Gold Revisited

Gold is a useful hedge against inflation and uncertainty, but investing in it speculatively is not always a good strategy. In 2011, the price of gold climbed to historic heights; but since then, it has fallen significantly, though not to pre-Great Recession levels. Some policymakers have advocated that the United States return to a gold standard as a way to prevent governments from debasing the currency (that is, inflating). However, many economists, such as Milton Friedman, have warned that such an inflexible regime would deepen recessions by constraining the amount banks are able to lend. Considering gold purely as an investment, comparable to other commodities on the market, what are its advantages and disadvantages?

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