Can Gold Prices Rise in a Recession?

Dr. Mark Thornton and John Rubino return as this week’s guests. Gold has risen above $2,000 again and so far it is looking like the month of April 2023 may have the highest monthly average gold price in history. Yet, the investing public seems to have hardly noticed gold rise. There may be some good reasons for that. Enormous profits in the equity markets have resulted from an enormous destruction of the value of the dollar through massive money creation by the Fed during a decade of near zero interest rates and most investors are assuming a Fed pivot that will reinstate the stock market orgy they have come to believe is their divine right. So why invest in gold if you “know” getting rich quick by buying the S&P is sure to come. But is a Fed pivot a sure thing? And, what about the real economy? Will economic activity be such that we can assume rising profits will drive rising stock prices? For an appraisal of the general economy we will turn to Dr. Mark Thornton. We will also want to get his thoughts on gold in an emerging alternative global monetary system. John Rubino will share his thoughts from a recent Substack article he wrote titled “Check Out Gold’s Quiet Bull Market.” You might want to do that while the public seems to have little desire for gold and gold mining stocks.

Mark Thornton is an American economist of the Austrian School, who has been described by the Advocates for Self-Government as "one of America's experts on the economics of illegal drugs.” Thornton has written extensively on that topic, as well as on the economics of the American Civil War, economic bubbles, and public finance. Libertarian organizations including the Independent Institute, the Cato Institute, and the Mises Institute have published Thornton's writings on drug prohibition and prohibition in general.

Thornton received his B.Sc. from St. Bonaventure University (1982), and his Ph.D. from Auburn University (1989). Thornton taught economics at Auburn University for a number of years, additionally serving as founding faculty advisor for the Auburn University Libertarians. He is now a senior fellow and resident faculty member at the Ludwig von Mises Institute. He is currently the Book Review Editor for the Quarterly Journal of Austrian Economics.

John Rubino is the founder of the popular financial website DollarCollapse.com. He is co-author, with GoldMoney’s James Turk, of The Money Bubble: What To Do Before It Pops, and author of Clean Money: Picking Winners in the Green-Tech Boom (Wiley, 2008), The Collapse of the Dollar (also with James Turk), How to Profit from the Coming Real Estate Bust (Rodale, 2003) and Main Street, Not Wall Street(Morrow, 1998). After earning a Finance MBA from New York University, he spent the 1980s on Wall Street, as a Eurodollar trader, equity analyst and junk bond analyst. During the 1990s he was a featured columnist with TheStreet.com and a frequent contributor to Individual Investor, Online Investor, and Consumers Digest, among many other publications. Currently John has a growing following as a regular columnist on Substack.