2
“Whoever wishes to foresee the future must consult the past; for human events ever
resemble those of preceding times.”
– Machiavelli
LOW RATES AND
RISING METALS –
A 1965 REDUX
Back in 1965 Lyndon B.
Johnson was President
and ushered in his vision
of “A Great Society” for
the American People. The
average home price was
under $14,000. Gas was 31
cents per gallon, and a new
car was only about $2650.
1965 was the perfect time to
invest in oil, silver, gold and
other commodities that were
poised to skyrocket due to
extremely low interest rates!
As the nation watched My Fair Lady and crooned about
“The Eve of Destruction,” precious metals began a boom
that stretched 15 years before peaking in 1980. In fact,
gold rose from a low of $35 to over $850 an ounce giving
investors a whopping 2,400% profit. Silver was also up over
1,500 % during the same precious metals boom period.
HIGH RATES AND REAL ESTATE – 1980 REVISTED
1980 saw the advent of the Middle East hostage crisis,
record-breaking gold prices, and soaring double digit
inflation. But, from 1965 to 1982 stocks rose just one-point
from a DJIA of 856 to 857. That’s a mere one percentage
“gain” or just .001% over seventeen, long years.
In that same year America boycotted the Olympic
Games, Mt. St. Helens erupted in Washington State,
and the Challenger Space Shuttle tragically exploded
off the coast of central Florida.All the while interest
rates steadily rose from 1.75% in 1965 to a peak of 15%
in 1980, crushing real estate lending. In November,
America welcomed the Reagan Revolution as Ronald
Reagan defeated President Jimmy Carter in the 1980
Presidential Election.
1965 1970
1958
1976 1982 1988 1994 2000 2006 2012
Date
Historical Interest Rates
Percent
20
18
16
14
12
10
8
6
4
2
0
