So if Volker's Hammer brought inflation and gold prices down to earth in '81, what will do it now? With the debt crisis making increases in interest rates implausible, what will bring gold back down now?
From 1977-1980, gold price increased 5x due to high inflation, a loss of faith in the credibility of elected US government leaders, Russian invasion of a foreign nation, and Iranian instability...but I digress.
Ultimately, raising interest rates rapidly reestablished faith in USD stability (albeit with tremendous pain to farmers and real estate markets) and gold slowly unwound over the next few years.
What will save us now?