{"id":10815,"date":"2015-08-07T07:40:58","date_gmt":"2015-08-07T12:40:58","guid":{"rendered":"http:\/\/olduvai.ca\/?p=10815"},"modified":"2015-08-07T07:40:58","modified_gmt":"2015-08-07T12:40:58","slug":"gold-prices-disprove-krugman","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=10815","title":{"rendered":"Gold Prices Disprove Krugman"},"content":{"rendered":"

Gold Prices Disprove Krugman<\/a><\/span><\/h3>\n

Recently Krugman wrote an op ed ridiculing Ron Paul titled,\u00a0\u201cThe Old Man and the CPI.\u201d<\/a>(In case you don\u2019t get the reference, he\u2019s alluding to\u00a0Hemingway<\/a>.) Ron Paul has responded in\u00a0this video<\/a>, but I want to focus on Krugman\u2019s complains about gold bugs:<\/p>\n

Ron Paul has been\u00a0making the same prediction<\/a>\u00a0year after year \u2014 in fact, he\u2019s been making this prediction\u00a0at least since 1981!<\/a>\u2014 and has been wrong year after year. It\u2019s hard to think of a doctrine that has been as thoroughly refuted by events as goldbug economics. For a while gold prices did go up, although not for the reasons the goldbugs thought, but now even that has gone into reverse. So why would anyone pay money for this guy\u2019s analysis?<\/em><\/p><\/blockquote>\n

This has been quite the cause for celebration among progressive economists. (I won\u2019t link to some of the lesser lights and reward them for their smugness.) And it\u2019s true that a simple story relating the Fed\u2019s balance sheet to the price of gold doesn\u2019t work out very well:<\/p>\n

\"Gold<\/a><\/p>\n

In the\u00a0chart above<\/a>, total Fed assets (red line, left axis) are plotted against the price of gold (blue line, right axis). People who thought the price of gold would move in lockstep with the Fed\u2019s QE programs were sitting pretty during QE and QE2, but then things turned around with QE3. It almost looks as if the commencement of QE3 (when the red line started stairclimbing up) was the catalyst for making gold plunge about $600 an ounce.<\/p>\n

Nonetheless, suppose someone bought into the warnings of Ron Paul (and guys like me) when Bernanke began his unprecedented monetary inflation, back in late 2008 \/ early 2009, and began buying gold as a hedge. Depending on when exactly you got in,\u00a0gold was selling for anywhere from $700 \u2013 $900 an ounce.<\/p>\n

…click on the above link to read the rest of the article…<\/p>\n

 <\/p>\n

 <\/p>\n

 <\/p>\n","protected":false},"excerpt":{"rendered":"

Gold Prices Disprove Krugman Recently Krugman wrote an op ed ridiculing Ron Paul titled,\u00a0\u201cThe Old Man and the CPI.\u201d(In case you don\u2019t get the reference, he\u2019s alluding to\u00a0Hemingway.) Ron Paul has responded in\u00a0this video, but I want to focus on Krugman\u2019s complains about gold bugs: Ron Paul has been\u00a0making the same prediction\u00a0year after year \u2014 […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2],"tags":[303,7819,374,3622,7654,5065,426,7200,614,692],"class_list":["post-10815","post","type-post","status-publish","format-standard","hentry","category-economics","tag-fed","tag-fed-balance-sheet","tag-gold","tag-gold-price","tag-goldbugs","tag-hedge","tag-inflation","tag-mises-canada","tag-paul-krugman","tag-ron-paul"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/10815","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=10815"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/10815\/revisions"}],"predecessor-version":[{"id":10816,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/10815\/revisions\/10816"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=10815"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=10815"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=10815"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}