When we wrote this in 2022, it took about $1800 to buy an ounce of gold. Today, it is more like $2900. That implies an $1800/$2900=0.621 or a 38% decline in dollar value over that period. Prices will eventually adjust, over a period of years, to the new, lower value of the currency, with some prices moving faster and some moving slower. “All things being equal” (they never are but it is a good principle), we should expect a $2900/$1800 or 61% rise in prices of goods and services going forward, compared even to the inflation-boosted prices that we have had to get used to in 2022-2024. Read More ›
Today, we are seeing a lot of the institutions and bad ideas of the Post World War II Consensus breaking down and collapsing. Among these is the rather stupid notion that economies should be managed by some combination of currency and interest rate manipulation, and “fiscal stimulus” spending that amounts to utter waste, for the simple reason that it has no justification except as “stimulus.” These are the conclusions of “Keynesianism,” which has been taught in all universities since the 1940s. Read More ›
This month, the Central Bank of Zimbabwe launched a new gold-based currency, the first gold-based currency from a government since Richard Nixon effectively ended the world gold standard system in 1971. As long as the Central Bank of Zimbabwe adheres to some important principles, and doesn't play politics, it should be fine. Read More ›
After months of debate about various currency and commodity baskets, a Russia- and China-led consortium has apparently settled on using gold as the basis of a planned new international currency system separate from the US dollar and euro. Read More ›
