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Gold/Mining/Energy : Gold & Gold Stock Analysis

GLD 368.29

+0.6%

Nov 7 4:00 PM EST

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To: gold$10k who wrote (8664)	9/20/2007 5:11:34 PM
From: gold$10k	of 29622

Here's more... Gold peaked just as the FED stopped raising interest rates. "That the dollar is weakened by rate hikes will surprise some, but historical evidence confirms it. The dollar lost 67% against gold in 1972-1975 while the Fed hiked the funds rate from 3.5% to 13%. Similarly, the Fed funds rate rose from 5.25% in May, 1977, to 14% in February, 1980 (technically during the Volcker monetarism experiment after October, 1979), yet the dollar lost value from $150/oz to an all-time low against gold of $892/oz." realclearpolitics.com So it would seem that it wasn't the raising of interest rates that stopped inflation and gold's rise, it was a genuine reduction of the money supply. Duh, makes sense!

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