Gold

There were no fireworks, and not much champagne. Indeed, it wasn’t an anniversary that many people noticed. But on 9 March, the bull market in equities was five years old. It was on that day back in 2009 that the Dow Jones Industrial Average, the key global benchmark for stocks, edged down another 80 points to close at 6,547, its lowest level since 1997. Although no one knew at the time, that was the bottom, and it was to go no lower. From then onwards, the recovery was under way. In London, our own low point came three days earlier, on 6 March 2009, when the FTSE100 index touched 3,530.

Few assets are more misunderstood than gold. I might even refine that statement — if you’ll pardon the pun — and say that few assets are more misunderstood than money. Gold happens to be both. Technically, of course, we are constrained by government edict to use pounds sterling for the payment of our taxes and debts. My take on this dismal state of affairs, but also my optimism, can best be summarised in the title of Nathan Lewis’s recent book, Gold: The Once and Future Money. Economists give money three attributes. It should be a unit of account (we can price things in it). It should be a medium of

It was a problem that would be fixed with a snap of the Commissioners’ manicured fingers, but now fresh euro-storms are louring in the near distance. As predicted over the weekend, the markets reacted to the European Banking Authority’s deeply flawed stress tests with fevered concern and a clear note of contempt. The FTSE shed 90 points yesterday, with banks among the day’s biggest losers. The performance in Frankfurt and Paris was equally baleful, as investors fled for safe commodity stocks. As Fraser has noted, Allister Heath argues that the Eurozone crisis is responsible for the booming price of gold. The markets have recovered slightly this morning; but that does

Addictive though the hacking inquiry is, the average Brit is probably more worried about the slow decimation of his spending power at a time when salaries are flat. Against this backdrop, the price of gold today has broken $1,600 an ounce.  With inflation and the Fed’s printing presses whirring, faith in paper money is taking a knock – and this is reflected in the price of gold.  Fears of a debt crisis in Europe add to it too, with a disaster scenario all too easy to imagine. Over the last decade, the West blew a bubble fuelled by low interest rates and debt-financed consumption. The bubble burst. Solution: even lower