Gold is surging again, yet bonds barely flinch. Here’s what that quiet disagreement reveals about inflation, hidden taxes, and where steady investors can still find shelter.
Gold is hitting new highs again, which usually means people are getting nervous. Nervous about the dollar, nervous about debt, nervous that the whole thing might be built on air.
But here’s what’s strange: the bond market, where trillions of dollars trade every day, doesn’t seem to care. Its best guess for long-term inflation, called the five-year, five-year breakeven rate, is still sitting near 2 percent.
So what’s going on?
Gold buyers are saying, “The dollar’s being debased.”
Bond investors are saying, “Everything’s fine.”
It’s like two weather reports for the same sky.
The Hidden Tax No One Votes For
To understand the tension, you have to see what inflation really does.
Imagine the government as someone who borrowed a lot of money, trillions actually. Now imagine prices start rising. Suddenly, the dollars used to repay that debt are worth a little less each year.
That’s inflation at work, a hidden tax that quietly reduces the real value of debt. Nobody votes for it, but everyone pays it.
Japan has done this gently. Its debt has fallen from 162 percent of its economy to 134 percent, even while it kept spending. Inflation helped melt away part of the burden.
The U.S., though, didn’t take advantage. We had higher inflation, but we also spent more, wiping out the benefit. The debt actually rose.
So when people buy gold, what they’re really saying is, “I don’t trust that anyone’s managing this hidden tax responsibly.”
Where to Hide if Inflation Sticks Around
Gold is one answer, the timeless hedge that can’t be printed or debased. But it doesn’t pay you while you wait. It just gleams quietly on the shelf.
Warren Buffett once said, “Gold gets dug out of the ground in Africa, or someplace. Then we melt it down, dig another hole, bury it again, and pay people to stand around guarding it. It has no utility. Anyone watching from Mars would be scratching their head.”
That about sums it up. Gold can store value, but it doesn’t create any.
A more practical shield might be the kind of boring, old-fashioned companies most people ignore, the ones that actually own things.
Energy and Resources: Oil fields, refineries, and pipelines (ExxonMobil, Chevron, Kinder Morgan).
Real Assets: Warehouses, farmland, and utilities (Prologis, Gladstone Land, Dominion Energy).
Their physical assets tend to rise with prices, while their debt gets easier to repay. Inflation works for them, not against them.
Then there are companies with pricing power, the ones you keep buying from even when they raise prices.
Apple, Coca-Cola, and Nike, brands so strong they can quietly pass on their costs.
Drugmakers and medical device companies, protected by patents and steady demand.
These are the stodgy stocks that can quietly protect wealth through the storm. They pay dividends, own real assets, and endure.
The Real Hedge
If you step back, gold and bonds are just symbols, one for fear and the other for faith.
But the real hedge might be something simpler: owning a share of productive assets that create value no matter what the headlines say.
Factories, farmland, patents, brands, things rooted in the real economy.
The trick isn’t predicting inflation or timing gold’s next move. It’s owning things that last longer than the panic of the moment.
We’ve learned that living well isn’t about having the biggest house or the flashiest things. It’s about shaping what you have into enough, planning with purpose, and choosing experiences that last longer than stuff ever could.
A new bike, a little umpire money, and the lesson that time does the heavy lifting. Here’s how I’m teaching my kids that saving before 20 is the real snowball effect — with a simple tool to show the magic of compounding.
I skipped Intel at $20 because the numbers looked terrible, only to watch the government step in with unprecedented support. Missing wasn’t failure—it was discipline, and patience is what keeps you in the game.
Made with Bullet