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Why Did Gold Hit $850 In 1980 ?

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It was the effect of decades of inflationary policies (central bank money printing), and the US dollar gold backing being removed in 1971.

The important question is what stopped it going up further? The answer is Paul Volker, who in 1980 started quantitative management of the money supply, in other words he increased rates to rein in the expansion of the quantity of USD in circulation.

Back to the present. In the last ten-fifteen years money printing has balloned up again. Gold is now showing the effect of years inflationary monetary policy, and the this effect is already in the pipeline. It will take massive rate rises to reverse this process. But this would crash the economy.... so central banks are now between a rock and a hard place.

The fact that the FED announced they will no longer publish money supply (M3) data from this month is a powerful signal. They will increase M3 even more quickly in an attempt to let inflation reduce the debt burden. In my opinion this will only work as a short term fix and gold will explode until real rates are increased to painfully high levels.

Strategy for dummies:

- buy gold

- wait for interest rates to skyrocket, then sell gold

- buy long term bonds at sky-high rates (and rock bottom prices) when nobody wants them

- cash high bond interest until rates start falling.

- sell bonds and buy stocks when there's blood on the floor.

It will take a few years to develop but it will make you rich.

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It may seem hard to believe but gold became the object of a speculative bubble not unlike the current HP situation where properties are bought and "flipped". You could go into H Samuel, buy a load of crap jewelry then immediately take it down to a second hand jewelry shop and sell it for the gold "spot purchase" price which would be more than you had just paid. Suspect this could not happen again as computerised systems will allow retailers to adjust prices quickly if gold takes off.


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CNGO you are making it sound very simple I must say.

I was never into gold but after years of studing political situations of this current affairs you will see with my simple english explaination what I am trying to say.

Being a muslim I can see the other side of the coin and with very deep understanding of faiths and world history spanning over 1400 years. Adding to this I study prophecis too. Prophceis that have already been come to pass with 100% accuracy and many others that are on the way with very strong indications that they would come to be true too.

This war that has been waging is off the radar by many investors and by many others who do not know the world accurate history and developments.

This war is generational war and will not end over night but will take 30-100 years to come to conclusion and even then we might not even see the end.

You have to be on the otherside of the paralle civilisation to understand the turmoil that is on it way. Turmoil that history has never seen before and will be indeed apoloptic.

People have faiths and strong believes and they act upon these believes. The demonisation and labeling of islamic "fundimintalist" that I very much understand its concepts are working very hard with each passing year to establish the Worldwide Islamic State that ruled for 1400 years till its end on 4 March of 1924. I am not refering to the current backward islamic movements that exist today but a very different and new bread of Islam to the many eyes of born muslims and even more strange to the eyes of the western world.

This current war is waged underground and will be strong strugle between the two worlds. This war will be fought on all levels militry, media, political, economical and social.

It takes books to expain the very soon to be seen events unfolding in this world. Therefore I will only concentrate on the economic side.

These wars are not like other wars. It has multi faces to it and this will make it even more serious. You can study world wars and history and their types and this war that is being waged underground encompases all the types.


1.religion (ideas, belives, systems, rulings)

2.resources (Oil, food, water, gas, gold, silver, uranium)

3.Power and world influnce (China, Russia, US, Europe, fundementlist islam)

4.Economy (Trade, money, and systems)

5.Can't remember

You see the world has always two equlibriums and two superpowers. Currently and slowly we are coming to have 4 or 5 mini superpowers. History indeed repeating itself. The more superpowers the more intensity that the strugle will be.

These events do not happen over night but are very slow as the plan is being implemented.

As these events unfold will have a major impact on the world economy. There are economic systems that have gold and silver at the core i.e Islamic economic system. And also the chiness too have had gold and silver in their economic systems. As these emerging powers their trade and monetry system will be polarised.

China have stared on stocking on Gold. Russia have started on stocking on gold. Gulf state have started stocking on Gold. This is starting to show that the world have lost in its confidance in other countries paper money. Currently the emerging superpowers are stuck with their huge $ reserves and working ways to unload it without causing too much world economic upset. It will only take one to start unloading and you will have a snowball effect around the world.

As time passes gold will be going through decades of bull market. not only 10 or 20 years but 30 or even 40 and 50 years.

Currently it is not even a bull market but only the begining. People think that it is has reached the limit but I do not think so and very much belive that it is only the start.

I believe gold will go beyond the $2000 or even the £2000/oz mark levels. It is unblievable but very much possible.

I am heavliy intevested in gold but for very good reasons. Go physical as time passes by and events unfold.

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gold really was just a play for "those in the know" last time.

current markets are more like the 1800's speculative booms....remember the californian gold rush anyone??

.....people came from all corners of the globe to "invest"........same as they have with dotcoms...this is global guys,and the ones that win are at the top of the pyramid.

.....property has been done to death now,and with global interest rates rising...the name of the game is preserving what you have.the sheeple don't realise they've been sold a dummy yet.

...but they will happily jump out of the frying pan and into the fire...given sufficiently tempting rewards.

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