“I think what has happened is that gold has reverted to its long-standing original role: shock absorber. For centuries it absorbed every attempt by kings and governments to debase coinage. Commodity prices fluctuated away from but usually returned to their normal relationship to the gold price. It was the only trusted standard. The golden mean.
“(A gold price of) US$350 today is, incidentally, below the long-term purchasing power of gold. Perhaps world deflationary forces are more pervasive than we think.
“Certainly not many people like the current price. Now there are not too many kings left, but as long as governments print money, as long as inflation continues, as long as interest rates stay above 2%, gold will rally up from this level.”
From LAC Minerals President Peter Allen’s notes prepared for the annual meeting of shareholders, May, 1991.
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