Agreed.

Nice historical collection. Never the less, all these countries returned to FIAT.
Sadly, no evidence that there is a method that replaced it as a "safe haven".
Even if chose an asset as a safe haven, it is based on the currency at the time.
You do not know what will be the value under a new currency.

Matt
Optimus Futures

There is a risk of loss in futures trading. Past performance is not indicative of future results.

I took catastrophic and extreme situations in US history and Europe and found ZERO correlation between gold and any type of value it provided.

Gold today is like any other commodity, it goes up and down. Trade accordingly.

Unfortunately your article missed the only crucial fact relating to the modern history of gold - the creation of the Federal Reserve. The chart shows where that happened, no words needed. All other fluctuations are cyclic, wave driven and irrelevant, other than noise spikes such as the Gold Act and Bretton Woods on/off.

Gold has no 'value', it simply stores 'real work done' and measures the value of other things, such as paper currencies. Most people never understand the true upside down nature as they can only ever see 'money' as value, when in fact it is only ever paper, ink and a vacuous promise. This century's financial engineering does not count as real work done, no matter how we regard ourselves as traders.

ZH's commentary can be useful but in reality it is just an unfortunate part of the emotional landscape. Doom and gloom merchants tend to think in years and decades, real history takes hundreds and thousands as @TickedOff was illustrating.

However, you are right about trading it for what it is and I have no doubt gold can go way below 1k and way above it in whatever lifetime I have left.

Cheers

Cryptocurrency could be a gamechanger, if it is globally accepted as money. With bitcoin, the supply is limited to 20 something million and it is decentralized. The problem with paper currency, is that even if you back it with gold or some other physical commodity, there's always the temptation to print more to fund debt.

I am still fascinated with the emotions behind gold arguments. I spent my first 20 years in India and the next 20 in West. I think i am fortunate to understand both the emotional and the rational side of these arguments.

I was a Perma-Bull of gold. There couldn't have been any other choice for me. Indians (at-least the ones I know) NEVER NEVER SELL gold to lock in profits. If you need money, then you pawn your jewels but get it back as soon as possible. If you are in deep financial trouble, after exhausting all traditional sources, only then you sell. Gold is NOT JUST MONEY, it's more than that. It's DIVINE - like Goddess Lakhsmi. Even after living in the western world for more than 15 years, I would never short GC or sell my bars/coins/jewelry. (I am not a religious person but still wouldn't DARE short GC which has been in an eternal bull market). That changed in 2012.

Only recently (3 years ago), I realised the marvel of that 2000 years of tradition. I needed a great historian & trader - Martin Armstrong - to explain that to me in understandable terms. Gold is INSURANCE against Governments. Plain and simple. Every other relationship i.e to inflation, equities, bonds, silver or war is complex and NOT consistent. That explains the tradition in China and India whose lengthy history taught wise people NOT to trust the government who serve their own interest before that of their citizens. Morover, Banking industry has been poorly developed for centuries with no reliable source of money when you are in need. No-one would trust you without collateral which is often Gold. It's akin to living in USA with health problems but NO health insurance

Since there has been no welfare or pension system, there was a natural caution with savings due to unpredictable future. Real estate was a good option but risks taxation, confiscation and visibility. Hence Gold was a good alternative. Currently, we have several investment alternatives, but old habits die hard.

Back to my own story in 2012. I began to believe Gold as just another investment vehicle & NOT a mystical or divine object. I stopped my habit of quarterly purchase of gold bullion bars in 2012. However, I couldn't sell gold, not yet, not yet. When I eventually told my parents in 2013 to sell 1 ounce of bullion TO LOCK IN PROFITS, they couldn't believe it. There are no words to describe their reluctance & resistance. They were offended and also thought it was idiotic. I even had my extended family members asking me NOT to sell GOLD. Logic was simple. 'You are not in dire need of money, why sell now?'. I insisted and prevailed. We all know what happened to Gold prices post 2013.

Even after Indian rupee depreciation, Dollar strength & Govt's clampdown 10% tax, Gold price went down and I created quite an impression Now, they consult me before they buy gold 'just to make sure that it won't go down further'. None of them are ready to trade/sell gold yet but they added caution to their investment philosophy. That's a good start

I don't think the Bull Market is over for Gold. We are still in the correction phase and when Bonds collapse next, confidence in Govt will diminish and this will fuel price of all tangible assets including Gold. We are not there yet but getting close.

Finally, crypto-currency or any other electronic investments DON'T stand a chance in this environment where rulers have almost unlimited power over the citizens.

I would like to hear your reasoning behind your last statement. I think cryptocurrencies are great against oppressive governments because they can't be easily confiscated or manipulated.

I don't have an IT background either and hence don't understand the intricacies of them. However, I have few thoughts to share.

Cryto-currencies are essentially financial rebellion against governments. It's an alternative to the corrupt status quo. I consider the reasoning behind those currencies as clever & laudable but extremely hard to implement. Especial once it gains popularity among the common man.

No object is a currency if it's not endorsed by a legitimate government & used by majority of the citizens.

1 - Most governments will make it illegal as it threatens their existence in the current corrupt form. They can be forced to accept by informed citizens but I don't see that happening for a variety of social reasons. Their dependency on govt. and various benefit/welfare schemes is one of them.

2- Most citizens will find it hard to understand and use. There are still a lot of people in this word who either don't have access to technology or have a healthy dose of suspicion towards them.