This is a comparative advantage for the United States in a world in which the US has fewer and fewer comparative advantages.
Gold is a weird substance and for all the power that the central banks wield in this world, gold remains a bugaboo, for the mega-planners.
Central banks hate gold because it competes directly with fiat currencies. Gold, to a large degree gives one a nice snapshot of how well things are going economically. A high “price” means things are nasty, a low “price” means things are puttering along. In the short term the price of gold can be manipulated but the market always brings these efforts to heel.
Gold is a little bit of economic power one can hold in one’s pocket. This is a radical fact.
If one owns some gold, one has a bit of wealth, and power, that is outside of the control of the Fed.
I write this today in a hotel room in San Francisco, and last night I talked with the a manager of a left-anarchist bookstore about the power of gold.
After asking him if he had ever read Rothbard (he hadn’t) and if he carried any anarcho-capitalist books (he didn’t) we had a very friendly discussion about the power of metals as an investment for the average person.
I thought for sure he was going to call gold a barbarous relic or something like that, but he didn’t.
He instead told me of his experiences in Berlin during the fall of the Berlin Wall and what the Germans did with the East German mark.
At first as wide eyed East Germans flowed over the border the West Germans valued the Ostmark at par. But quickly it became obvious that this was unsustainable and the decision was made to eliminate the Ostmark. Soon the piece of paper which at least briefly had enjoyed significant purchasing power by fiat, was dead.
My new anarchist friend said that in the end it wasn’t uncommon to see Ostmarks floating down gutter streams with the rest of the garbage.
His story is a good example of the fleeting nature of fiat currencies.
The dollar, the true Federal Reserve note, backed by nothing more than the full faith and credit of the USA, is now 40 years old. That is very long in the tooth historically for a fiat currency.
Though I don’t think we are on the verge of seeing dollar bills in trash cans or floating in gutters, it is very fair to say that the dollar is not what it used to be. One can sense it when one goes shopping at the grocery store. The dollar just doesn’t feel as solid as it once did.
Gold is one of the very few ways the average person can protect themselves as the the dollar loses more and more of its mojo. Thankfully in this country we still have access to gold, and the average person should at least consider the metal as an option for some of their savings.
There are many reasons to be happy one lives in the United States, and ready access to gold is one of them.