April 27, 2009

Another article on Gold as an Inflation Hedge

The other day I wrote asking : Is Gold a Good Inflation Hedge? My conclusion was a solid 'no'.

Today My Money Blog wrote about the same topic with their article: Should I Buy Gold Now To Hedge Against Future Inflation? They give a pointer to a video from author Larry Swedroe who discusses the topic. They have the same conclusion I did.


  1. Don't think gold is a good inflation hedge? You can see the real impact of expansionary monetary policy on the value of our currency in the fall in the relative value of the dollar since the US left the gold standard. See the current gold dollar price and real inflation rate at :




  2. That website looks at gold from 1971 to 2008. Yes from '71 to '08 gold grew pretty well. But that ignores the fact that gold boomed in 79 and crashed in 80 and then stayed down for the next 20 years. If gold were a good inflation hedge then what about 1980 to 2000 period when gold lost 50% of its value? Why wasn't gold pacing inflation for that 20 year period? If there is a real correlation between gold & inflation then shouldn't it be consistent and not dependent on boom periods that are decades apart??



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