The public image of the United States Bullion Depository at Fort Knox, Kentucky, was cemented in the 1964 movie Goldfinger. The four-story vaults of shining chrome bar-encased gold, suspended staircases and vast interior are now classic Hollywood images of what our imaginations want Fort Knox to look like. The reality is very different. I’ve been […]
This post begins a series in which I give readers an insider’s view of how Washington, DC, works (and doesn’t work) from my perspective as director of the U.S. Mint. The complete story of how the Sacagawea dollar (aka, the Golden dollar) came to be has never been told, and the accounts that have been […]
This is the second in a series of posts making the “Main Street” case for gold. Read Part I I described in my last post how gold’s core value proposition is as wealth insurance. Here I’ll address why understanding gold as wealth insurance, rather than as just another investment vehicle, is crucial to understanding why gold […]
Coin Week has invited me to write articles about the Mint from an insider’s point of view, and I have some stories to tell that give a flavor for what it’s like to work in Washington, DC. Coin Week has also encouraged me to make what I call a Main Street case for investing in […]
So, nothing seems to have changed as a result of the budget and debt crisis. We simply kicked the can into next year. While the GOP took a good deal of self-inflicted damage in the standoff, this was not a victory for Democrats in terms of achieving any of their budget objectives. The deep budget cuts under sequestration remain in place and will deepen with more cuts in January. All is as it was before. But at a deeper level, there are, in fact, two significant consequences of this fiasco, having to do with the impact on the GOP and on markets in general.
In the weeks leading up to the debt crisis in 2011, gold rose $400 an ounce to hit its nominal all-time peak of $1,895. The 2011 debt crisis was the one in which we came so close to defaulting on our debts that rating agencies downgraded the nation’s credit score. But it was good for gold. As the crisis approached, gold rose spectacularly. After the crisis was resolved, it fell dramatically but retained a portion of the gain. Can we expect a similar pattern as the current debt limit standoff progresses?
An edited version of this post appeared on Institutional Investor’s Unconventional Wisdom blog. Three questions pending in Washington are poised to roil markets: When will the Federal Reserve taper quantitative easing? When will the government shutdown end? and Will Congress fail to raise the debt limit? How these issues play out is likely to have lasting […]