Going for Gold

Clearing through the rubbish in my Economics folder—which effectively means binning most of it—I have just come across this article by Theo Leggett, published on the BBC website on the 13^th May 2025. I was given it at the time by my fool of a teacher. And he is a fool. I will tolerate that he is fat and balding. So long as he keeps his distance, I will tolerate that his breath smells like dog food. What I will not tolerate is his smug assurance that intellectual maturity lies in believing whatever is put out by the regime media.

Let me turn then to the article in question. Its tagline is: “Gold is booming – but investors lured in by the hype could lose out, warn experts.” It is under a year old, but already has the musty air of something written for a vanished world. In the months since its appearance, gold has not merely “surged”, “rallied”, or “enjoyed a strong run”. It has risen, and risen again, and then risen further, with a dull, mechanical indifference to the polite caveats of City economists and the anxious throat-clearing of financial journalists.

Leggett’s article is a museum piece from the late phase of denial. It is written at that precise moment when the evidence has become too obvious to ignore, but the implications remain too frightening to acknowledge. Hence the familiar tone: soothing, anecdotal, faintly theatrical, and ultimately evasive. We are invited into Hatton Garden, shown a tub of scrap jewellery, introduced to obliging dealers, and treated to a little colour about queues in the street. This is the BBC at its most characteristic: human interest as anaesthetic. The reader is distracted with suede trays and biscuit-sized Britannias while the real story is quietly smothered.

That real story is simple, and it is not complicated by Emma Siebenborn’s plastic tub or Zoe Lyons’ nervous customers. Gold is rising because money is failing.

Leggett dutifully lists the approved explanations. Trump’s trade policy. Geopolitical uncertainty. Central bank purchases. ETF inflows. Fear of sanctions. Fear of missing out. All of these things are real, and all of them are secondary. They are accelerants, not the fire itself. They explain why now, not why at all. The underlying cause, which the article circles but never confronts, is the collapse in the value of Western fiat currencies.

Gold has not merely risen against the pound. It has risen against oil, against industrial metals, against foodstuffs, against almost everything that is not a financial abstraction. This is a revaluation that will eventually end. At the same time, however, the pound, the euro, and the dollar have fallen against almost all commodities. This is not a revaluation that will end. To speak of gold “going up” is to accept a false premise. What we really have is that the measuring stick is shrinking. When the unit collapses, everything solid appears to rise. Gold simply does so first, and most obviously, because it is monetary metal rather than a consumable good. It is where the rot shows earliest.

This is the point at which the BBC narrative breaks down, because to say it plainly would be to indict the entire post-2008 economic order. Inflation is no longer an unfortunate by-product of overspending. It is policy. It is the chosen mechanism by which states default on debts they have no intention, and no ability, to repay. Debasement is no longer a sin; it is the system.

Leggett quotes Russ Mould explaining that gold cannot be printed by central banks. This is true, and it explains why its nominal price is rising. Everything else can be printed, and increasingly is. Quantitative easing has ceased to be an emergency measure and become the permanent background condition of Western governance. Interest rates are politically constrained. Fiscal restraint is impossible. Welfare states cannot be unwound without riots. Military spending cannot be reduced without imperial humiliation. The only remaining option is silent expropriation via the currency.

In that context, warnings about bubbles are comic. The comparison with 1980 or 2011 is comforting, because it suggests a cyclical story with a reassuring reversion to the mean. But those episodes occurred within a world where money still retained some connection to reality. Today’s environment is structurally different. The debt overhang is larger. The political appetite for austerity is non-existent. The demographic base is weaker. The administrative class is more panicked and more dishonest. To expect gold to behave as it did in earlier decades is to assume conditions that no longer exist.

Gold will stabilise against other commodities at some point. That will indicate that real prices have found a new equilibrium. What it will not do is stabilise against currencies whose issuers are openly committed to their depreciation. The idea that the pound, the euro, or the dollar will “recover” in any meaningful sense is fantasy economics for people who still believe central banks are independent institutions rather than political auxiliaries with PhDs.

Leggett ends, as he must, with cautionary voices urging diversification and warning latecomers not to chase headlines. This is sound advice in a world of normal assets. It is largely irrelevant in a world where the denominator is being destroyed. Gold is not an investment in the usual sense. It is not a bet on growth. It is an escape from arithmetic fraud.

I note, incidentally, that before and since the publication of this article I have done rather well myself. Using my grandmother’s identity to run an online dealing account—a minor administrative workaround required by the age restrictions of brokerage—I have made a very substantial profit on my gold and silver ETFs. I regret only that I did not put in more money than I did when gold was still below £2,000. I have not done well because I possess any special insight, but because the logic of the situation is straightforwardly clear once you stop listening to people whose salaries depend on not understanding it.

Theo Leggett’s article is not wrong in its particulars. It is wrong in its frame. It treats gold as an exotic asset responding to episodic shocks, rather than as the thermometer in a room where the building is on fire. The BBC cannot say what this means, because to say it would be to admit that the post-war settlement is finished, that the promises embedded in Western currencies are being quietly broken, and that the public is being robbed in a manner too technical to provoke immediate revolt.

Gold will continue to rise, not because of Trump, or Russia, or China, or nervous investors in Hatton Garden, but because the alternative is to trust a cluster of governments that have already demonstrated, repeatedly and without shame, that they cannot be trusted.