"As far as I can tell, there are only three constituencies outside the mining or commodities-trading industries who have historically demonstrated consistent enthusiasm for acquiring gold: street pavers in heaven, leprechauns, and survivalists." Thus begins my most recent Fortune column.
We did a series about where to put your money in a recession and I took the a look one of the more popular options for the truly paranoid: gold investments. Something must be in the air because I pitched it several weeks ago with the notion that I wanted to talk a bit about survivalists and why they love gold, and the next weekend I amused to see a piece in the New York Times about the popularity of survivalism--in the Styles section, no less. It's an interesting piece written by my talented former colleague, Alex Williams, and you can read it here.
Alex's piece notes that interest in survivalism is the highest it's been since the late 1970s. As it happens, gold is also the highest it's been (price-wise) since the late 1970s. From my column:
...for those who remember the late 1970s, survivalism wasn't the only thing going up at the time. If you have any interest in precious metals, you may recall that period as the last time gold went up precipitously, setting a record high of $850 an ounce in January 1980. The intersection of the two is not a coincidence.Both were in part triggered by the Soviet invasion of Afghanistan and concerns about the economy. In 1979 inflation was high, energy prices were high, unemployment was high, and global political instability was an ongoing source of anxiety.
Now it's 2008. Inflation is on the rise (unless you're averting your eyes and focusing only on "core inflation," as the Fed would have you do), energy prices are high, unemployment is going up, and political instability is an ongoing source of anxiety. Concurrently, survivalism is enjoying a revival, and after a horrendous performance during most of the '80s and '90s (dropping to around $264 an ounce in 2000), gold has once again shot up, reaching a record high of $1,030.80 on March 17.
You can read the full article here.
Should You Rush to Gold? [Fortune]
Posted by Elizabeth Spiers at April 18, 2008 1:25 PM