Too many similarities to the 70's to ignore them.
"in the two years from the first quarter of 1973, annualised, quarterly real GDP in the US plunged from 10.6% to -4.7%, yet the price of gold tripled, that of oil quadrupled, and wheatâs gain to the monthly peak was 160%.
Nor was this an isolated incident, for worse was to come, just five years later, during the two years from the second quarter of 1978, when US GDP underwent an even more remarkable swoop from +16.7% to -7.8%. That time, wheat rose 70%; the price of a barrel of crude was well on its way to tripling; and the number of rapidly shrinking dollars needed to buy an ounce of gold quintupled."
It isn't that much different today, except its worse. The oil producing nations despise us. Some of them are no longer accepting dollars for oil. We are drowning them with paper and electronic dollars from our printing presses, and at the same time drowning ourselves in debt, and totally dependent on them accepting more paper for oil to keep the balls in the air. We are "monetizing" the oil price increases, and eventually its going to cause the dollar to collapse like it did in the 70's unless and until we get our imbalances back to reasonable levels. We can't keep borrowing $500 billon dollars more each year, and we can't keep importing $600 billion a year more than we export. Actually, IMO, its a miracle it hasn't caused a total collapse of the dollar already. It shouldn't be a surprise to anyone if it has the same effect on gold price this time or more than it did the last two times.
THOSE WHO ARE IGNORANT OF PAST MISTAKES ARE CONDEMMED TO REPEAT THEM
The quote with the statistics came from this article....
http://www.prudentbear.com/index.php/GuestCommentaryHome
"in the two years from the first quarter of 1973, annualised, quarterly real GDP in the US plunged from 10.6% to -4.7%, yet the price of gold tripled, that of oil quadrupled, and wheatâs gain to the monthly peak was 160%.
Nor was this an isolated incident, for worse was to come, just five years later, during the two years from the second quarter of 1978, when US GDP underwent an even more remarkable swoop from +16.7% to -7.8%. That time, wheat rose 70%; the price of a barrel of crude was well on its way to tripling; and the number of rapidly shrinking dollars needed to buy an ounce of gold quintupled."
It isn't that much different today, except its worse. The oil producing nations despise us. Some of them are no longer accepting dollars for oil. We are drowning them with paper and electronic dollars from our printing presses, and at the same time drowning ourselves in debt, and totally dependent on them accepting more paper for oil to keep the balls in the air. We are "monetizing" the oil price increases, and eventually its going to cause the dollar to collapse like it did in the 70's unless and until we get our imbalances back to reasonable levels. We can't keep borrowing $500 billon dollars more each year, and we can't keep importing $600 billion a year more than we export. Actually, IMO, its a miracle it hasn't caused a total collapse of the dollar already. It shouldn't be a surprise to anyone if it has the same effect on gold price this time or more than it did the last two times.
THOSE WHO ARE IGNORANT OF PAST MISTAKES ARE CONDEMMED TO REPEAT THEM
The quote with the statistics came from this article....
http://www.prudentbear.com/index.php/GuestCommentaryHome
