October 16, 2009

October 16, 2009 – One US economist has been called Scrooge by many US investors and White House officials, but his weighty theory on US holiday spending has caused some shoppers to alter their holiday shopping plans. Many Americans now want to buy gold and silver instead of more traditional holiday gifts, because the wealth that gets wasted from Thanksgiving through the end of the year could be allocated for more useful purposes. Gold and silver are not usually classified as gifts, except in jewelry form, but Wharton professor of economics Joel Wadfogel believes that our traditional gift-giving methods have caused needless hardship for Americans for far too long.

Wadfogel is not against gift-giving or the holiday spirit, but he is against much of the $70 billion spent annually on year-end holiday shopping. he calls our nation’s yearly spree "an orgy of wealth destruction," and he believes that our economy could be boosted substantially if this senseless spending was eradicated. "If micro economic theory teaches us anything, it’s that people do best when they make choices for themselves. Here is all of this consumption where the choices are being made by someone else…that seems like a real opportunity to allocate resources badly." Wadfogel argues that trillions of dollars have been wasted over the years on gifts that people don’t even want, and he believes that the reversal of this trend could drastically improve our present economic condition.

Wadfogel’s theory has caught on, at least in part, because many economists expect a horrendous 2009 holiday season for retailers. Gold and silver are physical assets that analysts believe will increase in value during the next 12 months, and their safe-haven status has caused many individuals to wonder why gifting precious metal investments is such a novel idea. The active gold spot price is $1048.10, and silver is currently trading at $17.34 per ounce on the Commodities Exchange(COMEX). 

Shannon King

Senior Staff Writer –

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