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In or around 1980, gold hit approximately $800 per ounce. It promptly retreated to around $400 per ounce and didn't see $800 again for approximately 28 years. Does anyone know of current circumstances that make a repeat occurance unlikely in today's prices of precious metals?

1980 was just before the biggest economic boom in history. (Computers, Internet, microchips, etc.)

That had a major impact on the value of this country's money.

In 2011 is there some sort of economic boom on the horizon? I'm not aware of one.

Is that 800 oz. inflation adjusted? (And I'm not talking about the phony inflation numbers but let's see shadow stats inflation)

At the same time silver went to $54 per oz and has never seen that again. That was because the silver market was cornered. I always kind of thought the rise in the price of gold was tied to the silver jump somehow, but I don't really know.

From 1981 to 2001 the economy grew 78.96941% adjusted for (feds) inflation. The majority of this was fueled by the tech boom.

In 1981 the debt to GDP ratio was 32.5%

In 2001 the debt to GDP ratio was 56.4%




For our economy to achieve the same GDP over the next 20 years it would have to reach 20.2 trillion dollars.

And for the debt to GDP ratio to be 56.4% again, the debt would have to be 11.4 trillion dollars.

Problem is, we are already at 9.247T, and at an average rate of 2.59% federal spending a year over the last 33 years. the debt will be 15.42T compounded by 2031.


So EVEN if we find the next great economic boom for this country. If Washington doesn't cut the deficit by a large amount, the dollar is screwed. Especially with china on the rise.

China started buying gold in 2000 as a long term plan as a way to diversify and hedge against the dollar, long term for the Chinese is 50 years. Better yet, they want to replace the dollar with their currency and become the leading economic power in the world, and they will wait a long time to make the perfect move. The beauty of being a nation thousands of years old. 50 years is not that long. The Chinese as a civilization have been around since 2000BC, as a unified region since 221 BC. 2231years vs 235 years for the US. The united states has been around for only 1/10th the time, and we act as such. 50/10 = 5. The length of our so called long term plans.



Ok enough with the rambling. The short answer of this, we don't have the new technology or social construct to change our ways and things are going to keep going down hill. That's how I feel anyway. Exponential economies can not grow exponentially, even if the fed thinks other wise.



**All numbers based off a year 2000 dollar

AlexTG wrote: China started buying gold in 2000 as a long term plan as a way to diversify and hedge against the dollar, long term for the Chinese is 50 years.

Quibble. 50 years is medium range planning for China. "Long term" is more like "150yrs".