U.S. Republicans introduce gold standard debate – mainstream media go mental

1 kilo gold bar

I am not holding my breath over the Republicans' plans for another gold commission to investigate the possibility of returning the USA to a gold standard in the case of the Romney-Ryan ticket winning. Of course, I like the Classical Gold Standard, which existed from about 1880 to 1914, and I am convinced it was a humongous mistake to do away with it, a mistake that was further compounded by the abandonment of its weak successor, Bretton Woods, in 1971. And you know what I think of our present unconstrained fiat money … [Read more...]

Is gold in a bubble?

gold

To answer this question is not straightforward. As the gold-sceptics keep reminding us, gold pays no coupon and no dividend, it does not offer a running yield, so traditional measures of 'fair value' do not apply. But gold is money, and just as the paper ticket in your wallet does not pay interest, neither does gold. Gold is a monetary asset that has functioned as a medium of exchange and a store of value for thousands of years, around the world and in almost all societies and cultures. Many modern economists believe that … [Read more...]

By abandoning the gold standard we embraced monetary central planning, chaos

Ben Bernanke

With this essay I will try to reconcile two apparently conflicting perceptions of the key problems with our present monetary system. I will start by characterizing these two positions first: As readers of this website and my book know, it is my conviction that the central problem with the present system is the high degree of elasticity of the money supply. A system of constant fiat money expansion, of ongoing injections of new money into the economy via financial markets - sometimes slow, sometimes fast - must … [Read more...]

How to debate Paul Krugman

Ron Paul vs. Paul Krugman debate

Paul Krugman is the high priest of Keynesianism and modern interventionism, of economic improvement through inflation and budget deficits. As such he is bête noir among us libertarians and Austrian School economists. What makes him so annoying is his unquestioning, reflexive and almost childlike enthusiasm for state intervention, even in the face of its obvious failure, and his apparent unwillingness to probe any deeper into the real causes of our present economic problems or to show any willingness to investigate the … [Read more...]

Why gold is my favourite asset

1 kilo gold bar

I hate to give personal investment advice. So please do me a favour and do not treat the following as investment advice. I am expressing my personal opinion here. I do so with honesty and conviction, without a personal agenda - I am not trying to sell you anything - but with some good arguments, hopefully. However, it is still an opinion. Nobody knows what the future will bring. I don't know what will happen to the gold price in the next week, the next month or for the rest of this year. I don't even know what 2013 will … [Read more...]

Thinking inside the box – Chatham House on gold

gold

Last week, Chatham House, formerly known as the Royal Institute of International Affairs and a non-profit, non-governmental institution in London whose "mission is to be a world-leading source of independent analysis, informed debate and influential ideas on how to build a prosperous and secure world for all", published a report with the title, "Gold and the International Monetary System." This report summarizes the findings of the Chatham House Gold Taskforce. This taskforce, comprising 10 permanent members but involving … [Read more...]

What should Obama do? – Interview with Detlev on ValueWalk.com

Picture of Detlev Schlichter

Jacob Wolinsky of the US website ValueWalk.com conducted an extensive interview with me that covered a wide range of topics, from my own background and the appeal of Austrian School Economics to what I think Obama and Bernanke should do. You can read it here or here. … [Read more...]

Bernanke’s blind side

Ben Bernanke

The world financial system is skating on thin ice, and that ice can crack at any moment. The instabilities of the global paper money economy are evident everywhere. In Europe, the debt crisis is picking off one euro-member after another like the protagonists of a teenage horror movie, leaving us in no doubt what the final destination for the core is going to be. Yet - bizarrely and inexplicably - German Bundesanleihen still play the role of safe haven. In the U.S. of A., years of near-zero interest rates and two rounds of … [Read more...]

At Last, the Death of Politics

Dollar note on a hook

For over a year now the Eurocracy has tried to put Humpty-Dumpty together again, to somehow restore belief in the solvency of the European welfare state, which is ultimately the real issue at the core of the current malaise rather than just the  problems of the more recklessly extravagant periphery. The Greek state cannot live within its means but neither can any of the others. Meanwhile, over at the global superpower, the public is slowly waking up to the fact that this government, too, is going bust, thanks to … [Read more...]