| |
|
$2,500.00 Gold and $250.00 Silver
|
|
|
‘That’s ridiculous’ I can hear someone saying.
But is it really all that far-fetched?
Let’s begin by adjusting the previous high gold price of $850 set in 1980, into today’s dollar value. By using the US government’s own inflation calculator (bls.gov/data/inflation-calculator.htm or simply Google ‘BLS inflation calculator’), we find out that gold should be trading at $2,260 to match the 1980 high of $850.
For silver the price today should be $129 to match the 1980 high of $48.
If one were to use the statistics maintained by John Williams at Shadowstats.com the numbers would be twice as high: close to $5,000 for gold and well over $250 for silver.
We need to keep in mind that there are today several billion people who were not part of the global population back then. According to Goldman-Sachs an estimated 70 million people worldwide are entering the middle class each year. Once people attain middle class status, they will work hard to stay there or advance higher still.
It is a coincidence that in two rapidly rising economies (China and India), the population has a centuries old attraction to precious metals.
The action in gold and silver during the past few days is an indication of how rapid the price rise can be. In a previous article I used the metaphor of a beach ball held under water. The deeper you push the
More...