Gold’s real value—the goods and services a given amount of it will buy—will not fluctuate much, as it has not fluctuated much for centuries. Each dollar unit will buy progressively less, which is what has happened to fiat currencies for centuries. From Egon von Greyerz at goldswitzerland.com:
With the US shooting itself in the foot again, we are now certain that this is the final farewell to the bankrupt dollar based monetary system.
More about this follows but, in the meantime, an extremely important warning:
If you have never been a goldbug, this is the time to become one.
I decided 25 years ago that the destiny of the world economy and the financial system necessitated the best form of wealth preservation that money could buy.
And physical gold performs that role beautifully just as it has done for several thousands of years as every currency or fiat monetary system has collapsed without fail throughout history.
Thus, at the beginning of this century we told our investor friends and ourselves to buy gold for up to 50% of investable liquid asset.
So at $300 we acquired important amounts of gold and have never looked back. We have of course never sold any gold but only added since.
I have never called myself a goldbug, just someone who wanted to protect assets against the risk of the destruction of the financial system including all currencies. But now is really the time to become a real gold bug.
So, today just over 20 years later, gold is up 7 – 8X in most Western currencies and multiples of that in weaker economies like Argentina, Venezuela, Turkey etc.
The total mismanagement of the US financial system has led to the dollar losing 98% of it’s value since Nixon closed the gold window in 1971. Most other currencies have followed the dollar down at varying speeds.
