04.25.13 10:42 PM ET
Keeping Your Faith (In Gold)
Matthew Parris of the Spectator and the London Times takes us inside the mind of a small investor in precious metals, i.e, himself. He lost money of course, but he has not lost faith.
The immediate panic that followed 2008 has passed. People are no longer switching on the news every morning to find out whether the global economy (and with it their world) has ended. Nor do they expect other people to believe this, sparking a hysteria that could make the fortunes of those with bullion. They think that, on balance, next year will be rather like this year; as will the one after that. No great urgency attaches to personal financial decisions.
But in the back of our minds lurks the possibility that, sooner or later and quite possibly later rather than sooner, paper currencies will lose a lot of their value: not perhaps overnight, but steadily, as governments keep interest rates (and returns on savings) low, and print more money to shrink their debts and get growth started; and inflation eats into savings. So (unconsciously) we are now looking at the middle-to-long-term benefits of owning bullion, and taking out a modest insurance policy on the possibility that our more conventional savings may be whittled away by politicians.
No apocalypse, then — or probably not. Just a gradual, bearable, steady impoverishment in a world where savings linked to the value of paper money languish. A long-stop based on mild, long-term, chronic and half-conscious pessimism: a plan-B pension that the politicians can’t touch.