For those who can remember...does it feel like 1979 or 1980 or...?

renman95

gold chart 1971-2007ish

ttown

Maybe it's my age but to me it's much worse than 79/80 even though we haven't seen the high interest rates just yet. The thing about it this time is we're printing money hand over fist and there are huge job loses that weren't present in 79/80. My career took off during that period even though times were up in the air. This has a long way to run unlike 79/80 where the it peaked quick and went back down and wondered for years in the 80's.

gsa1fan

The jobs were still in the USA then too! Overall not much to compare equal then & now.

I was 18 then - NOTHING feels the same!

jmski52

It feels like 1976 to me. Stagflation and a faltering economy for the next few years, at least. Then, inflation.

I was laid off in 1976, and this feels similar.

cladking

Everything's different now.

Silver took gold along for the ride in '79 and it took high interest rates
to knock gold down even after silver crashed.

Gold is taking silver for a ride this time and there won't be high interest
rates because of a weak economy. Even after very high inflation makes
interest rates go up they will lag inflation significantly and effective rates
will remain low.

Overdate

For a while in the late '70s official inflation was about 12 percent, and we actually experienced it in continuous price rises for the basics - food, shelter and clothing. To put that in perspective, the value of a $100 bill was shrinking at the rate of about 25 cents a week.

Interest rates were high, too, but until late in the game the rates were not high enough to make up for the loss in purchasing power, especially after taxes.

So far, things this time are different - near-zero interest rates and overall prices are rising more slowly. But unemployment is climbing and the economy overall seems far weaker than I remember from the late '70s and early '80s.

MoneyLA

there is no inflation now. Im not saying it isnt coming... but there is no inflation now.

Bear

I believe that the inflation equation has been jury rigged by the

many administration of both parties to deceive and manipulate

the sheeple.

57loaded

everybody was talking about T-Bill's and CD's and pyramid schemes, interest rates were sky high.

high interest rates were hindering consumption (spending and growth)

we are screaming down the roller coaster into a dark tunnel
in late 70's and early 80's not as much fear of the unknown

yellowkid

I remember thinking that the days of the low interest mortgage was over, I had friends with a 15% rate. No one was in the stock market then, at least not younger people so big losses weren't a topic, or a reality. I don't remember being overly concerned about the basic economic foundation of the country as I am now.

cladking

<< <i>I remember thinking that the days of the low interest mortgage was over, I had friends with a 15% rate. No one was in the stock market then, at least not younger people so big losses weren't a topic, or a reality. I don't remember being overly concerned about the basic economic foundation of the country as I am now. >>




The educational system had failed only ten years earlier in those days.

Now we have two generations who have come through a failed system.

It will require individuals to get us out of this mess and large percentages
are cut off at the knees.

People can't even be good consumers if they don't know what they're doing.

DoubleEagle59

not even close to 79-80.

why?

because....

answer

Clue: look at 1980 on the chart

secondrepublic

<< <i>not even close to 79-80.

why?

because....

answer

Clue: look at 1980 on the chart >>



Dow to Gold ratio is still about 9:1.... back in 1980 it was 1:1

secondrepublic

Let me add, I don't put a lot of stock (no pun intended) in the Dow to Gold ratio. They constantly change the composition of the Dow, kicking out the weak stocks and replacing them with stronger ones. Link. So it's really an apples to oranges comparison over time.

renman95

It truly is apples and oranges.

Strictly on a chart basis I think when it is all said and done we will look at a chart of "gold" that will be astounding. Much like I felt when I saw a chart from 1971 to 1981 in the early eighties. Except this time it will be more devastating to the country as a whole because of what got us there.

SUMORADA

In 1978-80 I worked in Balto. at my parents Jewelry Store, I was about 30 years old, things did not seem bad at the time, I bought a 1979 T Bird that year, I do remember
myself and my stepbrother trying to convince the old man to start buying gold & silver over the counter in the the store, "The business was established in 1901"
He is and was old school....Quote: "
We Are A Jewelry Store not a Pawn Shop....We Sell Jewelry....Period"

Shortly after that my step brother and I told THE OLD MAN.....if your not going to buy it...then we will put our own $$ in and do it ourselves..with that....he put 500.00 cash in a box in the safe and said use this...

Within a years time, with the profits from the original $500.00....they took my grandmother to Europe on vacation for a month...and built an addition on there home....
... times then......

and we only caught the end of it...

Edited to add....At some point during 1979 or 1980 at least in our area the refinery's and silver companies in our area (Kirk Stieff) put restrictions on who they would buy certain metals from....

As I remember it was something like... the silver companies would only deal with Jewelers, and the refineries (gold)
would only buy from coin guys or something like that...it could have been the other way around, anyway to get around this we struck a deal with one of the biggest buyers of gold and silver from the public in the area, one of the guys that was shown on the 6:00 evening News with lines of folks wrapped around the block.

Odenton Coin & Stamp or something close to that...

The basic deal was this, they would dump our gold for us and we would dump there silver for them...or vice versa..I don't remember which it was, and as part of the deal I would spend time in the Coin Shop and advise the owner on estate jewelry and diamonds...(which pieces to keep and which ones to melt as well as grading the diamonds that he had purchased and pricing them to sell to jewelers) At the time I was taking classes through GIA to become a Graduate Gemologist.

I can remember one day sitting at the corner of his desk grading diamonds and sorting thru estate pieces, there was lull for a little while and we started talking about the whole precious metals thing that was happening, he gave me a quick tour in the back area of the building which was filled with Fireproof Filing Cabinets, every drawer was filled with gold, jewelry coins and so on....oven stuffer roaster bags filled with class rings, file cabinet drawers filled with Asian (Vietnamese) gold in long narrow strips.. maybe 2.5 in. X 2-3 ft long, 2mm think...supposedly in that form to hide it on there person or in rolls of toilet tissue, most of which was used to pay off the VC in order to get out of S. Viet Nam

,
Anyway, something he said to me one day that I will never forget ( this was during a lunch break while he was waiting for the "Noon" briefcase of cash from the bank" because as usual he had run out...100k+...before noon.

He said to me, I don't know how much $$ we are making, but if I stop to count it, were gonna lose a lot of $$$.......

I didn't mean to post my life history here....but that's the way it was.....

KUCH

NO IT DOES NOT!!!!!!! WE WERE NOT A SOCIALISM THINKING NATION!!!!

jmski52

I bought my first 100 oz. of silver in 1974 in Houston. 100 onzas. A year later, I sold them. I lost a job in 1976 when the economy was backing off. The word then was stagflation - a stagnant economy coupled with inflation, and the inflation kept growing a little more each few months. In 1977, I got a break and a good job, so I was able to buy a bag of silver dollars. In 1978, I bought a second bag.

Around the Fall of 1978, I got a call from a precious metals dealer in Ft. Lauderdale, International Precious Metals Corp. (There were alot of boiler-room precious metals operations in South Florida at the time, and this was one of them. I was lucky that I didn't get burned in the end.) I won't mention the guy's last name, but we talked and he convinced me that he was legit. I had already bought 2 bags of silver dollars from F.J. Vollmer by that time, so I already had a position, and it was already gaining daily.

Terry got me into several gold forward contracts, same as futures contracts but on a smaller scale. I did it stepwise - as one contract made it solidly into the black, I bought another. I sold off one and took delivery of 2 rolls of British Sovereigns, paid free and clear from the profits. I rode the price up on the remaining contracts and when gold was around $650, Terry called me and said, "sell". I had no idea why, but I sold.

Gold went higher and then it finally hit the wall and dropped. I paid for my ex-wife's law school degree and an A-frame on 3 acres outside of St. Louis with the proceeds from those several gold forward contracts. I sold the bags of silver dollars later, and made good money on them, too.

This seems very much like 1976. I don't believe that we've even seen the inflation yet, although I can testify to rising prices on numerous things that I buy. Carter jacked up tax rates in 1977 and I remember being gored by that. I don't remember exactly why, but the economy seemed to pick up a little after 1977, maybe it was just the fact that I had a job and was lucky to have a decent one.

As inflation grew, gold went up and silver started taking off on its own in 1978. By the time that Volker took over in 1980 and slammed interest rates to 22%, inflation was over 14%. The result of his interest rate hike was to slam business activity for a loop. This time, I didn't get laid off, but my company cut about 20% of its staff, and that was not fun. That was in 1981.

Business was so slow in 1982 and 1983 that they didn't make any half dollars for circulation - it was due to the economy. Gradually, probably due to the Reagan tax cuts and his pro-business, pro-USA policies, the economy finally started to pull out of its slump in 1984.

We aren't even close to being there yet. It's still 1976. We haven't seen anything yet. With with this clown in the White House, it's gonna be much harder. Just my opinion, of course.

Overdate

<< Business was so slow in 1982 and 1983 that they didn't make any half dollars for circulation >>

They did make some (not a lot), but they didn't make any mint sets for those two years. Some "souvenir" sets were sold at each mint's gift shop.

ocon4008

<<NO IT DOES NOT!!!!!!! WE WERE NOT A SOCIALISM THINKING NATION!!!! >.

We are not now either; only our elected politicians are.

renman95

Comrade jmski, nice story.

I remember buying some junk silver when silver was at $18 on a friday and selling it on monday for $31. That must have been January 1980 or December 1979.

jmski52

I remember buying some junk silver when silver was at $18 on a friday and selling it on monday for $31. That must have been January 1980 or December 1979.

Renski, those were pretty heady days, eh? I remember dashing home almost every night to do the calculations on each position I held (this was the pre-spreadsheet era), and every evening I would think about what to do next.

At work one day, I realized that I made more in that one day, just in "profits" on my precious metals investments than my entire annual salary! Of course, that was a "before taxes" number, but still............very exciting at the time. Boy, now that I think about it - I'd have really been screwed if the market had dropped while I was "all in".

But, much like now - I don't see a significant downside. Too many factors weighing against the dollar, which to me means - cover your arse, and that means "precious metals". The only difference for me now is that I'm not buying on margin, and I am in a better position to ride it up, and eventually to "take the hit". Timing isn't all it's cracked up to be.

renman95

My positions back then were small potatoes but it was exciting.

mrearlygold

Not even close. I had a shop in South Jersey and had lines out the door. I also bought all the scrap from other dealers and jewelers sometimes buying 15,000 ounces of silver a day. Driving 1800 miles a week just to scrap out.

percyb

The chart is deceiving...if you'd stretch it out a bit, it'd look much less parabolic.

TomB

Today feels worse to me than the 70s and 80s.