The only real – albeit shallow – criticism of the gold story right now is that it's primarily a US Dollar story. For Aussie investors, a collapsing greenback doesn't equate to a higher Aussie-dollar Gold Price. We would say, though, that this is a short-sighted appreciation of what gold is saying about the modern money system.
The modern money system is built on credit, debt, and government money backed by nothing. To believe that does not mean you'd covert all your assets to bullion, or all your shares to Gold Mining stocks. But it IS to believe that the architects of this system are criminals who effectively steal your wealth through inflation and control of the money supply.
If you have confidence in that system, you're a sucker. And if you don't hedge against its collapse, you're unprepared. After the last two years, is it so farfetched to believe that the foundations of financial capitalism – based on unsound money as they are – are weak by design and will fail in a world of increasing complexity and interconnectedness?
If you don't think it could happen, you haven't been living on Planet Earth. Either that or you're in a business where you want everyone to go back to doing what they were doing pre-Lehman collapse because it's good for your business. If that's the case, it's fine. But it's foolish to ignore 5,000 years of monetary history.
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