Massive money creation means inflation is coming, not deflation, director says

"Gold is the solution and an alternative to the dollar," writes John R. Ing of Maison Placements Canada, an investment firm. "Gold has outlasted governments, currency collapses, depressions and yes hyperinflation. And unlike paper assets that can become worthless, gold always and everywhere retains some value. As such, we continue to expect gold will hit near all-time highs of $1,350 an ounce and $2,000 an ounce this year."

Ing sees inflation ahead, not deflation. "The explosion of U.S. dollars in the wake of America's easy money policy has caused a $1 trillion currency bubble. Freed from the Bretton Wood's system of fixed exchange rates almost forty years ago, the United States supplied the world with a faith-based currency which became the cornerstone of the international monetary system allowing them to spend and pay bills with printed fiat money. With inflation at forty-year lows and worries of a 'double dip recession,' investors fear that the United States will slip into a Japanese-style deflation. But deflation is negative pricing caused by a contraction of money. Lost on Paul Krugman and others is that America continues to print money, with the Federal Reserve pushing monetary base to new highs, doubling its balance sheet over $2 trillion by buying $1.5 trillion of mortgages and U.S. government debt. Deflation does not happen when there is too much money."

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