How Long Before US Inflation Equals Argentina’s?

Jon Blogosphere, Economy, Gold, Market Commentary, Precious Metals

The US and Argentina have a lot in common. Both are beautiful countries with a major land mass and an abundance of natural resources and agricultural land. Both had very strong economies around the turn of the last century. Political and economic problems have gradually caused Argentina to grow at a much slower rate than the US. The US has had the major advantage of having the dollar as the reserve currency of the world. This has meant that the US in the last hundred years never had to default like Argentina but could just borrow and print more money. Argentina on the other hand has gone through several periods of default as well as high inflation or hyperinflation since WWII.
As the graph below shows, Argentina is now in yet another period of hyperinflation. Since 2001 gold has appreciated 9,000% against the Peso. And just in the last 12 weeks, gold has gained 90% in Pesos. This is an excellent example of hyperinflation being caused by a collapsing currency. Many emerging economies currently have the same problem. Gold in Russian Rubles for example has gone up 127% in the last two years.

This post was published at GoldSwitzerland on March 4th, 2016.