Don’t Believe Your Lying Eyes: Gold Does Not Offer a Safe Harbor Against Financial Crises

from Jesse’s Café Américain

[…] Gold has moved in price from $250 in the year 2000 to roughly $1,350 today. In other currencies the move has been much more pronounced.

The period of 1996-2000 is a good time to pick a start for this monetary episode, because this is when the global monetary regime, which had been in place since the end of WW II with a significant change made by fiat in 1971, began to change, substantially in the most proper sense of the word.

Some like to cherry pick a study of recent gold performance from the prior top of $1,900, but that says more about them and their intentions than it does about gold. They know that all bull markets climb a wall of worry and can offer significant retracements from new highs while remaining intact.

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