The virtues of gold are many. It is a hedge against inflation and a safe haven amidst financial crises. An asset whose unique physical properties have made it the most sought after means to store wealth in the history of the world. And, as one famous banker put it, and you may be shocked to learn who it is;
“In the absence of the gold standard, there is no way to protect savings from confiscation through inflation. There is no safe store of value. If there were, the government would have to make its holding illegal, as was done in the case of gold. If everyone decided, for example, to convert all his bank deposits to silver or copper or any other good, and thereafter declined to accept checks as payment for goods, bank deposits would lose their purchasing power and government-created bank credit would be worthless as a claim on goods. The financial policy of the welfare state requires that there be no way for the owners of wealth to protect themselves.
This is the shabby secret of the welfare statists’ tirades against gold. Deficit spending is simply a scheme for the confiscation of wealth. Gold stands in the way of this insidious process. It stands as a protector of property rights. If one grasps this, one has no difficulty in understanding the statists’ antagonism toward the gold standard.”
Surely, this is the ramblings of one of those gold kooks forever predicting a collapse of the money system and an insidious attack against our wealth. And then came Cyprus – an insidious attack against wealth ...