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Forbes/Bill Conerly/10-17-2020
“The answers here are speculative. We lack good data over multiple inflation spells to know for sure how different assets perform as inflation hedges, and of course plenty has changed since the early inflation episodes, such as Egypt under Ptolemy IV (221-204 BC), Rome (from Nero through Claudius II) or China during the Song Dynasty (960-1279). But history tells us that inflation can happen anywhere, typically where rulers choose to spend more than they take in from tax revenue.”
USAGOLD note: Conerly’s point that inflation occurs where rulers’ i.e., governments’ spending exceeds revenue spend fits in nicely with the rest of this morning’s board. As the chart further down the page illustrates that gap is now radially askew. “Gold,” he says, “is the classic inflation hedge……During America’s worst inflationary period, 1968-1982, the Consumer Price Index rose an average of 7.3% per year, while gold gained 17.1% per year.”
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