Commentator David Frum.
Commentator David Frum. - 
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Kai Ryssdal: Economists from Ben Bernanke on down are talking more about deflation than inflation. There's been no inflation in the U.S. economy for a long while. Still, some investors are more worried about rising prices -- not falling -- and their trades show it. First, they bid up the price of gold the past couple of years. Now silver is following. Silver's up almost 70 percent since August.

Commentator David Frum wonders, how come?

David Frum: Geologists tell us that silver is about 17 or 18 times more plentiful in the earth's crust than gold. Historically, the silver-to-gold price price has fluctuated around 16-to-1: 16 ounces of silver to buy one ounce of gold.

So when the price of gold surged to 66 times the price of silver this past summer, that should have sounded a warning that something was amiss. Some might have interpreted this huge differential in the prices of the two metals as a warning that gold was joining tulip bulbs and in the annals of financial bubbles. But more seem to have decided, no, gold wasn't too high. Silver was too low. Since August, the price of silver has surged 66 percent.

Last week, the federal government reported more disappointing job news. The yield on 10-year U.S. bonds hovers about 3 percent, an indication that bond investors foresee zero inflation. You'd think that bad general economic news would also be bearish news for metals. Instead, bad news for gold is reinterpreted as good news for silver.

This reminds me of the late phases of the housing boom, when buyers persuaded themselves that if they could not afford a $2 million dollar house on the west side of Los Angeles, that a half million house in the Antelope Valley must be a tremendous bargain.

Well perhaps they are all right. Anyway, who cares? Metals buyers are consenting adults, let them buy what they want.

But more than almost any other commodity, gold buyers are small investors, not always very sophisticated, and relentlessly huckstered by advertisers and talk radio personalities. They pay premiums averaging $100 an ounce to buy gold in the most expensive way, as coin, rather than as bars. From the outside, this market looks a lot more like a mania than like a prudent hedge against inflation risk.

Warren Buffett once marveled at the market for gold: We dig it out of the ground, shape it into bars, then bury it again. Why? Silver is not quite so crazy. You can at least fashion it into lovely candlesticks -- if you don't buy at the top of the market.

Ryssdal: David Frum is the editor of FrumForum and a former speechwriter for President George W. Bush. Next week in his regular spot, Robert Reich. Your comments welcome any time.