The Inside Story of the Sacagawea Dollar

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 […]

Debt Limit Resolution: As the Dust Settles

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.

Gold and the Debt Crisis

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?

Wall Street Waits on Washington

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 […]

Inflation, the Dollar, and the Deficit: Three Things I Bet You Didn’t Know

Misconceptions about inflation, the falling dollar, and the relentless rise in federal budget deficits are skewing gold advocates’ arguments; however, a strong case can be made for the metal without resorting to these misconceptions.

Gold Is Wealth Insurance Plus a Bonus

There is a fundamental misunderstanding of the role of physical gold in a balanced financial portfolio. The bull market of the 2000s has led many to think of gold as another way to increase wealth through price appreciation. This is mistaken. First and foremost, physical gold is insurance. When you think about buying insurance, you don’t think about a return on your investment. You think about protection against the unexpected. Gold’s core value proposition is as wealth protection when the rest of your portfolio is going down the tubes. Price appreciation in good times, if and when it occurs, is a bonus.

FOMC Fallout: Here We Go Again

As I write this morning, gold has given up two-thirds of its gains following the Fed’s decision last Wednesday to continue its $85 billion-a-month in bond purchases under QE3. One reason for this retreat is that markets overreacted to the news, just as they did back in June when Ben Bernanke’s statement about QE3 was misinterpreted as a signal the Fed would cut back QE3 in September. Buckle your seat belts; we’re in for many more days like Wednesday in the year ahead…