Wednesday, January 5, 2011

More on Gold as Expensive Inflation Insurance

I was struck by an Bloomberg article declaring “World Food Prices Surge to Record, Passing Levels That Sparked 2008 Riots” because in all my research I had not analyzed this dataset from the Food and Agriculture Organization of the United Nations.  As I usually do when I run across a broad dataset from a respectable organization, I started playing with the numbers.  I found more confirmation that gold is expensive against inflation previously discussed in “Gold is Mighty Expensive Inflation Insurance.”  Here are the charts

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source: Food and Agriculture Organization of the United Nations and Bloomberg

I think a lot of investors/speculators will be mighty surprised when we get inflation and significant commodity price movements while gold does nothing or even worse moves down.


25 minutes

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