Government Counterfeiting vs Gold Standard

Counterfeiting...
When there is X amount of a currency chasing Y amount of commodities (real estate, food, metals, and any products made out of those), a price is established based on the amount of X there is in circulation. If suddenly, someone adds:Q (new quantity) = X + 1 which is obviously still chasing Y amount of things... the person who printed that +1 and started using it benefits from the fact that the market prices have not *yet* adjusted to the new amount of currency. It's like a long water reservoir where water is added at the beginning of the reservoir. Eventually, the level adjust to a new high and everyone pays a new higher price. But gosh, the counterfeiter got it for free at the expense of everybody else.
So, when the government creates money (or a central bank), who gets the benefit? The first spender! And the central bank happens to charge interest on money it just created.
When President Bush claims he is cutting taxes while at the same time spending like crazy - requiring the Federal Reserve to create new currency, he is actually taxing in a way that the media does not currently report. And that happens in all country in the world today. When people are happy that their house has just increase in value by say 20%, overall, did they actually increase in value? When inflation kicks in the rest of the commodities (when that water in the reservoir spreads to all the corner of the reservoir, raising all prices), the gain is mitigated. Of course, homeowners are gaining with the fact they owed a mortgage that has now decreased in value, that's the benefit. The folks most affected are the renters.
That's the reason why the democrats - who are claiming to be the protectors of the poor and middle class - are the first one who should declare we should go back to the Gold standard!
But this "inflation" which is a disguised tax that is like dust sent under the carpet makes it so much easier to get reelected.
A lot of homeowners and real estate investors are happy with this system since they see their mortgage going down in value - literally (since they are in fixed dollar, not adjusted for inflation while rents are). But they dont' realize that they too would benefit.
More on real estate on Planet Gold on a future post...

- Phil