Reviewing this period in gold's history makes evident the extreme difficulties experienced by the monetary authorities in controlling the price of gold. The typical flat $35 line on charts gives the illusion that the dollar was a stable store of value. In actuality, market prices diverged from $35 — and dramatically so in 1960. The attempt to fix the dollar at 0.888671 grams and gold at $35 — this while the dollar's purchasing power had declined versus all other goods — was a losing battle carried out at great expense. The United States and its allies would sell huge quantities of gold at prices below what a free market would have borne. In 2009, amidst some of the largest central-bank rescues and bailouts in history, let the 1960 gold rush and the eventual collapse of the London gold pool in 1968 stand as a reminder to us that central planning of monetary matters is doomed to fail. |
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