A couple of weeks ago an article appeared on Bitcoin magazine called, "Some economists really hate bitcoin." I read it with a sigh of nostalgia. As someone who has been writing about gold for a few years, I am used to reading similar criticisms as those bitcoin receives from mainstream economists, about gold.

As with bitcoin, gold is just a step too far for many economists. Criticism is often, as with bitcoin, targeted at the people who invest in it, rather than the asset’s own track record, fundamentals and safe haven attributes – classic attacking the ball and not the man.

This frequently involves name calling and the pejorative ‘goldbug’ label. This is used to try and discredit anyone who says anything positive about gold including being bullish on the price or seeing it as an important diversification. Often some of the gold naysayers refuse to distinguish between gold as a diversification in an investment or pension portfolio and gold’s role as a hedge against currency devaluations on one side and on the other calls for a gold standard.

Two completely separate matters – one pertaining to monetary policy and the other to investing, saving and personal finances.

In my experience to invest in gold is seen by the critics as the ultimate rejection of central banks, financial systems and government. These critics believe that faith in something that just gets mined out of the ground is baseless compared to something that ‘involves human endeavors (like stocks)’ as Joe Weisenthal of Bloomberg argued.

This ignores the fact that the production of gold, refining of gold, minting and fabricating of coins and bars and indeed the brokering, delivery and storage of bullion, and the running of the myriad of different precious metal companies involved in this quite large industry involves human energy, innovation and endeavours.

Below I touch upon some of those critics who continue to dismiss either gold as an investment or as a form of money which may play some role in the monetary system.

Nobel Prize Winning Krugman

If anyone could be accused of having a caricature of gold, it would be Paul Krugman. For him, gold investment is a push for the gold standard and anyone who advocates diversifying into gold is a lunatic, right wing “gold bug.”

Krugman most recently riled fans of gold when he went after Republicans during candidate nominations and mocked their apparent desire to return to a gold standard. (Despite it being a Republican who ended the gold standard).

What Krugman failed to acknowledge was that the push for gold in the financial system is not just coming from a the “Tea Party” movement and a bunch of Republican voters, but rather it is coming from the East – from China and the People’s Bank of China and indeed the Russian central bank who are buying up all the gold they can.

It’s coming from Western investors who are looking for a hedge against economic risk and for portfolio diversification. It is coming from countries who still see gold as a form of money and a safe haven, such as the people of India and people in Germany and Switzerland in Europe.

When asked why he celebrated the fall of the gold price in 2013 he told Business Insider:

“Well, the inflationistas/goldbugs are really, really annoying — all this air of having the secret wisdom when they actually haven’t a clue. And they have been a real destructive factor in policy debate, standing in the way of effective policy by raising fears of Weimar and Zimbabwe. So seeing the one thing they got right — betting on higher gold prices — turn sour is cause for a bit of celebration.”

To be fair, the gold price had fallen sharply in 2013 but Krugman ignored the performance over the medium and long term – a cardinal sin in investing which should always be about the long term.

Even at the end of 2015 when a few of us were doing some soul-searching and asking ‘did we miss something? It wasn’t as though we had returned to the days of a few hundred dollars per ounce. Gold and silver were some of the best assets to hold before, during and after the global financial crisis. Gold rose every single year from 2001 through to 2012, prior to the sharp correction in 2013. Gold rose in all fiat currencies – none of which acted as a safe haven during the financial crisis.

Gold acted as a hedge during the crisis when most property, stock and bond markets had seen sharp falls. When these markets stabilised and began to recover, gold prices fell. Exactly what a hedge should do.

This year gold and silver prices were up 26% and 38% respectively, in the first half of the year and have consolidated on those gains in Q3, 2016.