In the wake of the financial crisis, I’ve found myself creating content for three different precious metals companies and at least half a dozen financial news outlets. I’m a writer, researcher and storyteller --- and chronicling the saga of money in the wake of the housing bubble, market correction, QE1, QE2 and QE3 had all the spectacle and high drama of the perfect literary masterwork.
With unchecked ambition and the madness of greed, the prologue was downright Shakespearian. With the singing and dancing of a foreboding chorus, it was a Greek tragedy in every sense of the word. With the epic losses and journey to redemption, it was akin to Milton's magnum opus, Paradise Lost and the salvation of Paradise Regained.
I’ve subsequently done focus groups with venture capitalists, financiers and everyday investors who’ve repeatedly told me that money is fluid, flux and inescapably fiat. This whole notion of unbacked paper and currency “by decree” has been the fuel for generations of dollar-doubters and central bank skeptics. And with the advent of crypto-currencies we’re entering an entirely new dimension where ‘no investor has gone before’ --- a decentralized, digital world of computer-money generated from math puzzles. At the center of it all is a reclusive, mad scientist “creator” who is perhaps no less infamous than Ian Fleming’s Dr. No.
The one thing I’ve learned throughout my research and historical trend data is that gold matters. It matters for the same reason that my father sold insurance for over forty years in the quiet New York suburbs to small businesses and home owners. Some of his clients owned music shops and delicatessens. Others were union workers, cops and firemen. And some were rabbis who commuted to Manhattan and dealt in cash transactions in the diamond and garment districts.
Gold matters for the same reason that my home in California wine country has a special insurance rider for ‘hot embers’ and ‘wildfires’. It was an added provision that I never thought I would use or need because the area had not burned in a generation. Little did I know, that was precisely the reason why it would.
Gold matters because it always has. It’s not too much of a stretch to put one’s faith in a commodity that has functioned as money as far back as 700 B.C. It’s not blind trust to embrace an asset that has been the benchmark of wealth, prosperity, and social status for thousands of years. It’s not wildly irrational to hold a little bit of something that has been the backbone of the international monetary system for generations.
It’s ironic that those that dismiss gold investors as overly exuberant “bugs” are often the same people buying up all those simulated “coins,” minted in imaginary “mines,” and held in virtual wallets.
Gold has been the fixed yardstick for how great empires and great wealth have always been measured. It should be part of one’s portfolio because it has mattered for the last 3000 years --- and it will undoubtedly matter for the next.