Does Gold Go On Vacation?

Does gold go on vacation? I don’t know, but I am going for sure.

Gold Always Pays Its Debts

In July, I promised you to review some of the books about gold which you can find in the enormous library at the Mises Institute located in Auburn, Alabama. Now, it’s time to fulfill my obligation. In the picture below, you can see part of the collection dedicated to gold. Of course, it’s not the whole set, but I didn’t manage to bring them all (too much time in the library, too little at the gym, I suppose), so I chose the most interesting ones.

In the Mises Institute’s library I found a few positions about the history of gold and its relations to empires, adventures and debt (see: War and Gold by Kwasi Kwarteng), or Gold about the history of gold mining (the author, Matthew Hard, described it as a story about the race for the world’s most seductive metal).

And I was really glad to finally find the paper edition of The Golden Constant by Roy W. Jastram. He carefully analyzed the historical gold prices in the UK and the U.S. He found that gold was a poor hedge against shorter-term inflation, but it maintained its purchasing power over long periods of time, for example, half-century intervals. The problem is that the time frame was 1560-1976, so it covers also periods were the price of gold was fixed (we have a free market for gold only since 1971).

Gold Standard

But most books refer to the gold standard: how it worked, why it should be a better monetary system that the current one, or why it was hated by the politicians (see: The War on Gold by Antony C. Sutton, in addition, of course, to the readings of Mises or Hayek). Some of the volumes also analyze the London Gold Pool and the collapse of the Bretton Woods system. It’s not surprising, as the libertarians and the Austrian economists are skeptical of the government and notice that the gold standard expressed the order of the free market system, or more generally that gold is money (see: Gold Is Money by Hans F. Sennholz) and it goes with freedom (see: Gold and Liberty by Richard M. Salsman).