Volatility and price drops may be nerve wracking, but the bull market in gold is far from over. In fact, it has barely begun.
To understand why, it helps to look at two prior episodes in the relationship of gold and money that are most relevant to today. These episodes were a period of extreme deflation, the 1930s, and a period of extreme inflation, the 1970s. History shows that gold does well in both conditions.
Commentators frequently observe that we are experiencing “price stability” or “low inflation” based on the fact that the consumer price index has averaged 2% over the past 12 months. However, this average hides more that it reveals.
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