Gold hedge against currency devaluation cost of fuel, food, housing
True inflation figures reflect impact on household spending
Household items climbed by average 964%
Pint of beersees biggest increase in basket of goods rise of 2464%
Bread rises 836%, butter by 1023% and fuel (diesel) up by 1375%
Gold rises 2672% and hold’s its value over 40 years
Savings eaten away by money creation and negative interest rates
Further evidence of gold’s role as inflation hedge and safe haven
Editor: Mark O’Byrne
Gold hedges against rising cost of living
Remember when you were taught about the inflation of theWeimar Republicin Germany at school? More recently I was taught about the inflation ofZimbabwe.In both instances we were given examples of how much the staple food of people cost the humble loaf of bread.
We were all supposed to be horrified and thank our lucky stars we didn’t live in such times. Wethanked God that those days were gone andlong in the past, never to be seen again.
Obviously we are not unfortunate enough to live in a country where the price of bread changes from us walking into the bakery to paying for the loaf. Nor do we have to carry huge wads of bank notes around in bricks as we saw in Zimbabwe.
Worthless 1 Trillion Zimbabwe Dollar Note (Wikimedia Commons)
But, there has still been a whopping devaluation in the pound, the dollar and all major fiat currencies as much as of over 90% devaluation in some in the last forty or so years. Food items have increased on average by 964% in the UK.
A form of hyperinflation is has happened globally but just over a much longer time period.
Back in 2014 we wrote about theimpact of inflation on household spending and the cost of living due to thedevaluation of the pound since 1973.Needless to say three years on that the impact of inflation is even greater and the pound worth even less especially after sterling’s sharp fall after Brexit.
Today aBritish Pound from 1973 is worth just eight pence. When we first reported on this issue in 2014 the value of a 1973 pound was worth nine pence. In contrast, since 1973, one ounce of gold has climbed by a whopping 2,673%. Today, the 100 of 1973 is worth just 9.01, compared to 9.48 in 2014.
These numbers show just how muchdamagehas been done to the British pound and therefore the value of our medium of exchange andsavings.
They also show how well you would have been protected by investing in gold. Had you done so you would have enjoyed the benefits of thistime tested hedge against the long term ravages of inflation.
Cost of household goods rises by average of 964%
The 9.01 today wouldn’t get you too far given the prices found in the July 2017 RPI and CPI price list.
The price list also shows how many producers have been forced to lower prices thanks to supermarkets’ buying and pricing power. Bread and milk are just two key items which have been forced down in price since 2014. Despite this, their prices remain highly inflated since 1973.
Apint of a beerhas felt the biggest surge of the food and drink items we selected, it has shot up by 2,464.3% from 14p to 3.59 per pint.
A slicedloaf of white breadhas come down from 1.30 to 1.03 since 2014, but it is still up a huge 836% since 1973. The processed, mass produced bread of today is