Monday, July 20, 2015

Gold Hater Paul Krugman is Crowing Today

He takes the overnight drop in the gold price  to make a number of absurd comments:
Remember when the likes of Paul Ryan accused Ben Bernanke of printing too much money, solemnly intoning that “There is nothing more insidious that a country can do to its citizens than debase its currency”? A big part of the justification for this fear-mongering was that commodity prices were rising sharply from their 2009 low, which the usual suspects claimed was a harbinger of rising overall inflation.

So, look at what’s been happening to commodity prices, including gold, recently.

Does this mean that deflation looms? Is it time to demand that Janet Yellen roll the printing presses?
He follows this up with pure dumbness:
I mean, it could be that the inflation hawks have learned their lesson, that they realize that volatile commodity prices aren’t a very good guide to policy, and that it makes sense to focus on core inflation.
What the hell is he talking about? Gold is not removed from the calculation of core inflation, only energy and food prices are.

And in the long run, despite occasional serious corrections, gold has been doing okay.  Paul Krugman was born in 1953, at that time the price of gold was $35.00 an ounce. Since the day he was born, I imagine, he has been spouting anti-gold rhetoric. It is a tough career choice. Since he was born gold has climbed 3068%.

So let Krugman crow today, the empirical evidence shows (and Krugman, not me, is big on empirical evidence) that as long as Krugman is alive the general trend for gold will be much higher.

In fact, the older Krugman gets the more powerful the upward spikes.



  1. Krugman aside, gold is far below 1980 peak adjusted for inflation. No yield either.

    Gold is a speculative investment, given to bubbles.