John T. Reed’s hyperinflation/deflation blog

A headline on today’s Wall Street Journal says “Beijing’s Rules Aim to Keep Cash Home.” Google the title to read the article. I have been warning readers about that in the US for five years. Those rules are called “capital controls.” They basically prohibit possession or use of any foreign currency and, in the US from 1933 to the 1970s, gold bullion. They also prohibit taking the local currency out of the country (where it could be traded for another currency at the free market conversion rate). What would the government care? When the government “prints” too much money it...

My wife just asked me if maybe now is the time to buy silver. I revised and updated my spreadsheet on the matter. Year price $/oz 2015 dollars 1965 $1.29 $9.77 1966 $1.29 $9.50 1967 $2.06 $14.72 1968 $1.96 $13.44 1969 $1.81 $11.77 1970 $1.64 $10.09 1971 $1.39 $8.19 1972 $1.98 $11.30 1973 $3.14 $16.88 1974 $4.39 $21.25 1975 $4.09 $18.14 1976 $4.35 $18.24 1977 $4.71 $18.55 1978 $5.93 $21.70 1979 $21.79 $71.62 1980 $16.39 $47.47 1981 $8.43 $22.13 1982 $10.59 $26.19 1983 $9.12 $21.85 1984 $6.69 $15.37 1985 $5.89 $13.06 1986 $5.36 $11.67 1987 $6.79 $14.26 1988 $6.11 $12.33...

It is an article of faith among investors worldwide that gold is THE hedge against inflation and hyperinflation. They are wrong. Gold has numerous disadvantages in the role of hedge against inflation. It is a commodity. There are many indications that not only would a broad-based commodity index better match the consumer price index or inflation otherwise defined, but almost all other commodities individually would be better than gold to hedge against inflation. 1. 28% capital gains tax rate. Almost all long-term capital gains are taxed at 15% or 20%. Obama’s “rich” paid 20% starting in 2013 and real estate...