Here are a few observations about gold and the economy that we have been collecting to share with our friends and clients!
The problem, of course, is that the 12 mortals who sit on the FOMC are not clairvoyant, and for the most part not even astute. They have proven over and over again that they have no ability to forecast the course of a $25 trillion domestic GDP, intricately interwoven into a $90 trillion global economy.David Stockman
60 percent of Americans are living paycheck to paycheck heading into the peak shopping season.CNBC
A U.S. dollar is an I.O.U. from the Federal Reserve Bank. It’s not backed by gold or silver. It’s a promissory note that doesn’t actually promise anything.P.J. O’Rourke
A currency that rises in value over time incentivizes saving and thus investing for the long term.
The late 19th century provided a good example of this. Under the gold standard, money grew more valuable over time, thus rewarding long-term thinking and instilling that outlook in the culture at large.
Inflation has the opposite effect. It punishes saving. It forces a penalty on economic behavior that is future-oriented. That means also discouraging investment in long-term projects, which is the whole key to building a complex division of labor and causing wealth to emerge from the muck of the state of nature. Every bit of inflation trims back that future orientation.
Hyperinflation utterly wrecks it.Jeffrey Tucker
Gold still represents the ultimate form of payment in the world. Fiat money in extremis is accepted by nobody. Gold is always accepted.Alan Greenspan
Gold and silver, like other commodities, have an intrinsic value, which is not arbitrary, but is dependent on their scarcity, the quantity of labor bestowed in procuring them, and the value of the capital employed in the mines which produce them.David Ricardo
British political economist (1772-1823)
I grew up in a purely urban family. We had no relatives in the country. I’m born in 1944. When I was a baby, my mother could only buy food because she still had some gold coins. Without gold, I would have starved. She always told me that. Therefore, this generation already has a certain gold affinity. In extreme times of crisis, this is one of the few things left to be accepted. Gold was the only thing left to the people of the city at that time. Before the silver cutlery was also traded at the farmer.Ewald Nowotny
Former European Central Bank governor
The gold standard makes the determination of money’s purchasing power independent of the changing ambitions and doctrines of political parties and pressure groups. This is not a defect of the gold standard; it is its main excellence.Ludwig von Mises
With the exception only of the period of the gold standard, practically all governments of history have used their exclusive power to issue money to defraud and plunder the people.F. A. Hayek
And finally, one more note about gold: