Moves in Gold & Silver Will Be 1970s on Stilts

Friday, May 10, 2019
By Paul Martin

By: Egon von Greyerz
Friday, 10 May 2019

My long standing target for gold of $10,000 in today’s money and much, much higher in inflationary terms, is now more probable than ever. But I hope it will never be achieved. When gold goes to $10,000, it won’t be under the same circumstances that we saw in the 1970s. Gold then went from $35 in 1971 to $850 in January 1980 – a 24x explosion in very different conditions.

In the 1970s we had high inflation, weakening currencies and recessions in most countries. I remember the time well. I lived in the UK and experienced in those days a global oil crisis, a coal miners’ strike and shortages of various products. In 1974, businesses could only operate with electricity for three days per week. I was involved in retailing with Dixons which later became the UK’s biggest consumer electronics retailer and a FTSE 100 company. We sold televisions and other electric products with candle light. The Dixons’ share price went down 94% (and so did my first options) although the company was always profitable and well financed. My first mortgage went to 21% for a period.


I was fortunate to learn early what could happen to a country’s economy. Times were hard but there was no depression and most people had a job. What we must remember is that in August 1971 Nixon took away the gold backing of the dollar and that opened the floodgates for the credit creation and money printing that we are now in the final stages of. Gold’s massive surge in the 70s was primarily caused by double digit inflation and currency debasement.


US debt in 1971 was $400 billion which was 34% of GDP. Today US debt is 55x greater at $22 trillion and 105% of GDP.

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