History Rhymes

01 Sep

History Rhymes

Take a look at this!  You’ll want to own more gold!

Larry Summers, Former Director of the National Economic Council, tweeted (or X’ed) this chart the other day, noting the similarity between price inflation’s rise and slowdown and rise again in the 1970s and today’s chart.

“It is sobering,” he says, “to recall that the shape of the past decade’s inflation curve almost perfectly shadows its path from 1966 to 1976 before it accelerated in the late 1970s.”

Sobering indeed!

If the next leg of today’s movement, the yellow line, tracks what happened after 1976, we could reexperience what was one of the greatest gold and silver bull markets in history.   

Stephen Moore comments on the chart, “Twelve years of inflation was finally smothered by the Reagan-Volcker era of tight money, falling tax rates, and deregulation. 

“Past isn’t always a prelude. But if the 1970s and early 1980s taught us anything, it is that the solution to Bidenflation (just as was the case with Carter inflation) isn’t just higher interest rates. It’s growth policies that expand the supply side of goods and services.”

Resistance to the Fed’s interest rate policies is growing.  Already some are arguing for the Federal Reserve to abandon or raise its two percent interest rate target.  As funding US and corporate debt grows more difficult, that resistance to higher interest rates will grow as well.  

The digital money printing presses haven’t been disabled.  They are just idling.

For now.

Be prepared!