The Illusion of Wealth & How to Beat Inflation: A 100-Year Perspective
We tested 30 ideas about how to beat inflation against 100 years of US money supply data, from gold and housing to savings, the S&P 500 and Bitcoin.
Topic
Gold: A Century of Returns vs Money Printing
Is gold a good hedge against inflation?
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We checked it against the money supply rather than shop prices, using Macrotrends’ price history and the St. Louis Fed’s M2 figures, and over the century from 1926 it rose 168-fold while M2 grew 503-fold.
That leaves gold with about a third of its starting share of the money pool, better than cash by a long way but well short of breaking even, and its record in between swings from a 17.6x gain in the 1970s to a fall of more than 60% between 1980 and 2000.
- 168x Gold, 1926 to 2026 An M2-adjusted value of 0.33, so about two thirds of its share was lost.
- 17.6x Gold, 1959 to 1980 Against 5.3x for M2, the one period gold clearly won.
- $6,362 Gold 2030 base case A modelled scenario from $4,345 in June 2026, not a price target.
Articles on Gold
5 articles from our research on this topic.
Nvidia Stock Prediction & Gold Price Forecast 2030: The Modern Playbook
Our base-case Nvidia stock prediction and gold price forecast for 2030 and 2035, alongside Bitcoin and the Nasdaq, all modelled against money supply growth.
Crypto vs Stocks: Bitcoin & Tech in the Digital Era
We measure Bitcoin, Nvidia, Apple and the Nasdaq against money supply growth to settle crypto vs stocks, and to see how much faster tech built real wealth.
Historical Asset Class Returns: The 100-Year Scorecard
Historical asset class returns since 1928 for nine investments, from small caps to T-bills, and why only three of them grew faster than the money supply.
Gold vs Real Estate Returns & Which Asset Beat Inflation? The 100-Year Performance
Gold rose 168x and US house prices 83x after 1926, while the money supply grew 503x. We compare gold vs real estate returns to see which kept its value.
Plain-English definitions
Key terms for gold
- Safe haven
- An asset people buy to protect wealth in bad times, such as gold or property. Part I tests whether they did that against M2.
- M2-adjusted value 1.0 = break-even
- An asset’s growth divided by M2 growth over the same years. Above 1.0 it gained share of the money pool, below 1.0 it lost share.
- Stock-to-flow
- Existing supply divided by new supply each year. A higher number means new issuance is small relative to what already exists.
- Nominal vs real
- Nominal figures are the dollar amounts you see. Real figures adjust them for something else, which in this research is the growth in M2.
FAQ
Questions about gold
Answers drawn from the figures in our research. Educational only, not financial advice.
Has gold kept up with money printing over the last 100 years?
Not over the full century, though it did far better than cash. For Part I we priced gold from Macrotrends’ history against the St. Louis Fed’s M2 series and got 168x for gold against 503x for M2 between 1926 and 2026, an M2-adjusted value of 0.33.
Part III starts two years later, in 1928, using Aswath Damodaran’s NYU Stern data, and gets 210.3x against 473x, or 0.444. The two start dates give slightly different numbers but the same answer, which is that gold kept some of its value and lost well over half its share of the money pool, while cash lost 99.8%.
Why did gold do so well in the last few years if it lost over 100?
We put most of it down to central banks buying gold as they move away from the dollar. In the series overview, published in June 2026, gold’s five-year growth rate came out at about 20% a year, roughly four times its 100-year average of 5.6%. We looked for a structural reason for that to continue, of the kind Bitcoin has in its fixed supply or tech companies have in their earnings, and couldn’t find one, so we treat the recent run as unusual.
How does gold compare with Bitcoin as a store of value?
Both are scarce, in different ways. Gold’s total supply is an estimate, and mining adds to it every year with no theoretical cap, whereas Bitcoin’s 21 million limit is in its code and can be audited. After the 2024 halving, Bitcoin’s stock-to-flow ratio was about 120 against roughly 62 for gold. Our Part VI base case has gold at about 1.5x in real terms by 2035 and Bitcoin at 6.2x, with far more volatility for Bitcoin along the way, and we would treat both as scenarios.
Important information
Capital at risk. The value of investments can fall as well as rise and you may get back less than you invest. Past performance is not a reliable indicator of future results. Educational information only, not financial advice. Read our disclaimer.
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