1970s Are Repeating, and That Is Good News for Gold

Despite the rise to $2,500 an ounce, gold is still below where it was in 1971 in terms of percentage of assets on the Federal Reserve's balance sheet. Back on August 15, 1971 - exactly 53 years ago yesterday - gold made up 12% of Fed assets. Today, even at $2,500, it makes up less than 9%. By those metrics, we are lower now at $2,500 than we were at $35 in 1971. From that point, gold rose by a factor of 24x to the 1980 top. A repeat of that move brings us to a top of about $60,000 per ounce.

That rally also ended with a 15:1 gold to silver ratio. That brings us to $4,000 per silver ounce in a full blown monetary panic.

This is not a prediction. It's just simple math, and if we do have a repeat of the 1970s, that it where the math leads.

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Arcadia Economics

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