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Inflation Dragon Now Too Big To Hide

May 17, 2022

“Here in the U.S., the most significant issue pressing on the polls and agitating voters is not abortion, it’s not the Supreme court, it’s not climate change, but inflation and cost escalation, number one. Polls register a growing concern with, again, household budgetary pressures. And so now you get politicians who are like, how do we dance around this? It’s a reality we can’t control, and how do you manage perceptions with it? You’ve got to find somebody to blame.” — David McAlvany

Kevin: Welcome to the McAlvany Weekly Commentary. I’m Kevin Orrick, along with David McAlvany. 

I’m really looking forward to Friday. We’re celebrating the 50th anniversary of the company. Basically, it was your mom first that started this company back in 1972—

David: That’s true.

Kevin: And your mom and dad are in from the Philippines. They live at one of the orphanages that they help with, and they came back to Durango for this and the 16th birthday of your eldest son. Wow.

David: Right? Well, I mean, of course, to see the rest of their kids too. My sister in California, the rest of the family towards the east coast. And it’s great to see them. We spent the weekend tent camping in Arches National Park, which I don’t think they’ve been in a tent in 50 years.

Kevin: I didn’t even know you could camp there. I’ve been there and I thought you had to leave after five. But you guys had the permit, huh?

David: We head to Moab twice a year with the five families, we call them the five families. Sounds like sort of a mob gathering or something. It is a mob when you start counting all the kids and sort of the mayhem that happens over—

Kevin: The red rock, the desert, and the kids, and the noise— Is there water there?

David: Sometimes we’re floating the river. Arches, it’s more about hiking. Other trips we’ll take mountain bikes and various levels and various ages. So we kind of scatter and then re-gather for meals.

Kevin: You were a little worried, your mom and dad, you weren’t sure when the last time was that they tent camped. Now, they’re pretty tough. They do missions work all around the world, but tent camping, was this the first time for your mom in what, 50 years?

David: I think so. Yeah, to end the weekend, it was thank you for the invitation, we look forward to coming back next year.

Kevin: So they said that they liked it?

David: Yeah. So I guess we will invite them.

Kevin: Well, good. Well, Friday, the company gathers, and again, we’re very, very thankful. We have—

David: 50 years.

Kevin: 50 years. And we were talking to shift this thing over to economics because your dad— When Nixon closed the gold window in 1971, your dad knew enough about economics and he was a broker at the time, a stock broker and a bond broker. He understood that that was the beginning of the death of the dollar. And since that period of time, since 1971 when Nixon closed the gold window and then ’72, when Don and Molly opened this company, the dollar’s lost 99% of its buying power. So I guess that he was right. If you look at it, gold was 35 bucks an ounce when they started.

David: You know, there’s a life cycle to everything. And when you look at the dollar and you look at the changes that were happening in 1970s, you could say it was creative genius. I mean, there were things that were going on that had to happen. They set the stage for a tremendous credit expansion, 40 years of tremendous asset appreciation and real estate and stocks and bonds unloosed fr...