Inflation Explained

Statistics are from a column I wrote January 8, 2002

I must have done a bit of research back in 2002, but here was the cost of gold in reichsmarks in those years after WWI.  Glad you didn’t save in reichsmarks?  Gold then was $20.67 an ounce, and today over $1700, meaning, it has gone up over 8500%.  You decide if the buck has slid.  Here’s what an ounce of gold cost in Germany in reichsmarks, which was their currency.

                                                       Jan. 1919 – 170

                                                       Sept. 1919 – 499

                                                       Jan. 1920 – 1340

                                                       Sept. 1920 – 1201

                                                       Jan. 2021 – 1349

                                                       Sept. 2021 – 2175

                                                       Jan. 1922 – 3976

                                                       Sept. 1922 – 30,381 

                                                       Jan. 1923 – 372,477

                                                       Oct. 2, 1923 – 6,631,749,000

                                                       Oct. 9, 1923 – 24,868,950,000

                                                       Oct. 16, 1923 – 84,969,072,000

                                                       Oct. 23, 1923 – 1,160,552,882,000

                                                       Oct. 30, 1923 – 1,347,070,000,000

                                                       Nov. 5, 1923 – 8,700,000,000,000

                                                       Nov. 30, 1923 – 87,000,000,000,000

 Then, they invented a new currency.  Once inflation gets going, there’s no stopping it, as long as the presses don’t break down, and there isn’t a shortage of trees to cut down to make paper.  If you had bought and stored one ounce of gold in 1919, it would have gone up in purchasing power and dollars, 8500 %, or rather than $20.67 or even $1700, your ounce would now be $8500.  Maybe the spot price of gold should be $8500?  See why one needs to store surplus wealth in real money?

Don Stott – don@coloradogold.com. 

My 1-888 number no longer exists, but the other one on my card still does.