Back in the drug-soaked, if not halcyon, days known at the sexual and drug revolution—the 1960’s—many people were on a quest for the “perfect trip”, and the “perfect hit of acid” (the drug lysergic acid diethylamide, LSD). We will no doubt generate some hate mail for saying this, but we don’t believe that anyone ever attained that goal. The perfect drug-induced high does not exist. Even if it seems fun while it lasts, the problem is that the consequences spill over into the real world.

Today, drunk on falling interest rates, people look for the perfect speculation. Good speculations generally begin with a story. For example dollar-collapse. And then an asset gets bid up to infinity and beyond (to quote Buzz Lightyear, who is not so close a friend as our buddy Aragorn). It happened in silver in 2010-2011. It happened more recently in bitcoin.

Most speculators don’t care about the economic causes and effects of bubbles. They just want to buy an asset as the bubble begins inflating, and sell just before it pops. But bitcoin and many gold proponents are different. They promise that their favorite asset will cure many social ills, fix many intractable problems, and increase liberty. Oh yeah and get-rich-quick.

We been pounding the table for going on a decade, sometimes even bellowing from the rooftops, that gold does not go up. Even the gold bugs claim that the dollar is collapsing. Our point—which has so far gone unanswered—is that you cannot use something which is collapsing to measure other things. Especially not the economic constant (gold). Either the dollar is collapsing, in which case if gold is going up then the dollar could not be used to measure this. Or else it’s not collapsing, in which case maybe it could measure gold—but then remind us why these folks are buying gold.

In response, some argue “well yeah, we don’t necessarily want a higher price of gold for its own sake—we want to grow our purchasing power.” Gold, they say, will increase in purchasing power when the masses dump their dollars and buy gold. Maybe.

As an aside, we are not sure how they square this with their oft-stated assertion that purchasing power in gold has been constant since Rome. We have heard this a million times. A fine toga back then supposedly cost one ounce of gold, as does a fine suit today. We don’t know where they shop, but we have bought pretty nice-looking suits for a lot less than $1,350 and we have also paid multiples of that for a handcrafted Italian sartorial masterpiece. There is no reason why prices should be constant, but we suppose this myth is necessary to bolster the belief that the value of money is 1/P (P being prices).

Anyways, suppose it were true that prices will fall in gold terms (while they hyperinflate in dollar terms). So? Is that a good thing?