Douglas Carswell's Blog

What are gold prices telling us?

With media attention focused on high gold prices, a lot of pundits have become overnight experts on the subject. “It’s because of all the instability in the Middle East”, some pronounce sagely. “It’s worries about the bond market”, declare others.

All true, I’m sure.  But might the fact that you now need $ 1,518 to buy one ounce of gold also be a reflection of the fact that there are an awful lot more $ out there than there were? If you print more money, money loses its value.

We’ve only had a fully fiat, or paper, system of currency for the past forty years. The way the West has turned a banking crisis into a sovereign debt crisis, perhaps gold prices are also telling us that we might not have one in another forty years time?

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