Why the PMs are going up
Mozart, why are PMs shooting up? Is there any one major factor? I recall a blurb about gold tripling in price during Jimmy Carter, but it's been fairly stable ever since then (until your post).
Gargamel, et. al.,
Tis a good question to ask.
My answer is strictly an economics-based answer, not a political one; it is strictly to be construed as an informational one that is based on the "dismal science" of economics. I majored in econ in my school days at Sac State in the '80's, but the internet has been my real teacher in the last ten years. I think that economics is sexier than Salmons.
And it's not PMS (PreMenstrual Syndrome) in my subject line! It's an abbreviated Precious Metals in plural form, just to be clear with y'all.
1) As you implied in your quote, the PMs have gone up because of my post. Just interpreting what you wrote.
2) There are a number of factors in the reason for the price rise in gold in the late 70's, but I'll focus on this one, per your request. I'd like to point out that...<sheesh, I listed two urls and they both came up, but without the charts, sheesh>...the price of gold really went up OVER 20 TIMES VALUE during the seventies, if you look at it from 1971, when it was around $40 an ounce, to 1980, when it hit the peak price of $875 an ounce. 1971 was the fateful year when Nixon fully broke the last, tenuous link between the dollar and gold that caused the dollar to be a fully-fiat monetary unit of exchange.
The price of gold slowly rose during the 70's, but it was during the Paul Volker era and his high-interest economic "medicine" that he applied that was a part of the reason for the price of gold to take off on a 4-year-long bull run from a low of just over a $100 an oz to the peak of $850 an ounce with 75% of the increase happening in less than a year.
The #1 factor in the increase in the dollar-denominated valuation of the gold during that legendary, parabolic gold run of the late 70's was the massive increases of the money supply that the US "government" created (Vietnam War and LBJ's Great Society programs) that greatly exceeded the real GDP of that era, hence the value of the gold reflected the debasement of the dollar currency.
Dollar debasement = inflation. Period.
The very same thing is happening today with the price of gold in the early stages of a nearly identical parabolic curve going upwards that reflects the massive "government" spending on the Iraqi war, the Military-Industrial Complex, the Pharmaceutical-Industrial Complex, the Usury-Industrial Complex (the banking industry), the Energy-Industrial Complex and the Media-Industrial Complex.
The central banks of the world--which are the Federal Reserve in the US and the several European-based ECB banks--have been funding those numerous industrial complexes so thoroughly that the American economy is now dominated by those aforementioned industrial complexes to the tune of 85% of the entire American GDP, which is an astonishing %.
Those various industrial complexes really don't produce a lot of utility and wealth in the masses of people, but they do create an enormous amount of wealth for those who own the various corporations that run those complexes, hence the amount of money that those industrial complexes cause to be created exceeds the real GDP of the American economy, hence the value of the dollar continues to decline with the attendant across-the-board price increases in everything that's sold, including gold and silver, both of which have been monetary units of exchange for thousands of years acting as monetary stabilizers over the centuries that were the key means of enabling trade to go from barter to monetary-based, trade-based markets with stable prices world-wide.
Gold/silver was acceptable to buyers/sellers on one side of the globe as much as the other side of the globe. Without gold/silver being used as monetary units of exchange, the world's economies would never have developed like they did over the centuries. If someone tried to pass off some piece of paper with a picture of an idiot on it on the other side of the globe, the seller would go "WTF?"; but if the buyer presented a gold/silver coin, the seller would bite it, weigh it and, perhaps, haggle a bit over the amounts to be traded and wind up with a mutally-acceptable trade price to both parties.
The last century or so has been an aberration of the long monetary history of the gold/silver acting as key units of exchange and they were shoved aside, which allowed the dominance of the fiat-based money being used in the 20th Century. Only Iran, Cuba, Libya, Sudan and North Korea (I now doubt that North Korea belongs to this list, as they've accepted financial "assistance" from the US in "exchange" for limitation of nuclear development.) All other countries in the world use fiat/usury-based monetary units of exchange.
Search this: " German Mark hyperinflation " to see what happened when a fiat monetary unit was inflated well beyond the real GDP of Germany of that time.
The same thing that happened to the Mark is now happening to the dollar with the hyperinflationary spiral of the dollar being in the early stages of a parabolic curve upwards...with the gold now matching that today. The central banks have dumped most of their gold holdings in the markets in their so-far-successful efforts to keep the price of gold suppressed, but now that some 70% of gold is now held in private hands outside of the central banking systems, the banks have lost their leverage in their decades-long suppression of the price/value of gold, so now we are seeing the re-adjustment of the prices/values of gold adjusting itself upward to balance out the amount of $ that has already been created out there.
Search this: " GATA " to understand the suppression of the price/value of gold.
Hence we haven't seen the last of the price increases of the gold and many expect the gold to hit at least $4,000 an ounce to $12,000 an oz or more within the next two years. It has to happen in order for the fiat monetary units of exchange (the dollar, the pound, etc.) to stay viable as units of exchange that pretend to have gold/silver as the great equalizer of monetary units.
The entire PM industry is a $1.4 trillion-dollar industry; the entire dollar-denominated industrial complexes exceed $200 trillion dollars today, and this does not count the massive $540-trillion-dollar derivatives markets that have exploded since the last major Dow Jones crash of 1987. Do the math. It's why I'm a gold/silver bug, big-time.
This also 'splains why Bibby's contract price is so sky-high.
I blame Mikki "Stone Hands" for any typos in this post.
Any questions?
Class dismissed. And knock off the icicles off the schoolyard baskets before you start shooting the balls...
~Mozart
