SchiffGold: Prices Up 2500% Since FDR Abandoned Gold
April 5 marked the 91st anniversary of the day that the United States abandoned the gold standard domestically. Americans were able to buy and invest in gold again in the 1970s.
However, the country has remained on a fiat money system. That simply means that governments can print or borrow money at will without any limits. The gold standard limited governmental expansion of the money supply only to total gold holdings.
As a result, prices have soared far higher. Cumulative inflation since 1933 is about 2,500%. That simply means that every $100 in 1933 carries less than $1 in purchasing power today.
Today, inflation has been trending lower compared to the past few years. Investors view that as good news. However, as inflation is cumulative overall, higher prices are the cost investors have to bear today.
In recent months, inflation has shown signs of strength. That’s caused gold to perk up. The metal is now once again moving to new highs. It’s just broken over $2,300 per ounce for the first time.
With the metal trending higher and inflation potentially on the rise again, it may be time to add to gold holdings.
Gold stocks may also start to see stronger performance in the months ahead. In a major gold rally, gold mining stocks tend to have better percentage returns.