Mark McHugh

News Flash: There’s ALWAYS Been a Gold Standard

In Open Thread on Tuesday, July 12, 2011 at 2:44 pm

You may think the price of gold swings wildly….that’s really not true.

You just have to view it through the right lens.  I think CQCA Business Research has found a great formula for pricing gold: Using the US monetary base.

If you check out this post and the chart, you’ll see that the monetary base = about 1.75 Billion Ounces of gold, or right about where it was in the early 1970s.   That was the beginning of a 2000% move.  I think the coolest thing about the chart is that it shows how gold has pretty much stayed in a range with monetary base, between .5 Billion to 2 Billion ounces.  When it went below .5B it was time to sell and when it went over 2B it was time to buy, buy, buy,buy,buy.  It’s around 1.75B now…..nowhere near time to sell.

If you ever find yourself with access to a time machine, don’t go to America in the early 70s to buy gold, it was still illegal for US citizens to hold.  I might  reccommend  January 1, 1975, and trust me, it’s so you could relive the disco-era.  That’s when US citizens could own gold again, and it was $185 an ounce.  It would quaduple over the next five years.  Not bad…

But when I look at this chart, I realize that gold was much more expensive in 1975 in terms of monetary base.  So maybe I’ll pass on the time traveling.

Right here, right now, there’s is no other place I’d rather be….

~ Jesus Jones

If you’ve been following the debt ceiling talks, you know there’s still no grownups in the room.  Gold’s got a looooong way to run. 

Check out CQCA Business Research .  There’s a whole lot a fresh thinking posted there.

Update:  CQCA will be added to the blogroll.  I have been remiss in adding many of the people who have helped me.  To those supporters who would like, just leave a comment saying so and I’ll be glad to add you to the blogroll too.


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