Good friend and renown gold historian Tim Green has been researching and writing about gold for more than 40 years. His latest book, The Ages of Gold, is the most comprehensive ever written on the history of mines, markets and the price over 6,000 years. For those of us interested in gold today, there’s much wisdom to be learned from the long view — as you’ll discover from my recent conversation with Tim.
Jeff Nichols:Â What struck you most in researching the 6,000 year history of gold?
Tim Green:Â The stability of its price over long periods, often centuries, which built up its reputation as a benchmark and safe haven.
Jeff Nichols:Â What’s the best example?
Tim Green:Â The classic is the British gold standard which fixed the price from 1717 to 1931, with only minor hiccups in the Napoleonic Wars and World War One.
Jeff Nichols:Â What happened next?
Tim Green: President Roosevelt set a new fixed price for gold of $35 per ounce in 1934. That price endured until 1968.
Jeff Nichols:Â Why did that fail?
Tim Green: During the 1960, as the United States became mired in the Vietnam War, the dollar was under threat: a price set in 1934 no longer made sense. Moreover, the growth of European and Asian economies created a growing demand for gold in jewellery and industry. Gold was no longer a monetary metal absorbed primarily by coin or central bank reserves.
Read the rest of this article »
Filed under: Gold Briefs, Interviews | central banks, gold, gold price, gold standard|No Comments
The World Economic Crisis and the Outlook for Gold
Shanghai, China / December 4th, 2008
Thank you Mr. Chairman for that flattering introduction and thank you to the conference organizers who have made it possible for us to exchange information and insights into the future of gold here in China and in the global marketplace.
You should know that my presentation today will be posted on my website, NicholsOnGold.com, so you can easily check back in a few days, or a month, or a year – to review my analysis and my expectations for gold.
A few weeks ago, I mentioned to a Chinese acquaintance in New York that I would be traveling to Shanghai. He said, with some excitement that his family was originally from Shanghai and that he still had relatives here. Then he told me about a friend of his grandmother . . . a very old lady who is a fortuneteller of great repute. He said, in all seriousness, that I must visit her before speaking here today on the outlook for gold, just to be sure, and volunteered that his cousin would accompany me and translate.
So yesterday afternoon, we visited the old lady in her new apartment. We were offered tea and sat down together to talk. Finally, I asked: “So where do you see the price of gold next year?” To which the old lady replied: “Well, young man, we’ll just have to wait and see.”
Jeff Nichols addresses China Gold Summit
What the old fortuneteller really meant was this: Global asset markets have jumped into another dimension – a non-linear “Alice in Wonderland” universe – where the irrational and unpredictable have suddenly become the most likely.
Indeed, writing a forward-looking speech – at this moment of unprecedented worldwide economic crisis and uncertainty – has been like trying to hit a fast-moving target. Today, the price of gold has less to do with ordinary supply and demand fundamentals . . . and much more to do with fear-driven investment and speculative demand at the margin.
Every country is now affected by the spreading recession. From day to day, the business news worsens, bankruptcies and unemployment mount, one central bank after another cuts interest rates, new fiscal initiatives and other policies are undertaken – some of them seem wise, others may prove to be less so – and the United States, still by far the world’s largest economy and dominant political force, is in the midst of changing Presidents and changing directions in Washington.
Read the rest of this article »
Filed under: Speech | American Precious Metals Advisors, central banks, China, deflation, economics, economy, gold, gold price, inflation, Jeffrey Nichols, monetary policy, money supply, Quantitative Easing, Sovereign Wealth Fund, U.S. dollar|1 Comment
