High Prices, High Anxiety

April 1, 1974

Here’s some arithmetic plenty of Americans were puzzling out in the early ’70s: Say you had put $100,000 into a savings account yielding about 5% in January 1973. A year later, that $100,000 had grown to $105,000 but could buy only $93,000 worth of goods once you accounted for taxes and “the villain of this piece— bloated, ominous inflation.” Prices rose 6.2% in 1973 and would climb another 11.1% in 1974. Investors responded by stampeding toward any asset that might offer a hedge: real estate, art, silver, bonds, antiques—and gold. Lots of gold. “This place is a zoo,” said Benjamin Stack, looking around his New York City coin-dealing shop. A 50-person line to enter his store stretched down the block, undeterred by the stiff spring rain. Gold prices would more than triple by decade’s end. “I used to sell to collectors,” Stack said. “Now people say, ‘Sell me gold coins—any gold coins.’ ”

“A very simple enlistment form will appear in many of tomorrow’s newspapers along with the symbol of this new mobilization, which

I am wearing on my lapel. It bears the single word WIN. I think that tells it all.” —Gerald Ford

“The bloody uproar of the war is over; let’s enjoy the carnival of the inflation. It’s loads of fun and paper, printed paper, flimsy stuff. The Yankees are coming, but as peaceful tourists this time.” —Klaus Mann

“The more distant your financial target, the longer inflation will gnaw at the purchasing power of your money.” —Suze Orman

“Mere inflation may look like the creation of more demand. But in terms of the actual production and exchange of real things, it is not.” —Henry Hazlitt

“It is difficult to set bounds to the price unless you first set bounds to the wish.” —Cicero

“The inflation that comes inevitably with government pump-priming soon catches up with the laborer [and] wipes away any real increase in his wages . . . . And so it is that the ‘long run’ is very soon a-coming.” —William F. Buckley Jr.

“I was reading in the paper today that Congress wants to replace the dollar bill with a coin. They’ve already done it. It’s called a nickel.” —Jay Leno

“Inflation is taxation without legislation.” —Milton Friedman

“There is only one topic on everyone’s lips in Berlin: the dollar, the mark and prices.” —Eugeni Xammar

“Lenin was certainly right: There is no subtler, no surer means of overturning the existing basis of society than to debauch the currency.” —John Maynard Keynes

“The millions one always wanted are suddenly there in one’s hand, but they are no longer millions in fact, but only in name.”

—Elias Canetti

“Inflation consists of subsidizing expenditures that give no returns with money that does not exist.” —Jacques Rueff

“Pile up that gold around my head. I must take it with me to pay the ferryman.” —Tom Holt

“It was true that there was still money to be made and wages were high, but they were always at least 20% less than real needs. This was some mad and artful game.” —Ivo Andrić

“Your gold and silver have corroded, and their corrosion will be evidence against you and will eat your flesh like fire. You have hoarded wealth in the last days.” —James 5:3