Friday, February 17, 2012

Fri Post #2: Gold in 1980 vs Today - Is Gold at the top of a bubble?

Last year when Gold was hitting it's all time highs in the $1,900 per ounce range, pundits consistently made comparisons to the way Gold exploded in 1980 and subsequently crashed.

But even a simplistic analysis indicates that while in the 1980s gold was a hedge to runaway inflation, in the current deflationary regime, it is a hedge to central planner fiat money printing as a response to runaway deflation.

In other words this time around it is a hedge to the trillions in central bank reserves currently being printed (at last check approaching 30% of world GDP).

For those who are only now contemplating the topic of gold for the first time, the following brief summary from captures the salient points.

Hat tip to Zero Hedge for bringing this to us.


Click 'comments' below to contribute to this post.
Please read disclaimer at bottom of blog.

No comments:

Post a Comment