Gold Is For War – by Clem Chambers (Forbes Magazine – September 27, 2021)

Gold is a favorite for old fogies like me, but spanning the digital age gap as an early adopter of “online” in the 1980s, I grok and love crypto. Crypto is a kind of digital gold, or you might say gold is a kind of Boomer bitcoin.

People dismiss gold as a barbarous relic and governments de-emphasize its importance as a relic. So what is the point of a dense yellow metal only good for trinkets, electronic contacts and dodgy dentistry? Why do governments keep huge piles of it in extremely heavily guarded vaults?

The answer is simple. Gold is for war. In war your paper is at a big discount and practically worthless if you are losing. Governments renege on their paper promises after wars, either by not paying out, restructuring them into dust or simply inflating the value away. In war, gold is what you pay with.

I am up to my armpits in gold, not an asset I have ever put much into up to now, because it’s crystal clear to me we are in for a lot of inflation. The market does not agree, which is very unsettling. I’m an equity guy so to watch gold trade I’m left wondering if it’s much of a real market at all.

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