Gold and War: What Truly Drives The Price of Gold Higher Since The Turn of the Century

One of the major beliefs about gold is that it spikes during times of war – however, taken as a whole truth, this is misleading.  In fact, for the better part of the last century, even through two World Wars and the Industrialization process of America, gold remained relatively stable in price because of the Gold Standard.  The price marginally increased in price by several percent in the early 1930s, but the price didn’t move in any major way until the very beginning of the 70s when President Nixon took us off the Bretton Woods Agreement which removed the Gold Standard and made all United States printed currency fiat (or based on the faith and credit of the United States).  But even that wasn’t enough to significantly move gold – during both the Korean and most of the Vietnam Wars, gold remained steadfast.  It spiked sharply in the mid 70s, perhaps mostly due to the political pressure created during Watergate and Nixon’s resignation.

Gold found major footing through most of the 80s due to Recession; while it lost some of the headway it gained, it never lost all of it – within one decade (1970 to 1980), gold had moved up 1700%. While gold lost some of its luster for the remainder of the century, it still stayed several hundred percent above where it had been in the 70s.  Many different factors played into this, but primary amongst them was the massive increase in our national debt and the related fears about the value of the American dollar.  In fact, since 1980, the United States national debt has done nothing but increase; expenditures from the Gulf War and multiple other military actions within the Middle East didn’t directly affect the price of gold outside outside of what would be expected for the relative increase in the national debt as a result.

This changed drastically post-9/11.  While, oddly, the price of gold didn’t move significantly (or at all) in the aftermath of the World Trade Center attacks, the price began to move upwards steadily when the United States began the massive expenditures related to both the Iraq War and Afghanistan War.  These costs, combined with the massive market crash in 2007-2008 which in turn led to a Recession, led to the massive increase in the price of gold.  Since the Recession, while the price of gold has fluctuated up and down, the overall average of gold has been significantly higher than it was prior with nothing to indicate that the price of gold is going to fall to pre-Recession levels.  In fact, it could be safely estimated that the prices of gold will hold steady with increases year over year until the next major economic downturn/debt increase that will cause gold to shoot up significantly.

This is why it is so important that you contact Global Monetary Reserve at 877.795.9585 to discuss the future of your investments and why now, more than ever, is the time to purchase gold to hedge your investments and to insure that when the next economic disaster occurs, you’ll be in the position to ride through the chaos and not only retain the value of your assets but profit handsomely.  Call us at 877.795.9585 and ask to speak with a personal account advisor to get started.