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Does the link to gold still hold true in todays world? There are much diverse asset classes available now and perhaps the root cause of inflationary economy is
by vijaypatil 4y ago
Does the link to gold still hold true in todays world? There are much diverse asset classes available now and perhaps the root cause of inflationary economy is our inability to accommodate these.
- PaulHoule 4y agoGold has a special hold on people's imagination. I find it interesting that some people in ancient Rome were paid a few pounds of gold a year which is in the same ballpark of what people get paid in the U.S. today. In general if there are more asset classes and people feel wealthier because of them that should lead to more spending, and that spending could ultimately drive inflation if demand starts to outpace supply. https://en.wikipedia.org/wiki/Wealth_effect https://en.wikipedia.org/wiki/Wealth_effect I'd be careful at assigning inflation one root cause. Whenever it gets out of hand there seem to be numerous interacting problems. Just to look at some recent events we've had stimulus checks that empowered people to buy manufactured goods, shortages that drive up prices, food and fuel supplies endangered by the Russia-Ukraine war, and the last administration slapping a 20% tariff on imports from China.