John Williams of Shadowstats: $7,150 is the inflation-adjusted equivalent to gold's 1980 peak.
October 21, 2009
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I missed this little gem during my first read-through. I'm glad Iopened the article for a second look.
“If the methodologies of measuring inflation in 1980 had been kept intact, gold would have to hit $7,150 to be the equivalent of the 1980 record,” Williams said.
Gold would need to rise more than sixfold to top the 1980 record, using a more accurate inflation-adjustment, said John Williams, an economist and the editor of Berkeley, California- based Shadowstats.com. He said the government has understated the cost of living over the past two decades with adjustments in the way it measures the basket of goods and services monitored by the U.S. consumer price index, or CPI.
How nutty is my $2,000 target looking now? ;)
I'll remind Fools that back in 2006, when gold traded around $500-$650 or so, my calls for $2,000 gold were routinely met with incredulous consternation. I suppose one reason I gravitated to the Motley Fool at the time had to do with the fact that everywhere else I espoused my views, they were met with even greater skepticism to the point of ridicule. Here, although few agreed, at least I found an open-minded community of investors willing to discuss the prediction on its merits without dismissing it out of hand.
I know we've yet to reach the $2,000 mark, but it's so in the bag. The Churchill Downs of currency races has begun, and I'm afraid the dollar has suffered a broken ankle right out of the gate.
Volaitility is a given, and will only increase as the bull market for precious metals proceeds, but it's still not to late to seek protection from the dollar with gold and (especially) silver.
