Tag: Gold

A Gold Rush of Commentary

It seems the Republican party’s talk of a gold commission has led to a virtual gold rush of commentary from columnists, talking heads, and assorted punditry.  Taking a glance at the Real Clear Markets link aggregator, I see “The Failing Case for Gold,” “The Top Ten Reasons you Should Support the Gold Commission,” and “GOP’s Golden Oldie,” along with the fabulously titled “The Lost Bush/Obama Era Gave Us the Gold Commission” and “The First Gold Commission Scared the Hell Out of the Fed. These latter two pieces with the provocative names are pretty favorable takes, I’d say.

Not every economist is high on the gold standard, as Paul Krugman noted a few years back:

There is a case to be made for a return to the gold standard. It is not a very good case, and most sensible economists reject it, but the idea is not completely crazy.

Most sensible economists, yes, suggesting that some sensible economists might be somewhat more favorable (see the links herein, for instance).

Of course, times change, and evidently so has Krugman’s assessment.  Here’s Krugman’s in yesterday’s New York Times:

The truth is that returning to gold is an almost comically (and cosmically) bad idea.

So much for the sensible goldbug.  Krugman finishes the piece with this zinger:

Now, the gold bugs will no doubt reply that under a gold standard big bubbles couldn’t happen, and therefore there wouldn’t be major financial crises. And it’s true: under the gold standard America had no major financial panics other than in 1873, 1884, 1890, 1893, 1907, 1930, 1931, 1932, and 1933.

I guess we’ll see how the campaign shapes up and perhaps we’ll be seeing more of this.

GOP Going for the Gold?

Future Heads of the Hungarian Central Bank?

Speaking of gold, the Financial Times is reporting that the Republicans are discussing a return to the gold standard.

What do you suppose a return to the gold standard would entail?

I can’t answer that question in short order, but if you are interested, here are some places where I would start.

For a brief overview geared to a more general audience, Michael Bordo has a brief article and a number of references at The Concise Encyclopedia of Economics and Liberty.

For articles geared for more scholarly audiences, check out the article at the New Palgrave Dictionary of Economics (available from on-campus IP addresses), or a lengthier treatment, chocked full of descriptive statistics, is Lawrence Officer’s extensively documented piece at the Economic History Association’s webstite, EH.net.

Speaking of Gold

Jordan Weismann has an interesting bit in The Atlantic on the recent decline in gold prices — off about 15% from last-year’s peak — that includes some fascinating perspective on China and the world economy:

[China] deregulated its gold market in 2001, and since then, it has gone from consuming about a third as much gold as the developed west to overtaking it by 2011. Let me repeat that: the Chinese buy more gold than the entire west combined.

The current gold price seems pretty high to me.  Back when I was thinking more about the mining industry, (nominal) prices were less than $400 /oz;  today’s prices are north of $1500.  So, even adjusting for inflation, that is a pretty good ride.  But when I looked for a graphic to illustrate the changes, I came across this nice blog post on how it’s hard to find an “objective” series of real gold prices.

Gold markets are interesting for all sorts of reasons that I won’t get into here. Perhaps I will start cobbling together a reading list on the many dimensions of the economics of gold and gold markets.