According to Ken Rogoff it has never been easy to have a
rational conversation about the value of gold. Lately, with gold prices up more
than 300% over the last decade, it is harder than ever. Just last December,
fellow economists Martin Feldstein and Nouriel Roubini each penned op-eds
bravely questioning bullish market sentiment, sensibly pointing out gold’s
risks.
Wouldn’t you know it? Since their articles appeared, the
price of gold has moved up still further. Gold prices even hit a record-high
$1,300 recently. Last December, many gold bugs were arguing that the price was
inevitably headed for $2,000. Now, emboldened by continuing appreciation, some
are suggesting that gold could be headed even higher than that.
One successful gold investor recently explained to me that
stock prices languished for a more than a decade before the Dow Jones index
crossed the 1,000 mark in the early 1980’s. Since then, the index has climbed
above 10,000. Now that gold has crossed the magic $1,000 barrier, why can’t it
increase ten-fold, too?
More? Check out http://www.project-syndicate.org/commentary/-10-000-gold-
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