Source: Kitco, Inc.
We’re now a little over $100 below the all-time high price of gold, in real (CPI-adjusted) dollars.
The last time the price of gold was at this level, in real terms, was the end of 1979/start of 1980. Not quite half a century ago. Continue reading Post #2127: Oh, the price of gold … IV
As noted in prior posts, an increase in the price of gold is never a good thing.
By my reckoning, we’re now a couple of hundred dollars off the all-time high, in the real (inflation-adjusted) price of gold, in dollars.
My interpretation is that three months of Trumpism managed to do for Russia what 15 years of agitation by the BRICS countries could not.
By reneging on our international commitments, turning on our former allies, aligning ourselves with Russia, and giving an absolutely ignorant crew of knuckleheads complete control over tariffs …
… I do believe we’ve managed to destroy the dollar’s role as the key international currency AND cripple much of our industrial capacity. In one fell swoop.
Restated, by setting large and rapidly changing tariffs, with no policy goal beyond making The Leader happy, we’ve slit our own throats.
It’s just going to take a few months for that to be completely obvious.
Putin’s ROI is beyond calculation.
As noted in prior posts, an increase in the price of gold is never a good thing.
Looking on the bright side, a good chunk of this last push was merely from dollar going down the toilet.
That should happen because gold is an internationally-traded commodity. It’s a global market. When the value of the dollar falls, the value of gold, expressed in those dollars, rises.
I guess I need to start a countdown or something, as by my calculation, if gold tops $3519 (or so), that will be its all-time high in inflation-adjusted (CPI-adjusted) terms.
So, right now, gold is just (1- $3234 / $3519 =~) 8% below its all time high, in real (inflation-adjusted) terms.
I described the economic conditions under which gold set its previous high, in a recent post on this topic:
Before that, my most recent prior post on this topic was from half a year ago:
Oh the price of gold is rising out of sight
And the dollar is in sorry shape tonight
What the dollar used to get us now won’t buy a head of lettuce
No the economic forecast isn’t right
But amidst the clouds I spot a shining ray
I can even glimpse a new and better way
And I’ve devised a plan of action worked it down to the last fraction
And I’m going into action here today.
From: I’m changing my name to Chrysler, recorded by Arlo Guthrie.
When the stock market is making new highs, everybody steps up to take credit for it.
But gold? Nope. Nobody ever takes credit for a rising price of gold. Given the cheapness and ubiquity of public lies these days, you’d think some prominent braggart would try. But nobody ever tries to own a rise in the price of gold. That’s because a rapidly rising price of gold is never good news. And peaks in the price of gold tend to occur when the 💩 is in the process of hitting the 🚁.
What caught my eye about $3100 is that this has to be getting close to setting a new record for the price of gold in real (inflation-adjusted) terms. (In the modern era, where the dollar price of gold has been allowed to float. Post-1970, say.)
If I take the prior price peaks (red arrows I added to the chart above) and use the BLS inflation calculator to express them in 2025 dollars, I find that we’re now just 14% below the all-time high price of gold in real (inflation-adjusted) terms.
So, when Guthrie sang about the rising price of gold, in the context of the 1979 bail-out of Chrysler, following two Arab oil embargoes, the resulting energy crises, two long, deep U.S. recessions, and the near-destruction of the U.S. auto industry with its lack of energy-efficient cars, in a context of persistent double-digit rates of inflation … the price of gold, in real terms, was somewhat higher than it is today.
I’m trying to take some comfort in that. Either things aren’t as bad now, as they were then. Or they aren’t as bad, yet.
Either way: Eat, drink and be merry.
My most recent prior post on this topic was from half a year ago:
