Mark Lister

Now that outpaced the local share market and it eroded a whole decade's worth of house price rises.

There weren't many places for investors to hide through this period.

Gold and commodities were two of the only things that performed well

Gold surged 14-fold over the 1970s, and it's never come even remotely close to repeating those returns.

It did about 30% per annum for the whole 10 years.

Farmland was also strong on the back of high commodity prices and demand for tangible assets that would be better insulated from that higher inflation.

So US farm prices increased 13.8% per annum over that decade.

Now, it's really difficult to pinpoint exactly what led to this environment.

Soaring oil prices were definitely a part of it, as was high government spending, wage demands from very powerful trade unions, this is in the US, and all of those things together conspired to end the prosperity of the previous two decades.

The 1950s and the 1960s were pretty prosperous in the United States, but the energy shock

was probably the biggest factor.

So that has a real similarity with what we're seeing today.

Now back then, it was because the oil producing countries cut supply in the wake of the Yom Kippur War in 1973.

That was a conflict between a coalition of Arab states and Israel.

And that saw oil prices soar from about US$3 a barrel to four times that in a pretty short space of time.

So American oil production had already peaked a few years before this, and it just couldn't keep up with the growing demand from vehicles, from all those gas-guzzling V8s from the 60s that people like me know and love.

So rising fuel prices hit the US economy hard, and that led to higher transport costs, wage growth, and overall price increases.

So you look at the 1960s, and you had a US inflation rate that had averaged about 2.5%.

Unemployment had fallen as low as 3.4%.

and interest rates had remained fairly stable and low.