Why Gold?
Once upon a time money was backed by gold, but after 1971 the gold standard was abandoned for the fiat currencies we know today. Nowadays that shinny metallic yellow stone has uses in jewelry, electronics, medicine and is also part of most if not all central banks reserves. Money Mischief: Episodes in Monetary History But why should I buy gold today? As a hedge against inflation? reserve of value? price speculation? Zombie apocalypse? Here a quick analysis of why or when it seems gold is prefered. - Against inflation: There where times in which gold price (blue line) went down, like the period from 1980 to 2000, while Consumer Price Index (CPI) continued rising. That 20 year span is too much time to say that gold is bought exclusively to hedge inflation . Imagine that in 1980 an ounce of gold allowed you to buy 12 apples, even if apples remained at a fixed price, that same ounce allowed you to buy 3.5 apples in the year 2000. Below the same graph but with the percentage change from a
