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With booms it

With online measurements of reader activity, anything that mentions gold or silver and rising prices is zeroed in on and web traffic soars.

This article was originally printed in the latest issue of Numismatic News.
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With online measurements of reader activity, anything that mentions gold or silver and rising prices is zeroed in on and web traffic soars.


My own interaction with readers also indicates this elevated level of interest.

I could probably write “Silver soars” 500 times and the web traffic would soar with it. But I could only get away with that once. You understand. You are probably being drawn more and more to the precious metal spectacle and are enjoying the ride.

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It sure is something to watch as it happens.

Many collectors who remember their experiences in 1979-1980 are reacting accordingly.

This is my fourth bullion boom. The first one I experienced was in 1968. I kind of became aware of it midway through that drama. This was just after the federal government stopped setting an official price and let the free market work in 1967.

Naturally, the price zipped higher fantastically. It basically doubled in just months. The last official price was $1.2930 and by 1968, the market price hit $2.56. Then it started down. By the time it got back down to $2, I thought I should use some paper route money to buy some. It had to go higher, I reasoned. The 25 percent backing of U.S. Federal Reserve Notes had been removed.

Inflation was assured.

Naturally, the silver price decline continued. It actually bottomed out in 1971 at $1.2828, which was below the last official price.

That didn’t mean inflation didn’t set in. It did. But the inflationary wave took far longer to manifest itself in bullion than I would have thought possible. It took until 1973 for me to break even on my first silver purchase.

But I also saved silver coins out of circulation, a habit I started in the 1960s. My Saturday morning collection round of my newspaper customers was always a numismatic treat.
Silver peaked in 1974 at $6.70. That was my second boom.

The next high was $50 in 1980.

Now, here we are again, with silver around $26.

Where will it go?

The trend of four decades is clearly higher. The next four decades will be higher still.

How high is up? I don’t know. I will be sitting in a rocking chair if there is as long a gap for the next boom to arrive as exists between the 1980 boom and the current one.

I learned the definition of fiat money in 1969 from a booklet I got from the Forecaster Moneyletter about assignats issued during the French Revolution in the 1790s. It taught me a lot.

What it did not teach me was timing. The U.S. dollar was made completely fiat in 1968. It was fiat in 1974. It was fiat in 1980. It is fiat now. That fact alone is insufficient to be instructive about timing the bullion market.

That’s why there are so many Google searches on a daily basis looking for the secret to gold and silver timing.

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