decoupling of gold vs dollar (introduction), page-11

Decoupling of Gold vs USD

1) General related observations

It seems usefull to start with some related historical aspects before referring to more actual observations.

History:
Back during the end of the great depression, a period of DEFLATION, gold did rise to a value level, so that all gold held by the US at that time matched the value of the running USD (monetary base). Gold more or less kept this level until after the II world war the gold standard became introuduced (Bretton Woods).
Later on, this standard was abandoned by the Nixon Gvt. in the early seventies. This was followed by a period of INFLATION and Gold did start to rise, from about 30 USD to 100/150, than decreasing until it started it´s last big shot (from 1977 on) til the beginning of 1980.
During that period of time Paul Volcker became the Chairman of the Fed. To solve the silver problem of the Hunt-Family, he engaged Jim Sinclair (JS) - you have to remember this name - who did a great job. At that time, JS was one of the biggest private gold dealer of the world.

Now it`really getting interesting.

In October 1977, Gold was about 177 USD, JS talked to the public, saying that Gold will rise to 900 USD. He was laughed at. Indeed, he made a serious miscalculation: Gold did not rise to 900 USD, it peaked only at 875 USD (January 1980). A day later, JS sold all his Gold, became a very rich man and completely got out of any gold businesses. But we will meet him again, 21 years later!!!

In 1999 the financial world got into big trouble. A hudge hedge fund (LCTM) was about to get bankrupt. Alan Greenspan, Chairman of the Fed, called all Central bankers plus other important persons (the "troop", see chapter 2) to share a session in New York. Something very important came out of this session, namely the first central bank gold agreement (CBGA). Check this matter via google, if not familiar with it.

It was announced at the 26th of September in 1999 und you can watch the immediate effect of this message in every long lasting gold chart: Price jumped up like hell, just in front of my screen at that very day. So I happened to be online, right from the beginning of the actual story.

To be continnued with: More actual observations