When the returns on bonds, equities and real estate do not adequately compensate for risk and inflation, the demand for gold and other alternative investments such as commodities increases. Just like compound interest, compound inflation grows faster and faster. The average reported annual inflation since 1913 is only 3.24%. This inflation, when compounded over 100 years produces inflation of over 2000%. Yet that only tells a part of the story as this inflation rate as reported by the Bureau of Labor Statistics fails to include “food” or “energy” costs in its calculations.