Photo Credit: FOFOA

Oil rich Arabs like to buy gold when things get dicey in the world. For the year 1978, one year before the Iran hostage crisis, the price of gold averaged $193.22 per ounce. Because Jimmy Carter was perceived as an idiot and allowed the Iranians to hold our people hostage, the price of gold averaged $455.08 an ounce in December of 1979 pushing the average for the year to $306.68 an ounce.

For the rest of 1980 gold averaged $612.56 an ounce until Ronald Reagan assumed office and the rest of the Muslim world realized that here was a cowboy who knew how to run the most powerful country in the world; the Iranians quickly released the hostages (without a shot being fired), and the price of gold consequently dropped in his first year in office to an average of $460.03 per ounce. By his fifth year in office the average was down to $317.26 an ounce.

Likewise, when the riots first started in Tunisia last month, we saw gold rise from $1363.00 an ounce the day before the uprising to as high as $1420 an ounce until it looked like the ouster of President Zine El Abidine Ben Ali would restore peace to that country. It has settled down to $1332 an ounce for today, a little lower than it was a month before Mohammed Bouazizi turned himself into a cigarette lighter.

I have been asked why I haven't written anything about the riots now going on in the Arab world. The truth is I can't take it seriously until Arab money starts buying gold in fear that Egypt ( and then others) will fall.

In Saudi Arabia, gold Friday hit its lowest level since the Tunisian riots to 4,931.32 riyals an ounce.