forbes.com
Gold Standard Reveals Trump's More Inflationary Presidency
Using gold as a constant, this article measures the dollar's value under Presidents Trump and Biden, finding that the dollar lost 50% of its value during Trump's first term and 25% under Biden's, challenging traditional inflation measures.
- What is the author's primary argument regarding the relationship between inflation, the dollar, and gold prices?
- The author argues that inflation is a shrinkage of the unit of measure (e.g., the dollar), not necessarily rising prices. Using gold as a constant, the dollar lost 50% of its value during Trump's first term and 25% during Biden's term. Post-Biden's exit from the race, gold rose 13% before Trump's election, then declined 17% after.
- What are the potential future implications of the author's alternative definition of inflation for economic policy and analysis?
- The author's analysis suggests that future assessments of inflation might need to consider a broader definition incorporating changes in the unit of measure (the dollar) independent of changes in prices of goods and services. The gold standard acts as a benchmark against which to measure the relative impact of different presidential administrations' policies on the value of the dollar. The conclusion challenges conventional interpretations of inflation, implying that Trump's presidency was more inflationary than commonly understood.
- How does the author's use of gold prices to measure inflation differ from traditional methods, and what are the limitations of this approach?
- The article connects the dollar's value to gold's price, asserting that gold's movements reflect changes in the dollar's unit of measure, not necessarily changes against other currencies. This analysis contrasts with traditional inflation measures (CPI) which the author argues are influenced by factors unrelated to the dollar's value. The author uses gold prices to compare the relative inflationary effects of the Trump and Biden presidencies.
Cognitive Concepts
Framing Bias
The narrative frames the discussion around the author's specific definition of inflation and deflation, using gold prices as a benchmark to compare the economic performance of Trump and Biden. This framing is biased because it prioritizes one specific metric over others and interprets the data selectively to support a predetermined conclusion. The headline (if any) would likely reinforce this bias. The use of strong language like "Trump panicked" further amplifies this bias.
Language Bias
The language used is loaded with subjective opinions and value judgments. Terms like "relentlessly falling prices," "evisceration of global cooperation," "Trump panicked," and "the dollar lost 50 percent of its value" are examples of charged language that carry emotional weight and shape reader perception. More neutral alternatives would be needed to ensure objectivity. The repeated assertion that "gold tells the truth" is a subjective claim that should be supported by additional evidence or stated as an opinion.
Bias by Omission
The analysis focuses heavily on the author's interpretation of inflation and deflation, using gold prices as the primary metric. It omits other key economic indicators like CPI, GDP growth, and unemployment rates which are typically used to assess a country's economic health and inflationary pressures. This omission limits the scope of the analysis and may mislead readers into believing gold prices are the sole determinant of inflation. The piece also fails to consider the impact of global events beyond the pandemic, such as supply chain disruptions and geopolitical tensions, which can independently affect prices.
False Dichotomy
The article presents a false dichotomy by suggesting that inflation is solely a function of dollar devaluation and not influenced by other factors. It ignores the complexities of inflation, presenting an oversimplified view that neglects supply and demand dynamics, production costs, and global economic conditions. The framing of inflation as simply "shrinkage of the unit of measure" is a simplification that overlooks the multifaceted nature of the phenomenon.
Sustainable Development Goals
The article discusses inflation and deflation, focusing on the impact of government policies on the value of the dollar. While not directly addressing income inequality, the significant devaluation of the dollar under both Trump and Biden administrations disproportionately affects lower-income groups who have less ability to cushion against the loss of purchasing power. This exacerbates existing inequalities.