In 1964 Sean Connery starred in the movie ‘Goldfinger’ in which the villain, a wealthy Brit named Goldfinger, attempted to revalue his personal gold hoard higher by a factor of 10. His plan was to detonate an atomic bomb inside Fort Knox making the US gold radioactive for hundreds of years. With the Fort Knox gold hoard, the largest in the world at that time, effectively unavailable the global price of gold would increase at least ten times from the 1964 price of approximately $35.00 per ounce. Bond, James Bond, thwarted the dastardly plot and saved the US gold, the US dollar, and the US government.
The current 2015 gold price is about $1,100 per ounce. Overprinting fiat dollars has done what Goldfinger could not – substantially increased the price of gold.
The movie is, by today’s standards, a lousy movie, but Sean Connery and the Bond Girls are attractive. But bad movie or not, there are interesting parallels with today’s world.
Goldfinger understood that gold was the basis for the strength and confidence in the US dollar in 1964. The US had committed to exchange dollars for gold and continued to do so until Nixon abrogated the Bretton Woods agreement in 1971.
This post was published at Deviant Investor on November 19, 2015.
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