Whether the price of gold is seen as a measurement of the value of a precious metal or as a report card on the economic, monetary, and fiscal policies that go into determining the value of the dollar, it’s interesting to think about what the trends, short-term and long-term, may mean.
Tagged: gold standard
JOIN US: In this new book, Forbes Media Chairman and Editor In Chief Steve Forbes explains that today’s wrong-headed monetary policies are setting the stage for a new global economic and social catastrophe that could rival the recent financial crisis and even the horrors of the 1930s.
The federal government has been expanding for decades. More laws, more spending, more regulations. More executive actions and judicial decisions that enlarge the role of government. Everybody knows this, but[…]
Alexander Hamilton was America’s first Secretary of Treasury under President George Washington. When he first entered office in 1789, America was an agricultural nation of just 4 million still broke[…]
For more than two hundred years, practically all of the leading advocates of individual liberty and free markets have assumed that money and banking were different from other types of goods and markets. From Adam Smith to Milton Friedman, the presumption has been that competitive markets and free consumer choice are far better than government control and planning – except in the realm of money and financial intermediation. They have been wrong on this important issue.
This year marks one hundred years since the beginning of the First World War in the summer of 1914. The Great War, as it used to be called, brought great devastation in its wake. Millions of human lives were lost on the battlefields of Europe; vast amounts of accumulated wealth were consumed to cover the costs of combat; and battles and bombs left a large amount of physical capital in ruins. But the “war to end war,” as it was called, also resulted in another weapon of economic mass destruction – an orgy of paper-money inflations.
In 2013 the price of gold bullion lost 28 percent and closed near its low for the year. It was the first annual decline since 2000 and the worst since 1981. Gold ETFs experienced record redemptions, shrinking the funds 33 percent by year end, but they were the exception. Marcus Grubb, Managing Director of the World Gold Council, reported, “2013 has been a strong year for gold demand across sectors and geographies, with the exception of western ETF markets.” While investors were leaving ETFs, demand for gold jewelry, bars and coins was increasing, as were purchases by central banks. Globally, consumer demand increased 17 percent for gold jewelry and 28 percent for bars and coins.
Transparency, therefore, has little to do with being accountable to the political branches of government. It’s about allaying the concerns of the financial market in the face of accommodative monetary policy.
Some folks at The Heartland Institute’s home office thought my little email exchange about Keynesian vs. Austrian economics, the Federal Reserve, etc., with Dick Ewing of Winthrop, Wash., worth publishing[…]