Last week, gold moved sideways off its 50-day moving average. The metal closed the week at $1,749.80 per ounce. In a much-anticipated speech at the Federal Reserve’s annual Jackson Hole Economic Symposium, Federal Reserve Chair Jerome Powell said the Fed was prepared to do what it takes to fight inflation. He acknowledged that continuing to raise interest rates would cause pain for individuals and businesses but said this was necessary to rein in rising prices. He made it clear that he had decided that recession is his answer to breaking inflation—not reducing the M2 money supply or changing restrictive policies Powell pointed to his admiration for Paul Volcker, the Federal Reserve chair who famously raised interest rates as high as 20% to break the inflation of the 1980s. Powel now seems determined to emulate Volcker. But Volcker was dealing with an America that was still a creditor nation, with a national debt of only $900 billion. Today, America is a debtor nation, and Powell is faced with financing a U.S. debt of over $31 trillion. It seems improbable that he can sustain high rates long enough to beat inflation but before those rates overwhelm the U.S. budget with interest payments. It’s likely that the “stag” in “stagflation” will get worse and that price inflation will be replaced by a more devastating and longer-lasting wage-price spiral. Gold has historically been a safe haven for investors. Rick Andrews is president of Avant Capital Management.