Gold and inflation
New gold is being found and mined today at the rate of some 2,600 tonnes per annum.
That’s a modest increase of 1.6% per year to the above-ground supply. And critically for the value of gold bullion, this annual growth-rate lies beyond the power of politicians or investment banks to increase.
The supply of Euros, in contrast — the most hawkishly-managed major world currency right now — is currently expanding by 11.5% per year.
Thanks to this tight supply, gold grew its purchasing power more than nine times over during the 1970s — the last worldwide surge in inflation. In terms of business assets, it rose 23 times over by the start of 1980 as measured against the Dow Jones Industrial Average.
During the financial collapse of the 1930s — but this time amid a deflation caused by half of all banks in the United States failing — gold bought 17 times as many financial assets as it did before the Great Crash of 1929.
Now debt defaults and inflation are working together today, forcing a fresh crisis in the value of money. Gold has already risen three-fold against the New York stock market since early 2000. It’s recently turned higher in terms of residential and commercial real estate too indicating now could be the perfect time to trade gold bullion.