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<p>[QUOTE=&quot;yakpoo, post: 819154, member: 18157&quot;]It sounds like we&#039;re in agreement over the causes of stagflation in the 70&#039;s. However, I seem to recall a guy named <b>Paul Volker</b> that blew the top off the Prime/Fed Funds rates (way in excess to anything happening naturely in the credit markets) to sucessfully get inflation under control. </p><p>&nbsp;</p><p>True, he could have not done that, but we might not have broken the back of stagflation, either. Nixon&#039;s Wage/Price controls weren&#039;t much help and Gerry Ford&#039;s &quot;With Inflation Now&quot; (WIN) buttons didn&#039;t help much, either.</p><p>&nbsp;</p><p>I was in the Air Force at the time and the job environment felt a lot like it does today...I was glad to have a job! Here&#039;s a snippet I found in <a href="http://en.wikipedia.org/wiki/Paul_Volcker" target="_blank" class="externalLink ProxyLink" data-proxy-href="http://en.wikipedia.org/wiki/Paul_Volcker" rel="nofollow">Wikipedia</a>...</p><p>&nbsp;</p><p><img src="http://i664.photobucket.com/albums/vv10/Yakpoo/test/test1/au75-pres.png" class="bbCodeImage wysiwygImage" alt="" unselectable="on" /></p><p>&nbsp;</p><p>This KITCO chart shows gold prices from 1975 to present. The chart of the late &#039;70s has a similar trajectory to the chart of today. As you can see, once Paul Volker got busy working his magic (&#039;81-&#039;82), inflation was brought under control and gold prices CRASHED!</p><p>&nbsp;</p><p>I don&#039;t see the Obama administration taking such draconian measures today, although...they <b>ARE</b> bringing back Paul Volker (<b><span style="color: red">watch out!!!</span></b>). The Dems #1 goal is to get reelected in 2010 and &quot;Jobs&quot; are the #1 priority.</p><p>&nbsp;</p><p>All I&#039;m saying is that there&#039;s a &quot;chance&quot; the markets might worry about Paul Volker-esc rate hikes after the election and PM&#039;s could sell off heading into the 2010 mid-term elections. It really doesn&#039;t matter what actually happens...only what the markets think &quot;might&quot; happen.</p><p>&nbsp;</p><p>EDIT: I forgot about the large PM owners selling futures contracts. :thumb:</p><p>...and I ain&#039;t selling my little ladies, either![/QUOTE]</p><p><br /></p>

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