With the mainstream media onslaught against precious metals climaxing this weekend as WSJ’s Jason Zweig proclaimed gold “like a pet rock,” describing owning gold as “an act of faith,” we thought it worthwhile looking back at the last time ‘everyone’ was slamming gold and entirely enthused by the omnipotence of central bankers… May 4th, 1999 – “Who Needs Gold When We Have Greenspan?”
Over 16 years ago, The New York Times’ Floyd Norris unleashed the last big gold slamming piece topping a period of precious metal bashing…
Who Needs Gold When We Have Greenspan?
Is gold on its way to becoming just another commodity? The people who run the world’s financial system are doing their best to secure that fate for the metal that once was viewed as the only ”real” money.
The process of removing the glitter from gold has been a gradual but inexorable one, and is one of the most telling counters to the argument that national governments are less important in this era of globalization. Much of the world is now quite happy to accept the idea that a greenback backed by Alan Greenspan is just as good as one backed by gold.
Certainly gold’s reputation as a store of value has eroded. At the peak of the gold frenzy in 1980, an ounce of gold cost $873, precisely that day’s level of the Dow Jones industrial average. Now the Dow is at 11,014.69, about 38 times higher than the $287.60 price of gold.
Actually, that measurement understates the amount by which stocks have outperformed gold. If you had owned stocks all those years, you would have received substantial dividends. If you owned a lot of gold, you got no dividends but did have to pay storage fees for the stuff.
That is, in fact, how the central bankers of