Streams

Thomas Frank on Gold Mania

Tuesday, June 14, 2011

The price of gold has risen steadily over the last decade. Harper's magazine columnist Thomas Frank takes a look at the mindset of “goldbugs” and others who invest in precious metals as a hedge against instability and the perception that governments can’t manage currencies or chaos. His latest monthly column “Easy Chair” is called “Gold Faithful: Profiting from Paranoia with Precious Metals.”

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Thomas Frank
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Comments [18]

Shm224

Wow, it's pretty amazing how NPR, national propaganda radio, is willing to go to promote liberals's welfare and warfare state. Liberals loath gold standard because it stands in the way of liberals welfare and warfare state (or their ability to print money out of thin air to finance them)

Jun. 14 2011 06:59 PM
Dennis from New Jersey

Until 1971 a foreign nation could turn in US dollars for gold, than valued at $35 an oz. From 1949 to 1971 the US lost 3/4 of its gold supply or 526 million oz, or if you figure it on todays price of 1500 an oz, the US government gave away 780 billion dollars of the taxpayers money.

Jun. 14 2011 05:24 PM
Amy from Manhattan

Abby, there's a link for podcasts (2nd from the right) on the black bar under the "Post Comment" button.

Jun. 14 2011 02:25 PM
Mr. Bad from IL

@ Giuseppe from Manhattan

Yes, exactly. Price inflation in dollar denominated commodities (i.e. oil/gold) is a direct result of quantitative easing (money printing) and that is not a "fringe" idea, Marc Faber and Peter Schiff have been writing about this for some time. I don't necessarily think that holding physical gold is such a great idea for the average American, there are too many problems associated with its storage and exchange, but anyone with any insight into finance knows that diversifying out of the dollar is a very good idea and for some people (especially in emerging markets like India) gold is as good a choice as any.

If the us economy collapsed completely (due to war or default) I wouldn't want anyone to know I hand any gold on hand, so how exactly would one "spend" it? Hope you can afford a lot of armed guards. Better off keeping a small cache of foreign currencies for an emergency, CAD, Swiss Francs and maybe even Chinese yuan if you want to make a long bet.... they must eventually stop manipulating their currency if they are to fulfill their economic potential, it would require making the yuan more available for foreign reserves in the next 10-20 years.

Jun. 14 2011 02:11 PM
nick

I'm looking at a June copy of Harper's Magazine and can't find the article. In my copy the Easy Chair column is entitled "Required Reading" and seems to be about some prisoner at Guantanamo. Does any one know if the article on gold is supposed to be in the July issue, and not the June issue? Am I looking at the wrong magazine, pardon my ignorance but I thought there was only one Harper's?

Jun. 14 2011 02:03 PM
Giuseppe from Manhattan

The gold and silver mania is not only the result of "metal heads'" paranoia.
Gold and silver are trading like currencies in currency markets. Established currency trading brokers quote XAU/USD and XAG/USD
(e.g., http://fxtrade.oanda.com/)

Furthermore, non-fringe market economists and analysts advise holding gold in your portfolio as a hedge against currency debasement/devaluation. These actually explain at least part the rise of the price of gold in USD as a result of the corresponding secular decline of the latter.

Jun. 14 2011 01:57 PM
Abby from Brooklyn

How do I get a copy of today's show on Gold?

Abby

Jun. 14 2011 01:55 PM
Matthew from Brooklyn

Didn't Utah just legalize gold and silver as currency? I think I can just file some gold dust off of my nugget and buy my toothpaste with it. So this has some weight in the real world....

Jun. 14 2011 01:53 PM
Arnold from Brooklyn

About 10 years ago, central banks stopped selling gold. Under what circumstances would they resume sales?

Jun. 14 2011 01:50 PM
Amy from Manhattan

Had silver also "never gone down" when the Hunt brothers tried to drive it up by buying as much as they could ~30 years ago??

Jun. 14 2011 01:49 PM
keil

as a material that does not oxidize gold is usefuland and heavily used in elctronics, automotive, defense and research applications.

Jun. 14 2011 01:47 PM
Sean

Responding to your guest, Gold has many uses in the modern economy. It is an excellent conductor of electricity. It also has numerous applications in the space industry.

Jun. 14 2011 01:46 PM
Truth & Beauty from Brooklyn, NY

Gold has many industrial uses as it is one of the top four conductive metals: copper, silver, gold and platinum.

It is used in dental work, as it is inert in the human body,and in printed circuits in computers because of its conductivity, as well as in jewelry.

Jun. 14 2011 01:45 PM
tom

I prefer to put my life savings in aluminum.

Jun. 14 2011 01:43 PM
Truth & Beauty from Brooklyn, NY

Questions for your guest:

1. Does the discussion about gold in Ian Fleming's (when James Bond visits an expert in gold at the main branch of Bank of England) Goldfinger have any truth to it?

2. Is not the current lack of the gold standard what is driving inflation of its price right now? Perhaps the threat of devaluation is less than that of the inflation of those who are currently buying up the gold and, concurrently, increasing its price.

I am in favor of returning to the gold standard, in general because without a standard of some sort, inflation will run rampant. That appears to be what is happening right now.

Jun. 14 2011 01:38 PM
Amy from Manhattan

I may have prevented someone from becoming a goldbug. A few months ago an acquaintance starting going on about gold & finished with "And it never goes down!" I answered, "That's what they used to say about real estate."

Jun. 14 2011 01:35 PM
jgarbuz from Queens

While I would recommend everyone having a few gold coins, not as an investment, but just in case, in fact, the reason why societies went from gold as money to paper backed by government credit as money, was because the industrial revolution meant that production of goods FAR outstripped the production of gold. That is why there were many gold rushes in the 19th century, as production of gold could never keep up with the manufactured production of goods.

Both slavery and the use of gold as money were together made obsolete by the industrial revolution.

Jun. 14 2011 01:33 PM
Patrick from Bronx

Does the hunger for gold moderate when the economy is going well?

Jun. 14 2011 05:44 AM

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