Bible Science Forum

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The Coming Crack-Up Boom

The article speculates on gold prices, referencing 1978’s volatility and projecting a potential price surge. Charts and predictions suggest a significant increase to $20,000/oz.

John Gideon Hartnett
6 minutes
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My speculation on the price of gold in the End Game.

Recently Endgame Investor Rafi Farber wrote in his subscriber newsletter, under the heading ‘Beware of Wild 1978‘:

“What we have to be careful of, if we’re in 1978 and I think we are, is the fact that 1978 was a wild year for gold. 1978 was a good year for gold for sure, but there were two major, scary corrections [which can be seen on a daily chart]. Corrections will happen again, especially if it’s the hedge funds that are long. We still have one huge financial crisis to go before this thing blow[s] up. That is going to bring everything down, including gold, but gold will go down the least of all assets, just as happened in March 2020. After that’s over, we’ll be on a beeline to the End Game.

I decided to speculate on what the ‘beeline to the End Game could look like. As Rafi says it could be a wild ride before that starts, but I can model the ‘moon shot’ of the gold price once it starts.

We are talking about 1978 from which began a massive rise in the price of gold to the dizzying height of about $840/oz from $100/oz in 1976, a 8.4x increase. That happened only a few years after the gold window was closed. Perhaps a major reaction occurred as the price of gold was set free to rise and it went crazy wild. Well, what if a similar situation occurred soon?

It is necessary to compare ‘apples with apples’. Because the Federal Reserve has been ‘printing money’, creating credit since its inception, dollars start deflating as soon as they are created. Therefore by using the M2 money stock as published by the Fed we can calculate how to strip out the effects of price inflation on the gold price.

Chart 1: The red data are the M2 currency supply data for 1959–2023 from the Board of Governors of the Federal Reserve System, statistical release H.6 Money Stock Measures, via FRED. The dashed curve (1) is an exponential fit to the data between 1959 and 2020. The dashed curve (2) is a 5th order polynomial fit to the data after 2020 up to December 2023. After normalisation the M2 supply becomes essentially constant (not shown). The sepia strips indicate recessions.

Chart 1 presents the M2 supply from which I calculated a normalisation curve such that $1 from 1959 deflates in value. This is shown in Chart 2 as curve (1) followed by curve (2).

Chart 2: $1 in 1959 will deflate by the exponential (red) curve followed by the blue curve (2) as shown. This is the price inflation of 1/35 oz of gold over this time period resulting only from the expansion of the M2 currency supply. Thus the gold price is inflated by a factor of 47 by the end of 2023 in terms of current dollars. This means that the USD has lost about 98% of its value in the last 65 years. If the price of gold remains constant in terms of 1959 dollars then its current price is only rising due to inflation. However after 2020 the anomalous curve (2) had to be used to allow for the massive additional deflation of the dollar’s value in that period. The sepia strips indicate recessions.

This was then used to normalize the price of gold as shown in Chart 3.

Chart 3: The price of an ounce of gold in 1959 dollars. The red data are the price of gold ($/oz) scaled by the USD normalisation curve from Chart 2 using curve (1) and the blue data are scaled using curve (2). The historical gold price data were downloaded from Auronum, the National Mining Association and YCharts. The horizontal dashed line (2) is the $35.10 price for an ounce of gold from 1959. The descending dashed line (1) touches the tips of the peaks except in 1980 where a few points break above it. The exponential dashed curve (3) is a curve fit to data from 1977 to 1980. The exponential curve (4) is an extrapolation based on curve (3). The sepia strips indicate recessions.

You’ll notice that the gold price in normalised 1959 dollars is almost tracking horizontally (blue data, after 2020) which is headed into the apex of this triangle formed with the $35.10 price of an ounce of gold from 1959. The apex occurs sometime in March 2026 but what happens then?

If the powers-that-be lose control of the monetary system and nature takes over the Great Reset may not be as Klaus Schwab imagined. What if Rafi Farber’s prediction takes on the same break out as in 1978-80?

To model this I fitted an exponential curve to the data in the period 1977-1980 and translated it to fit the point of the 2026 apex in Chart 3. That is shown as the purple curve (4). But these values are still all in 1959 dollars. To get the current gold price in deflating current dollars I needed to multiply the 1959 dollar price of gold by the exponential curve (1) from Chart 2, but this time following its extension after 2024. The assumption here is that the Fed pivots sometime this year (2024) and cranks up the printing presses again. That means further exponential growth of the M2 money stock. The result is shown in Chart 4.

Chart 4: My prediction for the gold price in nominal dollars after 2024 on log-linear axes. The red data are the nominal price of gold from 1959 to the end of 2023. The purple curve is my ‘Prediction’. The sepia strips indicate recessions. A recession is indicated also from 2025 as the hyperinflationary stage kicks in.

From 1976 when the price of gold touched a $100/oz to 1980 when it broke through $800/oz we saw a nearly order of magnitude increase. So I have assumed that a similar increase could occur in my crack-up-boom speculation. This is shown as the price increase according to the purple curve labelled ‘Prediction” in Chart 4. An order of magnitude increase means reaching $20,000/oz in 3½ years.

I don’t know when this will occur but it will eventually happen. It has to because the dollar is dying. Prepare accordingly.

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