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Sounds of Silence
March 03, 2008

Silver is trading over $20 an ounce as this is written. Wow. That's up by more than one-third since the year 2007 ended at $14.797. Gold is not yet at $1,000, but can this milestone be far behind? It began the year at just over $834.90.

What's the Treasury doing about it? Nothing I can see. Should it? That I even ask such a question may be a generational disconnect.

It used to be that the Treasury was terribly concerned about the price of precious metals. In the 1960s, the Treasury dumped huge quantities of what had been a 2-billion-ounce hoard of silver to try to maintain its official price of $1.2929. Same with gold. Large amounts went into maintaining the $35-an-ounce figure.

The sense of crisis and the public pronouncements all indicated officials considered something amiss.

The free market eventually won, but it was treated like a course of castor oil unpleasant but necessary.

Even in 1979-1980, there was a sense of crisis despite the fact that the markets were free. Interest rates were raised to tamp down speculation. One Federal Reserve chairman was pushed out and another, Paul Volcker, was put in his place.

Not this time. It's different. Buyers of gold and silver are starting to sound like buyers of real estate did two years ago. You can't lose, they say.

The similarity is unsettling. That is perhaps why the echoes of the 1960s, 1970s and 1980s are in my ears. They may be part of the past, but are all of their lessons now irrelevant?

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About the Author
David C. Harper has been a coin collector since 1963. He joined the Krause Publications editorial staff in 1978 and is currently editor of Numismatic News and World Coin News. He also edits two books annually, North American Coins & Prices and Coin Digest. He is the author of the Class of '63 column that runs each week in Numismatic News. His first bylined numismatic article appeared in the June 1971 issue of Coins Magazine and his various Krause Publications assignments included a stint as editor of the magazine 1980-1983. Harper received a bachelor of science degree from the University of Wisconsin-Oshkosh in 1977. He had a double major of journalism and economics.

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