Gold Prices Scream Biden’s ‘Shrinkflation’ Narrative Is All Wrong

In crafting their election-year narrative, President Joe Biden and congressional Democrats are attempting to save face by using a plethora of buzzwords to blame businesses for rising prices. Terms such as “price-gouging” and “shrinkflation” are used to publicly chastise any industry that dares to raise prices or reduce portion sizes, attributing such attempts solely to corporate greed. The problem for Biden is, the gold market is now a megaphone for his economic ineptness. 

Gold continues to close at record-setting prices. In the past six months alone, the metal is up almost 25% — now costing as much as $2,400 per ounce. For added context, at the start of 2021, the price of gold hovered around $2,000 per ounce, and at the start of 2024, the price was also approximately $2,000 per ounce. 

All of this is to illustrate that the current run-up in gold prices is very much a new phenomenon, occurring after three years of relatively stable prices. 

It appears that when the Biden administration promised that inflation would be “transitory,” it meant to a period of even higher inflation.

We know this because, since the dawn of civilization, gold has commonly served as currency due to its remarkable uniqueness as a store of value. This isn’t to say that gold isn’t subject to any price fluctuation whatsoever — it’s just historically been the least unstable precious commodity, which made it the most ideal currency.

Therefore, when gold prices suddenly skyrocket, it’s not a sign of some meteoric surge in its popularity or demand. Rather, it’s a sign that the dollar — the unit that gold is priced in — has declined relative to its stability. We now need more dollars to buy the same amount of gold. There’s your “shrinkflation.” 

When the prices of materials and services cost more, businesses are forced to also raise prices or reduce product sizes. This is a symptom of inflation — not its cause. The same higher prices and shrinking product sizes that Biden derides as corporate greed are what one would logically expect in an environment where the dollar has less value. 

The actual root cause of inflation has always been the same. It is a conscious policy decision made by governments. Here in America, it’s a simple historical truth that presidents tend to get the dollar they want. Under Bill Clinton, we enjoyed a period of dollar stability. Under Biden, we’re experiencing inflation. In both cases, it was a matter of choice. 

This might lead one to wonder why Biden would opt to fuel inflation, or at a minimum, be indifferent toward it. I cannot ascertain his motivations for certain, but one guess is it’s based on a misguided Keynesian belief within his administration that higher inflation will stimulate the markets and the economy before the election. It’s a fool’s errand and will cause significant suffering — enormous, in fact, if the gold price projections from major banks, including Goldman Sachs and Citigroup, actually manifest.

While the Biden administration is enabling inflation, Democratic Sen. Bernie Sanders of Vermont has cosponsored the Shrinkflation Prevention Act of 2024, which he claims will lower prices by essentially allowing the Federal Trade Commission, another arm of government, to take action against businesses that reduce their product offerings. Returning to what was previously stated, the irony here is that “shrinkflation” is again merely a symptom of inflation. Sen. Sanders can address it only by combating inflation itself.

Interestingly enough, this is something Congress is perfectly capable of doing. The Constitution originally granted Congress the power to coin money and regulate its value. Instead of asserting that authority, our representatives chose to punt it, which resulted in the status quo of American presidents essentially obtaining the dollar value they desired.

If Congress wishes to reassert its authority, so be it. 

But if it allows Biden to continue to devalue our currency, lawmakers shouldn’t complain about what businesses do to counteract his economic policies.

Republished from Issues & Insights


  • Jonathan Decker

    Jon Decker is a senior fellow at the Parkview Institute and a leading "supply-side community organizer" in America. In 2015, he launched the Committee to Unleash Prosperity on behalf of Steve Forbes, Larry Kudlow, Arthur Laffer, and Stephen Moore and served as their executive director for 8 years. Decker’s writing and research has been featured in publications such as the Wall Street Journal, DailyMailUK, New York Post,, and the Boston Herald. He has also appeared on national talk radio programs and has been featured on Fox News shows including Hannity. Decker is a graduate of Roger Williams University with over a decade of experience in various public policy roles.

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