Inflation of the '60s, '70s, and Today: Does History Rhyme? -

They say history doesn't necessarily repeat, but it often rhymes.
With that in mind, Midweek Memo host Mike Maharrey looks back at the inflationary era of the 1960s and 1970s and finds some interesting parallels to today.
Inflation didn't rise in a straight line back then. It came in three distinct waves. We've seen one wave in the currency inflationary cycle, and it appears we're setting up for a second. And there are other similarities between then and now – including the trajectories of interest rate policy and government spending. 
Mike also reveals just how badly this price inflation is impacting the American consumer, who is broke, stressed, and buried in debt.
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Mike opens the show reminiscing about Super Bowl LI.
<blockquote>
"February 25, 2017. Super Bowl Sunday. Midway through the third quarter, the Atlanta Falcons were firmly in control of the game, leading the New England Patriots 28-3. Most people assumed it was game over. 
"It wasn’t.
"New England scored 25 unanswered points to tie the game in the waning seconds. The Tom Brady-led Patriots capped their comeback with an overtime touchdown to win the game 34-28.
"It was the biggest comeback in Super Bowl history.
"It just goes to show that a game is never over until the final horn.
"Anyway, most people thought the Fed had whipped price inflation with its rate hikes and balance sheet reduction. Never mind that the CPI never did get back to the mythical 2 percent target. It was coming down, and everything was supposedly fine. The central bank even cut interest rates. 
"But the game wasn’t over.
"And now, inflation seems to be making a Brady-Esque comeback."
</blockquote>
Mike says this doesn't shock him at all. 
<blockquote>
"In the first place, inflation is the plan, so I know that inflation will never be beaten. The government just wants to keep it tame enough so you don’t complain. However, the inflation tax is a crucial aspect of government financing. In the second place, a look back at history should have given people pause before taking an inflation victory lap."
</blockquote>
Mike notes that history doesn't necessarily repeat, but it often rhymes. 
<blockquote>
"If the inflationary era of the 1960s and '70s is any indication, we are only in the early stages of a secular inflationary cycle."
</blockquote>
Mike looks back at the trajectory of price inflation of the past several years, noting that it peaked, fell, and appears to be surging again. He points out that the newest inflation spike isn't solely due to the U.S.-Iran war. The money supply has been increasing for well over a year. This is, <a href="https://www.moneymetals.com/news/2024/01/12/common-definition-of-inflation-you-hear-today-is-wrong-government-propaganda-002925">by definition</a>, inflation.  
<blockquote>
"Whether it’s due to the war, the increasing money supply, or some combination of the two, price inflation is clearly setting up for a second wave. And this is exactly what happened in the 1960s and 1970s."
</blockquote>
Inflation didn't increase in a straight line in the '60s and '70s. It came in three waves. 
<blockquote>
"Now, if you overlay the 2022-2023 inflationary spike over that chart, you’ll see some startling similarities. That tells me that if history is any indication, we may well still be early in this inflationary surge."
</blockquote>
<img src="https://www.moneymetals.com/uploads/content/cpi-today-and-60s.jpg" width="600" height="432" class="mx-auto p-3" alt="" />
Mike explains that the Fed cut as each time inflation peaked, setting the stage for the next wave. 
<blockquote>
"The first wave of inflation started in the mid 1960s and then eased in the early 1970s. What happened? Well, the Fed hiked rates in 1969, with the effective federal funds rate peaking at 8 percent in 1969. This brought price inflation back under control, and the Fed cut rates in 1970. That set the stage for the second wave of inflation that peaked in 1974. Once again, the central bank responded by jacking up rates, with a 10.5 percent peak in 1974. And once again, the inflationary pressure eased. So, what did the central bank do? It eased rates again, setting the stage for the third wave of price inflation. Price inflation wasn’t put in the grave for good until Paul Volcker cranked rates to 20 percent."
</blockquote>
Mike then exposes a strong correlation between government spending and inflation surges. 
<img src="https://www.moneymetals.com/uploads/content/cpi-v-federal-spending.png" width="700" height="380" class="mx-auto p-3" alt="" />
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<blockquote>
"Price inflation is ultimately driven by money creation. But why do governments print money? They need to borrow and spend. Government outlays increased steadily in the 60s and 70s thanks to Lyndon B. Johnson’s Great Society social spending coupled with the Vietnam War. The necessitated borrowing. Fast forward to the most recent inflation spike. It followed massive levels of spending and stimulus during the pandemic."
</blockquote>
One could argue that the primary role of the central bank is to facilitate government largesse. 
<blockquote>
"Again, history doesn’t always repeat. But this looks an awful lot like a sequel to the 60s and 70s. Unfortunately, sequels are rarely better than the original. So, you should probably think twice before selling your inflation hedge, or panicking because people say the Fed might raise interest rates and that will be bad for gold."
</blockquote>
Meanwhile, this inflationary environment is putting significant stress on Americans.
<blockquote>
"In fact, the best way to describe the American consumer is broke, stressed, and buried in debt. Inflation will do that to ya."
</blockquote>
Mike explains that the data mainstream pundits spin to argue the American consumer is doing great doesn't tell the whole story, and just because people are spending doesn't mean they're fine.
<blockquote>
"There is a difference between spending because you can and spending because you have to. When prices rise, spending necessarily rises with them, and that’s exactly what is happening to the American consumer."
</blockquote>
Not only that, Americans have drained their savings and turned to credit cards to make ends meet. Mike parses the data to expose this unpleasant reality. 
<blockquote>
"This does not scream 'resilient consumer.' In fact, it smacks of desperation."
</blockquote>
This desperation is reflected in LegalShield’s Consumer Stress Legal Index (CSLI). The report concluded that the data is "consistent with sustained, broad-based financial distress.”
Mike urges listeners to take mainstream reports touting the "strong consumer" with a grain of salt.
<blockquote>
"Ask yourself, 'What data points are they missing or just ignoring?' Because taken as a whole, the data points to a consumer at the end of his proverbial rope."
</blockquote>
Mike says this underscores a broader point. An economy built on borrowing and spending money for stuff isn’t sustainable. At some point, consumers will crack under the pressure, taking this debt-riddled bubble economy down with them.
<blockquote>
"When the bubbles finally burst, the Fed will have to surrender to inflation to try to pump the economy back up. You want to have gold and silver before that happens, because once it does, I have a feeling that prices are going to skyrocket quickly. You don’t get fire insurance when your house is on fire."
</blockquote>
Mike wraps up the show with a call to action — call 800-800-1865 and talk with a Money Metals' precious metals specialist today.
<h2>Articles Mentioned During the Show</h2>
<a href="https://www.moneymetals.com/news/2026/05/22/two-things-mainstream-pundits-get-wrong-in-their-current-gold-narrative-004934">Two Things Mainstream Pundits Get Wrong in Their Current Gold Narrative</a>
<a href="https://www.moneymetals.com/news/2026/05/26/sound-money-the-enemy-of-big-government-and-a-friend-to-liberty-004939">Sound Money: The Enemy of Big Government and a Friend to Liberty</a>
<a href="https://www.moneymetals.com/news/2026/06/01/rate-hikes-the-right-medicine-at-the-wrong-time-004954">Rate Hikes: The Right Medicine at the Wrong Time</a>

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