To: Richnorth who wrote (85641 ) 5/22/2002 1:03:31 AM From: E. Charters Respond to Remember that was from gold in constant dollars. In 1945 gold was at a high , despite being at a low in constant dollars due to inflation. So the curve may change if we calculate from 1935 dollars onwards and calc from gold cost over a dollar labour, energy and materials. Psychologically it is easy to get into production with a high dollar cost of gold even if it is eroded by inflation.Industrial PI should perhaps eat the gold at the same rate, but this is not known for sure. Technology in mining may work against this. It has in some areas. Cost of money is a factor too. As interest rates fall, so does capital payback and so costs fall there too. In fact during the 50's and 60's mining was cheap as labour, money and energy in Canada was cheap and copper was high. So most gold was got from copper mines during that era. the mythical constant dollar, but it may in today's dollars. What we see in analog is that at the end of 1920 which inflation wise is where we are sitting today, is that gold rose in price during a deflationary period or recession/depression. Then Roosevelt fixed it to prevent further erosion of the dollar. He needed that rising star. Ironically that delayed economic recovery by limiting capital. The difference between then and now is that they had no price inflation during the 20's. It was all from 1900 to 1920. Then they had stock market inflation during the 20's as we had in in the 90's. We had both subtle but damaging price inflation in the 90's but commensurate market inflation. So we are about even with the 29 crash. The Dow, we can be sure is on big phony reporting bubble of paper empires. There ain't no beef. No earnings or production to match the equity value.
