Jeff Clark of Casey Research today reports that John Williams of Shadows Stats has concluded that the gold price, adjusted by the U.S. government's Consumer Price Index formula from 1980 (before the index was constantly recalibrated to conceal inflation), is actually near an all-time historical low, even as worldwide debt levels have exploded.
This, Clark writes, shows that gold is "dramatically undervalued."
No, it doesn't. It shows that the gold price is a spectacular anomaly that must be caused by something, a phenomenon that Clark and Casey Research apparently will leave for another day.
For if, for example, the inflation-adjusted gold price is at a historic low because central banks have created infinite supplies of imaginary gold in a fractional-reserve gold banking system and rig the futures markets with derivatives, and if such imaginary supplies can be created forever, the market rigged forever, and the gold price suppressed forever, gold is not "dramatically undervalued" at all but actually practically worthless -- at least when held by ordinary investors.
In such circumstances gold would have value only to governments -- as their primary mechanism for rigging all markets.
Clark's marveling without curiosity is headlined "Gold Is Near an All-Time Inflation-Adjusted Low" and is posted at the Casey Research Internet site here:
http://www.caseyresearch.com/articles/gold-is...me-inflation...
