2 freaky friday the events of the market 13 that changed America

In the last two weeks, I have covered the positive and negative aspects of the historical hurricanes of the August market, and how August went from being the best month of the market for almost a century, then became our worst month in recent decades.

Today, I would like to profile two milestones of the mid -August market for a long time, both falling on Friday, August 13: (1) The Camp David de Nixon meeting to close the window in 1971 and (2) the birth of the largest upward market in our life on August 13, 1982.

Between those two epic events, the stock market collapsed in real terms (after inflation), since the gold shot and the dollar sank.

Nixon’s gold clash from August 13 to 15, 1971

In recent days, Gold has established its most significant maximum of all time to date: A $3,500+ On an ounce, 100 times its fixed price of $ 35 from 1934 to 1971. Then, in terms of gold, a 2025 dollars are worth only a penny of 1970.

That story began on this date in history: on Thursday, August 12, 1971, President Nixon informed 15 key officials of his team to pack a bag of the night and be prepared to leave during the weekend, destination not revealed, and they were forbidden to tell anyone, even his spouses, what it was.

Friday 13^thThose 15 officials were transported in two huge helicopters from the White House to Camp David, about 65 miles to the north. The senior officials included the president of the Federal Reserve, Arthur Burns, Treasury Secretary John Connally and the Undersecretary of International Monetary Affairs Paul Volcker, along with the key political assistants John Ehrlichman and Hr Haldeman. Its main objective was to stop the gold drain that had emerged from the gold price of “two levels” of $ 35 per ounce for the central banks and a market price of more than $ 40 for private buyers (outside the United States, where it was still illegal that US citizens have gold linges).

Smart governments were buying US gold. UU. A $ 35, only to sell it with a quick gain of 20%, the perfect crime. Many nations promised not to take advantage of the gold drainage of the United States, but some bought all the gold as they could, so President Nixon needed to “close the gold window” for these arbitraphics.

That weekend, on Sunday, August 15, 1971, President Nixon advanced to the most popular television program in the United States, to tell La Nación through a special television address that not only closed the gold window, but also effectively devalued 20% of the dollar of its fixed price of $ 35, while dedicated to a fun action through an import price and an import price for 90 days, despite the drops (3%) Inflation, plus 10% of 10% (more than 10% (boxes of boxes of the evaluation). The American public and the press loved these movements, for some strange reason, since the “sweets” in the package were freezing any price increase, in addition to an import tax, delaying any dollar devaluations.

Nixon’s team had not leaked any of this plan in advance. Nor did they warn any of our main commercial partners or the IMF in advance, so it became known in history as “Nixon’s clash.” But the shock was positive at home. On Monday morning, the Dow Jones index enjoyed an increase of 5% in the first two days after Nixon’s shock.

Nixon’s gold speech (on live television), and my old “Internet sources” in 1971 (The memory of a boomer)

At that time, a 220 -houses survey of Albert E. Sindlinger & Co., on Monday revealed 75% of Americans favored the president’s proposals, while most of those who disseminated did so with the argument that Mr. Nixon’s actions should have arrived before. Albert Sindlinger’s astonished reaction was. As my colleague Gary Alexander said: “In all years, I have been doing this business, more than 15, I have never seen anything so unanimous, unless Pearl Harbor.”

After the reaction of the buoyant market on Monday, the true story, however, was a future decrease in the dollar, along with greater inflation and a gold market, but most experts did not see that.

Inflation was mainly flat until Nixon closed the gold window in 1971, and gold is now almost 100 times its 1971 price.

However, these people did.

• Robert D. Kephart (1935-2004), editor of Human Events, launched the inflation survival letter at the end of 1971 to help investors benefit from inflation to come.
• James U. Blanchard III (1943-1999), a professor of American high school in New Orleans, was so outraged that he resigned from his teaching work to form the National Committee to legalize gold, launching the “Gold Bulletin” that fall.
• Libertarian activist David Nolan (1943-2010) was so outraged by the Nixon movement that the Libertarian Party created at home at the end of 1971.

These brave dissidents saw the challenges of the 1970s clearly, in advance, with the inflation that erodes the few profits from the stock market, while the “real things” (such as metals, products or real estate) exceed actions and bonds.

Data source: Inverter’s almanac for stock market levels

*Real decline = profits after inflation, based on IPC data (consumer price index)

The dollar also fell sharply in the rest of the 1970s:

Source: Federal Reserve

Two oil price clashes carried the inflation rates to two digits for some years, while gold increased from $ 35 to $ 850 in 9 years.

Friday, August 13, 1982 – Birth of the best bullish market in our life

After Reagan’s incoming team endured two deep consecutive recessions and a fainting market, on August 12, 1982, it marked an important market minimum 43 years ago. After that, from a minimum of Dow “777” in Las Vegas style, the upward market grew 15 times in less than 18 years. Yes, that mega bullish market was born on Friday 13^thIn 13^th Consecutive quarter of negative growth. Our fainting of the 11 -year -old market was over. I will continue this second dramatic Friday, August 13, Saga next week.