The first contact man had with Gold is
still unclear to this date, however it is recognized
by the Archeological community that pharos and temple
priests used Gold for adornment sometime around 3000BC.
The first use of Gold as money has been traced back
to the Kingdom of Lydia (western Turkey) in 700 BC.
In 1792 the Congress passed the US Coinage
act. It invoked the death penalty for anyone debasing
money and provided for a Mint where silver dollars
were coined along with Gold coins beginning in 1794.
The valuation for the nations new currency was set
with Gold valued at $19.30 per troy ounce. This remained
unchanged until 1834, when the price of Gold was raised
to the $20.67 level which held for the next 100 years.
It was not until 1934 when President Franklin
Delano Roosevelt devalued the dollar by raising the
price of Gold to $35.00 per ounce. The stated reason
was to raise commodity prices (especially farm products)
and to create more employment for the millions who
were suffering through the Great Depression.
In December of 1971 the Smithsonian Agreement
was created by the worlds ten most industrialized nations
in order to improve international economic conditions.
Gold was raised to $38.00 per ounce. Unfortunately
international economic conditions continued to deteriorate
and in 1973 the US Government was forced to devalue
the dollar yet again by raising the official price
of Gold to $42.22 per ounce. Finally all international
currencies were allowed to "float" freely against Gold.
By June of that year Gold had risen to $120.00 per
ounce in London. Exploding Gold demand set the stage
for the trading of Gold futures on the COMEX in 1975.
In 1980 Gold briefly hit $850.00 per ounce
as the demand far outstripped supply and the bubble
burst. Since that time Gold has been in a bear market
and finally bottomed out in the summer of 1999 against
the backdrop the greatest financial bull market in
the history of the world.
The subject of Gold is both timely and
critical. Prudent investors are realizing that the
bull market in equities is now over and alternative
investments are the in order.
