Gold is Different.
The Backdrop The world went off the gold standard in 1 971, enabling much freer manufacture of money because the constraint of possible redemption for gold had finally been removed.
The 1970s saw a period of stagflation, ended by 20% interest rates in 1980 that reset the system with low inflation.
Our story begins in 1982, when the great money bubble started. It was a good time to be a banker.
Commercial banks manufactured ever more bank money ( or “credit”), raising the level of bank money in the economy to record highs. Because bank money is created by the act of lending, bank money is also debt, so the debt levels also rose to historic highs.