Gold oddly subdued despite the economic crisis unfolding in Europe
Former German foreign minister suggests we are at ‘the end of contemporary history’

(USAGOLD – 9/7/202) – Gold is level this morning at $1705 – and oddly subdued, we might add, given the unfolding economic crisis in Europe. Silver is up 13¢ at $18.21. Investors are watching developments in the Eurozone with considerable apprehension. However, that concern, thus far, has failed to materialize to any significant degree in asset pricing – beyond, of course, the soaring US dollar. Comparisons to the 1970s proliferate among the best analysts. Stanford University historian Niall Ferguson last week posed the question: “Why shouldn’t it be as bad as the 1970s?” (See below if you happen to be reading this on the “Live Daily Newsletter” page.)

In a recent essay titled The End of Contemporary History, Joschka Fischer, Germany’s former foreign minister, says that he “cannot recall a time during the past 75 years when there has been such a massive accumulation of major and minor shocks. The world today is dealing with intensifying climate change, a pandemic, major wars, surging inflation, disruptions to international trade and supply chains, and acute food and energy shortages.” He says that the West did not anticipate the consequences of its “economic dependencies” on rivals China and Russia. “The bill for this naivete,” he says, “is now coming due and it will be large.”

Gold, Stocks, and the Misery Index during the Stagflationary 1970s
(% change, annual; Misery Index = Inflation + Unemployment)
baar chart comparing the performance of gold, stocks and the Misery Index in the 1970s
Data sources: St. Louis Federal Reserve [FRED], • • • Click to enlarge

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