Change in The Old Order Impact on Financial Markets and Gold

Politics / Gold and Silver 2010 Jan 04, 2010 - 12:19 AM
By: Howard_Katz

The change of the old order has important implications for the financial markets in general and for the gold market in particular for the simple reason that politics affects economics. The reason that gold exploded in the 1970s is that it was suppressed in price by the US Government for 35 years. During this time, the US kept printing more and more money (more politics) thus reducing the value of its currency, and the explosion of the gold price of the 1970s was required to correct the corresponding undervaluation of gold. Similarly, recent Administrations have so increased our budget deficits that a new word is being used to describe them. The older generation remembers Everett Dirkson’s comment, “A million dollars here, a million there, pretty soon it adds up to real money. That was funny in the 1960s, but to update it to today would require substitution of “trillion.â€