Gold, Homes, and Groceries: 1970s Inflation Lessons for Today

nflation has a way of hitting hard and leaving wages lagging behind. From the 1970s to today, prices for homes, cars, and gold have soared, but paychecks? They’ve barely kept pace. The middle class and poor feel the squeeze most—caught between rising costs and stagnant earnings.

The decade saw relentless inflation and economic turmoil. Annual Inflation Rates (CPI, All Items) 1970: 5.9%, 1971: 4.3%, 1972: 3.3%, 1973: 6.2%, 1974: 11.0%, 1975: 9.1%, 1976: 5.8%, 1977: 6.5%, 1978: 7.6%, 1979: 11.3%, 1980: 13.5%

The total inflation over this span is the cumulative percentage increase in prices from the end of 1969 to the end of 1980. Here are the estimates for the specified categories:

1. Overall CPI (All Items): Approximately 131.3% This reflects the cumulative rise in the general price level over the 11 years, compounded from annual CPI data.
2. Wages: Approximately 100–110% Nominal wage growth continued into 1980, but inflation eroded real wage gains. Cumulative nominal increases ranged around 100–110%, though purchasing power remained flat or slightly negative for many workers.
3. Homes: Approximately 150–160% Housing prices surged further in 1980 due to persistent inflation and high interest rates (peaking near 18% for mortgages). The cumulative increase from 1970 to 1980 is estimated at 150–160%.
4. Cars: Approximately 110–120% Car prices rose with inflation, fuel costs, and production expenses, though slightly less than housing. A cumulative increase of 110–120% aligns with historical data.
5. Hard Assets (e.g., Gold, Metals): Approximately 350–400% (varies widely) Gold prices soared to around $800 per ounce by late 1980 (from $35 in 1970), a nominal increase of over 2000%, but other metals and commodities grew more modestly. A broad average for hard assets suggests a 350–400% cumulative rise.
6. Agricultural Prices: Approximately 180–220% Agricultural commodities continued to climb in 1980 due to inflation, oil prices, and global demand, with a cumulative increase estimated at 180–220% over the period.

Make no mistake! I’m warning about an impending 1970s-style inflation surge and a looming financial reckoning. Governments, drowning in unpayable debt, will resort to printing money to inflate their way out—crushing savers, leaving middle-class America reeling, and devastating the poor as bond values real returns go deeply negative due to a tidal wave of inflation.

While short-term deflationary risks will always be present, it’s crucial to adapt and learn to stomach the volatility. The new bull market emerging in commodities will be incredibly tough to navigate. However, the greatest pain will be felt by those clinging to the same investments that performed well over the last 10–15 years, mistakenly believing they’ll outpace inflation.

Not all sectors run at the same time. Base metals, energy, agriculture prices, gold, and silver will each experience periods of leading and lagging performance, and occasionally, they may move together. But have no fear—we can navigate these waters, profit from the volatility, and protect our savings. Stay tuned…