Arts, Culture & Media

A Golden Future? Inflation Fear Underlies Global Rise in Gold

Gold's power is enduring.

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The price has risen from an average $300 an ounce in 2002, to an average of $1,600 last year, peaking a shade under $2,000.

The change has surprised many economists. Gold was seen as "a kind of historical artifact" in the 1990s, according to Matthew Bishop. Bishop is New York Bureau Chief for the Economist, and co-author of a new book, "In Gold We Trust: The Future of Money in an Age of Uncertainty".

Bishop argues that something big has changed.

He says investors have lost confidence in money, or more specifically in the promises of governments: promises which form the basis of money, since the end of the gold standard.

Bishop says he wrote the book to let people know just how tempting it is for governments to simply print money to lower the value of their debts.

He says the downside for the public of allowing that kind of inflation is that they will lose their savings.

"Now this may be the moment when history doesn't repeat itself," he says, "but I think a lot of people are buying gold because they think that what's always happened in the past will happen again."