Can you spend too much time thinking about gold? I don’t think so. It is an important topic. Rises in the price of bullion and records set by coins like the 1854-S $2.50 make the topic of gold very timely. Even the financial press has noted that gold has hit values not seen in 17 years.
Many readers remember when gold set its record price of $850 a troy ounce in 1980. They remember the repeated expectation that it was only a matter of time until $1,000 would be reached. Well, 25 years have passed and we are still waiting for $1,000. We haven’t even seriously threatened to return to $850.
However, at heart, we are all a little bit enthralled by gold. We may all be a little bit of a gold speculator. If gold breaks the $500 mark again, that tendency will be encouraged. I know I already feel a building excitement.
I believe that every collector should own at least one gold coin. I fully realize that most of us cannot afford to collect it by date and mintmark. However, to truly understand American numismatics, you have to recognize the gold component. You have to be tempted by its beauty and fall for the siren song of making a financial killing, preserving your wealth or somehow making a political statement by supporting it. Whatever you specifically find attractive about it, the metal somehow works itself into every collector’s blood in one form or another.
I have been talking to retired staff about gold. I have been talking to current staff about gold. I have been sharing e-mails with readers. It is all good fun and it would be easy for me to get a bit carried away with it.
Gold or the lack thereof dominated most of the 20th century financial landscape. What is its place in the 21st century? Some want to re-establish the norms of the past, a return to a gold standard. Others want to look to a future where it has an important role but not a central role.
What will happen? I don’t know. I feel a bit like the middle of a generational sandwich. When I was a young staffer here in the late 1970s, I thought it was an open-and-shut case. Gold was good. Paper money was bad. The inflation track record from 1933 to 1978 was not good. Worrying about finding a job after college and shortly after that experiencing double-digit inflation convinced me that only the wisdom of the past could save the future.
More than 25 years have gone by since the peak. Inflation is much lower. Gold is much lower. Dare I write that perhaps I am less brash? Now with gray hair, I am not so sure about a gold standard. I believe gold ownership should never be compromised. I believe it is a legitimate source of protection against inflation. But collecting gold coins is even better. You get the numismatic satisfaction with an in-built inflation protection. You get the best of both worlds.
I have talked to Russ Rulau, who is considerably older than I and who was a boss of mine more than 20 years ago. He is a living encyclopedia of gold.
I have talked to Dave Kranz. He is considerably younger than I. He doesn’t remember gold’s last peak, let alone the pre-1975 time when it was illegal for Americans to own gold bullion. The gold standard, the gold exchange standard, Bretton Woods, the London gold pool for him are all textbook notations, or watercooler memories of older staffers.
Gold’s future, though, is in his hands and the hands of the younger generation. We have seen dueling Viewpoints in recent weeks on its appeal and monetary usefulness. It matters less what I think or what I remember and more what I observe from this point going forward.
It appears to me that there will be a lot more to observe. Gold won’t go away quietly. It isn’t the be all and end all of the universe, but something that has served as money for over 2,500 years won’t simply disappear. Governments aren’t strong enough to make it go away. However, the attitudes of younger Americans will have a great impact on what happens next. They never spent a gold coin, spent a gold-backed dollar, or found themselves yearning for illegal possession.