Paul Krugman: Lust for Gold

News flash: Recent declines in the price of gold, which is off about 17 percent from its peak, show
that this price can go down as well as up. You may consider this an obvious point, but, as an article
in The Times on Thursday reports, it has come as a rude shock to many small gold investors, who
imagined that they were buying the safest of all assets.

And thereby hangs a tale. One of the central facts about modern America is that everything is
political; on the right, in particular, people choose their views about everything, from
environmental science to gun safety, to suit their political prejudices. And the remarkable recent
rise of “goldbuggism,” in the teeth of all the evidence, shows that this politicization can influence
investments as well as voting.