Every once in a while I do read William Rees Mogg's columns in the Sunday Times. I do so because he writes very elegantly and that is a joy in itself. He seems to be a supremely civilised, decent, intelligent, learned and reasonable man. So why do I only 'sometimes' read what he has to say? It is because he is one of those people by whom you can set your watch. When you read his beautifully crafted articles you know that the correct position to take is the opposite of the one he has taken - how, in view of his attributes, he manages to be so consistently wrong I cannot say but there you are.
This week he wrote about the flight to gold in difficult times and the true value associated with that metal. It is one of those rare cases where he is not only wrong but actually ignorant too; he seems not to comprehend that value in a currency or in a commodity lies equally in the confidence of people who will accept the value of either. Gold, indeed, does have some intrinsic value since it is used not just in jewellery but in electronic devices and many industrial applications but as a store of value or a medium of exchange it is no match for intangible 'money' created by banks. Its advantage lies in the place it has in human history as a store of value that is reasonably plentiful, pretty, malleable and does not corrode. Diamonds will not do because they are hard to fashion into coins and can only be valued by an expert, silver ought to work ok, platinum is too scarce, copper too plentiful. But all this is a side issue: the world economy needs to be mended and intangible paper or electronic money is irreplaceable unless we collapse into barbarism, in which case gold or cowrie shells may have to do.