The Dollar: Gold Beating Green

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The Israel-Iran war has triggered yet another rise in the price of gold. That is no surprise. Gold has been seen as a safe harbor by investors for a long, long time. More interesting is that the price of gold has been strengthening for a while now, something I discussed in a Capital Letter from April 2024. I attributed its strength to, among other factors, worries about inflation, worries about America’s fiscal position, and worries about a tense geopolitical situation. Since then, concern over the latter two has not exactly gone away, and tariff wars have only added to investor jitters. In April 2024, gold was trading at around $2,400, an all-time high. It is now priced at about $3,400, up about 6 percent on the month…

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The Black Death’s Economic ‘Dividend’

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The Black Death, the bubonic plague that tore into England in 1348, was — this should not need saying — a cataclysm. The English had little natural immunity to this terrible disease, which arrived in Europe with the Mongols, either making its debut or for the first time in thousands of years. About 80 percent of those infected died. By the end of this first great wave of infection (others were to follow), England, like many other European countries, had lost around half its population…

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The Tariffs of April

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When I see epic, self-inflicted disasters crowned by poor planning, slovenly, often outdated thinking, remarkable carelessness, and predictions of victory that are little more than slogans, the qualities of leadership that led to World War I — and the way that it was fought — have a way of coming to mind. They did so, for example, during the pandemic, and they do so when contemplating the pointless “race” to net zero.

And so, when thinking about the crisis dramatically deepened by “liberation” day, I recalled “The General,” a poem from 1917 by Siegfried Sassoon…

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Tariffs: 'Liberation' Day

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April 2 will be “liberation day for America” as President Donald Trump unveils his tariff hikes, he promised — one of the “most important days in modern American history,” according to Press Secretary Karoline Leavitt.

Trump will say what he’s going to say, but the basic picture he paints has not changed for decades, although the role of principal villain may do so (in the 1980s, it was Japan). Leavitt sets it out again: A lack of reciprocity has contributed to a “large and persistent annual trade deficit that’s gutted out industries and hollowed out key workforces.” This, the president says, will now change.

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Net Zero: Fantasy Island

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Britain’s Secretary of State for Energy Security and Net Zero (good luck with combining those) Ed Miliband has been working to accelerate the rate at which Britain runs the “race” to net zero since assuming office after the Labour party’s election victory in July 2024. Part of that acceleration will involve decarbonizing 95 percent of the U.K.’s electricity grid by 2030, an impossible objective. The people, equipment, and resources are not there. Nevertheless, the disconcertingly exuberant Miliband exudes the confidence of a Soviet central planner of the high Stalinist era, convinced that determination, coercion, and the arc of history will overcome all obstacles…

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Keir Starmer's Labour Dystopia

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If the Labour Party won the United Kingdom’s July 2024 general election, promised Keir Starmer in June, it would “relight the fire” of optimism in Britain. Well, it went out. According to one recent poll, three-quarters of Britons think that the country is going in the wrong direction. According to another, 62 percent disapprove of the job the government is doing. Six months after Tony Blair had won a similarly lopsided parliamentary majority, in 1997, one poll found that 52 percent were satisfied with his government and 70 percent with Blair himself.

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Twelve Months of Milei

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Wait, what?

In the third quarter Argentina’s GDP grew by 3.9 percent over the previous quarter, more than the 3.4 percent that was expected. This follows earlier signs of improvement and reinforces hopes of strong growth next year, albeit from a deep trough. Year-on-year, the quarterly numbers still show a decline of 2 percent (compared with the third quarter of 2023), but recovery must start somewhere…

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Decline and Fool

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Germany has slipped deeper into crisis with the collapse of its governing coalition. An unlikely union between the center-left SPD, the Greens, and the free-market(ish) FDP never made much intellectual sense, but the parliamentary arithmetic worked, so that was that.

And that was then.

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The EU: A Prescription for More Stagnation (or Worse)

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In July 2007, José Manuel Barroso, the president of the European Commission (Brussels’ top bureaucrat) said rather a lot of the quiet part aloud. The European Union, he boasted, was an empire, an empire of new kind, a “non-imperial empire,” but an empire all the same. For some that had always been the idea. Europe’s former great powers could never, individually, restore the global preeminence they had enjoyed before the world wars. Maybe they could come close to doing so collectively. A united Europe could become a rival “pole” to the U.S., not an enemy, not militarily, but economically and as an exemplar to the rest of the world of a better way forward….

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