During the Boom years, prior to 2007, inflation remained very low (according to official data) while money supply increased at double digits. It is easy to see now this was because the freshly created money was not going into Consumer/ Retail goods, it was going into property. Thus it did not show up in Consumer or retail Price Indices..
Edward Harrison, over at Creditwritedowns has data on just how incredible the increase in commodity prices has been since 2007:
"..........over the course of the 20th century, there were only 13 instances in which the price of a single commodity rose by 500 percent or more. For example, the price of sugar rose 641 percent in 1920, and in the same year, the price of cotton rose 538 percent. In 1947, there was a commodities boom across three commodities: pork bellies (1,053 percent), soybean oil (797 percent), and soybeans (558 percent). During the Hunt brother's episode, in 1980, silver prices were driven up by 3,813 percent.............
............Now, if we look at the current commodities boom, there are already eight commodities whose price rise had reached 500 percent or more by the end of June: heating oil (1,313 percent), nickel (1,273 percent), crude oil (1,205 percent), lead (870 percent), copper (606 percent), zinc (616 percent), tin (510 percent), and wheat (500 percent)..........."
It is interesting to note that gold does not show up in his group.
To date, the ten year increase in the price of the gold lags behind, at only 480%.
Which goes to show that if you really want to make money in metals, nickel is the one to hold; increasing from around $2,000 to about $24,000 per tonne.
But wait, I hear you say, a tonne of nickel isn't exactly convenient, unlike a one kilo bar of the yellow metal.
And we agree.
Concentrated value is important, very important.
That is why rare coins will continue to dominate hard assets: portability, privacy and track record.
