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Thread: Similarity between 70's and today?

  1. #1
    Join Date
    Aug 2008
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    35

    Default Similarity between 70's and today?

    I noticed that no matter HOW much the Kudlowians want to spin goldilocks and say we arent in recession, we arent in the 70's, and we are in the 1930's, the SAME variables are showing up now in our economy.

    1. An unpopular war that has lasted over 5 years.

    a. Vietnam
    b. Iraq

    2. Stagflation

    a. Low employment and massive interest rates reaching 19% (70's)
    b. Employment levels today which are ACTULLY 12% (not 5.7) since the government took out people NOT looking for work, and people with part-time jobs who are LOOKING for full-time jobs.

    3. REAL inflation rates (including oil, rents, and food)

    a. 18-19% (70's)
    b. 12-14% (Now)

    4. Welfare programs in high gear

    a. LBJ's Great Society
    b. SSN, Medicare, Prescription Drugs

    5. Immigration

    a. Casar Chavez (70's)
    b. Illegals

    6. Education

    a. NEA promotes radical change to education system, and writes pamphlet on use of Ritalin for students - (Education for the 70's Pamphlet)
    b. one in four children in schools now on some psychotropic drugs

    7. Oil Crisis

    a. Oil embargo
    b. Oil Prices and Peak Oil Theories

    8. Gold and Silver

    a. Gold reaches $850.00 in 70's currency value
    b. Silver moves with a volitile ratio to gold

    Israel

    a. 1973 Yom Kippur War
    b. Israel and the Middle East today...

    An interesting fact to look at is the ratio of the silver and gold prices. In the past 100 years, this ratio has widely fluctuated. The lowest being 22.93 in 1970 and the highest of 101.63 in 1990 when silver was $4.17 and gold at $423.80. Taking the average of the lowest and highest you get a 55.69 ratio. At today’s silver and gold prices, the ratio is 53.88.

    One last thing here... in 1980, the Hunt brothers with Arab partners attempted to corner the silver market. They made ONE mistake however... they used COMEX and bought ONLY paper silver.

    The Hunt brothers just sold their oil conglomerate and are hinting AGAIN at going after silver, BUT, they are intending to BUY physical silver, and THIS will KEEP the government from defending against them through the use of shorts on the Comex as was done back in 1980.

    Paper Comex is as bad as fiat currency... they can print ALL the volume they want.

    Anyway, there are probably many other areas where the economy of the 1970's and today have striking similarities.

    It took 7 years from the 1973 oil embargo to reach climax in 1980 when interest rates hit their highest... so in reality, raising interest rates doesnt necessarily mean PM's go down.

  2. #2
    Join Date
    Mar 2008
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    Chicagoland
    Posts
    242

    Default Interest vs PMs

    "so in reality, raising interest rates doesnt necessarily mean PM's go down."
    -argonath

    Seems logical.... the way we do interest rates, reactively (vs proactively) .... the interest rate is just a cure chasing the disease. It takes a while for the antibiotics to start to do their thing..... and PMs will continue to stay ahead of the curve until the damage has been fully unwound.

    To bad we don't raise rates when we see inflation coming to head it off at the pass, it would be a lot less painful in the end. Oh, but I forgot (snark snark) ....that would assume that the FED wants lower inflation.

  3. #3
    Join Date
    Aug 2008
    Posts
    35

    Default

    PK -

    This time there IS a big difference.

    The Discount window... for BOTH commercial and investment banks.

    Most people simply look at the interest rates and go from there, BUT, over 890 billion dollars has been loaned out curtousy of these windows, and thats EXTRA printed currency out on the markets.

    Plus, we ship 700 billion dollars a year overseas for oil alone, where in the 70's, we shipped about 40% of that for our import needs.

    So many different factors... the interest rate seems like a MINOR cause today.

  4. #4
    Join Date
    May 2008
    Posts
    45

    Default

    I am on a few different PM forums, and have mentioned several times that I see the similarity between now and 1973-1974 and also 1979-1980. Usually my posts are cautionary...don't jump off of a tall building. We have been here before, we survived it, and we will survive this one.

    I was 18 in 1973, and saw gas prices go from 33 cents to over a dollar in no time. I was driving a 1963 Studebaker!

  5. #5
    Join Date
    Jun 2008
    Location
    Bay Area, CA
    Posts
    1,373

    Default

    Quote Originally Posted by Scrap Metal View Post
    I was 18 in 1973, and saw gas prices go from 33 cents to over a dollar in no time. I was driving a 1963 Studebaker!
    Ouch...talk about hurting the pocketbook. I think it takes 12 gallons just to start a '63 Studie.

  6. #6
    Join Date
    Jan 2008
    Location
    Fly-over country, South Dakota. The heart of the USA
    Posts
    1,403

    Default Talk about exaggeration!!!

    It's only 11 gallons plus a cup or two.
    Stop stretching the truth,
    JesterJay


    Quote Originally Posted by balou2 View Post
    Ouch...talk about hurting the pocketbook. I think it takes 12 gallons just to start a '63 Studie.
    If you don't GOT it, You don't GET it!

  7. #7
    Join Date
    Mar 2008
    Posts
    1,490

    Default

    but now we know where he got his forum name...

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