40 years on from gold standard, bugs crow
Gold is back, for good.
August 13, 2011 9:44 by p.deleon
Gold, and only gold, will be our salvation when the value of companies, banks, countries and even money itself melts away. Gold, not shifting currencies, is the foundation of wealth and security. Gold is back, for good.
This is the song of the “gold bugs” – the fervent fans of the precious metal who have clung to its investment value for three generations and now glow in the reflected lustre of a record price approaching $2,000 for just one ounce.
Monday will mark the 40th anniversary of the United States’ abandonment of the gold standard. But gold bugs kept the faith — even when prices stayed under $500 for nearly 25 years after their 1981 peak.
Their passion derided, dismissed as hopelessly out dated doomsayers, their love for the metal seemed irrational.
The gold bug label itself goes back to master of the supernatural Edgar Allen Poe and his story of that name, a tale of golden beetle whose bite sends the hero to a chest of gold and jewels.
It reappeared as one of the first campaign buttons — a brass bug sported by supporters of William McKinley in the bitter U.S. presidential election of 1896.
McKinley, the first presidential candidate to barnstorm across the nation, backed the gold standard against his Democratic opponent’s proposal that it should be joined by silver in a fixed ratio. Loser William Bryan slipped into history but bimetallism lived on for a little in the think tanks of the day.
Fast forward and the financial crisis of 2008 has made gold the darling of investors from hedge funds to taxi drivers, and sparked a near-doubling of prices.
“Gold has been rising against all national currencies, and that’s significant,” James Turk, founder of bullion dealer Goldmoney, said.
“When there are problems with a national currency…