Well, according to many investors in gold, at least in theory. The central bank prints money, inflation goes up, and gold prices – as an inflation hedge per excellence – go up as well. This seemingly simple logic appears to hold some truth but is – unfortunately – entirely wrong. What is the real deal?

Who Determines the Money Supply?

<p>Observe the money supply and inflation rate in Zimbabwe since 1994. A clear example of the quantity theory of money, right?</p>

Is There Something Else Going On?

<p>The money supply in the United States increases year after year, but there is little sight of inflation. Source: St Louis Fed.</p>

Money, Inflation, Gold


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