nicer). Precious metals do better (the price increases) with rising inflation (up a full point in January alone). The thing that seems out of whack to me is the rate at which gold has increased. It is up 20% in 2008 so far, and it rose another 32% in 2007. In 2002, gold was $278.20 an ounce. As you can see from the chart above, gold has steadily increased over three-and-a-half times from '02 to today. In other words, if you invested $1000 in gold at it's low point in 2002, you would now have $3,595. That's nothing to laugh at. What other investment could more than triple in less than 6 years?

With oil now up around $110 a barrel, the dollar hitting it's lowest point against the yen in 12 years and a record low against the euro, and the fed rumored to be cutting rates again on March 18, it's time to start seriously worrying about the state of our economy. I'm not sure about you, but my pay raises aren't going up a percentage point a month. Here is my plea to Ben Bernanke: let the economy go through it's natural cycles. Stop with the sudden rate adjustments. The housing bubble burst, there is a "credit crunch", we can deal with it. What we do not need is an incompetent Federal Reserve adding to inflation to somehow steer us away from a natural recession. Let the recession hit. Recession is better than stagflation, Bernanke, and it's better than depression. President Bush, what impact with your $600-per-family tax rebate drop of water have on the vast ocean of our multi-trillion dollar economy? Seriously - let people control their own finances, let people take responsibility for bad decisions, prosecute lenders who break laws, but otherwise leave the economy alone. It will right itself. If you really want to help, Mr. President, take those $600 checks, combine them, and create a lucrative salary package to coax Alan Greenspan out of retirement.