Unchanging Patterns of History

Unchanging Patterns of History


Early in 1980 the GOLD price peaked out at nearly US$900/oz.
Here is what the media headlines were saying about gold and the economy at the time;

Boston – 4th January 1980
Propelling the gold rush of 1980 is an international mood that has shifted from financial concern to political panic. “The world anxiety level has just taken off,” says Jeffrey A. Nichols, chief economist with Argus Research Corporation, a New York financial advisory firm. The wealthy and well-to-do, particularly in the Middle East but also elsewhere, have been frightened by the events in Iran and Afgh… (695 words)

Washington – 4th January 1980
At home and abroad, deep concerns about peace and war and about the future supply and price of oil are distorting economic behaviour. Latest evidence is the skyrocketing price of gold, as a relative handful of moneyed investors — fleeing the uncertainty of paper currencies — push the precious metal above $600 an ounce. “Panic,” international economist Lawrence B. Krause said in a telephone interview, … (595 words)

Hong Kong – 8th January 1980
The price of gold reached a world- record $680 an ounce on the Hong Kong bullion market Monday in what dealers described as panic buying. The price of the metal opened trading at $660 an ounce, $30 above its level here on Saturday, and quickly soared upward in reaction to President Carter’s weekend announcement of a reduction in grain sales to the soviet Union and other measures to retaliate against Soviet … (83 words)

London – 15th January 1980
The price of gold skyrocketed to $660 an ounce at the afternoon fixing in London Monday, another record. The dollar was steady to slightly lower. The latest gold-buying spree began in New York Friday afternoon. It was spurred by Kuwait’s announcement that it would trim its oil production 25 percent April 1. The cutback was seen as a prelude to similar actions by other OPEC nations. One dealer in Zurich, where gold prices were lower than London’s, but still high, attributed the… (96 words)

London – 17th January 1980
The price of gold rose to a stunning new record of $765 an ounce Wednesday on hectic European bullion markets before easing back as speculators took profits. Besides general concern about world political tensions, two other factors have been held responsible for the latest gold rush: concern over Yugoslav President Tito’s health and a remark by US Treasury Secretary G. William Miller that the Treasury had no pl… (176 words)

13th February 1980
By Robert Edwards On Nov. 20 of last year this column stated, “The solution for inflation is well known, but the cure could be worse than the disease.” Since then, a number of readers have asked about this “cure.” High labor costs, big government, oil price increases, and other factors may be blamed for causing inflation. But these are symptoms, not causes. Inflation results from too many dollars. Rather than an increase in prices, inflation is the decreasing value of our money.

Sitting with my father after a large Christmas lunch with close family, I asked him what he remembered about the investment world in the late 1970’s & early 1980’s.

He proceeded to explain how people were struggling to, or simply couldn’t, pay their mortgages because of rising interest rates. He went on, “In 1977-8, homes in South Australia had an average value of approximately AU$60-70,000, then interest rates began to rise to levels of between 17% to 19%. This then lead to an increase of homes flooding the market place dropping the prices of the average home to less than AU$30,000!! People who were cashed up, invested heavily into Commodities and had no or limited debt did well, did very very well! But unfortunately the majority were not cashed up and had debts that exceeded far beyond their annual income”.

Historians confirm that King Solomon was one of the wisest and richest men of all time. Here are some of his writings from his own personal autobiography;

“That which has been is what will be, that which is done is what will be done, and there is nothing new under the sun.”
“Is there anything of which it may be said, “See, this is new”? It has already been in ancient times before us.”
“There is no remembrance of former things, nor will there be any remembrance of things that are to come by those who will come after.”
King Solomon 931 B.C,

It’s interesting to note, King Solomon spoke about ancient times that were before his time, yet to us, he made these comments nearly 3,000yrs ago!

That is in stark reality with today, where many of our financial advisors in their very myopic analysis, are lucky to reflect back 5 to 10 years, let alone to the late 1970’s-80’s. As Solomon said, “there is no remembrance of things”.

by Simon Heapes