Better plan ahead.

The Fed's Spending Spree

Every month in 2013, the Fed increased its balance sheet by $85 billion, consisting of $40 billion in mortgage-backed securities and $45 billion in U.S. treasuries. The Fed monetized roughly half of the US budget deficit in 2013. Putting it all together, the Fed's balance sheet increased to $4 TRILLION! A total increase of $1.17 trillion in one year! And tapering a few billion dollars per month isn't going to change much.

So, how does Fed spending affect the value of your money? To clearly illustrate this point, let’s take a look at gold price action and debt accumulation since 2005. We can take this back all the way to 2000, or even further, and it will hold true. (The US Treasury was used to gather this debt data):

2005 US Debt = 7.6T | Gold = $430/oz. | Gas = $1.82/gallon

2006 US Debt = 8.1T | Gold = $520/oz. | Gas = $2.28/gallon

2007 US Debt = 8.7T | Gold = $635/oz. | Gas = $2.40/gallon

2008 US Debt = 10.7T | Gold = $875/oz. | Gas = $2.90/gallon

2009 US Debt = 10.6T | Gold = $855/oz. | Gas = $2.75/gallon

2010 US Debt = 12.3T | Gold = $1,100/oz. | Gas = $2.80/gallon

2011 US Debt = 14T | Gold = $1,320/oz. | Gas = $3.15/gallon

2012 US Debt = 15.2T | Gold = $1,540/oz. | Gas = $3.40/gallon

2013 US Debt = 17T | Gold = $1,580/oz. | Gas = $4.50/gallon

And here’s where we’re going:

2014 US Debt = 18.8T | Gold = $2,200/oz. | Gas = $5.00/gallon

2015 US Debt = 21T | Gold = $2,600/oz. | Gas = $6.00/gallon

2016 US Debt = 22.7T | Gold = $3,100/oz. | Gas = $6.75/gallon

2017 US Debt = 25.5T | Gold = $3,575/oz. | Gas = $7.50/gallon

2018 US Debt = 28T | Gold = $3,800/oz. | Gas = $9.00/gallon

So... we'll surge to $28 trillion in U.S. debt by 2018. Based upon the chart above, that will put gas at $9 and gold at $3800.