Will the Fed succeed in engineering a 1970's investment environment?

I think that this is what the Fed is aiming for. It wold reduce the US federal debt burden to a manageable level. Below is a comment from Frank Holmes essay today on what worked then. (Remember, these are nominal numbers; inflation averaged over 8%/annum during the decade. Thus, the real value of the initial stock of government debt was reduced by over 50%; sorry, bondholders.)

"A Rerun of That ‘70s Show?

Looking ahead, if the economy starts to experience runaway inflation, history shows it makes sense to hold real assets. A decade ago, Investment Advisers Stephen Leeb and Donna Leeb wrote a very informative book on how to profit from the “Turbulent Post-Technology Market Boom.” The book, Defying the Market, discussed how to protect against deflationary and inflationary scares, comparing investment ideas that were likely novel to many people in their day, including energy, food, gold, and small-cap stocks.

Will Commodity Investors See
a Rerun of That ’70s Show?

	Nominal Annualized Returns
Gold/Silver	33.10%
Gold Stocks	28.00%
Oil	26.40%
Oil stocks	14.20%
Equity REITs	12.10%
Commodities	11.00%
Real Estate	10.10%
S&P 500 Index	8.40%
CPI	8.10%
T-Bills	6.80%
Government Bonds	3.90%
Source: Defying the Market, Stephen Leeb and Donna Leeb, Leeb Investment Advisors

One table listed the performance of these investments during an earlier era when Americans faced high inflation—the 1970s.

In that decade, gold, silver and oil outperformed many other areas of the market. Gold stocks rose 28 percent on an annualized basis and oil companies grew 14 percent. The S&P 500 Index, on the other hand, grew 8.4 percent on a nominal basis. After factoring in sky-high inflation of 8.10 percent, gold and oil still added significant real returns. The real return of the overall stock market, on the other hand, was nearly zero.

“Stocks leveraged to growth, such as the oils and oil drillers, did splendidly. But the big-cap stocks [i.e. the general market] … were complete duds,” wrote the Leebs."