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Ten Things Every Economist Should Know about the Gold Standard
Many economists tend to get their monetary history wrong when it comes to the gold standard.
As George Selgin points out in an article published on the Cato Institute’s website, “if there’s one monetary history topic that tends to get handled especially sloppily by monetary economists, not to mention other sorts, this is it.”
In the article, Selgin addresses 10 truths about the gold standard that are often either misunderstood or miscommunicated. These truths include: The Gold Standard wasn’t an instance of government price fixing; The Gold Standard wasn’t to blame for the Great Depression; and gold supply “shocks” weren’t particularly shocking, among several others.
It’s important, Selgin writes, for all of us to accurately understand The Gold Standard, not just to win people over, “but to remove some of the sheen that has been applied to modern fiat-money arrangements using the same brush by which gold has been blackened.”
Click here to read more.
May 26, 2015
I’ve worked with Claudio Grass, managing director of the Switzerland-based Global Gold, Inc., for more than five years and enjoy his perspective.
To that end, I thought I’d share a recent report published by the organization he leads, titled Global Gold Outlook Report.
This issue covers several topics, including: “Switzerland: The last bastion of liberty”; “The aftermath of Charlie Hebdo”; an interview with the Czech Republic’s Former President Mr. Václav Klaus; and an article exploring the liberal values of Ludwig Erhard.
Click here to read the full report. Enjoy!
March 23, 2015
When exactly the Fed will begin raising the Fed Funds Rate has been in the news for a while now. And the timing of the rate increase is yet to be determined.
However, the prospect of these increases is successfully keeping investors on the sidelines as investment banks continue to perpetuate the myth that rising rates are bad for gold prices, according to the OCM Gold Fund’s March Market Update.
However, according to a chart included in the Market Update, the price of gold actually increased as the Fed Funds Rate increased during an interest rate hike cycle from 2004 to 2006.
Click here to read more.
March 16, 2015
It’s difficult to put into simple terms the importance of owning physical gold coins.
However, this video posted on the teapartyeconomist.com, does it well by drawing a historical parallel to the Titanic shipwreck.
Through a clever narrative and illustrations, the video conveys the importance of owning a “lifeboat” (ie. physical gold) if and when a “ship like the Titanic” (ie. U.S. banking system) sinks. It was difficult for passengers on the Titantic who didn’t know the ship was sinking to understand why they should actually own a lifeboat, instead of being promised a lifeboat by the Titanic staff members. In the same way, it’s difficult for many investors to understand the importance of owning physical gold until a crisis occurs.
Click here to view the video.
January 12, 2015
As many of you are aware, a core principle of the Manarin investment philosophy is to main a position in gold as a long-term hedge against inflation and shocks to the financial markets.
I thought you might be interested in knowing that, according to an article published by Yahoo Finance, Jim Cramer, the flamboyant, stock-picking guru and host of CNBC’s “Mad Money,” is a recent convert to this principle of sound investing and financial planning.
Click here to read more.
October 17, 2013
Many people are skeptical about gold these days. Its value dropped by $500 an ounce in the past year and by $100 just in the past month.
So why won’t the United States Treasury consider selling some of the country’s gold reserves to pay the bills if the budget crisis escalates?
According to a recent article by Brett Arends (a self-proclaimed “gold agnostic) published on marketwatch.com, “the Treasury itself considers U.S. gold holdings to be a key element in maintaining confidence in the country’s soundness – and the stability of the international financial system.”
June 12, 2013
Excerpted from Roland's 2008 book, "Manarin on Money":
Those of us who understand the way money works and use gold as a buffer against calamity are often regarded with skepticism. Just as in the late 1970s, around 2000 – when gold was setting record lows – my colleagues in the investment world and the media ridiculed me for loading up on gold investments. The media wrote about people like me as “gold bugs,” as though we were a bunch of wild-eyed survivalists and hucksters.
The more I was criticized in the press, the more gold assets I bought. To me, the negative coverage was as sure as sign as any that gold was cheap, and the shares of gold-mining companies were even cheaper historically.
By 2007, gold-mining shares had risen by 500 percent and more, and then the business writers and the callers into my office changed their tune, asking me if it was a good time to buy gold. It is a ceaseless wonder how so many otherwise intelligent people can get something so basic so wrong with such consistency.
For more information about Roland’s complete book, click here or call 402.330.1166.
April 29, 2013
The Precious Metal Purchasing Act (SB 3144) is the latest development in our country’s never-ending hold on gold.
The new act introduced in Illinois, discussed recently on The Santelli Exchange would require an audit trail by all retail or wholesalers for any precious metals.
This isn’t the first time the government has tried to put restrictions or monitors on gold ownership. On April 5, 1933, President Franklin D. Roosevelt proclaimed it illegal for Americans to own any significant quantity of gold with Executive Order 6102, compelling citizens to sell their gold to the Treasury at the exchange rate of $20.67 per ounce. The Gold Reserve Act of 1934 halted the minting of all gold coins and raised the price of gold to $35 per ounce. In 1971, President Nixon took the U.S. dollar off the gold standard, and in 1974, President Ford permitted gold ownership.
More information on gold and its mark throughout the ages is in this timeline.
It will be interesting to see how this latest chapter from Illinois plays out.
October 1, 2012
Q: The marketplace is saturated by commercials begging folks to buy gold and to invest. What are the risks? Rewards?
A: In 1999, gold was selling for around $250/oz. There were no infomercials, billboards, full page newspaper ads, or radio ads offering to buy or sell gold. Some commentators were telling folks to not buy gold because it would go lower. Gold has had a great 5-year run and that attracts attention. Unfortunately, the American public has a history of chasing the latest hot thing and most lose the game. I can make an argument on a technical basis that gold should be between $1,000 & $1,200. At the same time, if we find ourselves in a period of rapid inflation, the price of gold could easily double. I do not see rapid inflation in the near term, probably a year out.
Generally speaking, gold is not a good investment; it is a great hedge against inflation or monetary collapse.
The information provided here is for general informational purposes only and should not be considered an individualized recommendation or personalized investment advice. The type of securities and investment strategies mentioned may not be suitable for everyone.
September 18, 2012
I was recently interviewed by Crash Davis on Omaha’s 1110 KFAB about trends in investing, gold as an investment, and emerging markets.
Click here to listen to the interview!