In this discussion with Cory on The Korelin Economic Report, I talk about gold, stagnating economies, and why government suffocation of entrepreneurship pushes people toward hard assets.

We discuss how many economies stagnate when governments burden people with excessive regulation, bureaucracy, corruption, and intervention. China remains an important exception because, despite its state structure, it has allowed a great deal of entrepreneurial energy to flourish. In contrast, in countries such as India and Pakistan, where entrepreneurship is suffocated and trust in institutions remains weak, people naturally turn to gold as a store of value.

We also discuss the U.S. dollar and why it continues to perform relatively well. The reason is not that the United States is free of problems, but that it still functions better than much of the Third World.

Listen to the full discussion below:

Key Takeaways

• Gold becomes especially attractive when governments suffocate entrepreneurship and weaken confidence in institutions.
• In countries such as India and Pakistan, people buy gold not merely as an investment, but as protection against economic and institutional decay.
• China remains different from many stagnant economies because entrepreneurialism continues to operate there to a significant degree.
• The U.S. dollar remains relatively strong because, despite America’s problems, the United States still functions better than much of the Third World.
• Stagnation is often the result of government interference, not a natural condition of the economy.