Evidence for Inflation

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When we look at some critical events over the last 100 years, the evidence for an inflationary period is clear. While stocks are trading at record highs, consider that commodities are often at the same time undervalued. History repeated itself to show this in 1972 (nifty fifty stock bubble) and 1995 (dot-com bubble). As we see capital move into high growth and low valuation, investors respond. It is generally a time to part with fixed-income securities and deflationary growth equities and reconsider hard assets. The years’ worth of declining industrial materials, agriculture, and energy coupled with these historical stock/bond bubbles are strong evidence for impending inflation. It is apparent on the commodities front.

Pre- & Post-Covid Events

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Pre-covid, jobs were returning, and the economy was near full growth potential even while debt remained high. Inflation has remained in check, but again we must look at history. Shortages in the reserve currency, post-covid economic downfalls, and continuing stimulus packages may trigger rising commodity prices that could trickle into the global supply chain and truly impact living standards. There is no doubt the global economy may be at risk of commodity-supply inflation similar to what we experienced in the 1970s.

The Bloomberg Commodities Index is keeping watch on a 12-year resistance line that may cause a shift in small investments. Both aging demographics and advancing technology may lead to deflation even though consumer prices have remained stable. This is due in part to depressed commodity prices that may be about to change. When this happens, investors look at gold and silver. These metals are fast becoming highly demanded and, at the same time, short in supply.

According to google search engine, the price of gold has increased 28% within the past 12 months of year 2020 and silver also increased 47%. Furthermore, the gold supply issues are due to a shortage of gold discoveries and the expense involved in gold mining. It is a 30-year decline trend, but mining companies are reacting in efforts to reverse this trend. Gold and silver are continually rising, and resulting cash flow is high—more than ever in the last 25-year period.

Increasing Gold & Silver Prices and Demand

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Increasing prices are due to several factors:

1) Central bank debt monetization

2) Printing of money to address the debt burden

3) The attraction by investors due to post-pandemic uneasiness

4) Declining real interest rates

Looking at gold for example…Gold prices and demand are on the rise, with a high at nearly $1,918 a troy ounce in December 2020. History shows us that gold underperformed during the period from 2011 to 2018 when money was printed regularly. When we experience eventual imbalances in the economy, rising commodity prices, and real-world inflation, traditional assets are often devalued.

Printing money through central banks is frighteningly accepted as a way out of global debt burden, highly impacting worldwide GDP as much as 365%. This near-World War II level deficit may come at a severe cost to traditional investors. The Fed, along with the central banks believe they can exceed a 2% inflation target at full employment expense. While rising inflation is driven by consumers’ and investors’ expectations and actions, there is no doubt they may begin to act upon it.

Historical Evidence for 2021 Inflation

There is a strong possibility that inflation will rise at a faster rate than interest rates. This can drive investors away from overvalued stocks/credit into commodities such as precious metals and oil. This was the case at three different times in history (including the two noted above):

  1. During the dot-com bubble in the mid-1990s – the NASDAQ declined 78% over 2-1/2 years, at which time gold stocks went up over 7 years. Energy and industrial commodities increased.
  2. During the 1974 bear market – the S&P 500 declined 50% over 2 years, gold mining stocks increased 5-fold, and oil prices skyrocketed during the 1973 Arab Oil Embargo.
  3. Post-Spanish flu period 1918-1919 – this health crisis limited the industrial side of the economy and lead to raw materials shortages.

This caused commodity inflation and a rise in wholesale prices even as the pandemic healing was taking place. Grocery stores hoarded inventory to sell at a higher price, in which case the government was forced to intervene before a negative consumer impact. The cost of living surged, and labor unions protested for higher wages. Inflation rose above 20% in 1920. The Dow Jones Industrial Average declined from 1920 to 1921.

An Opportunity for Gold

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It is a time when investors are beginning to see gold as a solution to impending inflation, and the evidence is clear as gold and silver prices rise and supplies shrink. People are counting on the gold mining industry to send their junior explorers after new gold and silver deposits. Even with the 2020 stock price performance rebound, there is much more unexpected performance to surmise. What is certain is that the precious metals mining industry will provide valuable alternatives, especially those created from small-cap exploration, for shareholders.

At Reagan Gold Group, we offer gold and silver investment solutions that are essential in a weakened economy amidst a hopeful Covid-19 recovery, an uneasy political regime change, and a job market desperate to return to normal. Here, we guide individuals and significant investors to make critical decisions that impact personal and business futures. While government-backed fiat currencies sit in peril, potentially devalued due to impending inflation, now is the time to re-evaluate your investments. Don’t wait another day. A lot is going on. Forecasts show that gold will shoot to $3k per ounce by the end of 2021! Reach out to Reagan Gold Group and learn more about the upcoming bull market for precious metals.

 

Learn how a Gold, Silver, & Precious Metals IRA can help you hedge against inflation

The Collapse of Fiat Currency Is Gold’s Moment to Shine.

A dramatic transformation is unfolding in the financial landscape, as gold reclaims its position as the ultimate safe haven. Amid growing economic uncertainty, the U.S. dollar has lost over 40% of its purchasing power compared to gold in just the past year — a staggering decline that signals deepening erosion of confidence in fiat currencies.

Yet, despite this dramatic devaluation, the story has not made the headlines it deserves. This speaks volumes about the growing disconnect between financial reality and public awareness, as gold sees a remarkable 23% increase since the start of 2025, proving its resilience in an increasingly unstable global economy.

In a recent PBS article, reporter Bernard Condon says that economists fear that the recent drop in the dollar is so dramatic that it reflects something more ominous — a loss of confidence in the U.S.

“The safe-haven properties of the dollar are being eroded,” said Deutsche Bank in a note to clients earlier this month, warning of a “confidence crisis.”

Investors Turn to Gold as Fiat Fears Mount

For global investors, the message is clear: the dollar is no longer the unchallenged cornerstone of financial stability. With persistent inflation, record-breaking debt levels, and growing geopolitical uncertainty, many are opting for the tangible security of gold.

“Since 2023, gold’s gone from $1,800 to $3,400 an ounce,” Forbes Media Chairman and editor-in-chief Steve Forbes told Fox Business. “That’s a sure sign we’re going to have a weak dollar ahead, which means, ultimately, turbulence and higher prices in the marketplace. Just look at the 1970s, and we can see where that leads unless something is done about it now. But I don’t see any sign that the authorities have any idea, constructively, of what to do, sadly.”

According to Bank of America’s most recent Global Fund Manager Survey, a net 61% of participants anticipate a decline in the dollar’s value over the next year — the most pessimistic outlook of major investors in almost two decades.

A CNBC article published on April 21 highlights an even more worrying trend. As the U.S. dollar weakens, other central banks may be forced to devalue their own currencies just to stay competitive. This “race to the bottom” in global fiat currencies could ignite even more inflationary pressure worldwide, making gold all the more appealing for investors who want out of this volatile spiral.

Global Currency Devaluation May Be Just Beginning

The exodus from U.S. assets also shines a light on the broader crisis of confidence, with potential spillovers such as higher imported inflation as the dollar weakens. The drop in the U.S. dollar has prompted other currencies to appreciate against it, especially safe havens such as the Swiss franc, Japanese yen, and the euro.

This is no mere market correction or cyclical fluctuation. As Bloomberg Intelligence’s Mike McGlone and many others have noted, we’re in the middle of just the fourth-ever capital rotation event — a strategic shift of investments across asset classes, sectors or regions in response to market conditions, economic cycles, and performance trends. “Gold is now the most expensive ever versus the U.S. long bond market,” he observed, pointing to deep structural issues in the American economy and financial system.

Meanwhile, central banks around the world are bolstering their gold reserves at record rates, a move that signals long-term distrust in the global fiat system.

“Global trust and reliance on the dollar was built up over a half century or more,” University of California, Berkeley, economist Barry Eichengreen told PBS. “But it can be lost in the blink of an eye.”

As the dollar falters, gold is reclaiming its historic role as the foundation of monetary confidence. For investors seeking real, enduring value, the message has never been clearer: the future is golden.
“Gold is clearly seen as the favored safe-haven asset in a world upended by the trade war,” Nitesh Shah, commodities strategist at WisdomTree, told Reuters. “The U.S. dollar has depreciated and U.S. Treasuries are selling off hard, as faith in the U.S. as a reliable trading partner has diminished.”

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Gold Breaks $3,300: Experts Say $4,000 Is Now in Sight

Gold soared past the $3,300 mark on April 16, once again shattering an all-time high as investors and retirees continue to seek safety amid growing global uncertainty. The precious metal climbed more than 6% in the last week and is up over 25% year to date, fueled by escalating U.S.–China trade tensions, a faltering dollar, aggressive central bank buying and recession fears.

“Gold is clearly seen as the favored safe-haven asset in a world upended by the trade war,” Nitesh Shah, commodities strategist at WisdomTree, told Reuters. “The U.S. dollar has depreciated and U.S. Treasuries are selling off hard, as faith in the U.S. as a reliable trading partner has diminished.”

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New Tariffs Crush the Stock Market: Why Gold Is the Safe Haven You Need NOW

The stock market was already beginning to crumble this year under the weight of inflation, economic uncertainty and the threat of global war. But since the latest tariffs went into effect on April 2, the stock market has been dealt yet another devastating blow — while gold continues to stand strong and see record stability.

On April 4, the S&P 500 fell 291 points (5.4%) by the afternoon, while the Dow Jones tumbled 2,150 points (5.3%) and the Nasdaq slid 5.8%. The free-fall carried over from the previous day, when the indexes recorded their biggest one-day drop since 2020, with $2.5 trillion in investor wealth being erased from the S&P 500. The Dow and S&P 500 each sank more than 4%, while the tech-heavy Nasdaq plunged nearly 6%.

Despite these incredibly uncertain times, gold is up nearly 3% over the last month, while the S&P 500 is down over 13%. This stark contrast highlights gold’s resilience as a safe-haven asset when traditional markets falter. As investors scramble for stability, the surge in gold prices continues to underscore its long-standing reputation as a reliable store of value in times of crisis.

The Impact of Trump’s Tariffs on the World

The latest tariff announcements include steep levies on key imports, particularly from China, the European Union and Mexico. In response to Trump imposing 34% tariffs on Chinese goods — which were already subject to a 20% levy — China hit back on April 4 with a 34% tariff on all U.S. products starting on April 10.

This comes after Canadian Prime Minister Mark Carney said that Canada will match Trump’s 25% auto tariffs with a tariff on vehicles imported from the United States.

“We take these measures reluctantly — and we take them in ways that is intended and will cause maximum impact in the United States and minimum impact in Canada,” Carney said.

One of the most concerning aspects of these tariffs is their inflationary impact. Higher import costs will translate to rising prices for goods, squeezing American households already burdened by inflationary pressures. Companies facing higher production costs may either pass expenses onto consumers or cut jobs to maintain profit margins — both scenarios spell trouble for economic stability.

Gold’s Surge Amid Market Chaos

Historically, gold has served as a hedge against economic uncertainty. In today’s uncertain and scary times, that has been rang more true. While equities crumble under the weight of trade tensions, gold has surged by more than 12% since the start of the year, while the S&P 500 has plummeted by over 15%.

Gold’s appeal lies in its independence from government policy and currency devaluation. Unlike fiat money, which can be manipulated through monetary policy, gold maintains intrinsic value, making it a trusted store of wealth in times of crisis. With fears of a prolonged trade war and potential stagflation on the horizon, investors are ditching the uncertainty of stocks and moving their hard-earned capital into tangible assets.

Why Investors Are Turning to Gold

With global instability accelerating, more investors are seeking protection — not speculation. High-risk assets like stocks are increasingly vulnerable to sudden shocks, policy changes, and economic downturns.

While stock traders brace for more volatility, Deutsche Bank, one of the world’s leading financial services providers, is looking beyond the panic — and betting big on gold. The bank just raised its average price forecasts for gold to $3,139 for 2025 and $3,700 for 2026, signaling strong long-term confidence in the precious metal.

“We conclude that the bull case for gold remains strong despite this week’s correction and further upgrade our year-end forecast to $3,350/oz.,” the bank said in a statement on April 7.

This shift reflects a growing recognition: gold isn’t just a hedge, it’s a foundation for financial security. In times like these, where headlines shift hourly and markets react in real time, gold remains a steady and trusted asset.

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