The chart below shows the ratio of the Adjusted Monetary Base in $billions as calculated by the St. Louis Federal Reserve, divided by the price of gold. It provides a clear picture of what has come before as well as a strong suggestion as to what lies just ahead.
There are four distinct periods shown on the graph below:
The first is the period when the gold window was closed by President Nixon and the price of gold was able to seek a market price. The period shows a declining ratio as the denominator, and the price of gold soared. As gold peaked at the start of the 1980s, the ratio began a strong, secular uptrend that accelerated to the upside as the price of gold bottomed around $250.
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