Paul Krugman tweets:
Are people noticing that the Trump economic team is shaping up as a gathering of gold bugs? 1/
— Paul Krugman (@paulkrugman) December 20, 2016
That tweet is part of a recent series by Prof. Krugman divining glints of gold in the company of Donald Trump. He predominantly focuses on one of Trump’s appointments, Rep. Mick Mulvaney (R-S.C.) for Office of Management and Budget (OMB).
Krugman astutely points out that Mulvaney once observed that the Federal Reserve has “effective devalued the dollar” — hard to argue with when the dollar has lost 85 percent of its buying power since Richard Nixon closed the gold window in 1971 — and “choke[d] off economic growth.” This is also hard to argue with after 16 years of booms and busts that have left the average US growth rate at about half of its historic trend line for that dreary epoch.
Krugman does not furnish evidence that Rep. Mulvaney has endorsed the gold standard. One can but hope his inference is well grounded.
Exhibit B for his tirade is contained in a tweet referencing investor John Paulson, reportedly close both to the treasury secretary designate Steve Mnuchin and Donald Trump himself. Paulson had recently been invested heavily in gold before slashing his position this year.
My research has not revealed any evidence that John Paulson is a gold standard advocate, affectionately known as a “gold bug.” The record shows Paulson to be an active speculator in gold who has, on balance, done well for his fund thereby. Continue Reading