Gold prices peaked in January 1996 and then fell for 3.5 years into a multi-decade low. It was the age of stocks, debt, leverage, and good times; nobody needed or wanted gold.
Since the gold price peak in 2011 the Federal Reserve has “generously” supplied the world with trillions of dollars of newly created digital and paper debt, all backed by nothing but faith and credit. Bonds have rallied and the S&P is higher by 50% or so. The Japanese Central Bank has similarly produced trillions of yen, bought stocks and bonds, and extended their recession several more years.
Yes, the past four years have been a repeat of the age of stocks, debt, and leverage, but only the financial and political elite experienced good times. Debt is massively higher and gold is still bumping around a bottom.
- Gold dropped from about $405 in January 1996 to $253 in July 1999: 38% in 42 months.
- Gold dropped from about $1900 in August 2011 to $1070 in July 2015: 44% in 47 months. The drop is similar to the 1996-1999 collapse.
