Another look at those inflation adjusted gold all time highs in the UK

As gold trades within a couple of pounds of its all time high we thought it would be a good time to take a look at the inflation adjusted high from the 1980’s in gold.

The all time high price in gold of £371 was reached back in 1980. Using the BoE inflation calculator (which uses the CPI to calculate inflation) that would be about £1266 in today’s money – which is a 25% move from the current level of £950.

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But we only need to look at the BoE unprecedented money printing to see why the inflation adjusted numbers will not only be met but surpassed by a large margin.

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It took 177 years for the BoE’s balance sheet to reach £77bn – it then took just 4 years for the BoE to increase this amount 300% and currently stands at £233bn. In percentage terms there isn’t a central bank in the world who has printed as much money during this financial crisis – including the Federal Reserve.

We’ll let you decide what that really means for the price of gold in the UK.

Related posts:

1. Gold breaking out – another look at those inflation adjusted highs
2. Inflation adjusted gold price
3. Gold prices hit new all time highs
4. Mervyn King is a “fan” of inflation – New report sees inflation near 7%
5. UK Inflation – Is there a point to the Government’s inflation target?

Link to this article: : http://www.goldmadesimplenews.com/gold/4490-4490/

Posted by Thomas Paterson on Jul 7 2011. Filed under Analysis, Gold News. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry