a believer

Gold Bugs vs. Gold Haters

Gold Barron:

You are exactly right in your last point, which is that inflation is not on the minds of most people - few that I have recently talked to are concerned about it. But inflation is the way that the government will be able to impose a huge tax increase without calling it a *tax increase*. A significant tax increase is a political impossibility.

The government is absolutely committed to re-inflating the collapsing debt bubble with...cash in the form of government debt, i.e., more dollars than ever chasing decreasing goods and services, ZImbabwe-style.

Obama and Congress can increase spending at a high percentage of GDP and even promise *tax cuts* knowing that most will pay very real taxes in the form of inflation down the road. This is the *Mugabe Effect* on a much larger scale.

I have seen my monthly costs increase for many things in the last few months, which leaves me doubting that we are in a deflationary environment in the U.S.

For these reasons, right now we have the strongest fundamental I have ever seen for owning precious metals. A significant number of U.S. citizens buying and holding gold will destroy the government's scheme, which is why there is a viable scenario in which gold ownership could be outlawed in the U.S. Not likely, but a scenario.

(I'm now curious, is gold ownership legal in Zimbabwe?)

Disclosure: I have a very small position in GLD and SLV (in an IRA), but I believe that owning the physical gold makes better sense.