Gary North On Gold (Again)

He’s got an article posted on Lew Rockwell.

In it, he states that “Gold has no intrinsic value.” and that “…it is not a store of value.”, and that anyone who thinks otherwise “…doesn’t understand economic theory.”

He then argues these points at some length, unintelligibly.

His points are, roughly, that:

- the price of gold has fluctuated in dollar terms;

- there is no fixed measure of value;

- economic value is subjective or imputed;

- followed by – and I have to quote this directly because it is incoherent and therefore cannot be summarized:  “The important fact to understand here is that objective prices are the result of competitive bids by people with subjective assessments of the future: immediate and more distant assessments.”

- Individuals impute value.

- “Gold is not a standard of value.  It moves up or down in terms of individuals’ competing assessment of its prospects in a world of fiat money.”

What if the world was not “…a world of fiat money”?  In other words, what if the price of gold was fixed by law?

North does not understand a gold standard at all, because he does not understand that the law trumps economics, and a gold standard is a matter of law, and only secondarily a matter of economics.  Under a gold standard the dollar price of gold cannot fluctuate at all because it is fixed by law.  The law can do this.  Economics cannot.

We’ve been over this before, I think.  North should get over here and read.  And think.

I’ll admit, though, that not only is this never going to happen, but it wouldn’t change anything even if it did.  Narcissistic misanthropes like North, like Ayn Rand and so many others – Muamar Ghadaffi comes to mind – will never get it right.  They have mental and emotional blocks that compel them to focus on who is getting over on who.  It’s the way they view every problem.  It’s the way they view the world.

I try to make a contrast with this when I often say that I love people.  I may not do it well.  But then loving people is harder than hating them.

It is really that – and not the gold standard, as such – that’s at the heart of my disagreement with Gary North.

 

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1 Comment

Filed under financial crisis

One response to “Gary North On Gold (Again)

  1. If you want to hedge the depreciation of the dollar with precious commodities, I would go long gold rather than silver. Silver is at all time high against Gold. If you are long gold you would have the tailwind at your back rather than facing the headwind.

    Silver Intrinsic Value Update

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