Michael Kinsley Smells Inflation Ahead

He's not impressed with the goldbugs, and is far from becoming a gold investor, but Michael Kinsley is not sneering at the rise of the goldbugs. In an Atlantic Monthly piece, he admits that he suspects inflation will jump up in the near future.

The reason is the huge national debt, and the temptation to use inflation to whittle down its real value. He's somewhat apologetic about his reasoning, but his argument is a pragmatic one. Using inflation to whittle down the national debt, at least in the abstract, is easier than spending cuts and/or tax increases. Unlike the typical goldbug, he portrays President Obama as caught between a rock and a hard place.


It's interesting to see the goldbug argument, stripped of political cynicism and/or anger, appear in a mainstream publication. Those who'd rather not bring radical and/or alienative politics into the inflation question will find that Kinsley lays out the case for higher inflation in a palatable way.

While I'm on the subject, Donal Roche makes a similar argument in the Irish Independent, although he comes to the subject from a pro-gold stance. He advocates what's turned into a kind of compromise position for gold: 5-10% (in this case, 5%) of assets in gold as a just-in-case allocation.