Translation: Lessons from Investment History
Historically, there have been two instances of soaring gold and silver prices that ended quite tragically.
The first occurred from 1979 to 1980, when gold surged from $200 to $850 in a year, and silver skyrocketed from $6 to $50.
As a result, two months after hitting the peak, gold was halved, and silver fell by two-thirds, entering a freezing period that lasted for 20 years.
The second instance was from 2010 to 2011, when gold rose from $1000 to $1921, and silver again surged to $50.
After the meteoric rise, gold retraced by 45%, silver dropped by 70%, and then it was years of sluggish sideways movement.
In both instances of soaring prices, the backdrop was either the oil crisis, severe inflation, or rampant liquidity after financial crises. The crazier the rise, the harsher the fall, which has almost become a law.
Now, in this round of market activity, the story has a new script: global central banks are increasing their holdings, de-dollarization is happening, and silver has industrial demand to support it. Some believe this time is different, with central banks providing a safety net and potential declines being limited.
Is it really different?