The Power of Gold

I've started reading Peter Bernstein's next book, The Power of Gold. Its theme can be discerned from the subtitle: The History of an Obsession. Its focal point seems to be the old story of a man who was transporting his fortune -- in the form of many pounds of gold -- when this ship he's on is hit by a bad storm. He strapped the gold to his body and of course it drags him to the bottom of the ocean. He didn't have the gold -- it had him.

Still, as always, Bernstein weaves a fascinating narrative of belief and history. I'm pretty sure that when we get to modern times, he's not going to come down on the side of those who believe that we should return our money to a gold standard.

But this book's copyright is in 2000, before the current run-up in gold's price. Are we in the early stages of a new bull market in gold? Should we care?

My own attitude is shaped by the realization that gold doesn't dividends, although it's possible for gold mining stocks to do so. It's not common, though BHP Billiton is a top international dividend paying stock.

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