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Today, with interest rates near or at record lows in many countries, it is relatively cheap to speculate in gold instead of investing in bonds.
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But if real interest rates rise significantly, as well they might someday, gold prices could plummet.
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Most economic research suggests that gold prices are very difficult to predict over the short to medium term, with the odds of gains and losses being roughly in balance.
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It is therefore dangerous to extrapolate from short-term trends.
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Yes, gold has had a great run, but so, too, did worldwide housing prices until a couple of years ago.
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If you are a high-net-worth investor, a sovereign wealth fund, or a central bank, it makes perfect sense to hold a modest proportion of your portfolio in gold as a hedge against extreme events.
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But, despite gold’s heightened allure in the wake of an extraordinary run-up in its price, it remains a very risky bet for most of us.
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Of course, such considerations might have little influence on prices.
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What was true for the alchemists of yore remains true today: gold and reason are often difficult to reconcile.
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1929 or 1989?
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PARIS – As the economic crisis deepens and widens, the world has been searching for historical analogies to help us understand what has been happening.
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At the start of the crisis, many people likened it to 1982 or 1973, which was reassuring, because both dates refer to classical cyclical downturns.
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Today, the mood is much grimmer, with references to 1929 and 1931 beginning to abound, even if some governments continue to behave as if the crisis was more classical than exceptional.
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The tendency is either excessive restraint (Europe) or a diffusion of the effort (the United States).
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Europe is being cautious in the name of avoiding debt and defending the euro, whereas the US has moved on many fronts in order not to waste an ideal opportunity to implement badly needed structural reforms.
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For geo-strategists, however, the year that naturally comes to mind, in both politics and economics, is 1989.
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Of course, the fall of the house of Lehman Brothers has nothing to do with the fall of the Berlin Wall.
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Indeed, on the surface it seems to be its perfect antithesis: the collapse of a wall symbolizing oppression and artificial divisions versus the collapse of a seemingly indestructible and reassuring institution of financial capitalism.
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Yet 2008-2009, like 1989, may very well correspond to an epochal change, whose unfolding consequences will be felt for decades.
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The end of the East-West ideological divide and the end of absolute faith in markets are historical turning points.
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And what happens in 2009 may jeopardize some of the positive results of 1989, including the peaceful reunification of Europe and the triumph of democratic principles over nationalist, if not xenophobic, tendencies.
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In 1989, liberal democracy triumphed over the socialist ideology incarnated and promoted by the Soviet Bloc.
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For many of his supporters, it was President Ronald Reagan who, with his deliberate escalation of the arms race, pushed the Soviet economy to the brink, thereby fully demonstrating the superiority of liberal societies and free markets.
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Of course, there are obvious differences between 1989 and now.
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First, and perhaps above all, the revolutions of 1989 and the subsequent collapse of the Soviet Union put an end to global bipolarity.
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By contrast, 2009 is likely to pave the way to a new form of bipolarity, but with China substituting for the Soviet Union.
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Second, whereas democracy and market capitalism appeared as clear – if more fragile than expected – winners in 1989, it is difficult in 2009, with the spread of the global crisis, to distinguish winners from losers.
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Everyone seems to be a loser, even if some are more affected than others.
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Yet, history is unfair, and the US, despite its greater responsibility for today’s global crisis, may emerge in better shape than most countries from the morass.
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In better shape, but not alone.
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As a visiting professor at Harvard and MIT, I am getting a good preview of what the world could look like when the crisis finally passes.
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One senses something like the making of an American-Asian dominated universe.
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From the incredible media lab at MIT to the mathematics and economics departments at Harvard, Asians – Chinese and Indians, in particular – are everywhere, like the Romans in Athens in the first century BC: full of admiration for those from whom they were learning so much, and whom they would overcome in the coming decades.
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But before this new order appears, the world may be faced with spreading disorder, if not outright chaos.
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What, for example, will happen to a country as central and vulnerable as Egypt when hundred of thousands of Egyptians working in the Gulf are forced to return to their homeland as a result of the crisis in the oil-producing countries?
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When the rich get less rich, the poor get poorer.
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And what about the foreign workers who have reached for the “European dream” and are now faced with potential explosions of xenophobia in Europe’s supposedly open countries?
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The consequences of 1989 ended up being less enduring than many observers, including me, would have assumed.
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We can only hope that, in the end, the consequences of 2009 similarly prove to be far less dramatic than we now – intuitively and in our historical reflexes – feel them to be.
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The End of 1945
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NEW YORK – On May 8, 1945, when World War II in Europe officially ended, much of the world lay in ruins.
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But if the human capacity for destruction knows few limits, the ability to start over again is just as remarkable.
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Perhaps that is why mankind has so far managed to survive.
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No doubt, millions of people at the end of the war were too hungry and exhausted to do anything much beyond staying alive.
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But, at the same time, a wave of idealism swept across the wreckage, a collective sense of determination to build a more equal, peaceful, and safer world.
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That is why the war’s great hero, Winston Churchill, was voted out of office in the summer of 1945, even before Japan surrendered.
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Men and women had not risked their lives simply to return to the old days of class privilege and social deprivation.
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They wanted better housing, education, and free health care for all.
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Similar demands were heard all over Europe, where the anti-Nazi or anti-fascist resistance was often led by leftists, or indeed Communists, and prewar conservatives were frequently tainted by collaboration with fascist regimes.
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There was talk of revolution in countries such as France, Italy, and Greece.
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This did not happen, because neither the Western Allies nor the Soviet Union supported it.
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Stalin was content to settle for an empire in Eastern Europe.
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But even Charles de Gaulle, a resistance leader of the right, had to accept Communists in his first postwar government, and he agreed to nationalize industries and banks.
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The swing to the left, to social-democratic welfare states, occurred all over Western Europe.
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It was part of the 1945 consensus.
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A different kind of revolution was taking place in Europe’s former colonies in Asia, where native peoples had no desire to be ruled once more by Western powers, which had been so ignominiously defeated by Japan.
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Vietnamese, Indonesians, Filipinos, Burmese, Indians, and Malays wanted their freedom, too.
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These aspirations were often voiced in the United Nations, founded in 1945.
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The UN, like the dream of European unity, was also part of the 1945 consensus.
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For a short while, many prominent people – Albert Einstein, for one – believed that only a world government would be able to ensure global peace.
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This dream quickly faded when the Cold War divided the world into two hostile blocs.
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But in some ways the 1945 consensus, in the West, was strengthened by Cold War politics.
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Communism, still wrapped in the laurel leaf of anti-fascism, had a wide intellectual and emotional appeal, not only in the so-called Third World, but also in Western Europe.
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Social democracy, with its promise of greater equality and opportunities for all, served as an ideological antidote.
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Most social democrats were in fact fiercely anti-communist.
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Today, 70 years later, much of the 1945 consensus no longer survives.
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Few people can muster great enthusiasm for the UN.
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The European dream is in crisis.
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And the post-war social-democratic welfare state is being eroded more and more every day.
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The rot began during the 1980s, under Ronald Reagan and Margaret Thatcher.
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Neoliberals attacked the expense of entitlement programs and the vested interests of trade unions.
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Citizens, it was thought, had to become more self-reliant; government welfare programs were making everyone soft and dependent.
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In Thatcher’s famous words, there was no such thing as “society,” only families and individuals who ought to be taking care of themselves.
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But the 1945 consensus was dealt a much greater blow precisely when we all rejoiced at the collapse of the Soviet Empire, the other great twentieth-century tyranny.
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In 1989, it looked as if the dark legacy of World War II, the enslavement of Eastern Europe, was finally over.
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And in many ways, it was.
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But much else collapsed with the Soviet model.
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Social democracy lost its raison d’être as an antidote to Communism.
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All forms of leftist ideology – indeed, everything that smacked of collective idealism – came to be viewed as misguided utopianism that could lead only to the Gulag.
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Neoliberalism filled the vacuum, creating vast wealth for some people, but at the expense of the ideal of equality that had emerged from World War II.
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The extraordinary reception of Thomas Piketty’s Capital in the Twenty-First Century shows how keenly the consequences of the collapse of the left have been felt.
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In recent years, other ideologies have also emerged to fill the human need for collective ideals.
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The rise of right-wing populism reflects revived yearnings for pure national communities that keep immigrants and minorities out.
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And, perversely, American neo-conservatives have transformed the internationalism of the old left by seeking to impose a democratic world order by US military force.
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The answer to these alarming developments is not nostalgia.
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We cannot simply return to the past.
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Too much has changed.
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But a new aspiration toward social and economic equality, and international solidarity, is badly needed.
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It cannot be the same as the 1945 consensus, but we would do well, on this anniversary, to remember why that consensus was forged in the first place.
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2011: My Space Odyssey
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MOSCOW – Most people who know of me think of me as an information-technology expert, someone who probably lives in California and invests in edgy Internet start-ups.
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In fact, my formal residence is in New York City, but I am about to spend most of the next five months in Russia, training to be a cosmonaut in Star City, just outside Moscow.
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It all came about in a number of ways.
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First of all, as a kid, I just assumed that I would go to the moon, without having to do much in particular to make it happen.
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I just took it for granted that, by the time I was, say, 40, space travel would be a common thing.
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My father was involved with the United States space program, and we had some moon rocks at home, so I thought it was no big deal.
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Then I got distracted for about 40 years.
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A few years ago, however, I started paying attention to space again.
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A lot of people I knew in the IT industry were doing the same: Elon Musk, a co-founder of PayPal, founded Space-X;
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Jeff Bezos of Amazon started a spacecraft company called Blue Origin;
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