2024-09-06 02:35:36
Gold is having a great time. Its price has set a new record. The value of a standard gold bar soared to over a million dollars for the first time. And the very rich are rushing to stockpile.
What is the meaning of gold? Theas Bloomberg financial analyst John Stepek eloquently states, in the event of an economic collapse – in countries without the institutional stability that the US and UK have taken for granted for decades, if not centuries – “with a little gold … buried in your garden you will preserve some of your wealth”.
- Gold is the most suitable asset to use as physical money in case of need as it does not depend on the creditworthiness of any other entity to maintain its value.
- Gold is durable (so you can store it and it won’t rust).
- He is interchangeable.
- The amount mined grows quite slowly, so there is no serious risk of its supply exploding.
- Money is nothing more than a form of mechanism that, like any technology, evolves. But if the monetary system fails, gold’s inherent properties make it a valuable backup medium.
Gold – currency of the crisis: In demand as never before
Western arrogance and the nadir of its value
Gold was at its nadir when, between 1999 and 2002, British Prime Minister Gordon Brown decided to sell about half of Britain’s gold reserves
Brown took a lot of fire for this, but it was during this period that the euro was launched. About 40% of the money raised from the sale of the gold went into the new currency.
In other words, Britain exchanged its “reserve money” to show support for the newfangled, radical monetary experiment.
This leap in faith in the euro coincides with the height of Western arrogance, after the Cold War. The problems of the economy were largely solved, we had reached… the end of history and the same metal was now considered an asset fit only for the unrepentantly paranoid.
The hopes were not fulfilled
Obviously, the world has become more complex geopolitically since then.
Hopes that China and Russia would become friends because free market capitalism was demonstrably better than communism did not pan out, for a wide range of reasons.
And now, we are at a point where the global hegemony of the US dollar is being challenged, due to the de-dollarization efforts of various states, most notably China.
“Spare” money
Central banks own gold and have done so consistently, even at the nadir of the market. If they still consider it an integral part of the monetary system, that is something that certainly deserves our attention and interest.
So if you’re worried about the global monetary system, what do you need? Plenty of “spare money”. A “forever” asset.
naftemporiki.gr