The “Inflation Train “
Have you ever heard of what’s known as the The Chapwood Index? Probably not, because Federal Reserve Chairman Powell likes to use what’s known as the (CPI) Consumer Price Index. He points out that with the CPI only being 1.9% that the economy is right where the fed feels comfortable with, however if you go off the controversial Chapwood Index it shows that we’ve been losing our buying power since 2014 at an extraordinary rate of 10% a year. Looking at the different indexes can be quiet misleading at times however, as each seems to show a fundamental belief of whoever composed the study.
The one truth among even the misled analysts that believed that we could print our way out of debt, is that gold has compounded true gains since 2000, and that the shiny gold metal has gained 10% buying power since the turn of the century. The Consumer Price Index is misleading because it’s only showing you the prices of goods but doesn’t reflect the one variable that means the most to us, which is our standard of living.
From 1980 to today we’ve changed the way that we measure inflation and using either of the past two would put us between 4.5-9.5 % real inflation. Now I realize that if the general public understood this that we’d most likely have a run on the banks and market would start collapsing as people would begin panicking. Russia just moved up past China as the third largest consumer of the precious metal and are attempting what Putin calls “De-Dollarization .” He wants to take Russia away from its U.S. Dollar reserves as he’s already began selling Russia’s reserves at a disturbingly fast pace. He is now attempting to get Russia’s allies to follow suit and drop the dollar as the Worlds Reserve Currency. Now I know that’s a lot of information to take in at once, but it’s extremely important to realize that inflation is here, and it’s here to stay. There are many other factors that will benefit Gold for the foreseeable future, my advice to you is to do your homework before making any major decisions. Feel free to call and talk with one of our numismatists who can help you make the safe decision for you and your family!