Currencies are just as certain as the economies that they represent.
And why then, do current, high-growth economies continually devalue their currencies? Why did the entire high-growth Pacific Rim, the "Asian Century", go through a round of devaluations and is now poised again on a second such round?
The only certainty in a fiat currency is that it will inflate away at a real rate faster than the nominal risk-free interest earnable on that currency, if the economy doesn't collapse first from the cumulative effects of raging, leveraged debt.
What does gold represent other than blind faith on part of a few inflation hawks?
Gold, if not the basis of a system in opposition of the boom and bust syndrome cited above, is a hedge against basing a monetary system on "promises" instead of realities. Aside from its many and mundane uses, gold, when not used as money, is simply the hedge against the predictably ill effects of what fashionably passes for "money".
History repeatedly teaches us these monetary truths and we ignore them at our own peril. The few will manipulate the value of money at the continual expense of the many. The many know not that they are victims of the few and will indignantly defend the few and their manipulations. The few know their manipulations have limits and will move to protect themselves as those limits ultimately arrive. And the many will be left to fend for themselves. |
