Tuesday, March 20, 2007

Gold-Shares (1931-1934)

The US does not rule the world - then or now. A free market for gold existed then in OTC dealings in London and on the Continent.

Yes, in 1930 the official price of gold and the free market price of gold was for all practical purposes the same. However, in 1931 (on a yearly average) the free market for gold appreciated. In 1932, the free market average was 4% above the official price. In 1933, the free market average was $26.47 against an official price of $20.66. That was 28% higher, causing a rise in 1934 of the official price from 20.66 to $35. There was not one day between 1931 and 1934 that the official price and free market price was the same.

Today, gold shares are a proxy for inflation which along with geopolitical events impact currency valuations and gold's price.


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