![]() Original article and chart.ģ) Comparing gold with other asset classes can add yet another twist. Using the 2010 CPI-U, you get a 1980 peak of about $2,300. It is unclear which deflator the Economist and its contributors used, but it must have been hard to find an index with lower inflation than the CPI. Here, the upside seems much more limited ($1,200 to $1,650 +38%). Original story and chart.Ģ) In the other article, titled “After the gold rush”, the gold price is adjusted at 2010 prices. Optically, this chart suggest that there is still a lot of room for an upwards movement ($250 to $450 +80%). The latter article, titled “Store of Value”, featured a chart in which the gold price is adjusted at 1970 prices (above). What story are they telling?ġ) Just two days apart (July 6 and July 8, 2010), the Economist published two articles on gold containing these two different charts (No.1 and No.2). Sit back and try to grasp the first impression each one of them makes on you. Depending on which one you use, you can double or half inflation.īelow, 10 examples of such charts are shown. It can be the CPI-U, CPI-W, the pre-Clinton CPI and so on. The remaining 10% of curious readers you can discourage from questioning the chart by not stating which deflator you used. Hence, these graphics are a good way of leading the reader into believing your story. Of course, 90% of readers of media geared towards the general public, such as the Economist, take charted data for granted. They usually support various stories: why gold is an inflation hedge, why gold is not an inflation hedge (in the 80s and 90s) why gold is a bubble and why gold is not a bubble.ĭepending on what deflator you use, the charts look optimistic or pessimistic. ![]() The charts with gold at constant (inflation-adjusted) prices. But – half a truth is ever the blackest of lies.
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