Game Theory for Gold

Fergus Hodgson, January 21, 2019

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For centuries, gold bugs and investors have touted the yellow metal’s qualities as money and sought to analyze the fundamental trends behind its price. Since the end of the gold standard, however, it has morphed into an asset to protect against government mismanagement.

What drives the gold price today is market confidence in the Federal Reserve (or lack thereof), argues Ben Hunt, co-founder of Second Foundation Partners, which publishes Epsilon Theory.

Harnessing the power of game theory, he has devised a system to analyze the language of central bankers and other information agents, which has become an economic-policy tool in its own right since the Great Recession.

“Gold was money 100 years ago; it is not the meaning of gold today,” says Hunt. (Flickr)

Recommended Links

• Follow Ben’s work on Twitter and LinkedIn.
• Read about game theory at the Concise Encyclopedia of Economics.
• Watch this interview with Ben Hunt on his observation about bees.
• Read “How Gold Lost Its Luster” on Epsilon Theory.
• Read “The Federal Reserve and Monetary Policy Communications” at the Federal Reserve Bank of Cleveland’s website.

If You Liked This Episode

• “Gold for Insurance, Not for Profit” Gold Newsletter Podcast.
• “The Unstoppable Rise of Gold as Money” Gold Newsletter Podcast.
• “Ex-Federal Reserve Insider Speaks Out” Gold Newsletter Podcast.
• “Gold Prices: What Does the Data Foretell?” Gold Newsletter Podcast.
• “Why the Future Looks Bright for Gold” Gold Newsletter Podcast.

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Fergus Hodgson is Gold Newsletter’s roving editor. Follow him on Twitter and Facebook.