The Gold Bubble Bursts — 141 Years Ago

Gold has been soaring higher and higher recently so I wanted to remind investors that tomorrow marks the 141st anniversary of Black Friday. That’s when Jay Gould and Jim Fisk tried to corner the gold market. And as the name Black Friday suggests, it didn’t end well.

At the beginning of the Grant administration, the U.S. government was selling off its surplus gold and using the proceeds to get the fiat “greenbacks” off the market. There wasn’t a whole lot of faith in the dollar and the government was trying to restore some confidence.

Fisk and Gould went into gold in a big way and tried to encourage officials in the Grant administration to let gold rise higher. George Boutwell, the SecTreas, saw what was going on and on Friday, September 24, 1869, he made his move. The Treasury dumped $4 million dollars worth of gold on the market. Almost immediately, the price of gold plunged from $160 to $130.

Posted by on September 23rd, 2010 at 9:52 am


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