From Fred Sheehan via Marc Faber:
• England, inflationary periods — the purchasing power of gold: 1623–1658: –34%, 1675–1695: –21%, 1702–1723: –22%, 1752– 1776: –21%, 1793–1813: –27%, 1897–1920: –67%, 1933–1975: –25%.
• England, deflationary periods — the purchasing power of gold: 1658–1669: +42%, 1813–1851: +70%, 1873–1896: +82%, 1920– 1933: +251%
The raw numbers are not worth much, to the investor or to the preserver of capital. Gold has been a much better hedge against inflation than is shown above. For instance, during the inflationary period of 1933–1976, gold lost 25% of its purchasing power but prices rose 1,434%. (As to what might have kept pace with inflation, “crime” comes to mind, which was the conclusion of many a corporate boardroom and trading desk.) |
