Everyone has always considered gold as a safe haven, the index of the financial wealth of nations.
The Bretton Woods Agreement and the 70s
Everyone has always considered gold as a safe haven. Still until the Bretton Woods (USA) agreements in 1944, having gold was the parameter of the strength of a currency. In the town of New Hampshire the establishment of a gold exchange standard was decided based on fixed exchange rates between the currencies. The currencies were all linked to the dollar which in turn was hooked to gold.
The unfavorable turn to gold occurred in the early 1970s when President Richard Nixon announced the suspension of the gold dollar conversion system.
But even in all these years in which it was considered an obsolete good, gold has never ceased to exert its historical charm or its historical functions.
Why does everyone consider gold as a safe haven?
First of all, gold is the only real antidote to the devaluation of currencies, but also of consumer products.
Gold as a safe haven is a very concrete concept. The yellow metal offers protection in the stormy phases of inflation, deflation, political reversals and financial crises.
Gold cannot be repudiated as in the case of paper currencies. Gold is a unique good in the world, present on earth in limited quantities, with a history of over six thousand years behind it and used for multiple functions.
The world is increasingly indebted. In countries like USA that have worrisome public debts gold represents and will increasingly represent the only true way of salvation in view of the threat of default.
What will the future of gold be?
Gold, moreover, is starting a new … golden season. In fact the so-called BRICS countries have been buying gold in thrust in recent years to build a new international monetary system that no longer sees the US dollar as the sole preferred currency.
Futhermore it’s assumed that Russia and China intend to give life to gold-based coins that refer to gold.
Therefore, gold can be the tool of a geopolitical, political, monetary, financial worldwide upheaval, an upheaval that – as Merlin Merlin said in John Boorman’s Excalibur – most likely will be “a dream for someone” and “a nightmare for others” (USA in the lead).