Old frenzy missing as gold prices hit record
Updated: 2008-01-08 11:37
News of the event was sent as far away as Switzerland and South Africa, presumably to the annoyance of a bunch of military buffs hoping for a cheap addition to their collections.
Fear as well as gain was the motivation for some of the fever back in 1979-80. The Cold War, after all, was still icy and the global economy was in poor shape. The then US president, Jimmy Carter, was talking about his nation's malaise and sitting on double-digit inflation rates, which of course pushed up gold as a hedge.
Industrial economies were reeling from the second of two oil shocks, triggered by the 1979 Iranian revolution and the start of the Iran-Iraq war.
Srodes says one large mining company played on the fears with a full-page advertisement in newspapers showing a grim donkey cart pulling a bedraggled family toward a border checkpoint. The narrative with the advert had the family failing to pass Customs until they handed over some gold coins.
"The message was hardly subtle - you must have some gold to keep your family safe." The hoopla that accompanied gold's record-breaking rise the last time is probably missing this time partly because though there's plenty of risk around, including high oil prices, there's little 1970s-style doomsaying.
But primarily it's probably because high though the price of gold seems today at $860 an ounce, the record $850 it hit at the London fixing on January 21, 1980, translates in today's money to more than $2,150.
Better hold off on having those gold teeth removed.
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