Ms McArdle on gold

Her ignorance is astounding on this particular subject.

Here, she says that gold is in a bubble, because the dollar has declined in value against the Euro as much as it has declined against gold. Of course, the reason the dollar has declined against gold is that the Fed is printing record numbers of new dollars. The ECB has also done a fair share of printing Euros. The Gold Central Bank has not been printing any new gold. Do you see the logic? I think it you try really hard, you’ll be able to see what’s happening.

Here, she says that physical gold is a bad hedge against apocalypse, because canned goods and ammunition would be better. Perhaps this is correct, but a medium of exchange does tend to emerge, even post-apocalypse. Is it really absurd to believe that gold would be such a medium?


3 Responses to Ms McArdle on gold

  1. Jehu says:

    Gold has a good shot of being the post apocalypse currency for many possible catastrophes. I guess it wouldn’t be as good in a circumstance that massively reduced the population while leaving most of the gold stock recoverable (e.g., King’s ‘The Stand’). But most historical apocalypses (from the standpoint of the one suffering it—not the end of the world, but the end of YOUR world as you knew it) it has been pretty good. That’s why gold is so popular in places like India.

  2. Steve Johnson says:

    McArdle is an official member of the establishment.

    For people in that position it’s best not to think too hard about hedging against the collapse of the establishment. It signals that you’re not sufficiently committed.

    McArdle’s whole position is strange anyway; like a NYTimes “conservative” – her job is to warn progressives against doing things that are totally insane and yet get ignored… then do it again with the next policy. Connecting the dots and pointing out that progressives keep doing insane things is out of bounds.

  3. TAS says:

    “The whole idea of gold as some sort of unique store of value is badly flawed. It doesn’t make a particularly good currency, and it also doesn’t make a particularly good investment.”

    Is she serious? Gold has been used as a store of value since before recorded history in virtually every society that had access to it.

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