Gold and Resources in Deflation

This chapter discuss in detail the performance of gold and other resources at the time of deflation. Gold can indeed appreciate in periods of inflation, however, it can also appreciate in periods of deflation. It is monetary instability and crisis more than anything that cause gold to go up. Resources, however, act differently from gold during deflations. This is to be expected, since most resources are not monetary assets. Most resources do best in periods of economic growth, whether inflationary or deflationary. However, during deflations, when money increases in value, particularly during periods of monetary instability, gold can be depended on to not only hold its value but appreciate in purchasing power terms.